China Airlines Ltd. · TWSE:2610
China Airlines — 2021 Investor Conference
33 slides from China Airlines's conference presentation, Nov 16, 2021
Slide 1: China Airlines 2021 Investor Conference
China Airlines 2021 Investor Conference Nov 16, 2021 TSE：2610
Slide 2: Legal Disclaimer
• The information contained in this presentation, Legal including all forward-looking information, is subject to change without notice, whether as a Disclaimer result of new information, further events or otherwise, and China Airlines(the “Company”) undertakes no obligation to publicly update or rev
Slide 3: Agenda
1. Financial Results for First Three Agenda Quarters of 2021 1) Operating Performance 2) Composition of Op. Revenue & Cost 3) Financial Risk Management 2. Impact of COVID-19 Pandemic 1) Operational Performance Update 2) Industry Environment Update 3) Response to COVID-19 and outlook for post COVID 3
Slide 4: Financial Results for First Three Quarters of 2021
Financial Results for First Three Quarters of 2021 4
Slide 5: Operating Performance – 2021Q3
Operating Performance – 2021Q3 Consolidated Financial Statistics TWD 100 Million 2020Q3 2021Q3 YoY % Operating Revenue 26,612 34,474 29.54% Net Operating Income (Loss) -358 3,985 - Non-Operating Income (Loss) -817 2,801 - Net Income (Loss) After Tax -708 2,917 - Earnings (Loss) Per Share (TWD) -0.13
Slide 6: Operating Performance – 2021Q1~Q3
Operating Performance – 2021Q1~Q3 Consolidated Financial Statistics TWD 100 Million 2020Q1-Q3 2021Q1-Q3 YoY % Operating Revenue 85,484 91,675 -7.24% Net Operating Income (Loss) -581 4,722 - Non-Operating Income (Loss) -2,375 1,098 - Net Income (Loss) After Tax -2,022 1,555 - Earnings (Loss) Per Shar
Slide 7: Composition of Op. Revenue - CI
Composition of Op. Revenue - CI 2020Q1-Q3 2021Q1-Q3 Other Op. Other Op. Rev 4% Rev 4% 19% 24% 4% Passenger Passenger Rev 24% Rev 3% 67% 66% 4% Cargo Rev 72% Cargo Rev 93% Cargo revenue accounted for 93%, and Passenger and other operating revenue accounted for 3% and 4% respectively in 2021Q1-Q3. 7
Slide 8: Composition of Op. Expenses - CI
Composition of Op. Expenses - CI 2020Q1-Q3 2021Q1-Q3 22.2% Airport & Airport & Ground Ground Handling Fuel 28% Handling Fuel 22% Labor Cost Charge 12% Charge 11% 17% Others 3% Labor Cost Others 4% 16% Pax Service Rental & Pax Service Rental & 2% Depreciation 1% Maitenance Depreciation & Sales & Sale
Slide 9: Financial Risk Management (CI)
Financial Risk Management (CI) 1.Fuel Cost：Hedging ratio is 4.5% during next six months 2020 Q1-Q3 2021 Q1-Q3 YoY% Jet Fuel (MOPS) USD/BBL 44.04 70.75 60.65% Fuel Consumption 10KBBL 1,026.71 1,059.95 3.24% Fuel Expend TWD/100Million 167.38 223.27 33.39% Hedging Loss (Gain) TWD/100Million 0.34 -0.02
Slide 10: Impact of COVID-19 Pandemic- Operational Performance Update
Impact of COVID-19 Pandemic- Operational Performance Update 10
Slide 11: Passenger Performance
Passenger Performance Revenue Composition by Region 16,295 19,075million in 2020Q1-Q3 Australia/ Trans Pacific ▼86% New Zealand Ocean 31% 5% Europe 9% 2,579 million in 2021Q1-Q3 Hong Kong 3% 1,808 1,433 1,287 Mainland North East 972 612 680 South East China 23% Asia 2% Asia 27% Q1 Q2 Q3 Q4 Q1 Q2 Q3
Slide 12: Passenger Performance Index
Passenger Performance Index Load Factor、 ASK (MN) Yield (TWD) 5.7 5.5 10,731 5.2 5.0 67% 4.5 4.5 36% 2.3 26% 16% 17% 20% 17% 1,342 1,977 1,348 496 669 811 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2020 2021 2020 2021 ASK Pax LF ASK and load factor decreased by 77% and 43.8ppt respectively while yiel
Slide 13: Impact on Passenger Traffic
Impact on Passenger Traffic • Our frequencies between 2020 and 2021 plunged more than 90% compared to the same period during 2019. • There was no rebound tendency in demand for passenger transport capacity from 2021 to the third quarter due to the worldwide Alpha and Delta variant, domestic outbreak
Slide 14: Cargo Performance
Cargo Performance Revenue Composition by Region Australia/ ▲45% 81,106million in 2021Q1-Q3 New 55,894million in 2020Q1-Q3 31,170 Trans Zealand 25,798 25,978 Pacific 3% 23,400 23,958 Europe 21,448 Ocean 8% Hong Kong 61% 4% 11,046 North East Mainland Asia China South 5% 6% East Asia Q1 Q2 Q3 Q4 Q1 Q2
Slide 15: Cargo Performance Index
Cargo Performance Index Load Factor、 FATK (MN) Yield (TWD) 15.6 15.6 14.7 13.8 13.5 73% 74% 76% 76% 75% 12.3 69% 72% 2,542 2,669 2,392 2,329 2,328 8.8 2,092 1,802 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2020 2021 2020 2021 FATK CGO LF FATK increased by 17% and load factor grew 4.03 ppt. Yield was
Slide 16: Impact of COVID-19 Pandemic- Industry Environment Update
Impact of COVID-19 Pandemic- Industry Environment Update 16
Slide 17: 2020-2021 Air Passenger／Freight Demand
2020-2021 Air Passenger／Freight Demand International Air Passenger(RPK)／Freight(CTK) （%YoY, vs 2019） 2020 RPK ↓ 75.6% 2021 RPK ↓ 80.2% 20% CTK ↓ 11.8% (til Sep) CTK ↑ 8.7% 1.2% Freight 0% -20% -29.5% 2021/1 -40% 1st positive growth vs. pre-pandemic level -60% APR 2020 low point Passenger -80% -98.4%
Slide 18: Demand of Pax Market is far below the pre-crisis levels
Demand of Pax Market is far below the pre-crisis levels International Pax Traffic decreased by 69.2% in Sep,2021. and decreased by 80.2% from Jan to Sep, which is still far lower than the pre epidemic level. The recovery of international pax market of airlines in the Asia lags behind other regions,
Slide 19: Impact of COVID-19 Pandemic- Response to COVID-19 and outlook for post COVID
Impact of COVID-19 Pandemic- Response to COVID-19 and outlook for post COVID 19
Slide 20: Air cargo continue to rise
Air cargo continue to rise Demand surge still spread across various sectors from hi-tech, automotive to pharma. E-commerce contributed to robust air demand. Cargo demand remains strong amidst the upcoming e-commerce heavy events(Black Friday, Singles Day) and holiday shopping along with new tech pro
Slide 21: Ease travel restrictions for vaccinated tourists
Ease travel restrictions for vaccinated tourists Government policies will play a huge role in air traffic recovery, with travel restrictions mostly impacting cross-border flights. More and more countries beginning to reopen was not only welcome news to airlines but also represents a structural impro
Slide 22: Passenger volume recovery projection
Passenger volume recovery projection Most major flows are expected to Looking ahead to projected air traffic into July recover by 2023 or 2024 Projected recovery by region, index(2019=100) 2022 For intraregional flights, we expect close to full recovery as early as 2022. Baseline scenario projection
Slide 23: Operational strategies during pandemic
Operational strategies during pandemic Mainly rely on air cargo supplemented by passenger service, during pandemic air cargo is our core source of revenue. Cargo：Differentiation pricing strategy, maximize cargo capacity, consolidate source of goods, optimize rate structure, hold on to cargo busine
Slide 24: CAL Expands Cargo Service
CAL Expands Cargo Service CAL leverages Taiwan’s strategic position and cargo capacity during the pandemic, increasing by 23% of schedule flights per week . The overall weekly capacity will be up to 130 flights including charter flights in 2021. • Fully utilize CAL 18 747-400 freighters • Leverage b
Slide 25: The fifth cargo capacity in the world
The fifth cargo capacity in the world • IATA ranked China Airlines the fifth in the world in terms of cargo capacity, three places higher than 2019, ranking first among Asian airlines. It also ranked ninth in the world in terms of CTK. 2020 Top 10 Airlines: Ranked by Cargo Traffic 資料來源: IATA WATS 25
Slide 26: Flight Schedule Adjusted in Line with Market Demand
Flight Schedule Adjusted in Line with Market Demand Operations remain active in adapting to the dynamic changes of the market landscape and governments regulations. Operate selected routes to maintain network connectivity, and enhance revenue management . Gradually resume flights to align with board
Slide 27: Resume Passenger flights as borders progressively reopen
Resume Passenger flights as borders progressively reopen • Asia-Pacific : Indonesia：CECChas removed Indonesia from list of high-risk countries. flight services to Jakarta have resumed since 20th Oct. Myanmar： having been removed from list of high-risk countries because of the Delta variant by CECC s
Slide 28: Cargo opportunity | Passenger recovery
Cargo opportunity | Passenger recovery Economic recovery , strong cargo demand, sea- Increasing vaccination coverage, reopening of to-air conversions, supply chain disruption, low international travel , new international travel vaccine inventory, air cargo becomes a sellers' market, rules, herd im
Slide 29: Proactive COVID-19 Response Strategies
Proactive COVID-19 Response Strategies Comply with Conserve cash- regulations to flow & lower the promote safe travel Integrate sales cost and marketing strategy Rebuild Maintain business passenger continuity and confidence in stability air travel
Slide 30: Fleet status
Fleet status 2021 2021 2022 Oct 2022 Oct Dec Boeing 747-400F 18 18 12 Boeing 737-800 15 (-3) Freighters Narrow 5 Boeing 777F Body 3 (+2) 0 10 Airbus 321neo (+10) Freighters 21 23 14 14 Airbus 350-900 Boeing 777-300ER 10 10 Wide 2022年 Body 21 Airbus 330-300 Airline industry will recover, 23 (-2) 67 e
Slide 31: S&P revised rating outlook to stable
S&P revised rating outlook to stable Rating Long-Term Outlook Rating Date Organization Rating Taiwan twBBB+ Stable 2021/10/28 Ratings Taiwan twBBB+ Negative 2020/3/16 Ratings Taiwan twBBB+ Stable 2019/10/30 Ratings CAL is the first airline that received revised rating outlook to stable in Asia 31
Slide 32: Sustainability We Care
Sustainability We Care Excellent Corporate Governance • The only Taiwanese airline selected for DJSI 2014-2021 Emerging Markets for six consecutive years. 7 consecutive years • China Airlines ranked in 2nd place among the world's Top 6%-20% TWSE/TPEx airlines(DJSI ). listed companies in the seventh
Slide 33: Thank you
Thank you # We fly We fight # We will all be fine 2021.11 China Airlines│No.1, Hangzhan S. Rd., Dayuan Dist., Taoyuan City, Taiwan TEL│03.399.8888