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Friday, May 09, 2008

Japan Airlines Experienced Reduction in Losses During January-March Quarter

You might already know that price of fuel, petrol are increasing in world market on a permanent basis and because of this continuous price hike, automobile and airline companies are now facing strong challenges to carry on their business. In fact, many companies have seen extensive losses over the last one year.

Japan Airlines also faced financial losses, but the good thing is that it could reduce loses in the January-March quarter, compared with the losses it faced in the same period of previous year. However, Japan Airlines has forecasted lower profit for the current fiscal year, considering the increasing fuel costs and tough competition in the market. Japan Airlines is the largest airline companies in Asia in terms of sales.

AP reported:

Soaring fuel bills, costly early retirement packages and a tarnished image from a series of safety lapses have hurt JAL in recent years. It has struggled to win back customers who began booking with rival All Nippon Airways.

Although international business travel was relatively good for JAL in the fiscal year ended March 31, domestic passenger demand was stagnant, according to the airline.

JAL became profitable for the fiscal year ended March 31, marking 16.9 billion yen ($163.1 million) in profit, a turnaround from the 16.2 billion yen in red ink it chalked up the previous fiscal year — its second straight year of red ink.

It seems that soaring fuel price is not the only reason behind its current situation. Rather, I think, mismanagement and other internal problems have also contributed to bring the airline company down and forced the passengers to look to other companies. Naturally, in this competitive world, the rival companies are always active to grab more market share. So, Japan Airlines authority should give more focus on their internal management to ensure the passengers full safety in order to bring back the reliability of the passengers.

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