Japan LCC looks to better times ahead
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Skymark Airlines, Japan’s largest low-cost carrier, has said that it expects to return to profit next fiscal year following a troubled 2008, Bloomberg has reported.
The airline expects net income of about JPY2.6 billion (US$28 million) in the year starting 1 April 2009, President Shinichi Nishikubo told Bloomberg in an interview in Tokyo. That compares with a forecast loss of JPY2.1 billion this fiscal year.
The hopes are based on the fact that Skymark will hand back the final two Boeing 767s in its fleet, reducing costs related with returning the aircraft. Costs for returning the leased planes will drop 74% to JPY9 billion, from JPY35 billion this fiscal year, Nishikubo said. Skymark is converting its fleet to smaller Boeing 737s to cut seating capacity and reduce maintenance costs by using a single, more fuel-efficient aircraft type, the report said.
The carrier had a troubled time in 2008, and was forced to cancel 633 flights in the June, July and August due to a shortage of pilots. It was also badly affected by the summer’s soaring jet fuel prices. Skymark does not hedge its fuel costs, so will now benefit from the sharply declining prices seen in recent months. Jet kerosene, the carrier’s largest single operating cost, has more than halved to US$58.25 a barrel in Singapore on 5 December, compared with a record high of US$181.85 a barrel in July, according to Bloomberg. The strength of the yen is also reported to be helping the carrier.
“The stronger yen is a significant plus for us,” Nishikubo said, adding that Skymark will save about JPY60 million in fuel costs for a 15 yen gain against the dollar.
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