China Airlines Ltd. · TWSE:2610
China Airlines — Q3 2023 Earnings Presentation
30 slides from China Airlines's earnings presentation, Nov 23, 2023
Slide 1: China Airlines 2023 2nd Investor Conference
China Airlines 2023 2nd Investor Conference NOV.23.’23
Slide 2: Disclaimer
Disclaimer The information disclosed in this presentation and its accompanying announcements, including content relating to business outlooks, financial operations, and business forecasts, is based on information derived from internal corporate data and external economic developments as a whole. T
Slide 3: Agenda
Agenda 2023Q1-Q3 Operating Performance Operating Challenges Passenger Market, Performance & Strategies Cargo Market, Performance & Strategies Fleet Development Sustainability Actions and Achievements 3
Slide 4: 2023 Q1-Q3 Operating Results
2023 Q1-Q3 Operating Results
Slide 5: 2023 Q1-Q3 Financial Performance
2023 Q1-Q3 Financial Performance (NTD 100 Million) 2023 Q1-Q3 2022 Q1-Q3 Differences YoY Operating revenue Passenger revenue 866.2 122.8 743.4 605.4% Cargo revenue 424.3 928.1 -503.8 -54.3% Other operating revenue 85.1 66.9 18.2 27.2% Net Operating Income 90.7 42.5 48.2 113.6% Net Income After Tax 7
Slide 6: Operating Revenue by Source
Operating Revenue by Source Passenger revenue have exceeded cargo revenue becoming the largest revenue share representing 60% from 2023 Q2 Currency：NTD100 million Monthly revenue Pax rev Cgo rev Other rev 140 120 100 80 60 40 20 0 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 2022 2023 Based on ind
Slide 7: The growth operating revenue in 2023
The growth operating revenue in 2023 The operating revenue over the first nine months of 2023 increased by 14.7% compared with the same period last year. Mostly contributed by the 719.4% annual growth rate of passenger revenue, the passenger revenue from all regions increased significantly. NTD100
Slide 8: Cost Breakdown and Comparison
Cost Breakdown and Comparison 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2023Q1-Q3 34.0% 16.6% 14.5% 14.3% 10.3% 10.3% Airport & Rental, Depr. ground Passenger service, Fuel & Amortization Labor Maint. handling Sales & OTH 2022Q1-Q3 40.1% 18.2% 14.1% 13.6% 9.0% 5.0% Based on individual financial re
Slide 9: Fuel Cost Analysis
Fuel Cost Analysis Unit 2023Q1-Q3 2022Q1-Q3 YoY Jet fuel(MOPS) USD/BBL 103.6 129.8 -20.2% Fuel Consumption 10K BBL 1,127.2 1,004.2 12.3% TWD Fuel Cost 100 million 389.4 395.3 -1.5% TWD Hedging gain 100 million (0.2) (1.1) - TWD Total fuel cost 100 million 389.2 394.2 -1.2% Based on individual financ
Slide 10: Crude Oil and Jet Fuel Price Trends
Crude Oil and Jet Fuel Price Trends USD/BBL Brent Jet Fuel 140 128 124 120 116 100 101 88 86 94 80 85 81 73 60 1-Jan-23 1-Feb-23 1-Mar-23 1-Apr-23 1-May-23 1-Jun-23 1-Jul-23 1-Aug-23 1-Sep-23 1-Oct-23 1-Nov-23 10
Slide 11: Financial Risk Management
Financial Risk Management CAL’s hedging of fuel, exchange rates and interests rates etc., are based on the decisions made by the Risk Committee of Board of Directors. Exchange rates ： Natural hedge is applied in order to reduce exposure to currency fluctuation risks. Interest rates：Issue fixed
Slide 12: Passenger Market, Performance & Strategies
Passenger Market, Performance & Strategies
Slide 13: 2023 Q1-Q3 Passenger Operational Results
2023 Q1-Q3 Passenger Operational Results Period Passenger Revenue Sources by Flight Region (Q1-Q3) 2023 2019 +/- (%) Passenger revenue (NT $billion ) 742.2 711.2 +4.4% Oceania 7% Revenue China & Trans- Hong Kong Pacific passenger (10 K) 691 1,176 -41.2% 11% 27% Available Europe Seat Kilometer (ASK)(
Slide 14: Global Passenger Market Overview
Global Passenger Market Overview • The global international passenger market is experiencing stable growth, with high passenger load factors. • IATA predicts that the market will surpass pre-pandemic levels in 2024. Global Int. Passenger Market Global Int. Passenger Market recovery forecast ASK/RPK
Slide 15: APAC/Taiwan will Reach 2019 levels by 2025-2026
APAC/Taiwan will Reach 2019 levels by 2025-2026 All Regions Taiwan International Passenger Market recovery forecast International Passenger Market recovery forecast RP （million） Africa APAC Europe 120% 1200 Middle East North America 100% 100% 100% 105% 96% 1000 100% 92% 94% 80% 800 80% 80% 111% 60%
Slide 16: Passenger Market Outlook
Passenger Market Outlook ---Taoyuan Airport Passenger Demand Continues to Soar • Passenger volume reaches 6.714 Million, exceeding expectations by 3.3% during the summer vacation. • TIAC positively predicts total passenger volume till November will surpass 30 million, the annual passenger. volume wi
Slide 17: Capacity (ASK) Reached 80% of pre-COVID19
Capacity (ASK) Reached 80% of pre-COVID19 Long-Haul S.E. Asia ASK：82%~105% ASK：83% （PAX revenue：115%~168%） （PAX revenue：93%） Up to 80% at the end of year 2023 China & Japan、Korea Hong Kong ASK：59% ASK：37%~40% （PAX revenue：82%） （PAX revenue：42%~60%） 17
Slide 18: Passenger Operation Strategy
Passenger Operation Strategy Steady Development Continuous Innovation Take advantage of Taiwan’s Provide a unique journey to passengers geographic position as a transit hub, with enhanced digitalized customer and increase frequencies to North service America as well as short-haul network. Upgr
Slide 19: Cargo Market, Performance & Strategies
Cargo Market, Performance & Strategies
Slide 20: 2023 Q1-Q3 Cargo operational results
2023 Q1-Q3 Cargo operational results Cargo revenue distribution by region Period 2023 vs 2022 vs 2019 (Q1-Q3) Hongkong, Oceanic, Cargo revenue 3% 4% (NT $billion ) 422.0 -54.4% 33.6% Noth East Asia, 5% Carried tonnes (10 K) 54.6 -23.6% -5.2% China, 6% Available Freight Ton Kilometer 6.1 -3.0% 3.3% S
Slide 21: Global Cargo Market Overview
Global Cargo Market Overview • The increasing of belly cargo capacity drives FATK’s growth which has surpassed 2019 level. • Cargo demand has been steadily growing since May. • In August, the monthly international CTK recorded its first YoY growth in 19 months. Global Int. Market – FATK/FRTK/CLF Glo
Slide 22: 2023 China Airlines Cargo Performance and Market Share
2023 China Airlines Cargo Performance and Market Share For Taiwan import/export/transfer cargo in 2023Q1-Q3, China Airlines carried nearly 432 thousand tons with market share of 40.5%, ranking NO. 1 among all airlines although the belly capacities were largely increasing after pandemic released.
Slide 23: Cargo Market Outlook
Cargo Market Outlook ---Taoyuan Airport Cargo Demand Stabilizing • Q1-Q3 cargo volume experienced a 19.31% decrease compared to 2022, but nearly reached the 2019 level. • The proportion of Taoyuan Airport’s transshipment cargo continues to rise year by year. • The destocking phase nears its end, exp
Slide 24: Cargo operation strategy
Cargo operation strategy Optimize Network and Strengthen Revenue Management Introduce 777F new freighter strive for high-yield sources of goods, e.g., semiconductor, cool chain products, etc. Focus on industrial supply chain reconstruction and optimize cargo network Strive for medium/ long-t
Slide 25: Fleet Development
& CHINA AIRLINES :¥) Fleet Development
Slide 26: Operating Fleet
Operating Fleet Recent Plan： Year End Passenger Aircraft Type SEP 2023 Diff. 2023 Regional Routes： 777-300ER 10 10 0 In response to delayed A321 deliveries, extending Lease agreement A350-900 14 14 0 737-800 & A330-300 A321 neo A330-300 19 19 0 Extend Lease Receiving x 15 in 2025-2028 Long Haul： 737
Slide 27: Sustainability Actions and Achievements
Sustainability Actions and Achievements
Slide 28: Carbon Reduction Target/Strategy
Carbon Reduction Target/Strategy In response to the global 2050 net zero emissions target, CAL is the first airline in Taiwan to announce that its operational activities will reach net zero emissions by 2050, and has developed short, medium, and long-term carbon reduction targets for flight and gr
Slide 29: Sustainable Performance & Achievement
Sustainable Performance & Achievement 7 consecutive years selected for DJSI Emerging Market Index 2016-2022 6 consecutive years Sustainability Yearbook Ranked 1st in Global 2017-2023 Aviation Industry TOP 1% Highest Honor 8 consecutive years selected for FTSE4Good Index Series 2016-2023 5 consecutiv
Slide 30: Thank you
& CHINA AIRLINES :¥) Thank you