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ANA and Korean Air in the black; JAL and Asiana negative

16-Nov-2009
Asiana Airlines CEO, Chan Buk Park
Asiana Airlines CEO, Chan Buk Park

It is interesting to compare the respective results of the four major non-Chinese airlines in north Asia. The Korean carriers have a different financial year – ending on 31-Dec-2009 – from the Japanese, whose FY ends on 31-Mar-2010. So the four-carrier comparisons are only on the most recent quarter.

A separate analysis deals more in depth with JAL’s Sep-2009 quarterly and half yearly results, but this comparison makes clear just how far out of step JAL has become with its nearby competitors.

For the three months to 30-Sep-2009, both ANA and Korean delivered better than last year results. JAL’s decline is a standout by way of contrast. That ANA in particular was profitable in the September quarter is a notable achievement.

ANA, JAL, Korean Air and Asiana operating profit margin and net profit margin comparison for the three months ended 30-Sep-09

Korean performing better than Asiana; and cost is the key

The statistics for Asiana and Korean are similar but for one feature: the 14.7% reduction in cost that Korean achieved. This compared with a 8.5% fall in Asiana’s expenditures and goes a long way to explaining the difference in financial performance.

Korean Air vs Asiana Airlines: Financial performance comparison for the three months ended 30-Sep-2009

Jul-Sep 2009

Billion KRW

Korean Air

Y-o-Y

Asiana Airlines

Y-o-Y

Operating revenue

2,477

-10.3%

1,026

-11.5%

Passenger

1,506

-8.5%

669

-10.0%

Cargo

664

-18.6%

252

-20.0%

Others

307

2.8%

105

4.7%

Operating costs

2,377

-14.7%

909

-8.5%

Operating profit margin

4.0%

 

-2.8%

 

Net Profit margin

10.7%

 

0.1%

 

JAL and ANA: revenues down but worlds apart on the bottom line

ANA’s results by most measures would be unattractive, but as noted above the carrier is clearly improving quickly in the most recent quarter, making a JPY14.1 billion operating profit in the quarter, for a JPY3.8 billion net result.

For the six month period however, the big difference is JAL’s 28.8% revenue drop (partly related to its cost reduction, as services were reduced and fuel prices fell), against ANA’s 18.8%.

JAL Group vs ANA Group: Financial performance comparison for the six months ended 30-Sep-2009

Apr-Sep 2009

Billion JPY

JAL

Y-o-Y

ANA

Y-o-Y

Operating revenue

763.9

-28.8%

611.8

-18.8%

International Passenger

225.4

-42.8%

100.9

-39.1%

Domestic passenger

310.7

-11.9%

324.4

-12.9%

cargo

43

-54.9%

38.6

-33.3%

Others

184.7

-20.3%

147.9

-6.0%

Operating costs

859.7

-17.6%

640

-9.0%

Operating profit margin

-12.5%

 

-4.6%

 

Net Profit margin

-17.2%

 

-4.1%

 

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