ANA drops most since April after reports of $1.9 billion raising

ANA Holdings Inc. tumbled as much as 8.5% in Tokyo trading Monday, its biggest intraday drop since April 1, after a report the airline is considering raising 200 billion yen ($1.9 billion) via a public share offering.

The Japanese carrier is also planning to cut costs by selling aircraft and disposing of non-core businesses, Nikkei reported on Friday, without saying where it got the information. An ANA spokesperson who asked not to be identified denied the report.

The aviation industry, upended by the coronavirus pandemic, is unlikely to see a recovery anytime soon. Global passenger traffic won’t fully return to pre-Covid levels until 2024, according to the International Air Transport Association. ANA and domestic rival Japan Airlines Co. have been bleeding money and seeking relief measures such as loans and reduced airport fees.

“This is about survival,” Lightstream Research analyst Mio Kato wrote in a report on Smartkarma Holdings Pte dated Sept. 25. “Markets are too sanguine on airlines in general, and ANA in particular.” Kato added that “even post-pandemic, business travel will be severely impacted as businesses adapt to video conferencing as a much cheaper and convenient alternative.”

Earlier this month, ANA placed all contract pilots at its Air Japan unit on temporary leave. Air Japan has about 300 temporary pilots hired via recruitment agencies.

Airlines are a “fixed cost-heavy business,” said Ryota Himeno, an analyst at JP Morgan Securities Japan Co. “ANA is trying to respond early as the company will keep losing money if revenues don’t recover.”

Shares in ANA are down 30.5% year-to-date versus a 4.3% dip in the benchark TOPIX.