JAL pegs at forecasting $1.8bn operating profit next year

Tokyo / Bloomberg

Japan Airlines Co. expects operating profit of at least 200 billion yen ($1.8 billion) in the financial year that begins in April, according to two people familiar with the situation.
The profit forecast compares with 204 billion yen in operating profit expected in the fiscal year that ends in March. The country’s second-largest airline will update its mid-term business plan Thursday afternoon.
The people said JAL will forecast nearly 1.35 trillion yen in sales for next fiscal year, largely unchanged from the 1.347 trillion expected this year. The planned removal of remaining fuel surcharges that has made tickets more expensive suggests the company is expecting to sell more tickets. The company already removed surcharges on fights originating overseas in December.
JAL emerged from bankruptcy protection in 2011 to become the world’s most profitable publicly traded airline by 2014. The carrier issued its five-year mid-term business plan in February 2012 under former Chairman Kazuo Inamori.
The carrier has said it expects record operating profits this fiscal year, with margins of nearly 15 percent. Operating margins should be at a similar level next year, according to the figures from the people, which would mark the fifth consecutive year JAL has posted margins above 10 percent.
JAL shares closed down 1.7 percent on Thursday at 3,939 yen in Tokyo. The shares have fallen 9.6 percent so far this year, compared to the 15 percent decline in the benchmark Nikkei 225 Stock Average.
JAL’s equity ratio will remain above 50 percent next year, in line with goals the company outlined in the 2012 plan, the people said. The ratio was 56.2 percent in the three months through December, the company announced last month.