Despite the impact of the SARS epidemic across Asia and the Iraq war, All Nippon Airways Co. said Friday it swung back into the black in the first half of fiscal 2003, posting a group net profit of 20.57 billion yen.

The net profit compares with a net loss of 8.11 billion yen a year earlier, when the carrier booked extraordinary losses stemming from sales of overseas assets.

The company attributed the positive figure to cost-cutting efforts, which totaled 12.1 billion yen during the first half alone.

However, operating profit for the April-September period dropped 3.1 percent to 14.46 billion yen because the effects of the outbreak of severe acute respiratory syndrome lasted longer than expected.

Overall revenue slid 2.2 percent to 608.34 billion yen, it said.

The SARS outbreak and the Iraq war dealt a heavy blow to ANA’s international passenger flights, with revenue falling 11 percent during the six-month period, the company said.

Revenue per passenger was up 12 percent, thanks to a recent rebound in numbers of business travelers. But the impact of a large drop in the number of international passengers, which fell more than 20 percent, was a more serious drag on revenue, the company said.

Revenue from domestic flights slipped 2 percent due to a slow recovery in people traveling on business and fierce competition with Japan Airlines System Corp., the company said.

The impact of SARS and the Iraq war forced the carrier to reduce its full-year revenue forecast by 27 billion yen to 1.22 billion yen.

But the company said it will secure profits by carrying out many of the measures in the ongoing cost-cutting program in the current fiscal year, especially in the areas of personnel expenses and fleet maintenance fees.

Under its three-year plan, the firm plans to slash a total 30 billion yen from its expenditures by March 2006.

It revised a full-year net profit forecast upward by 2.5 billion yen to 17.5 billion yen. The company booked a net loss of 28.26 billion yen in the last fiscal year.

It said it did not factor into its earnings forecast the possible outbreak of SARS in the coming winter. Asked about a possible negative impact on revenue, an ANA official said it would probably be around 4 billion yen.

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