- POSTED: 29 Jul 2014 14:50
- UPDATED: 29 Jul 2014 17:39
Japan Airlines (JAL) said on Tuesday its net profit for the April-June quarter fell 19.4 per cent to US$145 million (S$180 million), as a weak yen and soaring fuel costs dug into its results.
TOKYO: Japan Airlines (JAL) said on Tuesday its net profit for the April-June quarter fell 19.4 per cent to US$145 million (S$180 million), as a weak yen and soaring fuel costs dug into its results.
The carrier said net profit fell to 14.8 billion yen (US$145 million), while operating profit also dropped 15.6 per cent to 18.6 billion yen. Sales ticked up 4.4 per cent to 307.1 billion yen.
A brief company statement did not outline reasons for the weaker profit figures. But the airline has previously warned that a sharp drop in the yen has driven up the cost of fuel, often a carrier's single-biggest expense. The weaker currency makes commodities priced in US dollars more expensive.
The yen has lost about a quarter of its value against the dollar since late 2012 as Japanese premier Shinzo Abe and his hand-picked team at the Bank of Japan launched a policy blitz, dubbed "Abenomics", aimed at kickstarting the economy and reversing years of deflation.
During the three months to June, JAL said it saw a rise in demand for both overseas and domestic flights. The company logged a 7.6 per cent increase in revenues from international passenger services, while from domestic flight revenue edged up 0.5 per cent.
JAL and its chief rival All Nippon Airways have expanded their international operations as Tokyo's Haneda airport significantly boosted its capacity to accommodate international flights.
Following Haneda's expansion, JAL launched additional flights linking Tokyo with London, Paris, Singapore, Bangkok and Ho Chi Minh City. The firm also increased domestic flights between Haneda and regional cities across Japan.
But JAL warned that its operating costs rose 9.5 per cent in the first quarter, compared with the same period last year.
JAL maintained its annual forecast for the fiscal year through March, with the firm expecting a net profit of 115 billion yen, down 30.8 per cent from a year earlier, and an operating profit of 140 billion yen, down 16.1 per cent. Annual sales were expected to come in at 1.35 trillion yen, up 3.1 per cent.
JAL, along with ANA, is increasing its use of the lighter weight Boeing Dreamliner to contain costs, but the fuel-efficient aircraft has been hit by a series of technical problems that forced a months-long grounding last year.
JAL re-listed its shares in Tokyo in 2012 to mark a spectacular turnaround three years after it went bankrupt with massive debts and saw its stock delisted from the Tokyo Stock Exchange.