Tokyo, Nov 8, 2006 - (JCN Newswire) - Japan Airlines Corporation (TSE: 9205), the holding company of the JAL Group, have announced the consolidated half-year results of the JAL Group for financial year 2006, the period from April 1, 2006 to September 30, 2006.
The Group's revenue in the first half of FY2006 increased by 37.6 billion yen to 1,150 billion yen, up 3.4% on the same period last year. Due to higher load factors, a result of route network restructuring and aircraft downsizing, JAL's international passenger revenue increased by 10.2 billion yen to 370.7 billion yen, a 2.9% year-on-year improvement.
The airline recovered market competitiveness in Japan by implementing a series of measures, including the launch of promotional campaigns and the expansion of the number of Class J seats, which helped to stimulate domestic passenger demand. As a result, domestic passenger revenue was up by 5.3 billion yen (1.6%) to a total of 345.8 billion yen.
During the first half of FY2006, total operating costs were 1,141.8 billion yen, 45.2 billion yen (4.1%) up on the same period in FY2005. Despite a 27.9 billion yen increase in the airline's fuel bill compared to the same period last year, steady cost reform coupled with the introduction of contingency measures, such as fuel consumption reductions, fuel surcharges, and a 10% basic wage reduction, helped to limit the overall increase in operating costs.
In the first half of FY2006, the JAL Group posted a net profit of 1.5 billion yen, compared to a 12 billion yen net loss in the previous year, a net income improvement of 13.5 billion yen.
JAL Group First Half Consolidated Results for FY06
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H1 ended Sept. 30,
2006 2005 Change % Change
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Total operating revenue 1,150.0 1,112.3 37.6 103.4
International passenger 370.7 360.4 10.2 102.9
Domestic passenger 345.8 340.4 5.3 101.6
International cargo 92.4 85.4 6.9 108.1
Other 341.0 325.9 15.0 104.6
Total operating expenses 1,141.8 1,096.5 45.2 104.1
Operating income (loss) 8.1 15.7 -7.6 51.7
Ordinary income (loss) 5.3 9.7 -4.4 54.6
Net income (loss) 1.5 -12.0 13.5 --
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* Figures rounded down to the nearest 100 million yen
First Half Factors
1) Operating Revenue - Air Transport Business
International passenger traffic:
As a result of route network restructuring and aircraft downsizing outlined in the JAL Group's recent medium-term business plans, supply measured in available seat kilometers (ASK) decreased by 10.8% when compared to the same period last year. Demand in terms of revenue passenger kilometers (RPK) was stagnant on Oceania and Hawaii routes, but was strong on US mainland, Europe, Southeast Asia, and Korea routes. Passenger demand on China routes fully recovered from the effects of anti-Japanese demonstrations held in China in April 2005. Overall there was a decline in passenger demand (RPK) of 6.1% when compared to the same period last year.
The international flight seat load factor for the Group was up 3.5 points on the previous year to 71.4%. Unit price increased by 9.5% compared to the previous year, mainly due to a revision of fares and fuel surcharges. Revenue over the half year increased by 10.2 billion yen to 370.7 billion yen, up 2.9% on the previous year. The total number of passengers carried was 6,760,569.
Domestic passenger traffic:
Compared to last year, corporate account passenger traffic was stagnant. However, individual passenger traffic as a whole remained the same, mainly due to the implementation of a series of measures including the introduction of discount fares, and the launch of seasonal promotional campaigns, which helped to stimulate demand. The number of passengers traveling in tour groups declined when compared to the previous year, due to fare increases, and also as a result of the effect the Aichi Expo had in boosting demand in Japan during 2005. During the first half the number of Class J seats - JAL's domestic business class seat - was increased on aircraft to meet customer demand.
Supply measured in available seat kilometers (ASK) increased by 0.6% on the previous half year, and demand measured in revenue passenger kilometers (RPK) increased by 0.2%. Due to rising fuel costs, fares were revised resulting in a year-on-year increase in unit price of 1.3%. As a result, domestic passenger revenue was up by 5.3 billion yen (1.6%) to a total of 345.8 billion yen. The total number of passengers carried was 22,190,898.
International cargo traffic:
Though demand from overseas including China was weak on the whole, there have been signs of recovery since summer. Demand from Japan was generally strong, with a high growth rate to China. Measured in revenue cargo ton kilometers (RCTK), worldwide international air cargo demand decreased by 2% on the previous year. With the revision of the fuel surcharge, yield rose by 10.4%, and revenue increased by 8.1%, up 6.9 billion yen on the previous half year. Volume carried was 379,186 tons, down 2.7.% on the year before.
2) Operating Costs & Foreign Exchange
Fuel costs:
The price of Singapore kerosene from April to September 2006 averaged USD84.9 per barrel versus an average of USD69.6 per barrel for the previous half year. JAL managed to limit the full effect of increasing fuel prices by conducting a wide range of measures including fuel hedging, and fuel consumption reductions. As a result, the fuel bill for the half was 209.2 billion yen, 15.4% increase or 27.9 billion yen up on the previous year.
Maintenance costs:
Maintenance costs in the financial half year increased to a total of 64.6 billion yen, up by 12.4 billion yen or by 23.8% when compared to the previous year, mainly due to planned B777 PW4000 engine modifications
Foreign Exchange rate:
The average US$ - Yen exchange rate in the first half of this year was 115.5 yen compared to 108.5 yen in the previous year, effecting operating income by -10.2 billion yen. However, the negative effect of the exchange rate was limited, by US dollar hedging which enabled the Group to post a foreign exchange profit of 7.6 billion yen for non-operating income.
Financial Indicators
------------------------------------------------------------------------
FH06 ended FY05 year ended
Sept. 30, March 31,
2006 2006 Difference
------------------------------------------------------------------------
Total Assets 2,261.3 2,161.2 100.0
Stockholders' Equity *1 333.5 148.0 185.4
Capital to Asset Ratio (%) 14.8% 6.9% 7.9%
Interest-bearing debt on
balance sheet *2 1,174.8 1,236.4 -61.5
Debt/ Equity Ratio
(on balance sheet) *3 3.5 8.4 -4.9
------------------------------------------------------------------------
* Figures rounded down to the nearest 100 million yen
*1: Stockholders' Equity does not include minority stockholders'
equity due to new accounting procedures.
*2: Excludes off balance lease debts and unrecognized debts.
(Interim off balance debts for financial year ending March 2007 =
700.6 billion yen & for year ended March 2006 = 693.4 billion yen).
*3: Debt /Equity Ratio(on balance sheet) = interest bearing debts
(on balance sheet) divided by stockholders equity.
------------------------------------------------------------------------
Outlook for FY2006 - Revised Forecast
The revised forecasts of consolidated results for the complete fiscal year replace those announced on March 2, 2006 and are as follows:
Consolidated Financial Forecast for the Year Ending March 31, 2007
------------------------------------------------------------------------
FY2006 FY2006 Diff FY2005
Revised Previous in results
Forecast Forecast Forecast 3/31/2006
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1) Operating revenues: 2,281.0 2,301.0 -20.0 2,199.3
International passenger 732.0 725.0 7.0 690.2
Domestic passenger 678.0 703.0 -25.0 659.9
International cargo 195.0 198.0 -3.0 180.5
Other 676.0 675.0 1.0 668.5
2) Operating costs 2,268.0 2,284.0 -16.0 2,226.2
3) Operating income 13.0 17.0 -4.0 -26.8
4) Ordinary income 0.5 0.5 0 -41.6
5) Net income 3.0 3.0 0 -47.2
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*Figures rounded down to the nearest 100 million yen
Additional financial improvement measures
By implementing the following additional measures, as outlined in our forecast, we will achieve ordinary income and net income as initially planned.
a) Reduction of pension costs - To improve the balance sheet, and strengthen our financial structure, during this fiscal year we plan to reduce pension costs.
b) Deeper cost reform - We will continue with Group-wide cost restructuring by reviewing property rental agreements, service contract agreements, and by implementing measures to further reduce general company overheads.
JAL Group Consolidated Traffic Statistics First Half 2006 vs. 2005
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H1 ended Sept. 30, %Change/
2006 2005 points
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International
Passenger number 6,760,569 7,230,244 93.5%
Revenue passenger Kilometers (000) 32,354,267 34,444,365 93.9%
Avaialable seat Kilometers (000) 45,286,215 50,754,677 89.2%
Revenue seat Kilometers (000) 71.4% 67.9% 3.5
Revenue cargo ton Kilometers (000) 2,213,925 2,259,975 98.0%
Mail ton Kilometers (000) 76,318 76,575 99.7%
Revenue ton Kilomemters (000) 5,289,073 5,530,216 95.6%
Available ton Kilometers 7,958,566 8,486,495 93.8%
Revenue weight load factor 66.5% 65.2% 1.3
------------------------------------------------------------------------
Domestic
Passenger number 22,190,898 22,286,276 99.6%
Revenue passenger Kilometers (000) 16,749,367 16,708,672 100.2%
Avaialable seat Kilometers (000) 26,154,645 25,991,109 100.6%
Revenue seat Kilometers (000) 64.0% 64.3% -0.3
Revenue cargo ton Kilometers (000) 194,575 191,380 101.7%
Mail ton Kilometers (000) 41,023 40,845 100.4%
Revenue ton Kilomemters (000) 1,511,548 1,484,330 101.8%
Available ton Kilometers 3,059,465 3,047,129 100.4%
Revenue weight load factor 49.4% 48.7% 0.7
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Total
Passenger number 28,951,467 29,516,520 98.1%
Revenue passenger Kilometers (000) 49,103,634 51,153,037 96.0%
Avaialable seat Kilometers (000) 71,440,860 76,745,786 93.1%
Revenue seat Kilometers (000) 68.7% 66.7% 2.0
Revenue cargo ton Kilometers (000) 2,408,500 2,451,355 98.3%
Mail ton Kilometers (000) 117,341 117,420 99.9%
Revenue ton Kilomemters (000) 6,800,621 7,014,546 97.0%
Available ton Kilometers 11,018,031 11,533,624 95.5%
Revenue weight load factor 61.7% 60.8% 0.9
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* International results include data from JAL International , Japan Asia Airways and JALways
* Domestic results include data from JAL International, JAL Domestic, Japan Transocean Air, JAL Express, Japan Air Commuter, Hokkaido Air System, J-Air & Ryukyu Air Commuter.
To download JAL earnings and traffic results, please visit the Company IR website at http://www.jal.com/en/ir/index2.html .
About JAL
The JAL Group is Asia's biggest airline group in terms of sales revenues and 2nd largest in Asia in terms of passengers carried annually. JAL Group airlines serve 216 airports in 34 countries and territories, including 60 airports in Japan. The international network covers over 246 passenger routes and 37 cargo routes, and the domestic network covers 154 routes. JAL and its seven subsidiary airlines make a total of up to 1,200 domestic and international routes passenger flights a day. In the year ending March 31, 2008, JAL Group airlines carried over 55 million passengers.
With around 23,000 employees in the air transport segment, JAL Group operates a fleet of some 270 aircraft including Boeing 747s and B777s and is now in the process of a major fleet renewal, introducing more fuel-efficient small and medium aircraft such as the B737 New Generation series and in the future the new high-tech Boeing 787 "Dreamliner".
JAL First Class offers fully reclining Sky
Contact:
Geoffrey Tudor
geoffrey.tudor@jal.com
Stephen Pearlman
stephen.pearlman@jal.com
Telephone: 81-3-5460-3109
Fax: 81-3-5460-3108
www.jal.com/en/corporate/
Nov 8, 2006
Source: JAL
JAL (TSE: 9205) (U.S: JALSY)
From the Japan Corporate News Network
http://www.japancorp.net
Topic: Press release summary
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