Category Archives: JAL Group

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.

Advertisements

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