Category Archives: JAL Group

Japan Airlines revises its international network plan on Sydney, Honolulu, and Dallas/Fort Worth route

Japan Airlines (JAL) has revised its flight frequency plans on select routes between February 1 and April 15, 2021. The carrier will continue to review travel restrictions within each destination and update its international network, while providing customers with a safe and secure travel experience.

Oceania Routes – Sydney and Melbourne
From February 1-14, the carrier will operate two roundtrip flights per week between Tokyo Haneda and Sydney. In order to abide by the travel cap established by the Australian government, flights for the latter half of the month will be announced at a later date. For service to Melbourne, the route will continue to be suspended for the immediate future.

SYD Schedule Chart.png

East Asia Routes – Seoul Gimpo and Busan
For service to Seoul Gimpo and Busan, the routes will continue to be suspended for the month of March.

Hawaii/Guam Routes – Honolulu, Kona, and Guam
From March 21 to April 15, the carrier will operate one roundtrip flight per week between Tokyo Haneda and Honolulu. For service to Kona and Guam, the routes will continue to be suspended for the immediate future.

HNL Schedule Chart.png

Travel restrictions are intact for flights between Hawaii and Japan. Currently, travelers must be quarantined for 10 days upon entering the state. At the same time, the State of Hawaii has implemented a regulation for travelers to submit a negative COVID-19 test result. If the FDA-approved test shows proof of a negative result, this allows travelers to waive the 10-day quarantine measure if tested 72 hours prior to departure.

Since September 1, all travelers to the State of Hawaii must submit their local contact information, itinerary, and health conditions prior to travel.

Reductions Announced Today
February 1 – April 15, 2021
Reduced: Routes 10 / Flights 848
See previous announcement (December 17, 2020)

Summary Chart (28JAN21).png

Extra Section Flights between Chubu Centrair Airport and Dallas Fort Worth
To support essential travel needs for workers planning to travel from/to Central Japan, JAL will operate one-way flights during the month of March. Reservations and sales for flights from NGO go on sale February 1 at 11:00 JST.

28JAN21 NGO Schedule Chart FNL.png

28JAN21 International Gateway Chart FNL.png
In other news, on the financial side, JAL issued this report:

The JAL Group has announced the consolidated financial results for the third quarter of FY2020. Beginning this fiscal year, the Company will apply IFRS (International Financial Reporting Standards) to the consolidated financial results. In order to make a comparative analysis, IFRS will be applied to the figures from FY2019.

1) JAL Group Consolidated Results for the Period April 1, 2020 – December 31, 2020
Due to the global impact of COVID-19, the business environment has been extremely challenging for the airline industry. In response to the sharp decrease in international and domestic travel demand, the carrier continued to reduce variable and fixed costs to counteract the significant decrease in revenue. However, operating revenue decreased to 356.5 billion yen, down 68.0% year-over-year, EBIT recorded a loss of 294.1 billion yen, and profit/loss figures recorded a loss of 212.7 billion yen.

As strict travel and quarantine restrictions continue to be imposed on a global scale, international passenger demand decreased 96.6% and international passenger revenue recorded 18.8 billion yen, down 95.3% year-on-year. Domestic passenger demand in Japan gradually recovered, especially in leisure demand, since the government sponsored Go to Travel promotional campaign included the city of Tokyo from October 2020. However, due to the increasing number of COVID-19 cases reported in December, the government temporarily suspended the Go to Travel campaign during the year-end holidays, resulting in lower domestic passenger demand. As a result, domestic passenger demand decreased 66.7% and domestic passenger revenue recorded 136.9 billion yen, down 68.0% year-on-year. In order to maximize its revenue stream, the JAL Group continued to support domestic and global cargo logistics by utilizing passenger aircraft. As a result, cargo revenue increased 31.5% year-on-year, recording 90.9 billion yen.

Consolidated Financial Results for Third Quarter – FY2020

01FEB Q3 Financial Results Chart 1.png

2) JAL Group’s Consolidated Financial Forecast – FY2020
Due to the global impact of the COVID-19 pandemic and travel restrictions imposed by relevant government authorities, the following figures may be subject to fluctuation. The following forecast is based on the assumption that the current international and domestic passenger demand will remain constant until the end of the current fiscal year.

Revenue

EBIT

Profit or Loss

Billions of Yen

Billions of Yen

Billions of Yen

Previous Forecast
(as of Oct 30, 2020)

530.0-600.0

(380.0)-(330.0)

(270.0)-(240.0)

New Forecast
(as of Feb 1, 2021)

460.0

(420.0)

(300.0)

Note: Market Assumption for FY2020
Singapore Kerosene :42.4USD/bbl, Dubai Crude Oil: 40.9USD/bbl, FX Rate: JPY 105.7/USD

Consolidated Earnings Forecast – FY2020 (Demand/Revenue)

01FEB Q3 Financial Results Chart 2.1.png
01FEB Q3 Financial Results Chart 2.2.png

1) FY2019 figures are based on the revised forecast disclosed at the FY19Q3 Financial Results announced on January 31, 2020
2) Disclosed on October 30, 2020

While maximizing efforts to increase revenue, the carrier looks to minimize its losses by reducing fixed costs and flexibly adjusting capacity based on actual demand. Cash on hand will be 370 billion yen, as of March 2021, and equity ratio will be 44.3% and D/E Ratio will be 0.5x.

3) JAL Group Financial Position
In order to improve the airline`s financial structure, JAL initiated a public equity offering in November 2020 to secure the necessary scale of funds to realize a growth strategy once the pandemic subsides. Through the offering, equity capital increased to 1 trillion and 17.1 billion yen. JAL established a strong financial base and shareholders’ equity ratio now stands at 47.6% and D/E ratio at 0.5x.

Interest-bearing debts decreased to 494.5 billion yen from the end of the second quarter. Required repayments within one year, including leasing, is set at 61.5 billion yen.

Operating cash flow improved to ▼29.9 billion yen in Q3 from ▼130.2 billion yen reported in Q1

Summary of Consolidated Statement of Financial Position and Cash Flow

01FEB Q3 Financial Results Chart 3.png

4) Initiatives to Improve Performance
Expenses have been reduced by over 120 billion yen for the fiscal year, doubling the original target of 60 billion in reduction.

Due to the early retirement of the Boeing 777 aircraft, restructuring costs will increase by 10 billion yen, resulting in a total of 590 billion yen in fixed costs for the fiscal year.

Continue to aim for a cost reduction equivalent to 40% of the reduced revenue.

Based on the previous forecast, a CAPEX reduction of 90 billion yen is estimated.

The carrier will continue to carry out drastic cost and CAPEX reduction initiatives in a timely manner and make company-wide efforts to improve the financial performance.

01FEB Q3 Financial Results Chart 4.png

Initiatives to Bolster and Secure Liquidity at Hand
As of the end of December, 2020, liquidity at hand is more than 750 billion yen, including unused credit line. During the third quarter, cash burn has steadily decreased to 10-15 billion yen per month. During the fourth quarter, cash burn expects to increase to 25 billion yen per month, half of the first quarter level, as cost reduction efforts have been made.

01FEB Q3 Financial Results Chart 5.png

5) Dividends Policy
The global impact of COVID-19 has had a significant impact on the JAL Group. Therefore, in order to secure liquidity at hand, the Company has determined to not provide an annual dividend payment to the shareholders and have asked for their understanding during the unprecedented crisis.

JAL aircraft photo gallery:

JAL aircraft slide show:

JAL Group reports its net profit rose 11.4 percent to 150.8 billion yen ($1.3 billion) for its fiscal year

The JAL Group (JAL) has announced the consolidated financial results for FY2018:

To summarize the business environment in FY2018, major global economies including Japan and the U.S. achieved moderate and sustainable growth, despite U.S.-China trade frictions and political instability in Europe. Under these economic conditions, international and domestic air travel and international air freight demand remained strong in the first-half of the fiscal year. Although the company experienced a slightly weaker demand in the second-half, steady growth was seen throughout the fiscal year.

Crude oil prices, which affect fuel costs and international passenger and international cargo revenues, increased significantly over the previous year in the first-half of the fiscal year but dropped in the second-half due to the slowdown of the Chinese economy. However, fuel prices rose again from January 2019, partly attributable to the OPEC agreement to cut oil production and expectations for progress at U.S.-China trade talks, which left fuel price projections unclear.

Under these economic conditions, the company continued to implement profit conscious management strategies based on the principles of JAL Philosophy and the divisional profitability management system. In order to reach the goals set out in the FY2017-2020 JAL Group Medium Term Management Plan, the company will strive to realize greater management efficiencies and provide unparalleled service to customers, while committing to provide a safe and comfortable travel experience.

As a result, the operating revenue for the consolidated fiscal year increased 7.5% year over year to 1,487.2 billion yen, operating expenses increased 8.5% year over year to 1,311.1 billion yen, operating profit increased 0.9% year over year to 176.1 billion yen and the ordinary profit increased 1.3% from the previous year to 165.3 billion yen. The net profit attributable to owners of the parent was 150.8 billion yen, up 11.4% from the previous year.

  1. 1. JAL Group Consolidated Results for the Period April 1, 2018 – March 31, 2019
Unit: Billions of yen   Fiscal Year 2017

(4/1/2017 – 3/31/2018)

Fiscal Year 2018

(4/1/2018 – 3/31/2019)

Difference

vs. Prior Year

% vs. Prior Year

Operating Revenue

1,383.2

1,487.2

+ 104.0

107.5

International Passenger

Domestic Passenger

Cargo (Inter/Dom)

Other

462.9

518.2

78.4

323.7

530.6

528.0

87.3

341.1

+ 67.7

+ 9.8

+ 8.8

+ 17.5

114.6

101.9

111.3

105.4

Operating Expense

1,208.6

1,311.1

+ 102.4

108.5

Operating Profit

174.5

176.1

+ 1.5

100.9

Operating Profit Margin

12.6%

11.8%

– 0.8 point

Ordinary Profit

163.1

165.3

+ 2.1

101.3

Profit attributable to owners of parent

135.4

150.8

+ 15.4

111.4

Figures have been truncated and percentages are rounded off to the first decimal place.

2. Air Transportation Segment

International Operations
For international passenger operations, outbound demand from Japan was steady while inbound demand remained strong, as the number of visitors to Japan reached 31.19 million in CY2018; exceeding the 30 million mark for the first time in the country`s history. To capture the robust demand, the carrier proactively optimized its cabin configuration and increased seat availability to balance out the supply and demand on each route. As a result of the routes launched in FY2017 (Narita=Kona, Narita=Melbourne, Haneda=London), available seat kilometers (ASK) increased by 6.0% year over year, passenger traffic grew by 6.3% year over year, revenue passenger kilometers (RPK) rose by 6.3% year over year, and load factor reached 81.3%.

In route operations, JAL launched new services between Haneda=Manila from February 1 and Narita=Seattle from March 31, 2019. And, for future routes, JAL announced the launch of the Narita=Bengaluru route during the summer schedule of 2020.

In regards to strengthening and expanding partnerships, JAL expanded codeshare agreements with the following airlines: S7 Airlines (from April 29, 2018), Garuda Indonesia (from October 28, 2018), Vietjet Air (from October 28, 2018), Aeroméxico (from February 13, 2019), Fiji Airways (from February 26, 2019), and Alaska Airlines (from March 31, 2019).

For enhancements to the current joint business partnerships, the following routes were added: British Airways` new Kansai=London route (from March 31, 2019) and Finnair`s Kansai=Helsinki route from March 31, 2019. In addition, Finnair announced new flights on the New Chitose=Helsinki route (from December 15, 2019), which will be added to the joint business structure. To further promote joint businesses with partner airlines, JAL filed an application for antitrust immunity with Hawaiian Airlines in June 2018 and with China Eastern Airlines in October 2018, with an aim to launch the business structure by March 31, 2020.

On the product and service front, the carrier introduced the JAL International Award Ticket PLUS program to provide customers convenient options to redeem award tickets. By using additional miles, customers can redeem award tickets that would normally be waitlisted under current conditions. Also, from April 2019, JAL changed the reservation start date for international flights from 330 to 360 days prior to departure, enabling travelers to book tickets at an earlier stage.

On routes to Hawaii, JAL introduced new services to meet the diversified needs of its customers and to further increase the carrier`s brand preference. Through a concept called Style yourself ~ JAL HAWAII, JAL opened a new lounge at Daniel K. Inouye International Airport in August 2018, launched an early check-in service program with the carrier`s hotel partners and offered a reciprocal mileage program with Hawaiian Airlines. In addition, JAL introduced a dedicated self-service check-in counter at Daniel K. Inouye International Airport from March 2019.

The new passenger service system, which was renewed in November 2017, is being utilized to maximize yield management strategies, as well as increasing sales on its overseas online channels.

In international cargo operations, strong air freight demand in the first-half of the fiscal year centered on automobile related shipments but weakened in the second-half of the fiscal year.

As a result of the above, international passenger revenue was 530.6 billion yen, up 14.6% year over year.

Domestic Operations
In domestic operations, a number of flights were affected due to the aftermath of Typhoon Jebi at Kansai International Airport and the Hokkaido Eastern Iburi Earthquake in September 2018. However, to cater to robust demand, JAL expanded routes operated by the Embraer 190 aircraft, centered on routes in and out of Osaka (Itami) Airport and introduced the JAL SKY NEXT configured Boeing 737-800 aircraft on Okinawa (Naha) routes operated by Japan Transocean Air.

As a result, available seat kilometers (ASK) increased by 1.1% year over year, passenger traffic grew by 2.4% year over year, revenue passenger kilometers (RPK) rose 2.2% year over year, and load factor reached 72.5%.

To support the recovery in the aftermath of the 2018 Hokkaido Eastern Iburi Earthquake, JAL offered Support Sakitoku fares at affordable prices on routes to/from Hokkaido along with dynamic package travel products. In addition, JAL lowered fares on its JAL Japan Explorer Pass as a limited time offer on Hokkaido routes and Kansai region routes (Kansai, Itami, Nanki-Shirahama) to revitalize inbound traffic to Japan.

In route operations, JAL launched new services between the islands of Tokunoshima, Okinoerabu, and Okinawa (Naha), also known as the “Amami Islands Hopping Route,” operated by Japan Air Commuter to further expand travel among the Amami Islands. In addition, the ATR72-600 aircraft was launched on routes to/from Kagoshima by Japan Air Commuter.

For products and services, the carrier started to accept domestic award reservations up to one-day prior to the flight from October 2018. In addition, JAL partnered with Kyushu Railway Company to offer optional services for customers traveling to airports in Kyushu using the domestic award ticket program, Dokokani Mile.

From February to March 2019, a new check-in system was progressively introduced to airports in Japan and the passenger service system renewal project was completed. This new system maximizes yield management strategy with greater precision in domestic passenger operations.

As a result of the above, domestic passenger revenue was 528.0 billion yen, up 1.9% year over year.

3. JAL Group Consolidated Financial Position

FY2017
As of March 31, 2018

FY2018
As of March 31, 2019

Difference

Total Assets (billion yen) *1

1,853.9

2,030.3

+ 176.3

Net Assets (billion yen)

1,094.1

1,200.1

+ 106.0

Equity Ratio (%)*2

57.2

57.4

+ 0.2 point

Interest-bearing Debt (billion yen)

125.7

142.3

+ 16.5

Debt/Equity Ratio *3

0.1x

0.1x

+ 0.0x

Figures are rounded down to the nearest tenth of a billion yen while percentages are rounded off to the first decimal place.

Note:
1. The Company applied “Partial Amendments to Accounting Standard for Tax Effect Accounting” (Corporate Accounting Standard No. 28, February 16, 2018), from the beginning of the first three months of the consolidated financial statements. The figure as of March 31, 2018 is based on a retroactive application.
2. Shareholders’ equity is total net assets excluding minority interests.
3. Debt-to-equity ratio is interest-bearing debt divided by shareholders equity.

JAL Express to be merged into Japan Airlines on October 1

JAL Group (Tokyo) has issued this short statement about merging subsidiary JAL Express (Tokyo-Haneda) into Japan Airlines:

Japan Airlines (JAL) and JAL Express (JEX), wholly owned by JAL, have reached an agreement to integrate as below with approval of the board of directors’ meeting.

1. Purpose of merger

JAL aims to stabilize the domestic business, through enhancing the mobility of making the best match between capacity and traffic, and improving inflight human service of domestic flights.

2. Effective date of merger

October 1, 2014

3. Form of merger

JAL, as surviving company, will merge with JEX and JEX will be dissolved.

This integration is simplified merger for JAL and short form merger for JEX. The consent of the general shareholders meeting of each participating company is not a requirement for reaching a merger agreement.

JAL Express commenced operations on September 30, 1998 as a no-frills unit of JAL for domestic operations.

Copyright Photo: Akira Uekawa/AirlinersGallery.com. Boeing 737-846 JA302J (msn 35331) with “Forward Together Japan” markings arrives at Tokyo (Haneda).

JAL Express: AG Slide Show

JAL Group upgrades and introduces “Welcome! JAL New Sky” for its domestic flights

JAL Sky Wi-Fi

JAL Group (JAL-Japan Airlines) (Tokyo) has launched JAL New Sky Project, a thorough revamp of its in-flight products and services under a collective theme “Welcome! JAL New Sky”.

JAL introduces more details on the fully revamped cabin interiors and new in-flight internet service on domestic routes, which the airline released last year. Under the theme of “Pioneering Standard” and following with the project of produces and services aim to provide more comfortable experience and convenience during every journeys on domestic routes, the airline will start to introduce revamped aircraft with updated cabin interiors through May 2014, and the in-flight internet service will be provided from July 2014.

Applicable Aircraft:

Domestic Boeing 777-200/300
Domestic Boeing 767-300/300ER
Domestic Boeing 737-800
(Total of 77 aircraft according to schedule)

From May 2014 according to schedule
(In-flight internet service will start from July 2014)

JAL will provide in-flight Wi-Fi service on domestic routes, and passengers are able to access internet or in-flight entertainment website by using their Wi-Fi enabled personal terminals, Smartphone, tablet or notebook PC.

Passenger can use their own wireless LAN devices to watch Sports, gourmet, music, anime and other plentiful video programs including SKY RURUBU (travel information), flight information and JAL website for free of charge. *Some video programs are examined to be included within fee based service.

JAL is the first Japanese carrier ever to provide in-flight Internet service (fee based) on domestic routes, using Gogo®’s communications satellites. Passengers will be able to access internet, send/receive e-mails and SNS etc. via their own smartphone, tablet and notebook computer and other wireless LAN devices during the flight.

The new leather seating in J-class and Economy class will be made from the same high-quality genuine leather used for seats installed in luxury vehicles. The airline’s plan is to revamp all the cabin seats in both classes on the domestic routes. In addition, carpet installed throughout the cabin will also be replaced to match the redesigned interiors.

Seating in JAL’s popular Class J will offer slightly wider space for passengers to enjoy their time in-flight, and the new genuine leather covered seats will evoke a feeling of luxury. The seat pitch in Class J is 97cm in average which is approximately 18cm more legroom than it in Economy Class.

20140130_SKY NEXT_fig7_en.jpg20140130_SKY NEXT_fig8_en.jpg

Based on the concept “air-like lighting”, the cabin atmosphere can be easily changed according to the flight hours, the season, and the natural rhythm of time to create a relaxing ambience and a feeling of Japan.

 

20140130_SKY NEXT_fig9_en.jpg

First class service will be installed on nine domestic Boeing 767-300ER from the Fall of 2014.

20140130_SKY NEXT_fig11_en.jpg

Copyright Photo: Japan Airlines (JAL Group).
Japan Airlines: AG Slide Show