JAL sees red for year after first-half loss

TOKYO - Japan Airlines (JAL), Asia's biggest airline by revenue, said it fell into the red in the half year and disappointed the market by forecasting its first annual loss in two years, pressured by high fuel prices and sluggish traffic.

Fuel prices had jumped more than 21 per cent in the six months to September and hurt airlines' bottom lines globally.

Some rivals successfully fended off negative impacts from fuel costs by operational efforts, but JAL has struggled to do so after its safety troubles hurt its image and slowed customer traffic.

JAL said yesterday its net loss totalled 12.04 billion ($150.5 million) in the six months to September, compared with a profit of 82.96 billion in the same period a year earlier.

It said it now expected a net loss of 47 billion for the year to March - its first annual loss in two years - against its previous forecast of a 17 billion profit.

That compares with a consensus estimate of a 7.35 billion profit, according to 10 analysts surveyed by Reuters Estimates. The company posted a profit of 30.1 billion in the year ended last March.

JAL's gloomy earnings came a week after smaller domestic rival All Nippon Airways posted record profits as it focused on profitable flight routes and added fuel surcharges to its fares.

Singapore Airlines also used futures contracts and higher ticket prices to offset fuel costs, and it reported a second-quarter profit that beat analysts' forecasts.

JAL last month said it would join the "oneworld" global airline network, seeking to bolster its services and operations.

JAL aims to attract more travellers by taking advantage of a bigger route network. It has held alliances with individual airlines, including oneworld leaders American Airlines and British Airways, but remained out of global groups.

Shares in JAL sagged 3.8 per cent in the April-September period.

- REUTERS