Paul Lewis/SINGAPORE
All three of Japan's largest carriers, Japan Airlines (JAL), All Nippon Airways (ANA) and Japan Air System (JAS), slid back firmly into the red as their latest round of annual reports showed the impact of currency losses, a depressed home market and increased competition.
JAL recorded a massive net loss of ´94 billion ($741 million) for the 1997/8 year to March, having come close to break-even the year before. The airline managed a small profit on operations, but opted for a a huge write-off on its troubled investments in resorts and hotels, as well as other losses it had been carrying on its books.
JAL has also suffered since October from weakening Asian economies, which pushed down its overall international traffic for the year by 2.2%. Outbound tourist traffic to Hong Kong showed a marked downturn following the handover to China in 1997.
ANA continued to push its international network expansion forward, but could not escape the overall gloom. It ended the year with a net loss of ´2.6 billion and suspended its dividend payments for the first time in 30 years. The carrier suffered from "sluggish" growth and increased price competition in the domestic market, on which it is heavily dependent.
Japan's economic recession and increased price competition has also hit JAS, which turned in a ´1.56 billion loss for the same period. JAS and ANA in particular are pointing to a hike in consumption tax at the start of the year and the weakening economy in the last quarter as major contributory factors.
Domestic competition is likely to intensify in 1998 with the planned entry of Skymark Airlines, the first of several planned new domestic Japanese start-up carriers. With the removal of pricing restrictions, the airlines are stepping up ticket discounting campaigns to stimulate demand.
Source: Flight International
