JAL group's 6-month profit doubles

By Desmond Hutton
Bloomberg News Service

TOKYO — Japan Airlines Co., which merged with Japan Air System Co. last month to form the world's third-largest carrier, said first-half profit doubled on gains from Boeing Co. discounts.

Isao Kaneko, president of Japan Airlines Co., unveiled an Airbus 300-600 with JAL Group's new logo at Tokyo's Haneda airport earlier this week. Associated Press

Rising demand for travel in the Asia-Pacific region helped cushion the impact of falling passenger numbers on routes to North America and Hawai'i.

Japan Airlines, the lead sponsor of the Honolulu Marathon, has been on a push to bring more visitors to Hawai'i for the Dec. 8 race. This week organizers said 16,000 Japanese have registered or about 57 percent of total registration, up from 38.9 percent last year.

Investors say they want more proof the company is able to compete with rivals in the Asia market before buying shares in Japan Airlines System Corp., the holding company.

"Many (Asian) carriers are paying a lot of attention to the potential for growth of the Asian markets," said Hideo Ueki, who helps manage $10 billion at UBS Global Asset Management. "I'm not sure that JAL has an outstanding edge against other carriers in this regard."

Passenger numbers fell 4.1 percent in the half to 7.22 million, the carrier said.

Japan Airlines booked a special gain in the half of $210 million on discounts for five jetliners Boeing delivered in the half.

Japan Airlines cut operating costs by 0.3 percent to $6.9 billion, and trimmed its spending on jet fuel to $739 million from $834 million a year earlier. Japan Airlines said it used 2 percent less fuel in the six months, with an average price during the period of $27.5 a barrel.

Sales for Japan Airlines fell to $7.15 billion in the first half from $7.26 billion.

Japan Airlines said total revenue from passenger and cargo operations fell 0.4 percent. Passenger revenue fell 3.1 percent.