Japan Airlines (JAL) reported a net profit of ¥51.2 billion ($472.2 million) for the six months through Sept. 30, down about 30% from the profit of ¥73.4 billion in the same period a year earlier.

Revenue rose 1.3% to ¥759.8 billion, although this was exceeded by operating cost growth of 3.9%. Fuel cost was up 1.9%, and non-fuel costs increased by 4.3%.

Domestic passenger revenue was up 3.3%, with traffic growing faster than the capacity rise of 1.7%. However, international passenger revenue fell by 1.2% for the period. International capacity increased by 2.5% as JAL opened new routes and reconfigured cabins, but traffic was only up by 0.9%.

Corporate demand did not increase in line with supply in international markets, JAL said. A global economic slowdown, rising competition on European and Chinese routes, and a decline in outbound demand were also cited as factors for the revenue fall. Demand was down on routes to Hong Kong and South Korea, which other airlines have also reported.

Cargo and mail revenue fell by 9.3%. JAL said outbound cargo demand from Japan dropped, and the US-China trade dispute was a factor.

The carrier is sticking to its forecast of a net profit of ¥114 billion for its full fiscal year ending March 31, 2020. However, to achieve its operating and net profit goals, the carrier said it will be implementing groupwide cost reduction measures.

JAL is revising its revenue projections downward for the second half of the fiscal year. It is also adjusting its operating cost estimate lower, with fuel and non-fuel costs expected to decline.

Adrian Schofield, adrian.schofield@informa.com