Long-troubled Japan Airlines (JAL) has issued a more positive outlook for its future, upgrading profitability forecasts and raising more than $1 billion to get its financial house in order.
JAL has been seeking to improve its financial position for some time and has said it must do so ahead of the opening of a new runway in 2010 at Tokyo's congested Haneda airport. Asia's largest airline group is now presenting a picture of a restructuring that has been paying off, and in its "Medium Term Revival Plan" for fiscal 2008-2010 has increased profitability targets.
For the 2008 fiscal year to March 2009, it expects operating income of ¥30 billion ($293 million), rising to ¥75 billion in fiscal 2009 and to ¥96 billion in fiscal 2010. It previously forecast an operating profit of ¥88 billion in fiscal 2010. For the fiscal year to March 2008, JAL also upgraded its forecast, to an operating profit of ¥48 billion, up from an earlier target of ¥35 billion.
Chief executive Haruka Nishimatsu says that "we are starting over" in terms of having a more positive outlook of the future. He says there have been "early successes in restructuring" the business and results are coming in one year ahead of schedule in many areas.
To help cut debt and pay for new aircraft, JAL plans to raise more than ¥150 billion by issuing preferred shares to 14 companies. It also says it will continue with a fleet renewal and downsizing, further restructure its route network, shift more operations to lower-cost subsidiaries and increase the productivity of its workforce, which is also being reduced in size.