Japan's Air Do has reported its first profits since operations were launched late in 1998, representing a major step forward in its restructuring.

The carrier, which is formally known as Hokkaido International Airlines, says in a statement that a pre-tax profit of ¥789 million ($7 million) was recorded for the first half ended 30 September, compared with a loss of ¥824 million in the same period the previous year.

A net profit of ¥219 million was recorded, compared with a ¥1.47 billion net loss in the same six months of last year.

Revenue increased 37% to ¥8.3 billion during the period, and a pre-tax profit of ¥931 million is now being forecast for the year ending 31 March.

Air Do was launched late in 1998 as Japan was nearing completion of a phased deregulation programme. It has struggled to compete against dominant incumbent carriers Japan Airlines and All Nippon Airways (ANA), however, in part because slots are in short supply at key Japanese airports, preventing it from competing at an even level with the majors.

Since early last year it has been restructuring under Japan's Civil Rehabilitation Law, receiving operational assistance from ANA.

Air Do says the larger-than-expected pre-tax profit in the first half was the result of its successful restructuring efforts, which have included deep cost-cutting moves.

It also increased services on its primary route between Tokyo and Sapporo during the six-month period, after expanding its fleet to three Boeing 767s from two with the addition of a leased 767-200 from ANA.

Source: Flight Daily News