Japan Airlines’ profit falls nearly 20 percent

Japan Airlines’ profit falls nearly 20 percent

Japan Airlines Corp. (JAL) said on July 29 that its group net profit tumbled 19.4 percent in the first quarter of fiscal 2014, which started on April 1, from a year earlier to ¥14.7 billion ($144 million) despite increased revenues from both passenger and cargo operations.

JAL’s group revenue from overall operations rose 4.4 percent year-on-year in the April-June quarter to ¥307 billion. Its group operating profit plunged 15.6 percent to ¥18.6 billion.

JAL blamed the sharp declines in both operating and net profits largely on higher fuel costs.

JAL’s group revenue from both international and domestic cargo operations in the April-June quarter amounted to ¥19.8 billion, up 4.6 percent from the same three-month period last year.

Of the overall cargo revenue, ¥14.0 billion came from international operations, up 9.2 percent from a year earlier, and the remaining ¥5.8 billion came from domestic operations, down 5.0 percent year-on-year.

Looking back on international cargo operations in the first quarter of fiscal 2014, JAL said in an earnings release, “We actively captured automobile-related shipments prompted by the moderate recovery of exports, improved revenue management, and efficiently captured transit shipments such as perishables in an effort to maximize revenues.”

“During the reporting period, the volume of international cargo in terms of revenue-cargo-ton-kilometers (RCTK) increased by 16.5 percent year-on-year,” the air carrier said.

JAL left unchanged its group revenue and profit forecasts for fiscal 2014, which were announced on April 30.

The carrier’s projections for the current fiscal year are: ¥1.35 trillion in operating revenue, up 3.1 percent from fiscal 2013; ¥140 billion in operating profit, down 16.1 percent from fiscal 2013; ¥115 billion in net profit, down 30.8 percent from fiscal 2013.

JAL filed for bankruptcy protection in January 2010 under the Corporate Rehabilitation Law, which is similar to Chapter 11 in the U.S., marking one of the biggest corporate failures in Japanese history. Its shares were delisted from the Tokyo Stock Exchange (TSE) the following month. But the carrier flew out of bankruptcy protection in March 2011 and relisted on the TSE in September 2012.

Contact Hisane Masaki at yiu45535@nifty.com.