All Nippon Airways Co. (9202), Asia’s largest listed carrier by sales, raised its full-year operating profit forecast 29 percent as it accelerates cost cuts.
ANA, as the airline is also known, predicted operating profit of 90 billion yen ($1.2 billion) for the year ending March 31, compared with a previous 70 billion yen forecast, the Tokyo-based company said in a statement today. The carrier left its estimates for net income and sales unchanged.
The airline added 20 billion yen in cost cuts to previous estimates, Eiji Kanazawa, ANA senior vice president, told reporters today in Tokyo. The carrier previously targeted 31 billion yen of cost reductions this fiscal year as it recovers from a slump in travel demand that followed Japan’s record earthquake in March and the nuclear accident at Fukushima.
“ANA’s cost cuts are beginning to shine through,” Ryota Himeno, an analyst at Mitsubishi UFJ Morgan Stanley Securities Co., said before the announcement. “The introduction of the 787 will help them reduce fuel costs more in the future.”
ANA, the first commercial operator of Boeing Co. 787 planes, has predicted it will save about 10 billion yen a year in jet kerosene costs with the more fuel-efficient aircraft.
ANA’s shares were unchanged at 222 yen at the 3 p.m. close of trading in Tokyo, before earnings were announced.
Seattle, San Jose
The carrier operates the 787 on domestic flights to Okayama and Hiroshima from Tokyo and started service to Frankfurt with the plane earlier this month. It plans to use it on new routes to Seattle and San Jose, Calif., later this year.
ANA reiterated its full-year net income forecast of 20 billion yen, 14 percent less than its profit of 23.3 billion yen a year earlier, and left its 1.4 trillion yen sales forecast unchanged.
Net income for the nine months ended Dec. 31 fell 10 percent to 33.8 billion yen, the company reported.
The number of foreign visitors to Japan dropped 28 percent last year to 6.2 million, the Japan National Tourism Organization said on its website. Overseas tourists slumped a record 63 percent in April after the March earthquake and tsunami, the JNTO said.
To contact the editor responsible for this story: Neil Denslow at email@example.com