Japan Airlines raises full-year forecast 37%

JAPAN Airlines Corp raised its forecast for full-year operating profit 37 percent as it lowered costs by speeding up job cuts.

The Tokyo-based company expects operating profit of 48 billion yen (US$419 million) for the year ending March 31, compared with an earlier forecast of 35 billion yen, it said in a statement yesterday. Asia's largest carrier kept its net income forecast unchanged as it took a 11.5-billion-yen provision for a possible price-fixing fine.

President Haruka Nishimatsu has sped up job cuts as he seeks to reduce personnel costs by 50 billion yen this fiscal year and pare back eight percent of the carrier's work force by March 2009. The airline also cut low-margin routes and attracted more business-class passengers on flights to China and Southeast Asia.

"JAL has cleared the first hurdle in its cost-cutting program," Mitsushige Akino, who oversees US$468 million in assets at Ichiyoshi Investment Management Co in Tokyo and doesn't own Japan Air shares, told Bloomberg News.

"Their focus on more profitable routes and passengers is also helping earnings."