Tuesday, October 17, 2017, 6:56 pm

JAL’s 9-month profit drops 25% to $955mn


TOKYO: Japan airlines on Tuesday said net profit dropped in the nine months to December due to a slump in income from international flights, but the carrier left its full-year forecast unchanged.

JAL posted a net profit of 108.3 billion yen ($955 million), down 24.6 percent from the same period the year before. Revenue fell 4.7 percent to 975.5 billion yen.

The airline said in a statement that income from international passenger flights dropped nearly 10 percent during the period, while that for domestic flights edged down less than one percent.

JAL, which slashed its full-year earnings outlook three months ago, left its latest target unchanged, forecasting a net profit of 161 billion yen and sales of 1.28 trillion yen for the year to March.

While the airline did not elaborate on negative factors behind the slump, analysts and local media said increased personnel costs, particularly rising salaries, were squeezing the bottom line.

“Increasing personnel costs are pressuring JAL’s fiscal year profit,” said Hiroshi Hasegawa, an analyst at SMBC Nikko Securities in Tokyo.

“JAL has been winding up the recovery stage from its crisis,” he said. “JAL is now moving to the next stage where it may need to consider LCC (low cost carrier) businesses and expanding international routes.”

JAL received a government bailout after a high-profile bankruptcy restructuring in 2010. The carrier relisted on the Tokyo bourse two years later.

In sharp contrast, rival carrier All Nippon Airways (ANA) last Friday said its net profit jumped 18 percent in the nine months to December thanks to brisk performance on international flights.

However, ANA said it sees the policies of new US President Donald Trump as a risk factor, with many economists fearing his protectionist slant could hurt the global economy or even spark a trade war.

JAL and ANA said Tuesday they decided to bar passengers from seven Muslim-majority countries from taking their flights to the United States following Trump’s entry ban.

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