Japan Airlines announces billion-dollar loss in Q2

TOKYO, Aug 7, 2009 (AFP) - Japan Airlines, Asia's biggest carrier, said Friday that it lost one billion dollars in the last quarter as the global economic downturn and swine flu fears triggered a severe slump in demand.

The carrier announced drastic cuts to its flight services as it braces for a second straight year in the red.

The net loss ballooned to 99.04 billion yen (1.0 billion dollars) in the April-June quarter, from 3.41 billion yen in the same period of 2008, a company statement said.

The carrier swung to an operating loss of 86.11 billion yen from a year-earlier profit of 3.91 billion yen.

Revenue slumped 31.7 percent to 334.90 billion yen, more than offsetting the positive effect of operating cost reductions of 65.4 billion yen.

"Conditions compared to a year before are starkly harsher," JAL said.

It maintained its forecast for a loss of 63 billion yen in the year to March 2010, after ending last year 63.2 billion yen in the red.

Passenger demand on JAL's international routes plunged 18.6 percent in the first quarter while domestic routes saw a fall of 12.4 percent.

There are some signs of a recovery in travel by leisure passengers thanks to receding swine flu fears and lower fares, it said.

"While business travel is projected to remain slow, JAL will persevere in the drastic adjustments to our network," the company said.

JAL said it would reduce flights on eight international routes within Asia from October 25 and suspend services between Nagoya in central Japan and Paris as well as between Nagoya and Seoul.

It will also cut the number of flights on six domestic routes and downsize to smaller planes on 14 international passenger routes and one domestic route.

In May JAL announced 1,200 job cuts -- or about 2.5 percent of its workforce -- in addition to the more than 10,000 posts it has shed since 2005.

Source: AFP

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