Hit by the dual impact of both the economic downturn and the outbreak of swine flu, Japan’s largest carrier Japan Airlines (JAL), reported a net loss of 99.04 billion yen (US$1.04 billion) in the three months ended 30 June. The dismal result was much larger than the 3.41 billion yen net loss it posted in the same quarter last year.

“The net loss was 10 billion yen more than expected,” Yoshimasa Kanayama, a JAL senior vice president, said announcing the results.

JAL’s cargo business took a severe hit from the downturn with the resulting cargo revenue of 19.9 billion yen, down 56.2 per cent or 25.5 billion yen down from last year. The company said that in order to carefully match supply to demand it has endeavored to “flexibly manage cargo fleet and routes by effectively scheduling large and midsized freighter flights, as well as utilising cargo space available in passenger aircraft.” These efforts have reduced cargo capacity for the quarter to 20.5 per cent in comparison to a year before.

“While there may have been a slight respite in the decline of cargo shipments to and from China, cargo demand overall, in terms of revenue cargo tonnekilometers, was down 31.1 per cent against last year in view of the decrease in capacity and also the continuous effects of the financial crisis that is still limiting import and export demands,” JAL said.

The carrier added that intense sales promotion activities, expansion of its J PRODUCTS line of services, and an increase in the ratio of short-haul routes contributed to propping up cargo yield. However, the final effects of lessening fuel surcharges, fierce competition, and the yen’s appreciation eventually logged cargo yields for this quarter at 36.4 per cent down from previous year.

The carrier also announced it was downsizing aircraft used on its Tokyo- Shanghai service from a B747-400F to a B767-300F and upsizing its Tokyo-Hong Kong service from a B767-300F to a B747-400F.