Japan Airlines Lands In Profitland

Japan Airlines (JAL), which went bankrupt two years ago in one of the country’s biggest-ever corporate failures, on Monday logged an annual net profit of $2.33 billion, thanks to cost-cutting efforts. The carrier said net profit for the year through March was 186.6 billion yen on sales of 1.2 trillion yen, as a strong yen saw more Japanese people travel overseas, although demand was hit by last year’s quake-tsunami disaster.

The carrier, which had forecast a 160 billion yen net profit, also said it posted a record operating profit of 205 billion yen in the period.

Despite last year’s natural disasters and record flooding in Thailand, the carrier said it managed to avoid losses by cutting back on its flight schedule.

“(Then) JAL reacted swiftly to capture more traffic and deployed larger aircraft and operated extra flights to Honolulu when demand recovered from summer due to the strong yen,” it added in a statement.

After filing for bankruptcy in 2010 JAL underwent an aggressive cost-cutting plan, led by charismatic businessman Kazuo Inamori, who was brought in by the government to help turn the firm around.

Inamori, founder of high-tech giant Kyocera, has previously lamented the airline’s lack of cost discipline, saying its executives were too inept to run a vegetable shop.

On Monday, he warned against complacency at the revived carrier, given “unexpected risks” that routinely hit the airline industry.

“All the employees became united to reduce costs and increase profit,” he told a news briefing in Tokyo.

“(But) I keep telling them not to feel complacent of this result,” added the company director who serves as chairman emeritus.

In a statement, the company warned that business conditions would “continue to cast uncertainty”, especially because of rising oil prices, while Europe’s debt problem also threatened the global economy.

The carrier predicted it would earn a profit of 130 billion yen in the present fiscal year.

In March 2011, the company exited bankruptcy, more than a year after a spectacular collapse that prompted a government bailout of the once-venerable flag carrier.

It went bust with staggering debts of about 2.32 trillion yen but continued flying during its rehabilitation, which included massive job and route cuts.