• Kyodo

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Japan Airlines Co. on Tuesday reported a smaller net loss of ¥57.92 billion ($531 million) for the April to June quarter compared with a year earlier, with demand for air travel having been recovering from a slump caused by the COVID-19 pandemic.

Cost-cutting efforts also helped the major Japanese airline limit red ink, having reported the year earlier a quarterly net loss of ¥93.71 billion — the firm’s largest since its 2012 relisting. Sales grew 74.1% from the previous year to ¥133.03 billion.

JAL did not release earnings forecasts again for fiscal 2021, saying it was difficult to make projections amid the pandemic.

Air traffic remains below pre-pandemic levels but the number of passengers on both domestic and international flights is increasing, leading to revenue growth.

The business environment remains “severe” due to the prolonged impact of the global health crisis, but hopes are emerging for an “early recovery” of domestic travel demand with progress in vaccinations, according to the airline.

JAL saw passengers on international flights increase 340% over the past year to 149,492, even though travel restrictions remained in force in many countries.

The number of passengers on domestic flights more than doubled to 2.71 million from a year earlier, when travel demand plummeted due to a COVID-19 state of emergency imposed across the whole of Japan.

Similarly to its domestic rival ANA Holdings Inc., JAL continued to benefit from a rise in cargo demand sparked by the pandemic. Revenue in the cargo segment increased to ¥47.6 billion in the April to June quarter from ¥26.5 billion a year ago.

Having reported in fiscal 2020 its first net loss since its 2012 relisting after rehabilitation, JAL now faces the challenge of returning to profitability on a full-year basis.

Demand for domestic travel has been picking up, but a COVID-19 state of emergency declared for prefectures with surging coronavirus cases such as Tokyo and Osaka has cast a cloud over the outlook ahead of Japan’s summer holiday season in mid-August.

The Tokyo Olympics, which are scheduled to end Sunday, have not been a boon to the airline industry as foreign spectators have been barred and domestic fans are also not permitted to enjoy the Games at most of the competition venues.

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