TOKYO - Japan Airlines' chairman announced his resignation Friday to make room for younger leadership, saying he had seen the carrier through a successful turnaround.
The company reported Friday a 13.1 billion yen ($122 million) profit in the October-December quarter, reversing a 10.8 billion yen loss from the same quarter the previous year. It was the second straight quarterly profit after more than two years of losses.
Japan's biggest airline, known as JAL, has worked hard to improve its fortunes, cutting staff, dropping unprofitable routes and shifting to fuel-efficient aircraft.
Toshiyuki Shinmachi, 65, told a board meeting he will quit March 31, having seen the company get on track to profit, according to JAL. The move is also an effort to rejuvenate managerial ranks, it said.
Shinmachi, who became president in 2004, took office as chairman in 2006, partly to take responsibility for the airlines' faltering finances and a spate of safety problems. The chairman's seat will be left vacant, JAL said.
JAL has been struggling in recent years, hurt by a rising fuel bill, costly early retirement packages and a tarnished image from a series of safety lapses. The airline has been trying to regain customer confidence after Japanese passengers have instead opted for rival All Nippon Airways.
Japan Airlines Corp. swung into the black in the July-September quarter of 2007 after losing money in the fiscal first quarter and the previous two straight fiscal years.
Sales for the quarter ended Dec. 31 declined 4.4 percent to 558.2 billion yen ($5.2 billion) partly because of the sale of a part of Japan Airlines' stakes in a trading company called JALUX.
JAL said international travel to China, Vietnam and India was strong in recent months, offsetting a gradual decline on previously popular routes such as Europe and Hawaii, which are now less popular because of the declining yen.
Adding to its bottom line in October-December were cuts in expenses, which decreased 65.8 billion yen ($613 million) from a year earlier. Quarterly revenue from international flights rose 5.7 percent while revenue from domestic passengers and cargo declined slightly.
JAL left its forecast for the fiscal year through March at 7 billion yen ($65.2 million) in profit on sales of 2.238 trillion yen ($20.9 billion). In fiscal 2006, JAL had posted a 16.2 billion yen loss.
The management reshuffle in 2006 followed safety problems that began in 2005, and tarnished JAL's image, including wheels falling off during a landing and an engine that burst into flames.
The airline was reprimanded repeatedly by the government, but the errors continued, including a takeoff with a faulty latch and other problems. No one was injured.
Since then, JAL has stopped unprofitable routes and reorganized flights to decrease empty seats on flights.
For the April-December period, JAL earned profit of 20.4 billion yen ($190.1 million), a marked improvement from the 9.3 billion yen loss the same period in 2006.
The airline said it reduced fuel costs by 13.3 billion yen ($123.9 million), or 4 percent, in the first three quarters of fiscal 2007 from the previous fiscal year, thanks to fleet renewal, downsizing and route changes.
JAL shares rose 2.7 percent to 264 yen ($2.46) on the positive earnings news.
No comments:
Post a Comment