Once bankrupt JAL posts almost $2.0 billion profit

Japan Airlines, which went bankrupt two years ago in one of the country's biggest-ever corporate failures, reported a nine-month profit of almost $2.0 billion Thursday, in part thanks to the strong yen. The carrier was bailed out by the government after filing for bankruptcy with debts of about 2.32 trillion yen, and emerged from a court-supervised restructuring in March last year.
JAL said net profit reached 146 billion yen ($1.92 billion) in the nine months to December after aggressive cost-cutting. It posted an operating profit of 162 billion yen on sales totalling 909 billion yen in the period. Because of the massive restructuring JAL carried out under government supervision - led by Chairman Kazuo Inamori - the airline does not have comparable data from the previous year.
The company upgraded its forecast for the full year to March to a net profit of $2.1 billion, partly due to a stronger yen that encourages more Japanese to travel overseas. "Revenue for the third quarter... has increased from the original projection in part due to the high yen rate, which encouraged international leisure travel from Japan, as well as from stable corporate travel demand," JAL said. In contrast, many Japanese exporters have blamed the strong yen for hurting their balance sheets, as it makes their products more expensive abroad and erodes the value of repatriated profits from overseas operations. "JAL continued to review aircraft scheduling on each route and enforced measures to increase revenues while examining every cost category to achieve greater cost reduction, such as in fuel costs," the airline said. The number of passengers travelling to Thailand decreased in October due to severe flooding in that country, but JAL increased flights on its Delhi route to meet robust corporate travel demand, the airline said.
For the year to March 2012, JAL now expects a net profit of 160 billion yen and operating profit of 180 billion yen on sales of 1.19 trillion yen. In November, JAL had expected a lower net profit of 120 billion yen and an operating profit of 140 billion yen on sales of 1.15 trillion yen. During its restructuring the company cut unprofitable routes, reviewed its fleet, and reduced fuel expenses. It also started using a new revenue management system to improve productivity.