Japan Airlines narrows H1 loss on cost cuts, flags annual loss

Tokyo

JAPAN Airlines (JAL) reported on Tuesday (Nov 2) a narrower first-half loss before interest and tax from a year ago, helped by cost cuts the carrier undertook during the pandemic, but it flagged a wider-than-expected annual loss.

The company posted a first-half loss of 151.8 billion yen (S$1.8 billion). In the prior year, Japan's second-largest airline had reported a loss of 223.9 billion yen in the six months ended Sept. 30.

JAL said on Tuesday that it would report a full-year loss of 198 billion yen, larger than the consensus loss of 120 billion yen from 12 analysts polled by Refinitiv. In August, the carrier failed to provide a full-year earnings forecast, saying uncertainty made prediction too difficult.

The airline, like the travel industry in the world's third-largest economy, was badly hit as Japan was under a state of emergency for much of the second quarter.

Rival ANA Holdings Inc said last week that it expected to report an operating loss in the current financial year, down from an earlier prediction of a profit, and that it would reduce staff numbers by 20 per cent within five years through attrition and retirement. JAL said it expected to stop burning cash by the fourth quarter of the financial year as travel demand improved.

It said domestic passenger numbers began increasing last month, and by March should reach 92 per cent of pre-Covid levels, though international traffic would remain subdued at 23 per cent of pre-Covidlevels. Japan on Tuesday confirmed plans to gradually ease Covid-19 border restrictions, but fell short of calls from business lobbies to open up the country in line with its major trading partners. REUTERS