All Nippon Airways Co. said Friday its losses for the year through March 2010 will widen to 28 billion yen ($308 million) as the swine flu scare and fragile global economy crimp air travel.
ANA had earlier expected an annual profit of 3 billion yen ($32 million) after losing 4.2 billion yen ($46 million) in the previous fiscal year.
The Japanese carrier also reported its April-September first half results Friday, recording a 25.3 billion yen loss and an 18.8 percent fall in revenue to 611.8 billion yen.
Japan's other major carrier Japan Airlines is in even worse shape and on the verge of collapse.
The government has assigned a team to come up with a turnaround plan, involving an expensive bailout. Japanese media reports say that will require 300 billion yen ($3.3 billion) in public funds and another 250 billion yen ($2.8 billion) in bank loans.
"Conditions were extremely challenging," ANA said in a statement, blaming the global slowdown for its losses. "Companies placed restrictions on business trips or made cancellations due to the spread of H1N1 influenza."
Competition with rivals intensified, and ANA wooed customers with special fares for the elderly and package tours for families, it said.
The number of passengers on ANA flights for the fiscal first half declined 9 percent from a year earlier to 20.2 million according to ANA.
