TOKYO—Nippon Yusen K.K.’s unprofitable air-freight unit, Nippon Cargo Airlines Co., said demand from China will help its annual Asian sales from outside Japan surpass domestic revenue for the first time next fiscal year.

Sales outside Japan will account for about 60 percent of the company’s Asian revenue in the 12 months starting April 1, compared with about 50 percent now, as domestic business stalls, Nippon Cargo president Tadamasa Ishida said in an interview today in Tokyo. The unit’s total sales in Asia will be about ¥67 billion ($668 million) this fiscal year, he said.

Japanese transport companies are relying on non-Japanese revenue to grow as economic strength outside the country provides greater opportunities. Nippon Yusen rival Mitsui O.S.K. Lines Ltd., Japan’s second-largest shipping company, said in March 2007 shipments between Asian countries excluding Japan will reach 60 percent of its sales over three years, from 50 percent.

“Demand in China and other countries is expanding while Japan will probably remain stable,” Ishida said. “Because of that, we are gradually increasing our capacity.”

The airline, which began operations in 1978, is adding new Boeing Co. 747-400Fs to its fleet and will retire old planes as it cuts costs to return to profit in fiscal 2010. Nippon Cargo’s fleet will expand to 24 planes at the end of March 2014, from six currently.

Sales will almost triple in that time to ¥300 billion from an estimated ¥101 billion this fiscal year, according to the company.

The cargo carrier predicts overall sales, two-thirds of which come from Asia including Japan, will rise 4 percent next fiscal year. (Bloomberg)

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TOKYO—Nippon Yusen K.K.’s unprofitable air-freight unit, Nippon Cargo Airlines Co., said demand from China will help its annual Asian sales from outside Japan surpass domestic revenue for the first time next fiscal year.

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