Nicholas Ionides/SINGAPORE
Asian carriers have reported a mixed but generally pessimistic bag of financial results as slowing economic conditions and weak local currencies cut into profits.
Asiana Airlines, Korean Air and Thai Airways International are all reporting interim and quarterly losses. While Japan Airlines (JAL) and Singapore Airlines (SIA) have posted solid full-year earnings, both express caution on the conditions ahead.
JAL says it expects consolidated group profits to fall this year "due to the continuing sluggish situation of Japan's economy and the very competitive marketplace".
The company made the profits warning while reporting a more than doubling of consolidated net profit for the year ended 31 March, to ´41.02 billion ($332 million). Operating profit jumped 75%. Operating revenue rose 7% but operating expenses increased 5%.
SIA is noncommittal on the outlook, highlighting the uncertainty Asian carriers are facing. While passenger traffic has not yet been affected, it says, economic conditions in the USA are negatively affecting cargo yields. Group operating profit rose 15% for the year, to S$1.34 billion ($740 million).
SIA's profits were buoyed by substantial exceptional gains from the sale of aircraft and shares in two subsidiaries last year, as well as contributions from 49%-owned Virgin Atlantic. Costs rose 10% to S$8.24 billion, mainly from a 49% increase in fuel charges.
In South Korea, KAL blamed slowing economic conditions and a weak won for a net loss of 230.8 billion won ($177 million) for the first quarter ended 31 March. This was despite an 8% increase in sales, to 1.333 trillion won. Operating losses widened to 105.9 billion won.
Foreign exchange losses hit the carrier particularly hard, as they did local rival Asiana, which reported a net loss of 102.52 billion won. Turnover increased 8% to 514.34 billion won but operating profit fell to 10.15 billion won.
Thai Airways blamed higher fuel prices and a weakening local currency for a first-half net loss of 935.33 million baht ($21 million), compared with a net gain last year of 9.68 billion baht.
Source: Flight International
