Japan Airlines raises profit outlook despite China spat

Japan Airlines has said that its net profit for this year will be higher than expected. The carrier which reemerged from bankruptcy last year is doing fine despite a decline in its China business. Japan Airlines (JAL) on Friday raised its full-year profit forecast to $1.74 billion (1.35 billion) during the first presentation of company results since the carrier relisted on Tokyo's stock market. The airline, whose collapse in 2010 marked one of Japan's worst corporate failures, announced net earnings in 2012 would rise in the fiscal year to March, primarily owing to earlier cost-cutting measures and increased demand for new international routes. JAL had continued flying while it went through a huge overhaul under court protection, cutting staff and scrapping money-losing routes as well as selling non-core businesses. The carrier got onto its feet again not least of which was due to a huge government bailout and other concessions drawing a storm of protest at the time from rival airlines. Bilateral frictions JAL President Yoshiharu Ueki said a 14 percent decline in third-quarter profit would not mar full-year results, but warned that the current territorial dispute between Japan and China over an East China Sea island chain was starting to have a grave impact. He said the bilateral spat would cost JAL some 10 billion yen in revenues in the current fiscal year. The number of passengers on Japan-China routes dropped 15 percent in September alone. "But a decline in the number of new bookings has now bottomed out," Uiki said in a statement, raising hopes that the carrier would continue to stand for the one of the most successful corporate turnarounds in the history of the country.