Japan Airlines saw its operating profit fall 14.6% to Y167 billion ($1.6 million) in its 2013 fiscal year ended 31 March 2014.
The carrier’s net profit for the year fell 3.2% to Y166 billion, while revenues rose 5.7% to Y1.3 trillion.
The operating result is marginally above the Y158 billion operating profit it forecast in late March.
The carrier cited countervailing influences in its results. Rising incomes in Japan, increased exports, and last-minute sales before a consumption tax hike boosted ticket sales. The weak global economy, however, weighed on the company’s performance.
International RPKs rose 4%, while capacity, as measured by ASKs, rose 3.3%, resulting in a marginal improvement in load factor to 76.5%.
The carrier says that it has worked to maximise international revenues through the expansion of Boeing 787 services from June 2013 following the grounding of the type early last year.
“We also fine-tuned supply to balance with demand,” says JAL. “For example, to make flexible response to changes in passenger traffic, flight frequency was temporarily reduced on the Narita-Beijing route, which faced a decline in demand triggered by territorial issues, to improve profitability.”
Other network changes include the replacement of 767s with 777-300ERs on the Narita-Honolulu, Chubu/Kansai-Honolulu, and Haneda-Bangkok routes.
Domestically, RPKs rose 3.2%, while ASKs rose 1.8%. Domestic load factor rose 0.9 percentage points to 64%.
“In route operations, we endeavoured to expand and improve our domestic network following the increase in flight slots at Haneda and Itami airports,” says JAL. “We increased Haneda flights, and launched services between Haneda and Chubu to improve connectivity to international flights.”
As for international air cargo, JAL says demand remained weak in Japan, pushing the carrier to focus on cargo traffic between other countries that transits in Japan.
The carrier ended the financial year with cash and cash equivalents of Y155 billion, up from the Y99.4 billion position recorded at the end of the 2012 fiscal year.