Japan Airlines has projected deeper annual losses for 2020 due to the global impact of Covid-19 and travel restrictions.

An October forecast of a loss of between 240-270 billion yen has been updated to 300 billion yen.

This came as the carrier reported a loss of 212.7 billion yen in the nine months to December 31 against a profit of almost 75 billion yen in the same period in 2019.

“As strict travel and quarantine restrictions continue to be imposed on a global scale, international passenger demand decreased 96.6% and international passenger revenue recorded 18.8 billion yen, down 95.3% year-on-year,” the carrier said.

“Domestic passenger demand in Japan gradually recovered, especially in leisure demand, since the government sponsored Go to Travel promotional campaign included the city of Tokyo from October 2020.

“However, due to the increasing number of Covid-19 cases reported in December, the government temporarily suspended the Go to Travel campaign during the year-end holidays, resulting in lower domestic passenger demand.

“As a result, domestic passenger demand decreased 66.7% and domestic passenger revenue recorded 136.9 billion yen, down 68% year-on-year.”

JAL initiated a public equity offering in November to secure more than 1 trillion yen to realise a growth strategy once the pandemic subsides.

Through the offering, equity capital increased to 1 trillion and 17.1 billion yen.

The carrier will continue to carry out “drastic” cost and capital expenditure cuts “in a timely manner and make company-wide efforts to improve the financial performance”.

JAL is aiming for a cost reduction equivalent to 40% of reduced revenue and has retired Boeing 777s early from its fleet as part of company-wide restructuring.

“As of the end of December, 2020, liquidity at hand is more than 750 billion yen, including unused credit line, JAL said.

“During the third quarter, cash burn has steadily decreased to 10-15 billion yen per month. During the fourth quarter, cash burn expects to increase to 25 billion yen per month, half of the first quarter level, as cost reduction efforts have been made.”