Aviation News Item: 00071

13th Nov 2009

Source: evaint.com

The JAL Group (JAL) has announced its consolidated financial results for the first half of FY2009 to 30th, September 2009.

The operating environment of the JAL Group during this reporting period remained extremely severe. Within this reporting period, the unprecedented economic meltdown and the global outbreak of the H1N1 strain of influenza caused an economic sluggishness, both internationally and domestically that adversely affected travel and air cargo transport demand.

While operating expenses were successfully trimmed in almost all cost categories by 183.6 billion yen to 859.7 billion yen in comparison with the previous year, owing to no-holds-barred cost-cutting measures and cost structure reforms, consolidated operating revenues in the six-month period decreased by 309.6 billion yen from last year to 763.9 billion yen.

The JAL Group has been doing its utmost against this backdrop to improve profitability through ongoing route suspensions and frequency reductions, aircraft downsizing, cost cutting in every possible area, and enhancement of product competitiveness.

Despite these efforts, results for the first half of FY2009 eventually logged an operating loss of 95.7 billion yen, ordinary loss of 114.4 billion yen and a net loss of 131.2 billion yen compared to an operating income of 30.2 billion yen, ordinary income of 18.0 billion yen and a net income of 36.6 billion yen in the last reporting period.

Under such circumstances, on 29th October, the JAL Group requested the Enterprise Turnaround Initiative Corporation of Japan that it initiates preliminary consultation to decide whether ETIC would support the restructuring of the JAL Group or not. The JAL Group has also applied for the "certified alternative dispute resolution procedure prescribed in the Act on Special Measures for Revitalization of Industrial Vitality and Innovation of Industrial Activities"

The JAL Group will finalise, at the earliest time possible, the proposed business revitalisation plan that will be accepted by the parties concerned and shall put forth its best efforts for reconstructing the businesses of the JAL Group.

The JAL Group is currently formulating the proposed business revitalisation plan with the intention of reconstructing the businesses of the JAL Group. However, as agreement regarding the proposed business revitalisation plan has not yet been reached between the parties concerned, the proposed business revitalization plan, which will be the basis of the performance forecast, has not been finalized and it is thus difficult to forecast future performance.

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