Kyodo News Agency reported on the 26th that due to the impact of the Coronavirus, the operating conditions of Japan’s All Nippon Airways and Japan Airlines (“JAL”), two large airlines, are continuing to deteriorate.
Recently, All Nippon Airways has basically decided on a workforce reduction plan of thousands of people, and the loss of JAL in the second quarter is as high as 85 billion yen (about 1 billion USD).
All Nippon Airways plans to downsize 3,500 people
According to reports, All Nippon Airways has recently basically decided to reduce the number of employees in the group by about 3,500 people through the natural reduction of hiring and retirement by the 2022 fiscal year (April 2022 to March 2023).
According to reports, ANA currently has about 46,000 employees. The company believes that the decline in demand caused by the spread of the Coronavirus will continue for a long time, and it is trying to reduce fixed expenses as much as possible.
In addition, relevant sources said that ANA is also considering promoting the transfer of employees to other companies, and will determine the transfer recipient unit and number in the future.
This series of measures is expected to be released together with the 2020 fiscal year interim financial report on October 27.
Specifically, in terms of recruitment, All Nippon Airways previously planned to hire about 3,200 people in 2021, but only about 600 people were actually hired. In the future, it will further reduce the number of new hires.
In terms of layoffs, ANA began recruiting voluntary leavers from October 14th, and these voluntary leavers can get more severance pay. However, the company has not yet proposed a target number.
In terms of salary, ANA is expected to reduce fixed expenses by at least 75 billion yen in fiscal 2021 through temporary vacations for almost all employees, salary cuts for senior executives, and no winter bonuses. Despite this, the consolidated net profit for fiscal year 2020 is still expected to lose about 530 billion yen.
JAL lost 85 billion yen in the second quarter
In addition to ANA, Japan’s other aviation giant, Japan Airlines, is also facing operational difficulties.
Kyodo News learned on the 25th that JAL’s main business is expected to lose approximately 85 billion yen in the second quarter of fiscal year 2020 (July to September).
Although the quarterly loss narrowed compared with the loss of 131 billion yen in the first quarter, the impact of the sudden drop in the number of passengers on international routes caused by the Coronavirus is still fermenting.
According to reports, affected by the continuous spread of the global pandemic, the number of passengers on JAL’s international routes in July and August was only 2.5% and 3.1% of the same period in 2019.
According to the report, although thanks to the “Go to travel” tourism recovery plan launched by the Japanese government in July, JAL’s domestic flights in July accounted for 35.3% of the same period in 2019.
However, due to the rebound of the pandemic, August, which was supposed to be the peak tourist season, a large number of people temporarily cancelled their travel plans, and the recovery of passengers was much lower than expected.
As a result, the number of passengers on JAL’s domestic routes in August was only 28.3% of the same period in 2019.
Earlier, Japanese media reported that due to the impact of the pandemic may continue for a long time, people in the industry in the country are generally pessimistic about when the Japanese aviation industry will recover.