Japan Airlines Corp, Asia's largest carrier by sales, narrowed its first-quarter loss by cutting jobs and axing unprofitable routes, bringing the company closer to its target of returning to profit this year.

The airline's net loss was 4.29 billion yen (US$36.5 million) in the three months ended June 30, compared with a loss of 26.8 billion yen a year earlier, the Tokyo-based carrier said in a statement on August 6. Sales fell 0.3 percent to 521 billion yen, Bloomberg News said.

Japan Air forecast its first profit in three years this fiscal year as the airline cuts staff and operating costs. Increased demand for business travel to China and Southeast Asia boosted the carrier's revenue from flying even as it lost domestic passengers to Skymark Airlines Inc, a discount carrier.

"Japan Air still has a way to go," said Mitsushige Akino, who oversees US$468 million of assets at Ichiyoshi Investment Management Co in Tokyo. "It needs to cut costs further."

Japan Air's operating expenses fell 4.5 percent, or 24.9 billion yen, after it trimmed jobs and wages, eliminated less profitable routes, reduced the size of its fleet and replaced large planes with smaller aircraft.

Japan Air cut 1,600 jobs in the year ended March and will eliminate another 700 this fiscal year. The job cuts are part of a plan to reduce the airline's workforce by 4,300, or eight percent, by March 2009. Japan Air had 51,497 workers at the end of March this year.