Japan Airlines System Corp. said Friday it lost 77.28 billion yen during the first quarter of fiscal 2003, blaming the Iraq war and the SARS epidemic for the plunge in its international flight passenger volume.

The nation’s largest carrier, created via the merger of Japan Airlines Co. and Japan Air System Co. in October, said it posted a group operating loss of 76.97 billion yen during the April-June period, while revenue stood at 398.85 billion yen.

Mirroring many other Japanese firms, this was the airline’s first quarterly report. Comparable figures for the year-earlier period were therefore unavailable.

The firm said the number of passengers on its international flights during the three-month period dropped 45.6 percent from a year ago to 1.9 million, with passenger volume on China flights logging a decline of nearly 70 percent, reflecting the negative effects of severe acute respiratory syndrome on both leisure and business travelers.

As a result, revenue generated from international passenger flights dropped nearly 40 percent to 93.86 billion yen. JAL officials said a revenue shortfall of some 60 billion yen was attributable to the war and to the epidemic.

The carrier said domestic flights generated relatively solid results, with flight passenger volume growing 2.3 percent to 11.18 million.

JAL, which expects the war and the SARS epidemic to have a negative impact worth 162 billion yen on full-year revenue, reiterated its earnings outlook for fiscal 2003, forecasting a group net loss of 43 billion yen on revenue of 2.03 trillion yen.

The carrier said passenger volume on its international flights has moved in line with forecasts, adding that the July figure was some 30 percent down from a year ago.

“The recovery in tourists has been slow, but we are seeing a relatively fast recovery in business users, which has been pushing up revenue per passenger,” JAL Executive Officer Haruka Nishimatsu said.

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