Tokyo, MondayAugust 7, 2006: Today the JAL Group announced consolidated financial results for the first quarter (April through June 2006) of the current financial year (ending March 31 2007).
Total operating revenues for the three-month period were 522.2 billion yen, 18.8 billion yen (+3.7%) more than the same period last year. During the quarter, JAL continued its restructuring of international passenger routes by concentrating more on high profit and high growth routes. Route restructuring led to an improvement in passenger load factors, and contributed to the 5.2% increase in international passenger revenue during the period.
Cost-structure reforms conducted by the JAL Group limited the negative impact that increased fuel costs, up 11.6% on the previous year, and an unfavorable US$ = Yen exchange rate had on operating expenses. Operating expenses were 554.1 billion yen, up 3.5% on the same period last year..
The Group posted a first quarter net result of a 26.7 billion yen loss, an improvement of 11.5 billion yen on the previous year's first quarter net loss of 38.3 billion yen.
Over the past 12 years, the first quarter result has generally shown a loss, with the loss being made up and profits earned in the second quarter.
JAL Group First Quarter Consolidated Resultsfor FY06
(Figures rounded down to one decimal place.)
AIR TRANSPORT SEGMENT DETAILS
International passenger traffic: Overall passenger demand on international routes was favourable. There was particularly strong demand on Europe, US, Southeast Asia and Korea routes. Demand on China routes bounced back, making a remarkable recovery from the negative impact that last year's anti-Japanese demonstrations had on travel to China.
Due to an increase in demand for first and business class travel, and fuel surcharges introduced to cope with higher fuel prices, there was an 11.2% increase in unit price. Revenue passenger numbers decreased by 5.8% to 3,192,191 on the same period last year, mainly due to a 11.6% reduction in the number of available seats kilometer (ASK), the result of route restructuring and aircraft down-sizing. The international passenger load factor was up 4.6 points on the same period last year. Revenue passenger kilometers decreased by 5.4% and revenue grew by 8.2 billion yen (5.2%) to 167.8 billion yen.
Domestic passenger traffic: When compared to last year, the domestic revenue passenger total was down by 1.6% to 10,368,755, mainly due to the increase demand generated by the 2005 World Exposition held in Japan from March 25, 2005. Unit price increased due to fare increases caused by rising fuel costs, resulting in revenues of 150.9 billion yen, up 0.6 billion yen (+0.4%) on the same period last year. JAL increased the number of Class J seats - business class seats - on domestic routes due to popular demand, and expanded its IC check in services. There was a reduction in revenue passenger kilometers of 0.8% - basically no change on the year before.
International cargo traffic:Demand out of overseas markets, such as China including Hong Kong, was generally weak, but demand from Japan was buoyant. Traffic measured in revenue cargo ton kilometers was down 3.4%. However, unit price rose 10.3% when compared to the previous year, due to an increase in the percentage of high yield cargo carried, and due to revised fuel surcharges. Revenue was up by 2.6 billion yen (+6.6%) to 43.8 billion yen.
Fuel: This year's first quarter fuel costs rose to an average of US$82.0 per barrel of Singapore Kerosene, compared to an average price of US$66.7 in the same period last year. Countermeasures such as fuel hedging and fuel consumption reductions, helped to limit the full impact of the price increase. As a result, the fuel bill for the quarter was 97.4 billion yen, an increase of 10.1 billion yen, up 11.6% on the same period last year.
Foreign exchange: The average US dollar - yen exchange rate for the period was US$1.00 = 115 yen, compared to a rate of US$1= 106.7 yen for the previous year. The exchange rate had a negative effect on operating income of minus 6 billion yen.
Forecast for the consolidated results for the year ending March 31, 2007 is unchanged on the forecast made on May 10, 2006.
Consolidated Financial Forecast for the Year Ending March 31, 2007(As of May 10,2006)
JAL Group Consolidated Traffic Statistics First Quarter
International results include data from JAL, Japan Asia Airways and JALways. Domestic results include data from JAL, Japan Transocean Air, JAL Express, Japan Air Commuter, Hokkaido Air System and J-Air.. Domestic results for the 1st quarter FY2006 also includes data from Ryukyu Air Commuter.
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