NYK Lines takes $144 million charge for Nippon Cargo Airlines subsidiary

For the quarter ended Dec. 31, NYK reported revenue of 428.5 billion yen, or roughly $3.9 billion, and an operating profit of $152.7 million.

Nippon Cargo Airlines had a $39.6 million loss in the third quarter on revenues of $186.9 million. Because of what it described as “harsh” market conditions and a lackluster peak season, NYK is forecasting a full-year loss of $156.5 million for Nippon Cargo Airlines.

Carriers from the Asia Pacific region saw cargo traffic fall 5.1% in 2019 to 71.29 billion freight tonne (metric ton) kilometers, according to the Association of Asia Pacific Airlines. Most of the cargo traffic is carried in the belly holds of passenger aircraft. AAPA Director General Andrew Herdman said the 5.1% drop in demand was the steepest fall since the global financial crisis in 2008 and that declines in new export orders throughout the year led to the lower demand.

He said the outlook for 2020 was already clouded by uncertainty over the global economy and unresolved trade disputes. Now the coronavirus outbreak has led to significant demand for air travel to, from and within China and to corresponding adjustments in airline schedules.