IATA: JAL targets A grade credit rating

Singapore
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Japan Airlines will focus on improving its cash position and achieving an ‘A’ grade credit rating as it continues to rebuild itself following its 2010 bankruptcy.

“We have achieved a certain level of profitability, but if you look at our balance sheet, we still believe that there are many issues we need to work on to improve our financial situation,” says chairman Masaru Onishi.

JAL recorded a 14.6% fall in operating profit during for the year ended 31 March 2014 to Y167 billion ($1.64 billion). It has forecast that this will fall again to Y140 billion in fiscal 2015 due to challenging business conditions.

Onishi adds that once it has achieved an investment grade rating, it will be able to look at increasing its dividends to shareholders.

“Our immediate goal is to increase and improve our cash situation. Within this fiscal year, we hope to attain a single A rank in terms of our financial valuation and that is our target. Once we have achieved this target, that is when we will look more specifically into what our dividends need to be to ‘pay back’ to our investors.”

That cash situation appears to be improving, with the carrier ending fiscal 2013 with a cash and cash equivalents balance of Y155 billion, compared to Y99.4 billion at the end of fiscal 2013.