Japanese airlines’ profits fall

Japan’s two biggest airlines, JAL and ANA, both experienced a significant fall in profits in the first three quarters of the financial year, as rising fuel costs and a weak Japanese yen impacted results.

But despite this downturn, the two airlines still produced strong figures. JAL posted a net profit of JPY123.5 billion (US$1.2bn) for the nine months ending 31 December 2013, down 17.1% year-on-year, while ANA’s net profits shrank 36.2% to JPY33.3bn (US$326 million).

Both airlines posted a significant rise in operating revenues, with JAL’s rising 5.1% to JPY989.9bn and ANA’s increasing 7.1% to JPY1.21 trillion. But this increase of turnover was outpaced by rising operating expenses. JAL’s costs increased 8.7% while ANA’s climbed 11.5%.

“Operating expenses rose by JPY118.3bn, or 11.5%, resulting in a reduction in operating income, recurring profit and net income for the period. The main reason for the increase in operating expenses was a rise in fuel costs caused by the weakening of the Japanese yen,” ANA said in a statement.

ANA also stated that the price of fuel has risen “approximately 25% year-on-year due to the declining value of the yen”.

JAL meanwhile, said that while Japan’s economy has been recovering, the airline’s performance was impacted by “the slowdown of overseas economies”.

In terms of traffic, ANA remains comfortably Japan’s biggest airline, carrying 37.32m passengers in the nine-month period, compared to JAL’s 29.62m. JAL is the country’s biggest international carrier however, boarding 5.79m passengers on its international flights in the nine-month period, compared to ANA’s 4.76m.

ANA has forecast a net profit of JPY15bn for the full financial year, ending 31 March 2014, while JAL is expecting to generate strong profits of JPY148bn.