ATW Daily News

JAL returns to profitability

Thursday November 9, 2006

Japan Airlines emerged from a year in the red with a ¥28.2 billion ($239.2 million) profit in its second fiscal quarter ended Sept. 30, a figure calculated by ATWOnline based on the carrier's half-year results released yesterday.

For the six-month period, JAL posted a ¥1.5 billion profit that represented a reversal from a ¥12 billion net loss in the semester ended Sept. 30, 2005. Six-month revenues rose 3.4% to ¥1.15 trillion.

The company credited a restructured route network and capacity cuts for a 2.9% gain in international passenger revenue, and new promotional campaigns and the introduction of more Class J business seats for a 1.6% lift in domestic passenger revenue. Costs climbed 4.1% to ¥1.41 trillion. The airline partially offset a 15.4% rise in its fuel bill to ¥209.2 billion with lowered consumption, surcharges and a "10% wage reduction." Six-month operating income declined 48.4% to ¥8.1 billion.

JAL flew 49.1 billion RPKs during the semester, a decrease of 4% from the year-ago period. Capacity fell 6.9% to 71.44 billion ASKs and load factor rose 2 points to 68.7%. Domestic traffic was up 0.2% to 16.75 billion RPKs against a 0.6% lift in ASKs to 26.15 billion, dropping load factor 0.3 point to 64%. International RPKs declined 6.1% to 32.35 billion, ASKs fell 10.8% to 45.29 billion and load factor grew 3.5 points to 71.4%.

The company maintained its full-year profit guidance of ¥3 billion but now forecasts revenue of ¥2.28 trillion, down from the ¥2.3 trillion projected in March, and costs of ¥2.69 trillion. As a result, its full-year operating profit is expected to come in at ¥13 billion rather than ¥17 billion.

by Brian Straus

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