JAL profit dives in April-june quarter

TOKYO: Japan Airlines (JAL) announced yesterday that its net profit in the AprilJune quarter dropped 31.9% to 18.33 billion yen ($187 million), after rival All Nippon Airways reported a loss on soaring fuel costs.

JAL, which re-listed its shares in Tokyo last year after a high-profile bankruptcy restructuring, reported sales of 294.1 billion yen, up 2.6% on-year.

While the carrier did not give specific reasons for the weaker profit, a sharp decline in the yen has pushed up the price of dollar-denominated fuel, which is a major expense for airlines.

The four-month grounding of Boeing’s Dreamliner also hit Japan’s two biggest airlines hard, with ANA saying on Tuesday that the crisis had helped drag it to a 6.6 billion yen loss for the three months to June.

For the fiscal year to March 2014, JAL kept its previous forecast unchanged at a net profit of 118 billion yen on sales of 1.272 trillion yen.

Japanese airlines were also hit by a flare-up last year in a territorial row between Tokyo and Beijing which sparked a consumer boycott of Japanese brands in China. The impact of the boycott has lingered with some Japanese companies saying it was still weighing on results.

JAL said moves to expand its network and the launch of discount airfares helped to offset the negative impact from the ‘‘grounding of Boeing 787s and a decline in demand in routes involving South Korea and China’’.

JAL and ANA were sideswiped by Dreamliner’s woes which began in January after lithium-ion batteries overheated on two different planes, with one of them catching fire while the aircraft was parked.

The two Japanese carriers at the time operated about half the Dreamliners in service and were forced to cancel hundreds of flights.

The two biggest Japanese airlines have said that they will seek compensation from Boeing, having lost a combined total of more than 22.5 billion yen in revenue.

Boeing admitted in April that, despite months of testing, it did not know the root cause of the problems on its flagship plane, but rolled out modifications it said would ensure they were safe.

Since then Dreamliners have experienced a series of glitches.

Among them is an anti-icing problem that forced a Singapore-bound Dreamliner operated by JAL to abort the flight and return to Tokyo in June, and a ‘‘possible’’ pump problem which forced a JAL-operated Dreamliner bound for Tokyo to return to Boston earlier this month.

After a long-running probe by regulators in several countries, the fuelefficient planes were allowed to fly again in June.

JAL shares fell 2.62% to close at 5,200 yen in Tokyo yesterday, ahead of the release of the airline’s earnings.