JAPAN. Japan Airlines System (JAL), in its new structure, managed to report a modest full year profit today but warned of sharp losses ahead as people cancel flights due to the fallout from SARS and the Iraq war.
The holding company, formed from a merger last October of Japan Airlines and the smaller Japan Air System, said it would temporarily cut another 250 staff to help weather the storm.
Net profit in the year to March came to ¥11.6 billion (US$99 million), compared with a combined net loss of ¥35.7 billion (US$306 million) for the two merger partners previously.
Recurring profit was Â¥15.8 billion (US$135 million), reversing last year’s joint loss of Â¥33.6 billion (US$288 million), while revenue slipped slightly to Â¥2.08 trillion (US$17.8 billion).
“International passenger volume numbers increased by -4.1% to 14.6 million,” JAL said.
“Other negative factors were the 2002 World Cup in Korea and Japan, which discouraged Japanese overseas travel, and in the second half, the Bali bombing, the Guam typhoon and the build up to the Iraq war,” the company added.
Despite its improved earnings, JAL warned of more tough times, revising down expected international passenger traffic by -14%.
“We are facing a very severe business situation because of the Iraq war and SARS,” executive managing director Gentaro Maruyama told a news conference. JAL said it expects the impact of SARS to continue until March 2004.
