787 woes temper Japan Airways’ profit
Feb. 4, 2013, Tokyo, Japan - Japan Airlines, which made a comeback from bankruptcy last fall, says its net profit fell 3.7 per cent in the first three quarters of 2012, but the carrier raised its full-year profit estimate despite the impact from its grounded Boeing 787s.
February 4, 2013 By Carey Fredericks
The 140.6 billion yen ($1.52 billion) profit the company reported Monday for April-December compared with 146 billion yen in the same period a year earlier.
Revenues rose 3.6 per cent to 942 billion yen ($10.2 billion), but operating costs rose by nearly 5 per cent as fuel prices climbed.
JAL was delisted after it filed for one of the country's biggest-ever bankruptcies in 2010, receiving a 350 billion yen
government bailout. It restructured and cut costs to restore profitability, netting 663 billion yen ($8.5 billion) in an IPO last fall, nearly double the sum spent on its bailout.
The carrier raised its profit estimate for the fiscal year ending March 31 to 163 billion yen ($1.8 billion), up from the 140 billion yen forecast issued in November. It anticipates 1.23 trillion yen ($13.3 billion) in sales for the full year.
JAL noted strong demand in key markets in Europe, the U.S. and Southeast Asia, but acknowledged persisting risks from tensions with both China and South Korea over territorial disputes.
Both JAL and its main rival All Nippon Airways, or ANA, have seen their fleets of Boeing 787s grounded following problems with overheating of their lithium ion batteries.
However, with only seven of the next-generation aircraft, used only on international routes, the impact has been relatively limited for JAL. ANA has 17 of the aircraft, used on both domestic and international flights.
Both airlines have sought to minimize disruptions from the grounding of the 787s as investigators in Japan and the U.S. look into what caused a battery on a JAL 787 to catch fire while it was parked at Boston's Logan International Airport and one on an ANA flight in Japan to overheat, leading to an emergency landing.
But despite switching aircraft for many flights, between them the carriers have had to cancel hundreds of flights, affecting tens of thousands of passengers.
JAL announced Monday it is postponing the launch of a nonstop Tokyo-Helsinki service that had been due to begin Feb. 25, due to the 787 problems.