Japanese airline loses more than 100 million USD due to plane fire

The plane fire on January 2 caused Japan Airlines to lose at least 105 million USD.

Japan Airlines (JAL) estimated on January 4 that the fire caused by the collision between its plane and a Japan Coast Guard aircraft will cost it 15 billion yen ($104.8 million). JAL said it was still assessing the impact of the incident on its profits for the fiscal year ending March 31.

Meanwhile, the burned plane will be covered by insurance. Reuters reported on January 3, citing insurance industry sources, that US company AIG is currently the main liability for an “all-risks” contract for the A350 wide-body that burned down after the collision. Large insurance contracts are often jointly insured by multiple companies.

Japanese authorities are inspecting the A350 after the collision on January 2. Photo: Reuters

Today is the first trading day of the Japanese stock market after the New Year holiday. JAL shares are currently up 0.5%, after losing 2.4% earlier in the session.

JAL is one of the two largest airlines in Japan. Since the beginning of last year, the country's airlines have recovered strongly after Covid-19. JAL recorded a 33% increase in revenue from April to September 2022 to 821 billion yen (over 5.7 billion USD). Of which, net profit was nearly 62 billion yen (equivalent to 432 million USD).

The collision occurred at Haneda Airport on January 2, while the A350 was landing after a trip from Sapporo to Tokyo, while the DHC-6-315 was preparing to take off to deliver relief supplies to the area devastated by the New Year's earthquake.

All 367 passengers and 12 crew members of the Japan Airlines plane successfully evacuated before the fire engulfed the plane, at least 17 people were injured but their lives were not in danger. The captain of the coast guard plane escaped with serious injuries, the remaining 5 people on board died.

According to the Aviation Safety Network (ASN), this is the first time in the world that an A350 has been completely destroyed. This aircraft line is made of carbon composite materials and has been in commercial operation since 2015.

Ha Thu (according to Reuters)

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