Japan Airlines Co., Ltd. · TSE:9201
Japan Airlines — Q1 FY2022 Earnings Presentation
42 slides from Japan Airlines's earnings presentation, Aug 1, 2022
Slide 1: Financial Results 1st Quarter Mar/2023 (FY2022)
JAPAN AIRLINES Co., Ltd. Financial Results 1st Quarter Mar/2023（FY2022） August 1, 2022 AIRBUS A350-900 #16 ©Japan Airlines, ALL rights reserved.
Slide 2: Agenda
SKYTRAX SKYTRAX SKYTRAX 2021 Covid-19 Safety World Airline Star SKYTRAX Rating Rating World's Best Economy Class 5-Star 5-Star Best Economy Class Airline Seat COVID-19 Excellence Award ※ APEX APEX 1. PERFORMANCE OVERVIEW FOR FY22Q1 WORLD CLASS Health Safety Powered by SimpliFlying Audit Diamond 2. R
Slide 3: Performance Overview for FY22Q1
PERFORMANCE OVERVIEW FOR FY22Q1 ✔ Both Revenue and EBIT have improved. Demand has steadily recovered as society shifts toward a balance of social economic activities and preventing the infection. ✔ Although interim dividends will not be paid as it is necessary to further monitor our performance, we
Slide 4: First Quarter summary commentary
● For the First Quarter, revenue was 268.8 Billion Yen, EBIT loss was 27.5 Billion Yen, and net loss was 19.5 billion yen. ● Passenger demand has steadily recovered, and EBIT has improved by 55.1 billion yen year-on-year as the society shifts toward a balance of social economic activities and the pr
Slide 5: FY22Q1 Performance by Business Domain
FY22Q1 Performance by Business Domain Full Service Carrier LCC LCC Significant increase in revenue Losses continue but sign of recovery by appropriate resource allocation in leisure and VFR(※) demand is evident FY22Q1 Revenue FY22Q1 EBIT FY22Q1 Revenue 3.3 JPY Bn ▼3.5 JPY Bn 153.1 JPY Bn Revenues of
Slide 6: Business domain results commentary
● On this page, I will explain the result of each business domain. From this fiscal year, we will show the result of each domain using internal management figures. ● The full-service carrier business has achieved a significant increase in sales by capturing the recovering passenger demand through appro
Slide 7: Agenda
1. PERFORMANCE OVERVIEW FOR FY22Q1 2. RECENT OUTLOOK 3. DETAILS OF FINANCIAL RESULTS FOR FY22Q1 4. REFERENCES ©Japan Airlines, ALL rights reserved. 5
Slide 8: Intentionally left blank
INTENTIONALLY LEFT BLANK ©Japan Airlines, ALL rights reserved.
Slide 9: Overview of 1st Quarter FY22 ending March 2023
Overview of 1st Quarter FY22 ending March 2023 ✔ EBITDA recorded positive. EBIT is expected to turn into black in July. ✔ No major concerns about our resources (aircraft/personnel). Aim to achieve EBIT of 80 billion yen capturing the high demand in summer. ✔ Ability to create cash flow is steadily re
Slide 10: Business performance points commentary
● On this page, I will focus on some points of business performance. ● EBIT did not turn into the black on a monthly basis in the first quarter, but we expect EBIT to turn into the black in July. ● Contrary to some other airlines, there are no major resource-related concerns about our operations. Whi
Slide 11: Recent Outlook: Int'l & Domestic Passenger Operations
Recent Outlook Int’l & Domestic Passenger Operations (Full Service Carrier) ✔ For Int’l, demand to/from Japan is recovering gradually; We will also capture the strong transit demand between Asia and North America. ✔ For Domestic, demand is recovering gradually as restrictions are eased ✔ We expect s
Slide 12: Passenger demand trends commentary
● On this page, I will explain the current trends in passenger demand. ● For international, demand to and from Japan is gradually recovering, and we are also steadily capturing the strong transit demand between Asia and North America. Due to Japan’s border controls which are significantly stricter th
Slide 13: Recent Outlook: Cargo & LCC
Recent Outlook Cargo & LCC ✔ Cargo business recorded significant increase in revenue, capturing strong Int’l cargo demand utilizing both own aircraft and other company’s freighters. This trend is expected to continue for this year ✔ For LCC business, both int’l and domestic demand is recovering stead
Slide 14: Cargo and LCC situation commentary
● On this page, I will explain the current situation of the Cargo and LCC business. ● As for international Cargo demand, the industry-wide total demand from Japan decreased due to the lockdown in Shanghai. However, issues of marine transportation has not been resolved. Therefore, our demand continue
Slide 15: Agenda
1. PERFORMANCE OVERVIEW FOR FY22Q1 2. RECENT OUTLOOK 3. DETAILS OF FINANCIAL RESULTS FOR FY22Q1 4. REFERENCES ©Japan Airlines, ALL rights reserved. 9
Slide 16: Intentionally left blank
INTENTIONALLY LEFT BLANK ©Japan Airlines, ALL rights reserved.
Slide 17: Consolidated Financial Results
DETAILS OF FINANCIAL RESULTS FOR FY22Q1 Consolidated Financial Results FY19Q1 FY21Q1 （JPY：Bn ） FY19Q1 FY21Q1 FY22Q1 Diff. y/y Diff. y/y Revenue 348.8 133.0 268.8 ▼79.9 ▼22.9% +135.8 +102.1% Full Service Carrier 284.3 97.7 218.4 ▼65.8 ▼23.2% ＋120.7 ＋123.5% International PAX (Full Service Carrier) 130.6
Slide 18: Consolidated results commentary
● From this page, I will show you the result of the first quarter. ● Page 10 shows consolidated results. ● In order to make it easier to understand, we have categorized income into different business areas. ©Japan Airlines, ALL rights reserved.10-S
Slide 19: Changes in EBIT (Revenues/Expenses)
DETAILS OF FINANCIAL RESULTS FOR FY22Q1 Changes in EBIT (Revenues／Expenses) ASK y/y ： +56.4% + stands for profit increase（ revenue increase, cost decrease ) RPK y/y ： +218.8% ▼ stands for profit decrease ( revenue decrease, cost increase ) ＋55.1 Bn （JPY Bn） Mileage, Lifestyle and Full Service Infrastr
Slide 20: EBIT change factors commentary
● This page shows the factors behind the improvement in EBIT through revenue and expense. ● Revenues increased in all areas, by 135.8 billion yen year-on-year due to the recovery of passenger demand and the continued strong performance of the cargo business. ● As for costs, fuel costs have increased
Slide 21: Changes in EBIT (Market and other impact)
DETAILS OF FINANCIAL RESULTS FOR FY22Q1 Changes in EBIT (Market and other impact) （JPY Bn） + stands for profit increase（revenue increase, cost decrease) ▼stands for profit decrease (revenue decrease, cost increase)) Impact from Currency Market ▼9.1 Bn ＋55.1 Bn Revenue +7.4 Bn Cost ▼16.5 Bn (Excl. Mark
Slide 22: Market impact on EBIT commentary
● This page shows the improvement of EBIT by dividing it into market fluctuations and other factors. ● The impact of market was a negative of 21.9 billion yen year-on-year. Although the negative impact of the rapid rise in the fuel market and the depreciation of the yen is significant, we worked to re
Slide 23: Int'l & Domestic Passenger Operations
DETAILS OF FINANCIAL RESULTS FOR FY22Q1 Int’l & Domestic Passenger Operations (Full Service Carrier) International Passenger FY19Q1 FY21Q1 FY22Q1 Vs. FY19Q1 Vs. FY21Q1 Passenger Revenue（JPY Bn） 130.6 11.2 62.4 ▼52.2% ＋457.0% Passengers（’000） 2,429 149 728 ▼70.0% ＋387.5% RPK（MN passenger km） 12,016 1
Slide 24: Passenger performance commentary
● This page shows the international and domestic performance. ● International passenger revenue was 62.4 billion yen, about 5.6 times year on year. ● Domestic passenger revenue was 88 billion yen, about 2.3 times year on year. ● While both international and domestic passenger demand is recovering, w
Slide 25: Cargo
DETAILS OF FINANCIAL RESULTS FOR FY22Q1 Cargo International Cargo FY19Q1 FY21Q1 FY22Q1 Vs. FY19Q1 Vs. FY21Q1 Cargo Revenue (JPY Bn) 15.1 38.9 56.9 ＋277.1% ＋46.5% Available Ton Km (MN ton km) 1,097 787 895 ▼18.4% ＋13.7% Revenue Ton Km (MN ton km) 589 735 729 ＋23.7% ▼0.7% Carried Cargo Weight (Thousan
Slide 26: Cargo business commentary
● This page shows the performance of the Cargo business. ● The total weight of international cargo was almost the same as last year due to the decline in the demand for cargo from Japan. Nevertheless, due to the rise in unit prices, revenue continued to be strong at about 1.5 times the previous year
Slide 27: LCC
DETAILS OF FINANCIAL RESULTS FOR FY22Q1 LCC Spring ZIPAIR LCC Japan (1) FY21Q1 FY22Q1 FY21Q1比 FY22Q1 Passenger Revenue (JPY Bn) 0.0 2.0 - 1.2 Passengers (‘000) 1 53 - 42 RPK（MN passenger km） 4 269 - 39 ASK（MN seat km） 270 983 +263.0% 101 L/F (%) 1.7% 27.4% +25.7pt 38.5% (2) Revenue per Passenger (JP
Slide 28: LCC business commentary
● This page shows the performance of the LCC business. ● ZIPAIR mainly contributed to Cargo transportation last year, but they started the full-scale LCC passenger business and contributed to a significant increase in passenger revenue with an unexpectedly high level of ancillary revenue this year. Z
Slide 29: Mileage, Lifestyle and Infrastructure
DETAILS OF FINANCIAL RESULTS FOR FY22Q1 Mileage, Lifestyle and Infrastructure JAL Mileage and Lifestyle Concept Recent Updates ～ Make Everyday life and life even better with miles ■ Expanding alliances with other ～ ~ make everyday life and all life stages industries even better with miles ~ • Launch
Slide 30: Mileage, lifestyle and infrastructure commentary
● On this page, I will explain our strategies and initiatives in the Mileage, lifestyle and infrastructure business. ● As shown on page 5, this area has steadily recorded profits this quarter, and we expect it to be one of the key areas of the JAL Group's business structural reforms. ● We are acceler
Slide 31: Expenses
DETAILS OF FINANCIAL RESULTS FOR FY22Q1 Expenses ✔ Actual fixed cost for Q1FY22 was 120.7 billion yen, in difficult market conditions ✔ Implementation of appropriate cost control measures to maintain 500 billion yen for FY22 Major Operating Expense Items FY19Q1 FY21Q1 （Bn Yen） FY19Q1 FY21Q1 FY22Q1 Diff.
Slide 32: Cost management commentary
● This page shows our cost management initiatives. ● The actual fixed cost was 120.7 billion yen. We are implementing appropriate cost control within the level to the achieve the annual fixed cost of 500 billion yen, promised in the medium-term management plan. ©Japan Airlines, ALL rights reserved. 17
Slide 33: Fuel Costs
DETAILS OF FINANCIAL RESULTS FOR FY22Q1 Fuel Costs Changes in fuel costs FUEL/FX Markets (JPY Bn) Market FY21Q1 FY22Q1 Vs FY21Q1 +35.2 69.8 FX Hedging Singapore Kerosene Volume 68.4 136.9 ＋100.1% increase +10.5 and others (USD/bbl) +13.8 ▼16.4 Dubai Crude (USD/bbl) 64.5 107.3 ＋66.4% 26.5 ＋43.2 Bn FX
Slide 34: Fuel costs commentary
● On this page, we will explain the fuel costs. ● Fuel costs for the first quarter was 69.8 billion yen, which increased by 43.8 billion yen year-on-year. While consumption did increase, this is mainly due to market situations. In addition to soaring crude oil prices and a significant depreciation of
Slide 35: Balance Sheet and Cash Flow
DETAILS OF FINANCIAL RESULTS FOR FY22Q1 Balance Sheet and Cash Flow ✔ Equity ratio is 39.2% for credit evaluation basis, Net D/E ratio is x0.2, keeping a BS healthy level CF ✔ Cash flow from operating activities is 78.7 billion yen for Q1FY22, Free cash flow is 46.3 billion yen of inflow Consolidated B
Slide 36: Balance sheet and cash flow commentary
● This page shows our balance sheet and cash flow. ● The balance of interest-bearing debt has begun to decline. The net D/E ratio on a rating evaluation basis is 0.2 times, kept at a healthy level. ● Our cash position at the end of June was 530.3 billion yen, 36.1 billion yen increase from the previo
Slide 37: Agenda
1. PERFORMANCE OVERVIEW FOR FY22Q1 2. RECENT OUTLOOK 3. DETAILS OF FINANCIAL RESULTS FOR FY22Q1 4. REFERENCES ©Japan Airlines, ALL rights reserved. 20
Slide 38: [Reference] Mar/2023 Full-Year Performance Forecast
[Reference] Mar/2023 Full-Year Performance Forecast Consolidated Full-Year Forecast ※ Full Service Carrier LCC (※) FY2021 FY2022 （JPY BN） Significant increase Improve EBIT by Result Forecast Diff. (%) in sales capturing recovering demand in Revenue 682.7 1,390.0 +707.2 +103.6% recovering demand touris
Slide 39: [Reference] Operation Performance by Geographic Segment
[Reference] Operation Performance by Geographic Segment (Full Service Carrier) Passenger Revenue Revenue Passengers Carried Component Ratio (‘000) FY22Q1 Vs. FY19Q1 Vs. FY21Q1 (%) Vs. FY19Q1 Vs. FY21Q1 FY22Q1 America 245 ▼38.6% +296.6% America 41% ▼32.0% +373.4% Europe 60 ▼69.0% +377.0% Europe 18% ▼
Slide 40: [Reference] Fleet Information
[Reference] Fleet Information End of FY21 (March 31, 2022) End of FY22Q1 (June 30, 2022) Owned Leased Total 1 Total 2 Owned Leased Total 1 Total 2 Diff. retired aircraft 退役済み機材除く retired aircraft Total2 of Jun/22 退役済み機材除く excluded excluded - Mar/22 Airbus A350-900 11 4 15 15 12 4 16 16 +1 Boeing 777-
Slide 41: Fly into tomorrow.
Fly into tomorrow. Finance & Investor Relations Japan Airlines ©Japan Airlines, ALL rights reserved. 24
Slide 42: Disclaimer
Disclaimer This content contains descriptions of the future expectations, outlooks, objectives and plans etc. Of Japan Airlines Co., Ltd. (hereafter "the company") and related Group companies (hereafter "the Group"). These are based on information available at the time when these materials were crea