TOKYO (Reuters) – Japan’s biggest airline ANA Holdings said on Friday it will issue new shares to raise 332 billion yen ($3.2 billion) to pay for Boeing 787 jets it has ordered and help weather a plunge in air travel caused by the coronavirus pandemic.
Like other big Asian airlines including Singapore Airlines Ltd and Cathay Pacific Airways Ltd, ANA is attempting to cope with the pandemic slump by cutting costs.
That includes asking staff to take furloughs or accept pay cuts. The Japanese government has also helped by slashing airport charges, including a landing fee waiver.
But aircraft it will need for when demand rebounds are expensive to buy or maintain, meaning it needs access to cash to see it through a downturn that is expected to continue next year.
Any cancellation of firm aircraft orders could result in heavy penalties.
“The company intends to use the proceeds from the offerings of new shares for capital expenditure, including acquisition of 787 aircraft,” ANA said in a press release.
The share issue comes after ANA secured $3.8 billion in subordinated loans from state-backed Development Bank of Japan and private lenders including Sumitomo Mitsui Financial Group, Mizuho Financial Group and Mitsubishi UFJ Financial Group.
(Reporting by Tim Kelly; Editing by Sam Holmes and Lincoln Feast.)