Japan Airlines Posted Record Revenue and a Much Smaller Profit

Japan Airlines announced its April-to-September results on November 2, and the headline numbers pull in opposite directions. Revenue rose 11.7 percent to 1,098.9 billion yen, the highest figure for that half-year since JAL returned to the stock market. Yet EBIT fell 36 percent to 70.1 billion yen, and net profit dropped 42.2 percent to 39.0 billion yen.

The company blamed fuel prices and the exchange rate, which together weighed on profit by 70.4 billion yen. Fuel expense alone climbed 47.4 percent, and the EBIT margin slid from 11.2 percent to 6.4 percent. Stronger passenger and cargo revenue produced a net gain of 30.8 billion yen once those market effects were set aside, which softened the blow.

International routes show the shape of the period. Passenger revenue on those flights grew 16 percent even though the number of international passengers dipped 3.1 percent, which points to higher yields per traveler. International cargo revenue jumped 46.8 percent. In other words, JAL is earning more from each seat and each kilogram, but still not enough to cover higher costs.

JAL left its full-year forecast unchanged, still expecting net profit of 110 billion yen, which would be 20.1 percent lower than the previous year. The report adds to a run of fuel-driven earnings warnings from airlines in the Americas and Asia this week, a reminder that busy cabins do not guarantee healthy profits.

Sources: Aviation Wire, Travel PR News