ANA to unveil restructuring plan
ANA Holdings Inc. plans to temporarily transfer workers to other companies as the Japanese airline faces billions of dollars in losses, forcing it to come up with restructuring measures to survive the plunge in air travel from the pandemic.
The carrier will cut about 3,500 jobs by the fiscal year ending 2022 and will seek to temporarily transfer employees to Toyota Motor Corp. and other automakers, the Yomiuri newspaper reported over the weekend. An ANA spokesman confirmed that employees will be dispatched without providing further details.
The global airline industry is facing a painfully slow recovery from the ongoing effects of the pandemic as carriers slash jobs and secure funds to ride out the crisis. United Airlines Holdings Inc. and Delta Air Lines Inc. both posted steep losses, with Cathay Pacific Airways Ltd. planning to cut thousands of jobs and close a regional carrier.
“It will be necessary to raise new funds immediately” if ANA posts a loss of about 500 billion yen, said Yasuhito Tsuchiya, senior analyst at Mitsubishi UFJ Morgan Stanley. ANA , Japan’s largest carrier, is planning to secure about 400 billion yen ($3.8 billion) in subordinated loans to keep operations afloat. Japan Airlines Co. is seeking to raise about 200 billion to 300 billion yen in subordinated loans, the Kyodo news agency reported on Monday. Sub
ordinated loans are usually given to debt-heavy or financially weak borrowers to bolster their financial health, because credit rating companies count part of such loans as capital, helping the businesses enhance their credit status. For lenders, they are riskier than straight loans but typically carry higher interest rates. A spokeswoman for JAL declined to comment on the loan report, saying that nothing has been decided and that the carrier has secured plenty of liquidity. ANA ’s shares fell 1.1 percent in Tokyo on Monday. The stock is down 35 percent this year.
ANA is projected to post a loss of 81 billion yen for the fiscal second quarter that ended in September, versus 45 billion yen in net income a year earlier, according to the average of analysts’ estimates compiled by Bloomberg. They predict sales will decline 58 percent to 231 billion yen. ANA is on track to post a record full-year loss of about 530 billion yen, the Kyodo news agency reported last week. ANA will also sell about 30 wide-body aircraft because of their low fuel-efficiency and high maintenance costs, the Yomiuri reported. It will also utilize its customer data to offer financial and other services, while arranging code-sharing with its budget carrier, Peach Aviation Ltd., according to the report. In fiscal year 2021, the company will cut about 80 billion yen in costs, the paper said.