TOKYO -- Japan's three major railways posted losses for the April-December period, while All Nippon Airways owner ANA Holdings suffered a net loss of as much as 309 billion yen ($2.95 billion) as the novel coronavirus and its impact prove long-lasting.
East Japan Railway Company, which operates in metropolitan Tokyo, took its first April-December period net loss, of 294.5 billion yen, the company announced on Friday. The railway also downwardly revised its revenue forecast for the fiscal year ending March to 1.7 trillion yen, down 39.8% from the previous year. The company cited the state of emergency that was declared this month as the main reason.
JR East's revenue from railway operations in October was 74% of the previous year's. In November, it was 61%, the best performance since March, before the country's first state of emergency. It dropped to 53% in December, when municipal authorities started to call on the public to refrain from traveling due to rising COVID-19 cases.
Central Japan Railway Company took a net loss of 111.4 billion yen for the April to December period. It is maintaining its previous forecast of 863 billion yen in revenue for the fiscal year ending March.
On Thursday, West Japan Railway Company, which operates Greater Osaka's commuter trains, announced a net loss of 161.8 billion yen for the last nine months of 2020, down from a net profit of 117.1 billion yen in the year-earlier period.
Airlines are also suffering. ANA on Friday announced operating revenue of 527 billion yen for the April-December period, down 67% from a year earlier. Although its operating loss narrowed on a quarterly basis thanks to downsizing and labor cost savings, the big increase in COVID cases that began in December and the subsequent state of emergency have dealt the carrier another heavy blow.
ANA, which has been relying on domestic flights as countries adopt border restrictions, in October announced it would suffer its worst year on record, a net loss of 510 billion yen for the 12 months through March.
"The outlook is unclear," executive vice president Ichiro Fukuzawa told reporters during an online news conference. "We need to be cautious, looking at plunging domestic passengers and upbeat international cargo." He stressed that the company had record international cargo revenue for the October-December quarter.
The airline had previously expected that by March domestic travel demand would be at 70% of pre-COVID levels and international demand at 50%. But assumptions of the business environment "are changing significantly," Fukuzawa said, implying that the situation could further deteriorate.
ANA also recorded an extraordinary loss of 76 billion yen due to restructuring; the airline is phasing out large and old aircraft earlier than initially planned. The loss also includes expenses for voluntary retirement packages.
Investors are expecting Japan Airlines to issue a similarly bleak earnings report on Monday. The company, like ANA, has repeatedly reduced its domestic flight schedule since New Year's.
The transport sector briefly benefited from the government's Go To Travel subsidies for domestic trips. The campaign began in July and was suspended in December. While the 1.3 trillion yen campaign initially excluded Tokyo, the capital was added to the program in October. At least 68.5 million stays were made through the end of November, according to the Japan Tourism Agency.
However, the carefree mood that helped to launch the campaign last summer did not last, and toward the end of the year, municipal authorities became increasingly wary of the growing number of cases. At the end of November, Tokyo asked restaurants not to stay open past 10 p.m. The Go To campaign's suspension originally affected only big metro areas like Tokyo and Nagoya; it became nationwide in December.
When the central government decreed the second state of emergency, it set a termination date of Feb. 7. JR East, along with other commuter train operators in Greater Tokyo, have pulled their last train runs forward by about 30 minutes.
Meanwhile, the number of COVID cases remains high. Daily confirmed cases peaked at 7,855 on Jan. 9. Although the state of emergency has helped to bring the daily numbers down, they remain high. On Wednesday, Japan confirmed 3,527 new cases, according to the World Health Organization. At this level, there is no guarantee that business activities and travel will resume after Feb. 7.
The transport sector has another worry: Many employees are expected to keep working from home -- and some business meetings are expected to still be done over the internet -- once the pandemic is brought under control.
As for international travel, countries remain in batten-the-hatches mode. The European Union this week decided to bar travelers entering from Japan because of the country's heavy caseload. New coronavirus strains initially found in the U.K. and South Africa are adding more pressure still, convincing governments to adopt stricter border controls.
Japan itself on Dec. 28 began barring nonresidents from entering the country.