Japan's ANA feels profit squeeze from yen weakening

Reuters

TOKYO, Oct 30 (Reuters) - ANA Holdings said aweakened yen, the result of policies to revive the Japaneseeconomy, have hurt profits, forcing Japan's largest carrier toalmost halve its outlook for operating profit this businessyear.

The carrier, which has to pay more for fuel in yen termswhen the Japanese currency falls, also faces less appetite byJapanese to travel overseas where their yen buys less.

The carrier trimmed its operating profit forecast for theyear to March 31 to 60 billion yen ($612 million) from 110billion yen. That is less than the 97 billion yen averageprediction by 15 analysts surveyed by Thomson Reuters.

"The main reason for an increase in operating expenses wasa rise in fuel costs," Kiyoshi Tonomoto, an executive vicepresident at ANA, told a news briefing in Tokyo to announce thecompany's results for the quarter that ended Sept 30.

The grounding of its Boeing Co 787 Dreamliners alsoprompted the downgrade to a less ambitious profit forecastbecause it had delayed the expansion of the airline's network,Tonomoto added.

In a bid to boost profitability, the airline said it wouldadd destinations in the United States and Asia, better matchaircraft to its routes, expand low cost carrier units and seeknew sales in related services such as pilot training andmaintenance.

The company also said it would cut staffing at itsheadquarters by a third and reassign the workers to other roles.

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