Japan Airlines (JAL) posted a fiscal second quarter net loss of ¥32.1 billion ($356 million), citing an extremely severe operating environment.

For the three months ending 30 September the Oneworld carrier lost ¥32.1 billion compared with a profit of ¥40.1 billion in the corresponding period last year.

Total operating revenue fell 26% to ¥429 billion from ¥583.2 billion a year earlier.

The carrier says it is doing its utmost to improve profitability through route suspensions, frequency reductions, aircraft downsizing, and "cost-cutting in every possible area."

International passenger revenue fell 40% to ¥128.1 billion in the first quarter, and international cargo revenue dived 54% to ¥23.1 billion, says the carrier. Domestic passenger revenue fell 10% to ¥179.5 billion.

"The operating environment of the JAL group during the [first half] reporting period remained extremely severe," says JAL. "Within this reporting period, the unprecedented economic meltdown and global outbreak of H1N1 caused an economic sluggishness both internationally and domestically that adversely affected travel and air cargo demand."

The carrier adds that "no holds barred cost cutting" saw costs reduced by ¥183.6 billion to ¥859.7 billion in the first fiscal half to 30 September, compared with the corresponding period in 2008.

Total passengers in the first half fell 10% to 24.6 million from 27.4 million the previous year.

First half RPKs fell 11% while ASKs fell just 3%, says JAL. Passenger load factors declined 1.7 percentage points to 64.6% from 66.3%.

On 29 October JAL requested that the Enterprise Turnaround Initiative Corporation of Japan initiate preliminary consultation about whether ETIC would support the restructuring of the JAL group.

The carrier also says it is withdrawing its full-year performance forecast announced on 7 August when it released its earnings for the first fiscal quarter of 2010.

JAL says it is difficult to forecast future performance given that there is no agreement yet as to the JAL Group's reconstruction.

Source: Air Transport Intelligence news