Posted on: Saturday, October 13, 2001
The September 11th attack
Japan Airlines projects loss of $330 million
Bloomberg News
TOKYO — Japan Airlines Co., Asia's biggest carrier, forecasts a loss of $330 million this business year, blaming a drop in travel and cargo demand after last month's terrorist attacks.
Japan Airlines last week cut its trans-Pacific flights — including 17 to Hawai'i — by 24 percent to adjust for slumping sales of tickets to the United States. It is hoping increased demand for travel in Japan or to destinations within Asia will help it stem losses.
Other airlines in the region have reported cuts to services, with Cathay Pacific Airways Ltd., Asia's No. 5 carrier, saying it would trim its flights by about 4 percent to reduce excess capacity.
The International Air Transport Association estimates the world's airlines may lose as much as $12 billion this year, leading to route cuts and the loss of as many as 200,000 jobs.
Current cuts to flights are in place until the end of November, and "we will consider further adjustments if lower demand calls for it," said Japan Airlines spokesman Yasuhiro Takebayashi.
"The company has based its forecast on an average 20 percent fall in demand for international flights in the six months to March 31," said Osuke Itazaki, an analyst at Credit Suisse First Boston in Tokyo.
The airline will cut staff by an additional 600 jobs this year by not replacing departing workers and transferring people to related companies, Takebayashi said. The reduction will bring the full-year job cuts to 1,300 staff.
All Nippon Airways is better placed than Japan Airlines with its smaller dependence on international traffic.
"It seems reasonable to expect that All Nippon Airways will also be affected although not quite to the same degree as they rely more on domestic flights," said Kouki Ozawa, who rates the stock "neutral minus" for Kokusai Securities Co.
All Nippon, which operates half of Japan's domestic flights, relies less on international air travel than its bigger rival.
