Japan Air System Co. has revised downward its net profit forecast for fiscal 1997 from zero to a 1.6 billion yen loss on an unconsolidated basis, JAS President Hiromi Funabiki told a regular press conference March 31.
The carrier also revised its pretax profit forecast from zero to a 1.5 billion yen loss for the same period, while the sales forecast was lowered from 331.9 billion yen to 325.1 billion yen.
Funabiki explained that since November the weak economy has badly affected domestic passenger demand, especially in February and March, and that intensifying competition calls for lower air fares. "We need to transform the focus of management from the current local routes to trunk routes, which is similar to the management style of the two other airlines," said Funabiki, referring to Japan Airlines and All Nippon Airways.
At the same time, Funabiki announced a restructuring plan that would reduce the number of board members and cut staff by 500 over three years beginning this fiscal year. The carrier plans to decrease the number of flights on 29 routes and suspend services on 21 unprofitable routes, while transferring its services on local routes to affiliates to achieve low-cost management.