Japan Airlines counts losses from plane destroyed in runway collision

Japanese authorities said on Wednesday the passenger jet had been given permission to land, but the smaller plane had not been cleared for take-off, based on the transcripts.

The loss of the aircraft will be covered by insurance, the company said, adding it was assessing the impact on its earnings forecast for the financial year ending March 31. (Image credit: Reuters)

Japan Airlines on Thursday said it expected more than $100 million in losses after one of its planes was destroyed when it collided with another aircraft on the runway as it landed at Tokyo's Haneda airport earlier this week.

All 379 people on board the JAL (9201.T) Airbus (AIR.PA) A350 widebody jet escaped before the plane was completely engulfed in flames that took more than six hours to extinguish.

But five of the six crew of the other aircraft - a smaller Coast Guard plane that had been on its way to deliver aid to quake-hit regions on Japan's west coast - were killed, with the surviving pilot badly injured.

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Transport authorities are probing the circumstances that led to the Coast Guard plane entering the runway where the passenger jet was landing, while police are also looking into possible professional negligence in the case, according to media reports.

Transcripts released by authorities show air traffic control ordering the Coast Guard plane to proceed to a holding point near the runway minutes before the crash, instructions the pilot appeared to have read back in acknowledgement.

Japanese authorities said on Wednesday the passenger jet had been given permission to land, but the smaller plane had not been cleared for take-off, based on the transcripts.

The Coast Guard pilot said after the crash that he had been given permission to enter the runway, coast guard officials have said.

Authorities have only just begun their investigations and aviation experts say it usually takes the failure of multiple safety guardrails for an airplane accident to happen.

A notice to pilots in force before the accident suggested that a strip of stop lights embedded in the tarmac as an extra safety measure to prevent wrong turns, was out of service, according to a copy of the bulletin posted by U.S. regulators.

BIG LOSSES
Japan Airlines (JAL) estimated on Thursday that the collision of its flight JL516 with the Coast Guard aircraft would result in an operating loss of about 15 billion yen ($104.81 million).

The loss of the aircraft will be covered by insurance, the company said, adding it was assessing the impact on its earnings forecast for the financial year ending March 31.

Insurance industry sources have said U.S. insurer AIG (AIG.N) was the lead insurer on a $130 million "all-risks" policy for the two-year-old plane that was destroyed by the fire. AIG declined to comment.

It was the first-ever hull loss globally for the A350 model, according to Aviation Safety Network. The type, made largely from carbon composite, entered commercial service in 2015.

Shares of JAL rose 0.4% as trading resumed after the New Year's holiday. They initially fell as much as 2.4% before recovering from that drop.

From the moment of the collision, it took crew 18 minutes to get everyone off the plane and safely accounted for.

Japan's second-biggest airline has detailed how the crew in the smoke-filled cabin followed emergency procedures in textbook fashion, even as passengers panicked, intercom systems failed and several evacuation chutes were out of use due to the fire.

Hundreds of flights in and out of Haneda have faced cancellation or delays since the crash on Tuesday.

Separately, nearly 200 passengers were stranded overnight at New Chitose airport near the northern Japanese city of Sapporo, from which flight JL516 had departed, as flights arrived late due to delays, a spokesperson for airport operator Hokkaido Airports said on Thursday.

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