• Kyodo News


Japan Airlines Corp., which filed for bankruptcy protection on Jan. 19, said Friday its group net loss in the April-December period expanded to ¥177.98 billion, the biggest sum ever, due to sagging demand particularly among business travelers.

The loss widened from the year-earlier ¥1.92 billion loss and the ¥131.22 billion booked in the first six months of the fiscal year, marking a record-high since the airline merged operations with Japan Air System in 2002.

JAL said it will set up a committee made up of third-party experts to investigate whether past management practices were compliant with the law, as the nation’s biggest carrier has come under scrutiny since the government pumped in public funds to keep it flying.

The committee will be established next Tuesday and is expected to submit a report by early June.

JAL, which was delisted from the Tokyo Stock Exchange on Feb. 20, is now undergoing rehabilitation sponsored by the state-backed Enterprise Turnaround Initiative Corp. of Japan. It submitted the earnings result to the Kanto Local Finance Bureau.

For the first nine months of fiscal 2009, JAL booked an operating loss of ¥120.83 billion, compared with a loss of ¥8.86 billion in the same period the previous year, on revenue of ¥1.14 trillion, down 26.6 percent.

Revenue from international flight passengers fell 41 percent from a year earlier to ¥336.3 billion, while revenue from domestic passengers slid 12.5 percent to ¥455.7 billion.

Norikazu Saito, JAL’s executive officer in charge of finance and investor relations, attributed the decline in revenue to price erosion caused by fewer business-class users due to the economic downturn and the new influenza pandemic.

The carrier did not provide an earnings outlook for the whole business year through March because it is still in the process of compiling the restructuring plan, which is expected to be completed by June.

Meanwhile, Akitoshi Nakamura, JAL’s administrator and representative director of ETIC, indicated the airline may not need all of the ¥600 billion in the credit line set aside by the state-owned Development Bank of Japan to aid its rehabilitation process.

“We were able to avoid the worst-case scenario,” Nakamura said, adding the bankruptcy filing did not cause serious turmoil or drive away customers, as initially anticipated. So far, the airline has tapped into about ¥300 billion of the credit line, he added.

ETIC earlier estimated that JAL would book a group operating loss of around ¥265.1 billion by the end of fiscal 2009, but Nakamura said the loss is likely to be smaller, without providing any specific figure.

He said the state-backed body still expects the airline to return to the black with an operating profit of ¥24.1 billion by fiscal 2011 through March 2012.

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