Japan Airlines Sees Omicron Delaying Overseas Travel Recovery
Japan Airlines Sees Omicron Delaying Overseas Travel Recovery
(Bloomberg) -- Japan Airlines Co. hasn’t seen any impact on domestic travel due to the omicron variant of the coronavirus, but an anticipated recovery for international flights may be delayed, Chief Executive Officer Yuji Akasaka said.
The spread of the omicron strain, which is said to be more transmissible than delta, has been disrupting overseas air travel. Although infection rates in Japan remain low, the government has been tightening entry restrictions due to concerns over the new variant.
A recovery for Japanese carriers was slowing even before omicron emerged late last month. While domestic travel recovered to about 60% of normal levels in November, international traffic remained at around 10%, Akasaka said at a press briefing. The CEO called for the government to ease entry restrictions after assessing conditions.
Asked whether disruptions to air cargo were causing some of the production halts disclosed by Toyota Motor Corp. this week, Akasaka said it was more likely due to shipping delays. Global auto production has been hit by multiple supply-chain issues as a result of the pandemic, from a shortage of chips as people buy more electronics, to Covid outbreaks shutting down parts makers in Southeast Asia.
Japan Airlines is forecasting a net loss of 146 billion yen ($1.3 billion) for the fiscal year through March. Still, it expects positive earnings before taxes, depreciation and amortization in November on improved cash flow.
The carrier issued an outlook for procurement of sustainable air fuel, saying it anticipates a shortage of 240,000 kiloliters in 2030, and no prospect of obtaining it domestically.
Japan Airlines declined 2.1% in Tokyo before Friday’s briefing. The stock is up more than 8% this year.
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