Japan Air: Net profit down 3.7%

— Japan Airlines, which made a comeback from bankruptcy last fall, said its net profit fell 3.7 percent in the first three quarters of 2012, but the carrier raised its full year profit estimate despite concerns about its fleet of grounded Boeing 787s.

The $1.52 billion profit the company reported Monday for April-December compared with $1.58 billion in the same period a year earlier.

Revenue rose 3.6 percent to $10.2 billion, but operating costs rose by nearly 5 percent as fuel prices climbed.

Japan Airlines was delisted after it filed for one of the country’s biggest ever bankruptcies in 2010, receiving a $3.8 billion government bailout. It restructured and cut costs to restore profitability, netting$8.5 billion in an initial public offering last fall, nearly double the sum spent on its bailout.

The carrier raised its profit estimate for the fiscal year ending March 31 to $1.8 billion, up from the $1.5 billion forecast issued in November. It anticipates $13.3 billion in sales for the full year.

Japan Airlines noted strong demand in key markets in Europe, the U.S. and Southeast Asia, but acknowledged persisting risks from tensions with both China and South Korea over territorial disputes.

Both Japan Airlines and its main rival, All Nippon Airways, have seen their fleets of Boeing 787s grounded after problems with overheating of their lithium-ion batteries.

However, with only seven of the next-generation aircraft, used only on international routes, the effect has been relatively limited for Japan Airlines. All Nippon Airlines has 17 of the aircraft, used on both domestic and international flights.

Both airlines have sought to minimize disruptions from the grounding of the 787s as investigators in Japan and the U.S. look into what caused a battery on a Japan Airlines 787 to catch fire while it was parked at Boston’s Logan International Airport and one on an All Nippon Airline flight in Japan to overheat, leading to an emergency landing.

But despite switching aircraft for many flights, between them, the carriers have had to cancel hundreds of flights, affecting tens of thousands of passengers.

Japan Airlines announced Monday it is postponing the introduction of a nonstop Tokyo-Helsinki service that had been set to begin Feb. 25, because of the 787 problems.

Last week, All Nippon Airlines stuck to its forecast for a $440 million profit in the current fiscal year, up nearly 12 percent from the previous year, despite the 787 woes.

Business, Pages 25 on 02/05/2013

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