Japan’s Airlines Seen Joining Global Carriers With Huge Losses

(Bloomberg) -- Japan’s major airlines are on track to see revenue drop by 500 billion yen ($4.6 billion) from February through May, an industry group said, pushing ANA Holdings Inc. and Japan Airlines Co. closer to the crisis ensnaring other global carriers because of the coronavirus pandemic.

The Scheduled Airlines Association of Japan’s forecast amplifies its warning from from March 13, when it predicted losses of more than 400 billion yen.

Unlike many nations, Japan has avoided shutting down its economy thanks to having the lowest infection rate among the Group of Seven rich countries. Even so, exporters and airlines are already feeling the pain from a steep drop in demand overseas, while retailers are also beginning to see an impact from measures to try and contain the outbreak. The delay of the Summer Olympics will also deprive Japan of the influx of tourists it had been expecting for this year.

All told, the global airline industry could see revenue fall by $252 billion this year due to the crisis, according to the International Air Transport Association.

Japanese airlines are seeking relief measures such as reduced airport fees and an expansion of cost-related deductions. Finance Minister Taro Aso said on Friday that airlines are a pillar of the Japanese economy, and that he would consider loan measures for the sector. Prime Minister Shinzo Abe, who described the industry as a key infrastructure for the country earlier this week, said “we will offer the utmost support.”

The government is considering investing 100 billion yen in large companies, which will be made available through the Development Bank of Japan in preparation for a prolonged outbreak, the Nikkei newspaper reported earlier this week.

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