JAL's 1st qtr net loss expands to 99 bil. yen, announces flight cuts+

TOKYO, Aug. 7 Kyodo -
Japan Airlines Corp. said Friday its group net loss for the April to June
quarter expanded to a larger-than-expected 99.04 billion yen as cost-cutting
efforts failed to compensate for travel demand ravaged by the global economic
downturn and the new influenza scare.

Earlier in the day, Japan's largest airline also announced it will suspend or
reduce 10 international routes and reduce domestic flights on six routes as
part of its restructuring efforts to return to profitability with the help of
state-backed funds.
Yoshimasa Kanayama, JAL's senior vice president in charge of finance, told
reporters in Tokyo that more flight cuts are expected in the second half of the
business year.
''As our revenue faces tough conditions, we will study all of our routes
without exception and will have no choice but to consider withdrawing from
routes that are deeply in the red,'' Kanayama said.
The net loss compares with a year-earlier loss of 3.41 billion yen and falls
short of the company's initial first quarter target by 10 billion yen, Kanayama
said.
JAL also said it booked an operating loss of 86.11 billion yen, swinging into
the red from a profit of 3.91 billion yen a year earlier, on revenue of 334.90
billion yen, down 31.7 percent.
Both the first quarter net and operating losses were also bigger than the
January to March period even though JAL is carrying out various restructuring
measures including job cuts, scrapping of unprofitable flights, and downsizing
of aircraft.
JAL said revenue from international flights nearly halved to 97.3 billion yen
while revenue from domestic flights also fell 14.7 percent from a year earlier
to 131.1 billion yen.
''Conditions for business demand will continue to be harsh since business
demand, unlike leisure demand, will not immediately recover even if we lower
costs,'' Kanayama said at a press briefing in Tokyo.
In addition to the impact of the global recession, Kanayama said fears of the
spread of the new influenza strain affected revenue by around 20 billion yen
during the first quarter.
But the company kept intact its earnings outlook for the whole of fiscal 2009
through next March at a net loss of 63 billion yen and an operating loss of 59
billion yen.
Kanayama said further cost-cutting efforts will be able to compensate for the
revenue fall and added there are signs of some improvement in travel demand,
particularly for the five-day holiday period in September, as the impact from
the new influenza wanes.
On Oct. 25, JAL will end the seven scheduled flights per week it currently
operates between Central Japan International Airport, serving Nagoya, and
Paris' Charles de Gaulle International Airport.
The airline will also reduce six domestic routes starting in November,
including flights to Okinawa Prefecture.
In June, the struggling airline inked a deal with two state-backed lenders and
three major Japanese commercial banks to borrow a total of 100 billion yen.
==Kyodo