Tokyo: Japan Airlines Corp. (JAL) careened deep into the red last fiscal year and forecast another annual loss even as it slashes costs this year by $0.5 billion.
JAL said that it posted a group net loss of ¥63.2 billion ($649 million) for the 12 months through March, in contrast to last year’s ¥16.9 billion profit.
International and business travel slumped during the period, hit first by volatile fuel prices and then by a slowing global economy.
The number of passengers on the airline’s international routes fell 12.4%, while domestic routes carried 1.8% fewer people, JAL said.
As demand for air transport weakened due to the effects of the global financial crisis, the JAL’s core business of air transportation, and its other airline-related and travel-related businesses sustained sharp declines in earnings, the company said in a statement.
It booked an operating loss of ¥50.9 billion on 12.5% lower revenue of ¥1.95 trillion, despite a series of cost shaving measures including annual bonus cuts and early retirement programs.
The company did not break down earnings by quarter.
As of March, the company employed 47,526 people, down 3.4% from a year earlier.
The road ahead looks just as rocky. JAL forecasts a ¥63 billion net loss and sales of ¥1.75 trillion for this fiscal year through March 2010, saying it expects even shaper declines in international passenger revenue.
The carrier aims to further reduce costs this year by ¥53 billion and a total of ¥100 billion by the end of next year through improving efficiencies in sales, maintenance and fuel usage. The company said it hopes the restructuring efforts will ‘bear fruit’ by the time expansion is completed at Tokyo’s main airports, Narita International Airport and Haneda Airport next fiscal year.
“With preparations already in progress, and success in seizing new business opportunities at that time, the JAL Group is positive that it will steer back into the black,” the airline said.
JAL reports earnings based on Japanese accounting standards.