ANA says reservations for flights from China halved in February

ANA Holdings Inc. said Thursday that seat reservations for its flights from China to Japan next month have halved from a year earlier, due to the spread of a deadly pneumonia-causing virus.

ANA said reservations for its flights from Japan to China have decreased by about 40 percent, with an executive of the company expressing concern that demand for cargo will likely also fall if the outbreak of the new coronavirus leads to a slowdown in the global economy.

ANA, however, said it is too soon to predict the impact of the virus outbreak on earnings, since its magnitude and duration remain unclear.

The airline has suspended throughout February all daily round-trip flights between Narita, near Tokyo, and Wuhan, a city of more than 11 million people from where the virus has rapidly spread across China and abroad.

Ichiro Fukuzawa, an executive vice president of the parent of All Nippon Airways. Co., said the suspension’s impact on earnings will likely be limited, given that the route between Narita and Wuhan, a manufacturing and logistical hub for many foreign companies, accounts for only 1 percent of the airline’s revenues from international flights.

Fukuzawa said ANA will continue its round-trip flights to other Chinese destinations, although an increasing number of international airlines have started to halt flights to the country’s major cities, including Beijing and Shanghai.

“We will closely monitor the spread and will act accordingly,” Fukuzawa said at a news conference on ANA Holding’s third-quarter earnings in Tokyo.

ANA said its group net profit in the April-December period fell 19.1 percent from a year earlier to ¥86.45 billion ($794 million), due to increased costs for services and facilities.

The company said its operating profit for the third quarter fell 23.6 percent to ¥119.66 billion, while revenues were up 0.9 percent to ¥1.58 trillion.

It left unchanged its earnings forecast for the full fiscal year through March, expecting a group net profit of ¥94 billion, down 15.1 percent, and an operating profit of ¥140 billion, down 15.2 percent, on revenues of ¥2.09 trillion, up 1.5 percent.

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