Japan Airlines 9-month Profit Rises, Backs FY View

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The FINANCIAL — JAL Group (JAL) on January 31 announced the consolidated financial results through the third quarter – the period from April 1 to December 31, 2017.

Through 9 months of the fiscal year, ending March 31, 2018 (hereinafter referred to as the “third quarter”), similar trends were observed in the Japanese economy when compared to the first half of the year, where employment and income rates improved across the country, while the overseas market has been on a recovery trend.

The JAL Group continued to work toward achieving the goals as outlined in the Medium Term Management Plan, where the company continues to refine the Full Service Carrier business model by adapting to global change, and making the necessary capital expenditures for safety and service enhancements to become the customers’ airline of choice. With safety as the foundation of JAL`s business model, the company will align all actions with the principles outlined in JAL Philosophy and the amoeba management system, realizing greater management efficiencies, and providing the finest service to our customers.

As a result of the above, consolidated operating revenue increased by 7.2% year-on-year to 1,046.0 billion yen and operating expense increased by 7.5% year-on-year to 900.8 billion yen, while operating profit increased by 5.8% year on year to 145.2 billion yen and ordinary profit increased by 4.5% year-on-year to 142.1 billion yen. Profit attributable to owners of parent for the third quarter was 114.1 billion yen, up 5.4% year on year, according to the JAL Group.

International Passenger

In international passenger operations, load factors rose from their prior-year levels due to robust outbound demand from Japan as well as strong inbound demand to Japan.

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With regard to route operations, in addition to the launch of new services between Tokyo (Narita) = Melbourne and Tokyo (Narita) = Kona, Hawaii in September 2017, JAL increased flight frequency between Tokyo (Haneda) = London and Tokyo (Narita) = Bangkok from October 29, 2017 to provide customers with a more convenient and extensive network.

On the marketing and service front, JAL won top honors for “Loyalty (Repeat Intention Rate)” for the fifth consecutive year and “Customer Satisfaction” in the International Airlines category of the Japanese Customer Satisfaction Index (JCSI) Survey. This survey is conducted annually by an external service evaluation organization in Japan. Furthermore, JAL was named “Best Trans-Pacific Airline 2017” and “Best Airline to Japan 2017” by readers of US business travel magazine “Global Traveler”. Of special note, JAL was the first Japanese airline to claim the title of “Best Trans-Pacific Airline.”

Regarding products, JAL introduced a new cabin configuration on the JAL SKY SUITE 787 aircraft this fiscal year and was featured on Tokyo (Narita) = Kuala Lumpur, Tokyo (Narita) = Dalian, and Tokyo (Narita) = Delhi routes. Reviews of the aircraft by users have been positive.

As a result of the above, capacity on international routes measured in Available Seat Kilometers (ASK) increased by 1.6% year-on-year, and international passenger revenue was 346.4 billion yen, up 10.2% from the year before.

Domestic Operations

In route operations, to improve convenience and comfort on regional network routes, service of the Embraer 190 was increased on routes to/from Itami Airport. On routes to outlying islands in Kagoshima Prefecture operated by Japan Air Commuter Co., Ltd., service of the state-of-the-art ATR42-600 turboprop was also increased to provide added comfort. During the year-end and New Year period, when strong demand is seen, flight frequency was increased on select routes, such as the Tokyo (Haneda) = Okinawa (Naha) route to further improve customer convenience.

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Regarding products, JAL continued to offer free inflight Wi-Fi service on domestic routes on board JAL SKY NEXT flights to the delight of many passengers. In addition, the 737-800 aircraft, operated by Japan Transocean Air, are progressively being retrofitted with JAL SKY NEXT cabin interiors to add greater convenience and comfort in air travel.

On the sales and marketing front, JAL and TripAdvisor, Inc. have collaborated to open a travel information website to provide travel content on lesser-known local sights and events in Japan to foreign travelers. Appropriately named “Untold Stories of Japan”, the immersive portal on TripAdvisor’s website provides information on tourist facilities and activities, as well as a special fare for overseas visitors “JAL Japan Explorer Pass” to boost and spread inbound tourism across Japan.

Furthermore, to create new tourist flows, JAL collaborated with Hokkaido Railway Company and started sales of Air & Rail Tours around Hokkaido from the Tokyo area. In its business cooperation with East Japan Railway Company (JR East), new Air & Rail Tour packages between Tohoku and Kyushu were added to the product lineup. By offering new values in travel by mixing multiple travel modes, JAL is working to promote inter-regional exchanges and regional revitalization.

As a result of the above, capacity on domestic routes measured in Available Seat Kilometers (ASK) increased by 0.6% year-on-year, and domestic passenger revenue was 398.5 billion yen, up 4.6% from the year before.

 

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