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Japan Airlines Co. said Friday its group operating profit for the first half of the business year fell 26.7 percent on a year-on-year basis to 28.55 billion yen.

The airline attributed this decline to its failure to revive demand for international flights following last year’s terrorist attacks in New York and Washington.

JAL’s group net profit surged 105.4 percent to 33.69 billion yen, however, with the firm having received 25.2 billion yen in cash from aircraft suppliers in preparation for future repairs, a common practice within the industry.

This was the last midterm earnings report for JAL, which integrated its operations with Japan Air System Co. under a holding company, Japan Airlines System Corp., on Oct. 2.

JAL’s group revenue for the April-September period dropped 1.5 percent from a year ago to 858.16 trillion yen.

JAL officials attributed the firm’s lackluster performance to weak demand for international flights, especially those bound for the U.S. mainland and Honolulu.

The number of passengers on international flights dropped 4.1 percent to 7.22 million on a year-on-year basis, with revenues falling 3.1 percent to 343.5 billion yen.

The firm’s international cargo operations fared well, thanks to strong demand for automobiles and electronic equipment bound for Southeast Asia and the U.S.

Japan Air System said its group net profit for the first half dropped 30.1 percent on a year-on-year basis to 3.42 billion yen, due to falling airfares.

Group operating profit fell 53.2 percent to 6.43 billion yen, while group revenues slid 6.6 percent to 207.46 billion yen.

Revenues from JAS domestic flights suffered amid declining airfares, triggered by the entry of discount carriers.

The number of passengers on JAS domestic flights fell 2.5 percent to 11.43 million, while revenues dropped 4.7 percent to 163 billion yen.

Regarding the earnings outlook for 2002 as a whole, Japan Airlines System said it expects to generate a group net profit of 24 billion yen on revenues of 2.09 trillion yen.

Officials said they expect the negative impact of the U.S. terrorist attacks to continue, forecasting that international flight revenues will fall 3 percent from those recorded in 2000, the last year with which valid comparisons can be made.

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