Stronger international and domestic business environments and continued high demand for cargo have helped Japan Airlines (JAL) to improve its results, it reported on February 2. Japan Airlines improves 9M results but lags behind ANA.
JAL reported a nine-month-loss of ¥128.3 billion compared to ¥212.7 billion between April and December 2020. The operating loss was ¥173.5 billion compared to ¥289.5 billion. Total revenues improved to ¥498.5 billion from ¥356.5 billion in the same period of 2020. The carrier returned to cash flow breakeven during the third quarter, having burnt between ¥10-15 billion each month during the first two quarters. EBITDA turned positive to ¥11.8 billion, up from ¥39.2 billion in Q1.
As international travel, notably transit passengers to North America, slowly recovered and expats resumed traveling, passenger revenues improved to ¥48.4 billion, up from just ¥18 billion. JAL carried some 595.000 passengers on its international network, up from 247.000. Revenue passenger kilometers (RTKs) grow by 273.8 percent to 4.1 million.
Domestic revenues increased to ¥174.4 billion from ¥136.9 billion, with the number of passengers carried up 123.3 percent to twelve million. RTKs improved 120 percent to 8.9 million. Domestic recovered strongly from October after the Japanese government lifted the state of emergency.
Low-cost subsidiaries ZIPAIR, Jetstar Japan, and Spring Japan contributed only marginally. Passengers carried on domestic routes were 42.607 and 20.747 on international routes. ZIPAIR launched services between Tokyo Narita and Los Angeles on December 25, so in the final week of the third quarter.
JAL’s cargo revenues improved to ¥161 billion from ¥90.9 billion but are lagging some ninety billion behind that of All Nippon Airways (ANA) reported ¥256.4 billion. With cargo-only flights with its own passenger aircraft and with chartered freighters, JAL Cargo tried to capture a part of the strong cargo market for semiconductors and parts for the automotive industry in North America. JAL announced recently that it will form a dedicated freighter airline with logistics company Yamato Holdings in 2024, starting with three Airbus A321P2Fs.
The Japanese carrier ended December with ¥518.3 billion in net cash and cash equivalents after raising ¥30 billion in straight bonds and ¥24.4 billion in bank loans in June, as well as conducting ¥350 billion in hybrid financing to support its post-Covid growth plans.
The first airline to issue transition bonds
As the world’s first airline, JAL issued so-called transition bonds today. These ¥10 billion Sustainable Development Bonds subscribe to the targets set out in the 2015 Paris Climate agreement. The carrier will use proceeds to support its carbon-neutral policy, including upgrading its fleet to more efficient Boeing 787 and Airbus A350 aircraft and purchasing more sustainable aviation fuels. JAL has ¥300 billion left in undrawn credit facilities. Interest-bearing debt stood at ¥879.4 billion.
JAL Group grew its owned fleet by eight aircraft to 219 and leased by one to 27. It took delivery of six more Airbus A350-900s, two Boeing 787-9s, and two ATR 72-600s. Retired were three Boeing 777-200s, one 767-300, and two SAAB 340s. The consolidation of Spring Japan added six 737-800s to the low-cost fleet.
JAL is giving no specific guidance for the fourth quarter and 2022. “It is expected to take for a while until complete recovery of air travel demands. In the meantime, we will strive altogether for strict cost management, efficiency improvement, implementation of sales promotion in a timely manner, and cargo revenue maximization. Also, we will strive for maintaining international and domestic network with safe operation and solid infection prevention measures to prepare for reopening of international interaction of people without any barriers.”
Active as a journalist since 1987, with a background in newspapers, magazines, and a regional news station, Richard has been covering commercial aviation on a freelance basis since late 2016.
Richard is contributing to AirInsight since December 2018. He also writes for Airliner World, Aviation News, Piloot & Vliegtuig, and Luchtvaartnieuws Magazine. Twitter: @rschuur_aero.