December 12, 2019

Japan Airlines Says 787 Grounding Will Cost It $7.5 Million

In announcing the forecast loss of about $7.5 million, the Japanese carrier joined other Dreamliner operators, like All Nippon Airways and United Airlines, in raising possible compensation demands. That adds to Boeing’s woes as it struggles to find out why a battery aboard a parked 787 burst into flames and another emitted smoke while a plane was in the air last month.

After those incidents, regulators around the world grounded the 50 Dreamliners that were in service. U.S. and Japanese officials investigating the two cases have not determined exactly what caused the lithium-ion batteries, made by a Japanese company, to overheat.

Japan Airlines, which operates seven 787s and has placed orders for 38 more, is pushing to get back on track after its emergence from bankruptcy last year and the relisting of its shares, which raised ¥663 billion.

In earnings announced Monday, the airline said net profit had fallen 3.7 percent to ¥140.6 billion in the first three quarters, through December, of its financial year. Sales rose 3.6 percent to ¥942 billion, Japan Airlines said, but were offset by a nearly 5 percent increase in operating costs as fuel prices climbed.

Japan Airlines also said that it would postpone the introduction of service between Helsinki and Narita International Airport near Tokyo, originally scheduled to start Feb. 25. The airline cited “necessary adjustments to JAL’s international routes utilizing the Boeing 787 aircraft.”

Still, it raised its full-year profit forecast through March by 16 percent to ¥163 billion, citing strong demand in Europe, the United States and Southeast Asia.

Speaking in Tokyo, Yoshiharu Ueki, president of Japan Airlines, said his company was more focused on doing all it could do to help get the 787s safely back in the air. He added, however, that the airline would begin compensation negotiations “once the situation had settled down.”

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