JAL third-quarter loss rises on fuel costs, safety issues
Tuesday February 7, 2006
Soaring fuel costs, "adverse publicity" over recent safety-related operational events and declining demand on services to China resulting from lingering feelings about anti-Japanese protests in April all factored into another rough quarter for Japan Airlines, which reported an ¥11 billion ($92.5 million) loss for the three-month period ended Dec. 31, up from a loss of ¥3.7 billion in the previous year's third fiscal quarter.Revenues rose 21% to ¥556.9 billion but expenses climbed 33.9% to ¥573.5 billion, leading to a ¥16.6 billion operating loss compared to a ¥3.8 billion loss in the 2004 quarter..
In conjunction with the results, JAL released its "Route, Frequency and Fleet Plan" for the coming fiscal year, which it said is designed to build a more "profit focused" network intended to return its international services to the black.
Plans to produce an annual income improvement of ¥8 billion include increased frequencies from Tokyo to markets including Chicago and Taipei, other seasonal increases, decreases to London and Bangkok and suspension of the Tokyo-Las Vegas and Osaka-Los Angeles services. Its JALways subsidiary will take over operations on several routes throughout Southeast Asia including flights from Tokyo to Jakarta, Vietnam and Sydney. A host of alterations to its domestic route structure were announced as well.
During FY06 JAL will retire six 747s, three A300s and four YS-11s and add two 777-300ERs and one 767-300ER for international operations, three 737-800s for domestic service and three Dash 8s. Its fleet at the conclusion of FY06 will number 275 aircraft. Cargo flights will increase with introduction of two 747-400CFs.
For the nine-month period ended Dec. 31, JAL slipped into the red with a net loss of ¥23 billion compared to a ¥79.2 billion profit in the year-ago period. Revenues rose 3.6% to ¥1.67 trillion and expenses climbed 9.3% to ¥1.67 trillion, resulting in an operating loss of ¥800 million compared to a profit of ¥83 billion last year. Fuel costs increased 30% to ¥284 billion. Consolidated traffic declined 1.2% to 75.93 billion RPKs, capacity dropped 0.8% to 113.42 billion ASKs and load factor fell 0.3 point to 66.9%.
by Brian Straus
http://www.atwonline.com/news/story.html?storyID=3961