JAL predicting loss for full year on low demand

www.jal.com

Japan Air Lines (JAL), the largest carrier in the country, has predicted that it will suffer losses for the second consecutive year, as businesses continue to cut back on travel due to the global economic climate.

The airline is expecting to post a loss of as much as 63 billion yen for its fiscal year ended 31 March, following a 63.2 billion yen loss last year, the Tokyo-based carrier said in a statement released earlier this week. It is likely that sales will fall by 10 per cent on the previous year, to 1.75 trillion yen.

JAL has seen the sharpest decline in overseas passenger numbers since SARS and bird flu depressed the demand for air travel in 2003. The airline plans to eliminate approximately 1,200 jobs (2.5 per cent of the workforce) and make other cuts to operating costs amounting to 195 billion yen during this fiscal year to counterbalance lower revenues.

“Waning demand for international transportation, swine flu and a slowing global economy are hurting Japan Air,” commented Tokyo-based analyst Yasuhiro Matsumoto, who works with Shinsei Securities.

The airline’s loss prediction comes at a time that rival-All Nippon Airways forecasts a return to a profit aided by cost reductions amounting to 73 billion yen.

“All Nippon Air has already announced large cost cuts,” said Matsumoto. “Japan Air has to cut costs to show they are making an effort.”

Thanks to www.bloomberg.com for the above quotes, for more information on this article please visit their website.

www.jal.com