JAL predicts return to profit

Asia's largest carrier forecasts its return to the black after two years of losses.

    JAL has cut some flight routes, but increased flights on short- and medium-haul routes [EPA]

    The airline missed its original goal of returning to the black in the last financial year, instead reporting a net loss of 16.27 billion yen.
    JAL blamed special factors for the past year's losses, including an extraordinary loss of six billion yen from its early retirement plan and the removal of a deferred tax asset from its balance sheet.

    "At the operating level we greatly surpassed our original target"

    Tetsuya Takenaka, JAL's managing director

    "The auditor wanted to be strict on accounting rules, considering wary eyes of the general public after recent accounting scandals by other companies," Kanayama said.
    But JAL reported operating profit last year of 22.9 billion yen, about 76 per cent higher than it originally predicted, and a sharp improvement on the 26.8 billion yen loss the previous year.
    Total operating revenue rose 4.6 per cent from the previous year, to 2.30 trillion yen.
    "At the operating level we greatly surpassed our original target," Tetsuya Takenaka, JAL's managing director, said.
    Revenue per customer increased 13 per cent from the previous year in international flights and rose two per cent for domestic flights.
    The company also expects to save about 50 billion yen in the current year by cutting staff costs, Takenaka said.
    In the last few years, JAL has axed thousands of jobs.
    It has also reduced its number of routes overall, but it has increased flights on short- and medium-haul routes, particularly within China.
    "Although the number of our seats on international flights declined due to suspension of flights to Micronesia and other resort destinations, the number of our customers on international flights didn't decline that much, which means we became more cost-effective," Kanayama said.
    JAL said it had gained from service improvements on international routes, including the start of a "premium economy" class, and membership in the Oneworld alliance of international carriers.
    In recent years JAL has often lost out to its rival, All Nippon Airways, due in part to a number of safety scares.

    SOURCE: Agencies


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