JAL says 787 grounding to cut profit by $19 million

TOKYO Tue Mar 19, 2013 6:19am EDT

Japan Airlines aircrafts are seen on the tarmac at Haneda airport in Tokyo September 10, 2012. REUTERS/Toru Hanai

Japan Airlines aircrafts are seen on the tarmac at Haneda airport in Tokyo September 10, 2012.

Credit: Reuters/Toru Hanai

TOKYO (Reuters) - The grounding of Boeing's (BA.N) 787 Dreamliner is likely to cut Japan Airlines Co Ltd's (9201.T) operating profit between mid-January and the end of May by 1.8 billion yen ($18.97 million).

The two months to end-May will slice 1.1 billion yen from JAL's profit, President Yoshiharu Ueki said on Tuesday, on top of the 700 million yen the idled Dreamliners cost the airline between mid-January and the end of March.

JAL expects operating profit of 186 billion yen for the financial year ending March 31.

Japan Airlines' seven 787 Dreamliner jets have been grounded since mid-January after problems with its lithium-ion battery.

Boeing last week unveiled a new battery system and predicted the 787 would fly again within weeks rather than months.

Asked when JAL will resume Dreamliner flights, Ueki did not give a specific timetable.

"Boeing has said several weeks and we are making sufficient preparations because that could be the quickest scenario. But at this stage we are not thinking of when exactly they will resume," he told reporters.

JAL's decision will depend on how aviation authorities in the United States and Japan will respond, Ueki said.

Its rival All Nippon Airways (9202.T), which with 17 Dreamliners is the aircraft's biggest user, said this week that Boeing's goal to have the jets back in the air within weeks was a best-case scenario, and too uncertain to plan its return to service.

JAL is preparing to negotiate with Boeing on possible compensation related to the Dreamliner grounding, Ueki said, but he did not give details.

"We will start negotiations at an appropriate period. But honestly speaking,I want Boeing to focus on making improvements on the jets rather than bothering them about this now," he said.

($1 = 94.89 Japanese yen)

(Reporting by Yoko Kubota; Editing by Daniel Magnowski)

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