Japan Airlines (JAL) posted a 20% decline in third-quarter operating profit, on the back of lower revenue from the international passenger and cargo segments.
Operating profit for the three months ended 31 December 2019 came in at Y38.8 billion ($357 million), the carrier states in an investor presentation.
Domestic passenger revenue was largely stable, gaining 1.5% to Y139 billion, but this was offset by a 6.1% decline in international passenger revenue to Y126 billion. Cargo revenue plunged 12.8% to Y23.9 billion.
Expenses were flat at Y332 billion, with higher aircraft maintenance and accounting costs offsetting the decline in fuel costs.
Net profit for the quarter was down by 24.4% to Y25.1 billion.
On a nine-month basis, operating profit fell 17.4% to Y120 billion. Revenue was flat at Y1.13 trillion, while expenses gained 2.6% to Y1.01 trillion. Net profit declined by 28.4% to Y76.3 billion.
As of 31 December 2019, JAL’s cash and cash equivalents stood at Y296 billion, down from the Y462 billion at 31 March 2019, at the end of the previous fiscal year.
JAL notes that domestic passenger demand held up but international passenger demand was “not very strong” due to the global economic trends, oversupply of capacity on flights to China and Europe, as well as declining demand to Hong Kong and South Korea. Overseas cargo demand was also “slack globally”.
As a result, the Oneworld member has revised its earnings forecast for the fiscal year ending 31 March. It expects to report Y1.49 trillion in operating revenue, with operating profit at Y140 million. Net profit is likely to come in at Y93 billion.