Japan Airlines says profit soars on falling fuel costs, tourism

Japan Airlines (JAL) said Thursday net profit in the April-June quarter more than doubled thanks to a jump in tourist arrivals and a drop in fuel costs. The carrier's net profit came in at 32.61 billion yen ($263 million), with sales up 1.6 percent at 312 billion yen. Visitor arrivals in Japan have surged as a weak yen puts more purchasing power in the hands of foreign tourists. "Due to robust inbound passenger demand, the number of visitors from overseas to Japan has increased significantly from the previous year," the airline said in a statement. The upbeat results came a day after the parent company of rival All Nippon Airways reported a surging operating profit in the quarter. A sharp drop in oil prices is also good news for airlines, which often count fuel as their single-biggest expense. "Oil prices, which greatly affect our fuel purchasing costs, have been low compared to the year before," JAL said, while adding that the weak yen offset some of the benefit of buying fuel priced in other currencies. The company added that it has rolled out new products including so-called "spacious economy" seats on certain long-haul flights, while its cargo business revenue dipped slightly due to "intensifying competition". "The Japanese aviation sector is enjoying strong demand for business use on the back of the nation's economic recovery," said Hiroshi Hasegawa, analyst at SMBC Nikko Securities in Tokyo. "A weak yen has helped boost foreign tourists to Japan especially from Asian countries." On Wednesday, rival ANA said net income more than doubled to 8.4 billion yen in April-June, while revenue in the quarter rose 7.0 percent at 413.9 billion yen. Its operating profit skyrocketed to 16.7 billion yen from just 347 million yen a year ago. The company said it benefited from having more landing slots at Tokyo's downtown Haneda airport. Japan Airlines has been embroiled in a spat with ANA over how many Haneda slots each one gets, after the one-time flag carrier JAL emerged from one of the country's biggest-ever bankruptcies following a government rescue. For the current fiscal year, JAL expects annual net profit will come in at 144 billion yen on revenue of 1.33 trillion yen.