All Nippon Airways Co. “Flu and Global Recession Causes Losses”

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All Nippon Airways Co. Asia’s second-largest carrier by sales, had a loss in the first quarter as the number of international passengers declined at the fastest velocity in recent years.  ANA, as All Nippon is also known, lost 29.2 billion yen ($307 million) in the three months ended June 30, compared with a profit of 6.6 billion yen a year earlier, the Tokyo-based company said in a recent statement .Sales fell 21 percent.

"Beset by H1N1 influenza, which came on top of the global recession to further suppress demand to levels not seen before, the three month period under review was tough in the extreme," said Tomohiro Hidema, ANA's Executive Vice President, Finance. "Individual consumption in Japan was down, as companies saw tumbling revenues across the board and capital investment fell. While we managed to achieve around 6% in cost-savings in this quarter, continuing the trend from last year, this was far outweighed by the fall in revenue. Looking forward to the next three months, the effect of H1N1 lessened as we moved into July and for the summer we are doing our best to stimulate demand for leisure travel. We thus expect an improvement in passenger numbers, albeit slight. In order to keep the impact of the first quarter fall in revenue on the entire year to a minimum, from the second quarter we shall implement an Emergency Income Recovery Plan to the tune of 30 billion yen. This is in addition to our plans to cut a further 73 billion yen in costs, our most ambitious cost reduction effort to date.

The company additionally reported as the effect of H1N1 influenza wanes and ANA’s efforts to spur demand into the second quarter take hold, along with its income recovery and cost reduction plans, demand for both passenger and cargo services is expected to show some improvement.

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