All Nippon Airways Co.’s group operating profit more than doubled from the previous year to 77.7 billion yen in fiscal 2004 led by strong demand for international flights and rigorous cost-reduction efforts, the carrier said Thursday.

It is the first time the nation’s second-largest carrier has ever brought its international operations into the black.

ANA reported a group net profit of 26.9 billion yen, up 9 percent from the previous year, while sales rose 6.2 percent to a record 1.29 trillion yen for the year ended March 31.

Although continued high fuel prices cost ANA 7.1 billion yen more than the previous year, the firm was able to produce a strong performance after slashing 30 billion yen in costs ahead of schedule for the year ending March 2006, ANA officials said.

But ANA forecasts that profits will drop in the current fiscal year even though sales are expected to rise.

One major reason is fuel prices, which are expected to cost ANA 18.5 billion yen more than fiscal 2004.

Another major reason is that ANA will start dropping from its financial report a rebate that it gets from airline builders. The rebate was reported as income in nonoperating profit.

The number of international passengers in fiscal 2004 surged 24.7 percent year-on-year to an all-time high of 4.12 million. ANA said its efforts to expand its international network under the Star Alliance and focus on the Chinese market has been paying off. The industry saw a sharp drop in international passengers the previous year due to the outbreak of severe acute respiratory syndrome in Asia and the war in Iraq.

Although the number of domestic passengers declined 0.7 percent to 44.5 million due to cancellations caused by a series of typhoons in Japan last year, ANA said sales from domestic operations increased slightly, thanks to improvement in revenue per passenger.

For the current fiscal year, ANA forecasts a net profit of 10 billion yen, down 63 percent from fiscal 2004, an operating profit of 74 billion yen, down 5 percent and a 2.6-percent increase in sales of 1.3 trillion yen.

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