Maki Shiraki

TOKYO (Reuters – Japan’s most important airline, ANA Holdings Inc. said Friday it expects an operating loss this year due to travel restrictions. The company previously predicted a profit but the reality is that it was experiencing a lower than expected first half.

Due to cost cutting and strong cargo demand, the airline reported a smaller operating loss ($116 billion or $1.02 billion) in the six-months ended September 30.

ANA reported seven quarters of losses consecutively and said that it expects to make a profit for the fourth quarter because of a predicted recovery in travel demand.

It expects an operating loss in the twelve months ending March 2022. This is down from 28 billion it had previously predicted.

Based on an average of eight forecasts and Refinitiv data, analysts had calculated a full-year operating loss of 89.7 Billion yen prior to the update.

The airline released a statement saying that the revised forecast “reflects the findings of the second-half revenue projections will not suffice to cover the lack of revenue in the first fiscal year.”

Japan ended the state of emergency that was in effect across large parts of the country at the close of January. Although domestic tourism has been slowly recovering, it is not clear that inbound travel will be returning in large numbers anytime soon.

There are still strict rules that prohibit most non-residents, such as tourists or business travellers, entering the country.

This year, the Tokyo 2020 Olympics, which were delayed by a full year, was the last chance for companies in tourism and travel to be held. There were no international tourists or observers, so they lost out.

The initial view of the event was that it would be a tourist boom for Japan. Japan has been trying to attract more tourists from abroad in recent years to boost its economy.

($1 = 113.5800 yen)