Japan Airlines Corp. suffered a record 46.7 billion yen (US$524 million) consolidated after-tax loss during the October-December period, compared with 38.5 billion yen during the same period in the previous year, the airline said Friday.

The embattled carrier's sales stood at 380.8 billion yen for the quarter, down a discouraging 21.5 per cent from a year earlier.

Both figures signify record lows since fiscal 2003, when JAL's business performance incorporated profits and losses accruing from its business integration with Japan Air System Co. for the first time.

The worst quarterly losses taken by JAL--a one-time flag carrier struggling to rebuild its business under the Corporate Rehabilitation Law--can be attributed to a decline in passenger demand as a result of the worsening recession, combined with a large number of customers shifting to other airlines because of media reports about the carrier's financial difficulties, according to analysts.

During the October-December period, the average amount of money spent by each passenger for JAL international flights declined a significant 35 per cent from a year earlier. This was exacerbated by cuts in fuel surcharges and a sharp rise in the yen's value during the period, according to analysts.

"The drop in demand accounted for about half of the 35 percent decline (in per-customer spending)," JAL Executive Officer Norikazu Saito said at a press conference Friday.

In a press conference the same day, however, Akitoshi Nakamura, the administrator in charge of JAL's rehabilitation, said the airline's operating losses in the business year ending at the end of March would likely fall below a projected 260 billion yen.

"There has been no major confusion (in JAL's business operation) since the airline filed for court-administered protection under the Corporate Rehabilitation Law," Nakamura, also a senior executive director of the Enterprise Turnaround Initiative Corporation of Japan, said.

He also said financial and other aid for the cash-strapped carrier from the corporate turnaround body and other institutions could be reduced from their initial estimate.

On Friday, JAL said it would establish a panel tasked with investigating whether there was any window-dressing accounting in the carrier's past business operations on Tuesday.