The irony in ANA’s quarterly loss

Courtesy Reuters

Courtesy Reuters


IT should come as no surprise that All Nippon Airways (ANA) posted a net loss of 6.6 billion yen (US$67 million) for the quarter Apr-Jun compared to a profit of 668 million yen for the same quarter last year.

The Japanese carrier is the biggest operator of the Boeing B787-Dreamliner jet – 20 out of the global fleet of 50 that were grounded from January to April because of the fire hazard posed by an overheating problem with the aircraft’s lithium-ion batteries. Consequently hundreds of flights were cancelled and ANA had to apologize to customers for the disruption and work at restoring customer’s confidence in its operations. The airline resumed B787-Dreamliner operations in May.

In a statement that it released, ANA said: “Operating revenues were held back by the suspension of Boeing 747 services for part of the period.” Now that the global restrictions have been lifted, ceteris paribus, the next quarter for ANA should pick up, but it is far from being a certainty. There is already a new issue confronting the B787-Dreamliner arising from a fire detected on an Ethiopian Airlines aircraft at London Heathrow, and operators of the jet and some other Boeing models have been advised to carry out inspections on the emergency transmitter. (See More precautionary measures from Boeing: The task to reassure, Jul 30, 2013) Even without new issues, regaining customer’s confidence may take a while beyond the consecutive quarter.

In reporting the Apr-Jun loss, ANA has blamed rising fuel costs – although Singapore Airlines reporting on its performance for the same quarter actually cited lower fuel costs that propped up its results but continued to warn of possible increases ahead. (See Singapore Airlines’ Q1 profit masks operating performance, Jul 27, 2013) That has become a perennial bugbear. However, for ANA, its posted quarterly loss presented an irony in how the B787-Dreamliner is a fuel-saver, yet fuel costs continue to be its worst demon. To be fair, the jet was only back up in the sky in the second half of the quarter; ANA’s best bet if of course the future when the jet finally gets the “all clear”.

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About David Leo
David Leo has more than 30 years of aviation experience, having served in senior management in one of the world's best airlines and airports. He continues to maintain a keen interest in the business, writes freelance and provides consultancy services in the field.

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