Japan Airlines Corp. said Friday it anticipates a group operating loss of ¥37 billion for the current business year through March, its first red ink in three years.
The projected loss is attributed to a decline in business travelers and international cargo amid the global economic downturn, even as Japanese airlines carry out cost-cutting measures, including fewer flights and pay cuts.
The carrier in November had forecast a ¥28 billion profit and a year earlier had projected profit of ¥90.01 billion.
"(Demand for) international passenger flights and international cargo has deteriorated dramatically from last autumn due to the global downturn," Yoshimasa Kanayama, JAL's senior vice president for finance, said in Tokyo.
"We need to brace for a significant decline in revenue for the fourth quarter as well," he said.
He added demand for international passenger flights is likely to decline around 20 percent during the January-March quarter from a year earlier, while demand for international cargo is likely to drop about 40 percent.
For the April-December period of business 2008, Japan's top airline said it logged a group operating loss of ¥8.86 billion from a year-earlier profit of ¥82.58 billion.
In the nine-month period, JAL said it also logged a group net loss of ¥1.92 billion from a year-earlier profit of ¥20.45 billion on revenue of ¥1.56 trillion, down 8.3 percent.
Revenue from international flights decreased 0.5 percent from a year earlier to ¥570.2 billion and revenue from international cargo dropped 7 percent to ¥133.5 billion as demand for flights to the United States and Europe declined due to the global recession and the yen's appreciation.
Domestic flight revenue inched up 0.2 percent to ¥520.9 billion as promotions increased package tour sales, but Kanayama said even domestic travel demand fell sharply from February.
In its downgraded earnings projections for business 2008, JAL said it expects a group net loss of ¥34 billion.