Japan Airlines, Asia's largest carrier, said Friday it swung back into the black in the three months to December after a restructuring drive as demand grew for travel within the region. In what the company said was confirmation of the recovery, JAL chairman Toshiyuki Shinmachi said he would step down next month at age 65 to make way for fresh leadership.
JAL said it benefited from rising traffic between Japan and other Asian countries and by slashing personnel costs and introducing business-class service on domestic flights, a statement said.
The company said it enjoyed net profit of 13.1 billion yen (122.4 million dollars) in the financial third quarter, sharply up from a loss of 24 billion yen posted in the same period of 2006. JAL posted an operating profit of 25.9 billion yen in the three months to December 2007, compared with a loss of 14 billion yen the previous year.
Revenue notched down 4.4 percent to 558.2 billion yen in the latest period, although the company said the fall was largely due to a subsidiary no longer being on the books.
Asia remained a lynchpin for JAL's growth. "Demand on South Asia routes as well as on South Korea and China expanded. As a result, international flight services did better than we had earlier expected," JAL managing director Isamu Jinguuji said at a press conference.
But the weak yen appeared to discourage some Japanese tourists from travelling to Hawaii and particularly Europe, where the euro has been soaring, the statement said. Overall international passenger revenue gained 5.7 percent. Domestic passenger revenue slipped by one percent, although the drop was tempered by the introduction of higher-yielding business-class service, JAL said. JAL also benefited from recent efforts to use more fuel-efficient smaller airplanes and an overhaul of flights.
JAL maintained its forecast to return to the black for the full year to March after two unprofitable years. The company said it has benefited by making "large reductions" in traditional summer and winter bonuses to staff and offering early retirement to cabin attendants and other employees.
Chairman Shinmachi will step down on March 31 "as part of the company's effort to rejuvenate the management," a company spokeswoman said, adding that the chairman's post will be vacant for now. Shinmachi became JAL president in June 2004 but stepped down in June 2006 to become chairman without the right to represent the company in the wake of the company's financial problems and a series of safety scares.
The carrier has had a troubled record since its 1987 privatisation and a complex merger with domestic carrier Japan Air Systems which was finally completed in 2004 after years of negotiations and integration difficulties.
It is being squeezed by rising fuel costs and the safety scares that sent customers into the arms of rival All Nippon Airways, which has enjoyed strong profit growth even as JAL wallowed in losses. After the announcement of the third quarter results, JAL shares rallied, closing at 264 yen, up seven yen or 2.72 percent, despite a fall on the broader market.
Comments
Comments are closed.