TOKYO (Reuters) – Japan Airlines (JAL) on Tuesday posted a first-quarter operating loss of 82.65 billion yen ($756.87 million), an improvement from a year earlier, as pandemic-related cost cuts took effect and travel demand rose from a very low base.
Japan’s second-biggest airline’s result for the three months ended June 30 was worse than an estimate of a 73.5 billion yen loss from five analysts polled by Refinitiv but narrower than the 131 billion yen operating loss in the same quarter last year.
JAL did not provide a full-year earnings forecast, saying uncertainty made prediction too difficult. The carrier could post an annual operating loss of 108.6 billion, according to the average of 10 analysts surveyed by Refinitiv.
The Japanese airline, like other carriers, is burning through cash reserves to keep jets and workers it will need when travel demand rebounds.
Travel restrictions around the world are still in place amid fresh waves of coronavirus infections, with Japan seeing record levels of new cases.
Passenger numbers for domestic flights in the April-June quarter more than doubled from the previous year, but were less than a third of pre-pandemic levels. International traffic quadrupled from last year, but passenger numbers totaled only 6.2% of the same quarter two years ago.
One bright spot for the airline has been demand for cargo, though JAL does not operate dedicated freighter planes like rival ANA Holdings Inc.
To adapt to what it expects will be a long-term dip in business travel, JAL is expanding budget units that will focus on tourism demand in Asia.
As part of that it is increasing the number of fuel-efficient Boeing Co 787 planes at its Zipair subsidiary and is establishing Spring Airlines Japan, a joint venture with China’s Spring Airlines.
It is also retiring 26 of its older 777 widebodies and adding new Airbus SE A350 jets.
JAL in November shored up its finances with a 183 billion yen stock offer, equivalent to 30% of its existing shares.
($1 = 109.2000 yen)
(Reporting by Tim Kelly and Maki Shiraki in Tokyo; Additional reporting by Jamie Freed in Sydney; Editing by Kim Coghill and Gerry Doyle)
