Weak cargo revenue hits All Nippon Airways profits

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All Nippon Airways (ANA) has seen profits fall by 20.7 per cent in the first quarter of the 2016 financial year, due to a number of factors including international cargo.

Profits in the quarter were down to 6.6 billion yen ($65 million) and revenue dipped by 2.3 per cent to 404.4 billion yen. Domestic cargo revenue dipped by 1.5 per cent to 7.1 billion yen and international services saw a more dramatic drop of 29.1 per cent to 20.4 billion yen.

Domestic freight fell by 1.3 per cent to 103,000 tonnes despite efforts to capture demand in the home parcel delivery business, and because of a reduction in volumes of fresh produce from Hokkaido. International freight grew by 15.6 per cent to 221,000 tonnes as it captured demand from China and other Asian destinations to North America via Japan. The appreciation of the yen and declining unit prices due to slowing demand, particularly from China, and change of agency commission settlement scheme caused revenue to drop.

“Revenues and profits for the period were affected by Kumamoto earthquake and terrorist incidents in Europe in addition to exchange rates and crude oil market conditions, changing in commission scheme for agency and unit price decrease in international cargo business.”

ANA says its consolidated business outlook remains unchanged despite risks including a slowdown in overseas economies and uncertainty following the UK voting to leave the European Union.