Nippon Cargo Airlines’ parent writes down freighters’ value

By Damian Brett

Nippon Cargo Airlines’ (NCA) parent, NYK, has recorded an extraordinary loss in its fiscal third quarter financial results as the tough air cargo market hit the value of its aircraft.

While announcing its latest financial results, NYK said that it had recorded an impairment loss of ¥15.7bn for the third quarter of the fiscal year ending March 31 as it adjusted the value of aircraft.

“Given that the air cargo market conditions remain difficult much more than expected, we have reviewed the future recoverability of the non-current asset including the airframes, spare engines and parts,” it said.

Meanwhile, during the third quarter, NCA reported a ¥4.3bn loss compared with a ¥4.2bn loss a year earlier.

This came despite revenues for the period increasing by 5.5% year on year to ¥20.3bn.

Over the first nine months of the year, revenues have increased by 14.4% on a year earlier to ¥56.6bn but its losses have deepened to ¥13.4bn against ¥12.2bn last year.

“As a result of continued lower demand resulting from mainly the impact of the trade problem between the US and China, the load factor and freight rates fell, and a loss was recorded,” the company said.

Cargo volumes for the quarter increased by 73.7% year on year to 99,000 tons as 2018’s figures were affected by the grounding of aircraft as a safety investigation was carried out.

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