A weakened yen as a result of policies to revive the Japanese economy have hurt profits at All Nippon Airways.
Japan's largest carrier has had to almost halve its outlook for operating profit for the current financial year.
ANA trimmed its operating profit forecast for the year to March 31 to 60 billion yen ($612 million) from 110 billion yen.
The main reason for the increase in operating expenses was a rise in fuel costs caused by the weakening of the Japanese yen, the airline said while announcing results for the quarter to September 30.
The grounding of its Boeing 787 Dreamliners also prompted the profit downgrade because it had delayed the expansion of the airline's network.
The airline also reported sluggish recovery in traffic between Japan and China.
Operating income in the quarter was down to 49 billion yen after operating expenses soared to almost 400 billion yen.
ANA said it plans to take advantage of the growth opportunities presented by enhancements to airports in the Tokyo area, improved industry competitiveness in Japan and a government target of achieving 20 million foreign visitors, all of which have been accelerated in preparation for the 2020 Olympics in Tokyo.
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