Japan Airlines has posted a record Y99bn ($1bn) loss in the quarter ending 30 June as the recession and fears over swine flu led to passenger numbers plummeting by a third. The airline also announced plans to cut or reduce services on 16 domestic and international routes.

JAL’s losses compared with a Y3.4bn deficit in the same quarter last year. The airline said sales fell 32 per cent in the quarter to Y335bn. The losses were heaviest within its international premium business, where passenger numbers dropped by nearly a fifth and revenues slumped by half as the airline was forced to offer heavy discounts to fill seats.

The airline, Asia’s biggest carrier by revenue, said the service reductions would include axing flights to Paris and Seoul from Nagoya. Eight other international routes and six domestic ones will see flight frequency reduced by 10 to 60 per cent.

A former national carrier, JAL is deeply in debt and had only recently returned to profit after a four-year restructuring.

In June the carrier secured Y100bn in emergency funding from a group of existing creditors after the Japanese government pledged to guarantee new loans.

This year the carrier has cut jobs, sold non-core assets and cut unprofitable routes in an effort to stem losses, but analysts and creditors warn that more radical measures are needed to turn round the former national carrier’s losses.

JAL rival, the smaller All Nippon Airways, also slipped into the red, reporting a Y29bn loss in the three months to June from a profit of Y6.6bn year earlier.