Japan Airlines Returns to Black
Japan Airlines returns to black through global route restructuring and cost-cutting

TOKYO, Nov. 8, 2006
By CHISAKI WATANABE Associated Press Writer
(AP)


(AP) After losing money last fiscal year, Japan Airlines said Wednesday that it had become profitable again in the half-year through September, thanks to route restructuring the contributed to higher international passenger revenue.

Japan's largest airline posted a net profit of 1.5 billion yen ($12.75 million) for the April-September period after a net loss of 12 billion yen for the same period last year.

JAL, whose business had suffered due to a spate of safety lapses that tarnished its image, had net losses in the fiscal year through March, as well as in the April-June quarter.

Half-year revenue rose 3.4 percent, to 1.15 trillion yen ($9.78 billion).

The airline did not break down quarterly numbers, but taking into account a 26.8 billion yen loss for the April-June quarter, JAL appears to have had net earnings of 28.3 billion yen in the July-September quarter.

Still, in the first-half, JAL felt the lingering effects of the safety lapses and widely published boardroom infighting, which have eroded its domestic passenger traffic.

"In the second half, we are experiencing a comeback" in the number of travelers using JAL's domestic services, said JAL senior vice president Tetsuya Takenaka.

Global route network restructuring and switching to smaller aircraft helped the company improve its international passenger revenue, it said. The company also took cost cutting measures amid rising fuel prices, it said.

JAL's operating income fell 48 percent in the half-year to 8.1 billion yen from 15.7 billion yen a year ago, largely due to higher oil prices. But it unloaded shares it owned worth 9 billion yen ($76.5 million), which helped offset that.

For the full fiscal year ending March 2007, JAL left its group net profit forecast unchanged at 3 billion yen ($25.5 million).

But it lowered its group operating profit estimate to 13 billion yen ($111 million) from 17 billion yen and cut its revenue estimate to 2.281 trillion yen ($19.4 billion) from 2.301 trillion yen.

"Our top priority is to achieve the 3 billion yen profit goal," Takenaka said. He said the airline will continue to sell stocks and real estate worth a considerable amount in the second half, without elaborating.

JAL's financial results are based on Japanese accounting standards.


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