Nippon Cargo records Q2 loss as parent confirms plans to offload B747-400Fs

09 / 11 / 2018

Nippon Cargo Airlines (NCA) reported a loss in its fiscal second quarter as a result of the temporary grounding of its freighter fleet while safety checks were carried out.

Meanwhile, its parent has confirmed that the airline will now concentrate on Boeing 747-8Fs, offloading its B747-400Fs.

The airline's parent company, NYK Group, reported that its air cargo transportation division saw revenues for the quarter ended September 30 decline by 38.2% year on year to Yen29.1bn.  It also reported a loss of Yen7.9bn, down 7.9% year on year.

The company also confirmed plans that it would offload its three B747-400Fs.

“All 11 of the aircraft operated by the company were grounded from the middle of June in order to confirm the soundness of the aircraft, and the aircraft are successively being returned to service once the soundness has been confirmed.

“Nippon Cargo Airlines Co., Ltd. has decided to narrow down the types of aircraft it operates to the Boeing 747-8F.

“Based on this decision, an extraordinary loss was recorded for the impairment loss on the Boeing 747-400F and spare engines owned by the company.”

The airline said it was considering reducing its fleet to eight aircraft in August in response to a business improvement order it was hit with in July over safety record concerns.

The Japanese carrier received the business improvement order from Japan’s ministry of Land, Infrastructure, Transport and Tourism (MLITT) following a government investigation into safety record maintenance as several incidents were incorrectly reported.

In its latest update, towards the end of October, the airline said it had resumed services to/from Southeast Asia and North America in addition to flights on the Shanghai, Hong Kong, North America and Europe routes.

NYK said in the results statement that five aircraft were operational.

Meanwhile, Flight Radar 24 data shows that two of its three B747-400Fs have now been flown to California’s Victorville for storage.

Attention will now turn to where the aircraft, which are around 10 years old, will end up.

There has been a spate of orders and deals involving larger freighters this year on the back of rapid demand growth since mid-2016. This suggests the airline should not have too much trouble finding a buyer for the relatively young aircraft.

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