Japanese carriers remain positive despite Dreamliner grounding

Japanese carriers All Nippon Airways (ANA) and Japan Airlines (JAL) affected by the Dreamliner grounding remain positive about their full-year profit forecasts ending March 2013. (See Dreamliner: Not quite a dream start, Jan 17, 2013)

Courtesy AFP

Courtesy AFP

ANA reported higher earnings at 52bn yen (US$561m) for the first nine months to December 2012, up 55 per cent, boosted by low-priced fares promotion and new routes domestically and internationally. It is sticking to its forecast of 40bn yen for the full year.

JAL, despite a 5.6 per cent drop in earnings for the April to December period, has raised its profit forecast to 163bn yen for the full year, up from 140bn yen, boosted by travel demand to Europe, North America and South-East Asia.

Both airlines play down the impact of the Dreamliner grounding. JAL, which owns seven of the Dreamliner jet, said: “While there are concerns of the impact of the suspended use of the Boeing 787 aircraft since January 2013, business has been robust. Various measures including new products and services, which were steadily promoted, are also expected to uplift revenue.”

Courtesy AP Photo/Kyodo News

Courtesy AP Photo/Kyodo News

JAL said the Dreamliner grounding has cost it 693m yen and would be seeking compensation from Boeing. The pain should be greater for ANA, which owns 17 of the Boeing aircraft. It has said the company would be hit to the tune of 1.4bn yen from the cancellation of 450 international and domestic flights, but it does not expect that to drastically affect the full-year profits.

It remains uncertain as to when Dreamliner operations would resume, in light of the inconclusive investigations into the suspected problem posed by the use of lithium-ion batteries. The current year’s profits may remain intact on the back of a strong first three quarters, but any prolonged Dreamliner grounding will be felt in the coming year. (See Prolonged Dreamliner grounding is not good news for Boeing and its customers, Jan 28, 2013)

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About David Leo
David Leo has more than 30 years of aviation experience, having served in senior management in one of the world's best airlines and airports. He continues to maintain a keen interest in the business, writes freelance and provides consultancy services in the field.

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