JAL says profits down by 61 percent

By Yuri Kageyama
Associated Press

TOKYO — Battered by a plunge in jet travel following the terrorist attacks in the United States, Japan Airlines said yesterday that its profit fell 61 percent in its first fiscal half and forecast a loss for the full year.

Japan's biggest airline said profits for the six months ended in September totaled 16.4 billion yen ($134 million), down from 42.4 billion yen for a year ago.

Sales totaled 871 billion yen ($7.1 billion), down 0.3 percent from 874 billion yen a year earlier.

For the fiscal year ending in March 2002, JAL expects to lose 40 billion yen ($327 million) on 1.6 trillion yen ($13 billion) in revenue. JAL earned 41 billion yen on revenue of 1.7 trillion yen in the year ending this past March.

Earlier this week, JAL announced it planned to merge with domestic rival Japan Air System to cut costs and compete better against global airlines by setting up a holding company next year and bringing together their businesses by 2004.

But hard times are certain to continue given the deterioration in international travel. Japanese have canceled numerous tours since the Sept. 11 terrorist attacks. And analysts say the promise of the merger remains too murky to count on solid results soon.

"It's really unclear what's going to happen," said Satoshi Abe, analyst with Daiwa Institute of Research in Tokyo. "To begin to tackle cost-cutting, they have to first show they can carry out the merger."

JAL controls 25 percent of the domestic market — only half that of the nation's No. 2 airline, All Nippon Airways. Together, JAL and JAS would control 48 percent of the domestic market.

The merger still needs approval from government regulators and shareholders.

In the first fiscal half, the number of international passengers for JAL fell by 2 percent to 7.5 million people. Travel plummeted on routes to and from the United States, including Hawai'i.