Discount carrier Skymark Airlines Inc. will return to profit next fiscal year as it hands back the final two Boeing 767 planes in its fleet, reducing costs related with returning the aircraft, according to its president.

The airline expects net income of about ¥2.6 billion in the year starting April 1, President Shinichi Nishikubo said in a recent interview in Tokyo. That compares with a forecast loss of ¥2.1 billion this business year.

Costs for returning the leased planes will drop 74 percent to ¥9 billion, from ¥35 billion this year, Nishikubo said. Skymark is converting its fleet to smaller Boeing 737s to cut seating capacity and reduce maintenance costs by using a single, more fuel-efficient aircraft type.

"It's reasonable to imagine Skymark could return its profit to last fiscal year's level," said Satoshi Yuzaki, a manager at Takagi Securities Co. "The costs involved in returning airplanes are fairly clear."

Skymark will return its last 270-seat plane in November, completing the conversion of its fleet to 177-seat planes. The airline has lost money two of the past three years as higher fuel prices hurt profitability. The airline, which doesn't hedge its fuel costs, will benefit from a decline in jet kerosene expenses and a strengthening of the yen.

Jet kerosene, the carrier's biggest operating cost, had more than halved to $58.25 a barrel in Singapore on Dec. 5, compared with a record high of $181.85 a barrel in July.

"We can ensure a profit of ¥2.6 billion next fiscal year," Nishikubo said.

A rally in the yen against the dollar will also help reduce costs for fuel, foreign pilots and aircraft lease payments, which it pays in dollars.

The yen has gained 21 percent against the dollar this year, rallying to a more than 13-year high of ¥90.93 in October.

"The stronger yen is a significant plus for us," Nishikubo said.