• Joe Breitfeller

JAL Group Reports Nine Month FY20 Loss of $2.0 Billion on 68 Percent Revenue Decline to $3.4 Billion

JAL Group reported a nine month FY 2020 loss of 212.7 billion yen (US $2.0 billion) on a 68 percent year-over-year revenue decline to 356.5 billion yen (US $3.4 billion). International passenger revenue declined 95.3 percent vs. 2019 to 18.8 billion yen ($179.1 million).

Japan Airlines Boeing 787 Dreamliner - Courtesy Boeing

On Monday (February 1, 2021), Japan Airlines reported their nine month consolidated financial results for the period from April 1, 2020 through December 31, 2020. The Group reported a year-over-year loss for the period of 212.7 billion yen (US $2.0 billion) on a 68 percent revenue decline to 356.5 billion yen (US $2.0 billion). Due to travel restrictions related to the global COVID-19 pandemic, JAL’s international passenger demand over the period decreased 96.6 percent, resulting in a 95.3 percent reduction in international passenger revenue to 18.8 billion yen (179.1 million). Domestic passenger demand declined 66.7 percent vs. 2019, while domestic passenger revenue was down 68 percent to 136.9 billion yen (US $1.3 billion).

The JAL Group maximized cargo revenue during the first nine months of FY20 by utilizing passenger aircraft in domestic and global cargo logistics, resulting in a YoY revenue increase of 31.5 percent to 90.9 billion yen ($865.7 million). As of February 1st, 2021, the Group is currently forecasting a full financial year loss of 300 billion yen (US $2.9 billion). In November 2020, JAL initiated a public equity offering, increasing equity capital to one trillion and 17.1 billion yen (US $9.7 billion). The company’s equity ratio is now 47.6 percent, with a debt to equity (D/E) ratio of 0.5x. From the end of the second quarter interest bearing debts were decreased to 494.5 billion (US $4.7 billion) yen and the company’s required debt payments for the next year, including lease payments, is $61.5 billion yen (US $585.5 million).

Thus far for the fiscal year, the Group has reduced year-over-year expenses by 120 billion yen (US $1.1 billion). Early retirement of the carrier’s Boeing 777s will result in an increase of restructuring costs of 10 billion yen (US $95.3 million), for a fixed cost total of 590 billion yen (US $5.6 billion) for FY20. The company will continue to target cost reductions to the equivalent of 40 percent of reduced revenue, including a forecasted CAPEX reduction of 90 billion yen (US $857.1 million).

Founded in 1951, Japan Airlines became the country’s first international carrier. The airline is a member of the oneworld® alliance and along with their codeshare partners, serves 430 destinations in over 66 countries. The award-winning carrier operates a modern fleet of 237 aircraft and is a certified “5-Star Airline” by Skytrax. Japan Airlines is known for their punctuality and is committed to providing guests with the highest levels of quality in every aspect of their service. The carrier aims to become one of the most valued and preferred carriers in the world.

Source: Japan Airlines