All Nippon Airways Co., Japan's second-biggest airline, reported Thursday its first annual net loss in six years, battered by a plunge in domestic and international travel as well as cargo revenue.
ANA Group fell into a 4.2 billion yen ($43 million) net loss for the fiscal year ended March 31, a reversal from its 64.1 billion yen profit for the previous year, when its bottom line was boosted by income from the sale of hotels.
Still, the red ink was slightly better than the 4.5 billion yen loss the airline had projected earlier this month.
For the January-March period, ANA posted a 13.6 billion yen loss, compared to a 53.8 billion yen net loss the same quarter a year ago. Quarterly sales sank 17.7 percent to 285.1 billion yen.
Sales for the fiscal year through March 2009 slid 6.4 percent to 1.39 trillion yen, ANA said.
ANA Executive Vice President Tomohiro Hidema described 2008 as "a disastrous year," affecting airlines around the world.
"ANA was no exception," he said.
The company's 18 billion yen in cost savings was outstripped by sliding sales as the number of passengers dropped for both international and domestic routes by about 6 percent.
ANA Group airlines carried 47.1 million passengers in the fiscal year just ended, down from 50.3 million passengers the previous year.
Especially damaging was the drop in overseas business travel, which declined by more than 25 percent on European and North American routes, according to ANA.
The carrier expects tough conditions to continue for the coming year amid a global slowdown that is eroding consumer confidence.
But preparations for boosting capacity at Tokyo airports will likely provide opportunities for ANA in the long run, it said.
The airline promised more aggressive cost cuts and efforts to stimulate travel demand to return to profit by the fiscal year ending March 2010, at a projected 3 billion yen net profit.
ANA said Thursday it will slash 73 billion yen in costs over the next year, which, if realized, will be the biggest annual cost cut in the company's history.
The savings are expected to come from fuel savings, reductions in landing charges and trimmed personnel costs, including salary and bonus cuts, it said.
It has also been reducing non-profitable routes, reducing capacity, limiting investments and setting up partnerships in cargo to boost revenue, ANA said.
ANA shares rose 3.5 percent to 360 yen in Tokyo. ANA earnings were announced after trading ended.
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