Japan Airlines posted a 2.3% fall in operating profit to Y96.8 billion ($855 million) for the six months to 30 September as higher fuel costs offset stronger passenger demand in key markets.
Revenue for the half-year period rose 8.4% to Y750 billion, with a 7.1% increase in international revenue, and a 1.2% rise across its domestic network. Cargo revenue also rose 5.6%.
Expenses increased 10% to Y653 billion, as fuel costs rose 23%. Other costs also increased 7%.
Net attributable profit declined 5.9% to Y73.3 billion.
During the six month period, the carrier established TBL Co, which will form the basis of a new medium- and long-haul low-cost carrier.
“Preparations have begun to launch medium- and long-haul flights to destinations in Asia, Europe and the Americas from its base at Tokyo (Narita) International Airport in 2020,” it says.
While the carrier reaffirmed its full-year operating profit forecast of Y167 billion, it has revised its revenue projection by 2.3% to Y1.49 trillion.
“In the third quarter or further, the demand is expected to be robust for the international and domestic routes and the whole JAL group will strive to achieve an operational profit target of 167 billion yen and further pursue more profits by maximising sales and minimising costs,” the company says.
At the end of the half, the carrier’s cash and cash equivalents amounted to Y128 billion, up by 3.98 billion on the start of the period. Compared to the previous corresponding half, net operating cash flow increased 5.9% to Y159 billion.