Printer Friendly

Japan Airlines Corporation and Consolidated Subsidiaries Results for the Half-year Ended September 30, 2007.

Tokyo, Japan, Nov 6, 2007 - (JCN Newswire) - Today, the JAL Group (TSE: 9205) announced the consolidated half-year results for financial year 2007, the period from April 1, 2007 to September 30, 2007.

Supply on international and domestic passenger routes measured in available seat kilometers (ASK) decreased respectively by 5.6% and 2.3%, as a result of network restructuring by shifting to high profit routes, suspending low profit routes and aircraft downsizing, as outlined in the JAL Group Medium Term Revival Plan FY2007-2010. Consequently, demand measured in revenue passenger kilometers (RPK) fell on international passenger routes by 5.7% and on domestic routes by 3.5%. However, due to an increase in unit price, operating revenue for the core air transport business segment which includes cargo, increased by 2.3% when compared to the same period last year, up by 20.6 billion yen to a total of 931.6 billion yen.

Consolidated operating revenue decreased by 7 billion yen or 0.6% from the same period last year to 1,142.9 billion yen. One main factor was a 38 billion yen decrease in non-air transport business revenue resulting from the exclusion of JALUX from the consolidated statement, after the trading company changed from a consolidated subsidiary to an equity method affiliate.

As a result of steady implementation of business structure and cost reforms outlined in the Medium Term Revival Plan, such as a review of all routes, aircraft downsizing, and personnel cost reduction, operating expenses decreased by 4.9% or 55.5 billion yen from the same period last year, to a total of 1, 086.2 billion yen.

Operating profit increased by 48.4 billion yen from the same period last year to 56.6 billion yen. Ordinary profit increased by 53.3 billion yen to 58.7 billion yen.

When compared to the same period last year, extraordinary losses increased by 34.8 billion yen to 40.5 billion yen, mainly due to implementation of the special early retirement plan, the posting of impairment losses resulting from speeding up of the retirement of aircraft and subsequent decision to sell aircraft, and provision of a reserve for anti-competitive practice

JAL Group Consolidated Results First Half FY2007 (April 1 - September 30, 2007)
------------------------------------------------------------------------
 H1 ended Sept. 30,
 2007 2006 Change % Change
------------------------------------------------------------------------

Total operating revenue 1,142.9 1,150.0 - 7.0 99.4%

 International passenger 384.1 370.7 + 13.4 103.6%

 Domestic passenger 352.7 345.8 + 6.9 102.0%

 International cargo 91.4 92.4 - 0.9 99.0%

 Other 341.0 325.9 15.0 104.6

Operating costs 1,086.2 1,141.8 -55.5 95.1%

Operating income (loss) 56.6 8.1 48.4 694.3%

Ordinary income (loss) 58.7 5.3 53.3 -

Net income (loss) 7.3 1.5 5.7 483.9%

------------------------------------------------------------------------
* Figures rounded down to the nearest 100 million yen


3. First Half Factors

a) Operating income

International Passenger

Demand: Tourism demand was weak on Europe routes and Hawaii routes due to a weakening of the yen, and also on Taiwan routes where competition intensified. Demand out of Korea was particularly strong, and business demand was strong on US routes, Southeast Asian routes and China routes. Oceania routes, where supply has been reduced considerably from the previous year, also enjoyed strong demand. As a result, demand measured in revenue passenger kilometers (RPK) was 94.3% from the same period last year. Revenue seat load factor was almost the same as last year at 71.4%. The number of international passengers carried by JAL Group airlines decreased just 0.8% to 6,703,388.

Supply: In addition to fleet downsizing, JAL has actively reduced flight frequency and suspended flights on low profit routes. On the other hand, the airline has increased scheduled flights on high profit routes to such high growth markets as China, India and Vietnam, whilst increasing international charter flights to meet demand primarily from the 'baby boomer' generation. Supply measured in available seat kilometers decreased by 5.6% from the same period last year.

Unit price: In addition to an increase in business passenger demand and the shifting of resources to high profit routes, air fares were revised and the fuel surcharge was increased resulting in an increase in unit price of 9.9% compared to the same period last year.

Revenue: Given the above, revenue increased by 3.6% from the same period last year up 13.4 billion yen to 384.1 billion yen.

Domestic Passenger

Demand: JAL implemented a number of measures that increased customer convenience and value through, for example, the introduction of discount fares and the launch of seasonal promotional campaigns. However, group demand in particular was sluggish due to a review of last year's air fares. Overall demand was also negatively affected by flight cancellations caused by typhoons which hit Japan in July. Demand measured in revenue passenger kilometers was 3.5% down on the same period last year. The number of domestic passengers carried by JAL Group airlines decreased by 3.7% to 21,371,061.

Supply: After reviewing routes, flight frequency was increased on routes with strong demand such as Osaka (Kansai) - Sapporo and Osaka (Kansai) - Okinawa (Naha). Supply measured in available seat kilometer was 2.3% down on the same period last year.

Unit price: Due to changes in passenger composition and an increase in air fares, unit price increased by 5.7% when compared to the same period last year.

Revenue: Given the above, revenue increased by 2.0% from the same period last year by 6.9 billion yen to 352.7 billion yen.

International Cargo

Demand: Demand from Japan to North America decreased from the same period last year due to a reduction in belly space resulting from a decrease in the number of passenger flights operated. However, from Japan to China, where supply has been increased, demand has increased by over 20% when compared to the same period last year. Demand to Europe and Southeast Asia also increased. Demand from China to Japan increased from last year, but demand from Europe was sluggish from the summer onwards due to a strong Euro. Demand from Southeast Asia to Japan also decreased. Demand to the US via Japan was stagnant as supply beyond Japan was decreased. Revenue cargo ton kilometers was 0.9% down when compared to the same period last year.

Unit price: Declined 0.2% from the same period last year.

Revenue: Revenue decreased by 1.0% from the same period last year by 0.9 billion yen to 91.4 billion yen.

b) Operating Expenses & Foreign Exchange

Fuel costs

The price of Singapore kerosene from April to September 2007 averaged US$82.2 per barrel, a slight decrease on the US$84.9 per barrel average for the same period last year. Nevertheless, fuel prices remained high. Despite the weak yen, a reduction in the effect of hedging, and other factors that increased fuel costs, due to a reduction of fuel consumption through steady implementation of the Revival Plan, such as aircraft downsizing, fuel costs decreased by 3.1 billion yen to 206 billion yen.

Personnel costs

As a result of steadily implementing the various measures of the Medium Term Revival Plan, in the air transport segment personnel costs decreased by 7.1 billion yen from the same period last year. The group will continue to increase productivity by, for example, expanded introduction of Toyota Production System methods, and reducing retirement benefit expenses.

Foreign Exchange

The average yen-to-dollar exchange rate for the half year was JPY 119.7 to US$1.00 compared to the average rate of JPY 115.5 to US$1.00 for the same period last year. The impact of foreign exchange on operating profit was minus 3.7 billion yen, but as a result of hedging and other measures, the company posted a foreign exchange gain of 10.3 billion yen in non-operating income.

Miscellaneous

Steady reduction of sales commission rates, review of external contracts and so on.

4. Outlook for FY2007 - Revised Forecast

Consolidated Financial Forecast for FY2007 the Year Ending March 31, 2008: The revised forecasts of consolidated results for the complete fiscal year replace those announced on May 9, 2007 and are as follows:

Consolidated Financial Forecast for the Year Ending March 31, 2008
------------------------------------------------------------------------
 FY2007 FY2007 Diff FY2006
 Revised Previous in results
 Forecast Forecast Forecast 3/31/2006
------------------------------------------------------------------------

1) Operating revenues: 2,238.0 2197.0 41.0 2,301.9

 International passenger 744.5 724.0 20.5 724.8

 Domestic passenger 689.0 691.0 - 2.0 675.6

 International cargo 188.5 192.5 - 4.0 190.5

 Other 616.0 589.5 26.5 710.8

2) Operating costs 2,190.0 2162.0 28.0 2,278.9

3) Operating income 48.0 35.0 13.0 22.9

4) Ordinary income 44.0 21.0 23.0 20.5

5) Net income 7.0 7.0 0.0 - 16.2

------------------------------------------------------------------------
*Figures rounded down to the nearest 100 million yen


Additional financial improvement measures

By implementing the following additional measures, as outlined in our forecast, we will achieve ordinary income and net income as initially planned.

a) Reduction of pension costs - To improve the balance sheet, and strengthen our financial structure, during this fiscal year we plan to reduce pension costs.

b) Deeper cost reform - We will continue with Group-wide cost restructuring by reviewing property rental agreements, service contract agreements, and by implementing measures to further reduce general company overheads.

JAL Group Consolidated Traffic Statistics First Half 2007 vs. 2006
------------------------------------------------------------------------
 H1 ended Sept. 30, %Change/
 2007 2006 points
------------------------------------------------------------------------

International

 Passenger number 6,703,388 6,760,569 99.2%
 Revenue passenger Kilometers (000) 30,500,422 32,354,267 94.3%
 Avaialable seat Kilometers (000) 42,743,468 45,286,215 94.4%
 Revenue seat Kilometers (000) 71.4% 71.4% - 0.0
 Revenue cargo ton Kilometers (000) 2,194,721 2,213,925 99.1%
 Mail ton Kilometers (000) 85,670 76,318 112.3%
 Revenue ton Kilomemters (000) 5,106,369 5,289,073 96.5%
 Available ton Kilometers 7,626,384 7,958,566 95.8%
 Revenue weight load factor 67.0% 66.5% + 0.5

------------------------------------------------------------------------


Domestic

 Passenger number 21,371,961 22,190,898 96.3%
 Revenue passenger Kilometers (000) 16,159,645 16,749,367 96.5%
 Avaialable seat Kilometers (000) 25,552,379 26,154,645 97.7%
 Revenue seat Kilometers (000) 63.2% 64.0% - 0.8
 Revenue cargo ton Kilometers (000) 197,802 194,575 101.7%
 Mail ton Kilometers (000) 42,076 41,023 102.6%
 Revenue ton Kilomemters (000) 1,450,922 1,511,548 96.0%
 Available ton Kilometers 2,996,808 3,059,465 98.0%
 Revenue weight load factor 48.4% 49.4% - 1.0

------------------------------------------------------------------------

Total

 Passenger number 28,074,449 28,951,467 97.0%
 Revenue passenger Kilometers (000) 46,660,087 49,103,634 95.0%
 Avaialable seat Kilometers (000) 68,295,847 71,440,860 95.6%
 Revenue seat Kilometers (000) 68.3% 68.7% - 0.4
 Revenue cargo ton Kilometers (000) 2,392,523 2,408,500 99.3%
 Mail ton Kilometers (000) 127,746 117,341 108.9%
 Revenue ton Kilomemters (000) 6,577,291 6,800,621 96.4%
 Available ton Kilometers 10,623,192 11,018,031 96.4%
 Revenue weight load factor 61.7% 61.7% - 0.0

------------------------------------------------------------------------


International results include data from JAL International, Japan Asia Airways and JALways

- Domestic results include data from JAL International, Japan Transocean Air, JAL Express, Japan Air Commuter, Hokkaido Air System, J-Air & Ryukyu Air Commuter.

To download JAL earnings and traffic results, please visit the Company IR website at http://www.jal.com/en/ir/index2.html .

About JAL

Asia's largest airline group, the JAL Group (TSE: 9205) serves 213 airports in 33 countries and territories, including 61 airports in Japan. The Group network extends over 235 international passenger, 39 international cargo, and 160 domestic routes. Altogether, the 9 airlines of the JAL Group make a total of over 1,200 flights a day, and in fiscal year 2006 carried nearly 58 million passengers. JAL Group operates a fleet of 276 aircraft including 64 Boeing 747s and 39 state-of-the-art B777s and is gradually introducing more fuel efficient medium and small-size aircraft such as the new high-tech Boeing 787 and B737 New Generation. For more information, please visit www.jal.com .

Source: JAL

Contact:
JAL Press Office
Stephen Pearlman
stephen.pearlman@jal.com
Tel: +81-3-5460-3109
www.jal.com/en/corporate/


Japan Corporate News Network. All rights reserved.
COPYRIGHT 2007 Japan Corporate News Network K.K.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2007, Gale Group. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:JCN Newswires
Geographic Code:9JAPA
Date:Nov 6, 2007
Words:2109
Previous Article:ORIX Announces Consolidated Financial Results for the Interim Period of the Fiscal Year Ending March 31, 2008.
Next Article:Toyota Marks 20th Year of Global Convention on Quality.


Related Articles
Notice 2007-13: loosening the rules surrounding substantial assistance.
Current developments in S corporations (Part II).
ORIX Announces Consolidated Financial Results for the Interim Period of the Fiscal Year Ending March 31, 2008.
Toyota Marks 20th Year of Global Convention on Quality.
MHI to Establish Steam Turbine and Generator Manufacturing and Selling JV in India with Larsen & Toubro; Follow-up to Supercritical Boiler JV.
Oriental Land Reports Results for the Interim Period ended September 30, 2007.

Terms of use | Privacy policy | Copyright © 2022 Farlex, Inc. | Feedback | For webmasters |