ANA Looks To Cut 3,500 Jobs Over The Next Three Years

ANA is looking to cut 3,500 jobs in the next three years as a part of a broader restructuring for the airline. The Tokyo-based carrier reported a $1bn loss for the first fiscal quarter as international flight traffic plummets. ANA will also announce further cost-cutting measures on Tuesday as the downturn stretches on.

ANA All Nippon Airways Japan Getty Images
ANA is looking to make long-term cost cuts as the pandemic continues to impact the airline. Photo: Getty Images

Job cuts to come

According to Business Standard, ANA is looking to reduce 3,500 jobs over the next three years. The reductions will take place through a hiring freeze, voluntary layoffs, and lay-offs with an outplacement program. The airline is targeting March 2023 to meet the deadline for the job reductions.

With demand for flights still low, ANA is considering more novel ways to deploy its 43,500-strong workforce. One possible measure includes temporarily moving some employees to other companies, with Toyota being a possible option. This would be preferable alternative to mass furloughs as seen in other countries.

ANA could sell 30 of its widebody planes to shore up liquidity. Photo: Boeing

Another idea being floated is the sale of 30 widebody aircraft. This would likely mean a sale and leaseback process, wherein an airline sells a plane to a lessor and leases it back for a fixed term. Many airlines have made such deals during the pandemic since it provides a boost of cash in the short term.

Struggling demand

ANA’s latest cuts come in the face of struggling demand for nearly the entire year. The airline was one of the first to be hit by the pandemic due to cases in Asia and global border closures meant international flight revenue was down 94% in the first fiscal quarter.

To combat this downturn, ANA aims to raise liquidity through loans to see itself through the crisis. The airline recently secured $3.8 billion in partially state-backed loans as a way to guarantee its survival, according to Business Standard. This loan is in addition to the $8.8bn funding round the airline raised in April.

ANA and JAL Domestic Reductions
ANA has been hit hard by border restrictions and rising cases. Photo: Getty Images

Despite the substantial cash reserves, ANA is still burning through substantial cash every month. The airline has already sent many of its staff on unpaid leave and plans to cut salaries by 30%. This week’s restructuring plan will see more such cost-cutting measures as the airline tries to slow its cash burn.

Green shoots of recovery

Despite ANA’s rocky 2020, it is starting to see a recovery. Japan’s robust domestic market has picked up once again after a government boost to restart the travel industry. ANA will benefit from this market, as domestic flights become key parts of revenue in 2020.

ANA, Self Service, Bag Drop
Domestic flights are picking up Japan, boosting ANA’s revenues. Photo: Boeing

Japan has also reopened international travel with a handful of countries, including Vietnam, Singapore, New Zealand, and more. Passengers can also continue to take transit flights through the country. Overall, we can only expect a slight recovery in the coming months as travel rebounds.

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