China Airlines Ltd. · TWSE:2610
China Airlines — H1 2020 Earnings Presentation
29 slides from China Airlines's earnings presentation, Aug 26, 2020
Slide 1: China Airlines 2020 Investor Conference
China Airlines 2020 Investor Conference August 26, 2020 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. First Half Year Financial Results for Agenda 2020 1) Operating Performance 2) Composition of Op. Revenue & Cost 3) Financial Risk Management 2. Impact of COVID-19 Pandemic 1) Industry Environment Update 2) Operational Performance Update 3) Response to COVID-19 3. Post-COVID-19 Outlook 3
Slide 4: First Half Year Financial Results for 2020
First Half Year Financial Results for 2020 4
Slide 5: Operating Performance – 2020Q2
Operating Performance – 2020Q2 Consolidated Financial Statistics TWD 100 Million 2019Q2 2020Q2 YoY % Operating Revenue 428.92 263.16 -38.64% Net Operating Income 5.73 27.48 379.58% Net Income(Loss) After Tax -2.91 22.53 - Net Income(Loss) Attributable to Owners of the company -4.43 24.59 - Earnings(
Slide 6: Operating Performance – 2020H1
Operating Performance – 2020H1 Consolidated Financial Statistics TWD 100 Million 2019H1 2020H1 YoY % Operating Revenue 832.98 588.73 -29.32% Net Operating Income(Loss) 13.34 -2.23 - Net Loss After Tax -4.38 -15.58 - Net Loss Attributable to Owners of the company -6.86 -13.14 - Loss Per Share (TWD) -
Slide 7: Composition of Op. Revenue - CI
Composition of Op. Revenue - CI 4% Other Op. Revenue 2020H1 Passenger Revenue Cargo Revenue 64% 32% Other Op. Revenue 2019H1 Passenger Revenue 66% Cargo Revenue 29% 5% Passenger, Cargo and other operating revenue accounted for 32%, 64% and 4% respectively in 2020H1. 7
Slide 8: Composition of Op. Expenses - CI
Composition of Op. Expenses - CI 2.1% Sales&General Adm. P a x S e r vi c e Others Airport&Ground 2020H1 Fuel Handling Personnel Rental&Depreciation Maintenance 21.8% 12.1% 16.5% 22.5% 19.1% 3.5% 3.5% 2.4% Sales&General Adm. P a x S e r vi c e Others Airport&Ground 2019H1 Fuel Handling Personnel Ren
Slide 9: Financial Risk Management – Fuel (CI)
Financial Risk Management – Fuel (CI) Fuel Cost 2019H1 2020H1 YoY% Jet Fuel (MOPS) USD/BBL 78.05 45.01 -42.3% Fuel Consumption 10KBBL 854.58 664.63 -22.2% Fuel Expend TWD/100Million 219.23 114.43 -47.8% Hedging Loss TWD/100Million 0.07 0.26 271.4% Total Fuel Cost TWD/100Million 219.3 114.69 -47.7% F
Slide 10: Financial Risk Management – Currency of Revenue and Expenditure
Financial Risk Management – Currency of Revenue and Expenditure 2020H1 2019H1 Rev. Exp. Rev. Exp. 100% 7% 7% 15% 2% 16% 2% 1% 2% 7% 7% 6% 6% 12% 7% 5% 9% 38% 42% 13% 15% 50% 49% 45% 47% 40% 0% TWD USD JPY CNY HKD Others 10
Slide 11: Impact of COVID-19 Pandemic: Industry Environment Update
Impact of COVID-19 Pandemic Industry Environment Update 11
Slide 12: COVID-19: Severe Impact on the Global Airline Industry
COVID-19: Severe Impact on the Global Airline Industry A slump in air travel demand due to COVID-19 pandemic which has forced airlines to cut flights. Air Airport Freighter RPKs Passengers Revenue Tonnes YoY% YoY% YoY% YoY% -55% -60% -57% -17% IATA forecasted airlines across the world are expected t
Slide 13: 2019 Level Recovered Only by 2024
2019 Level Recovered Only by 2024 • Five years to return to pre-pandemic level of passenger demand • 75% growth forecast for 2021 but RPKs still 36% below 2019 levels Source： IATA/Tourism Economics ‘Air Passenger Forecasts’ July 2020 13
Slide 14: Impact of COVID-19 Pandemic: Operational Performance Update
Impact of COVID-19 Pandemic Operational Performance Update 14
Slide 15: Passenger Performance
Passenger Performance Revenue Composition by Region Australia/ New Zealand Trans 10% TWD 47.76 Billion Pacific Europe Ocean 11% 21% ▼63.8% Hong Kong 4% TWD 17.27 Billion South East Asia 20% North East Asia Mainland 27% China 2019H1 2020H1 7% • Passenger revenue decreased by 63.8% to TWD 17.27 billio
Slide 16: Passenger Operation Index
Passenger Operation Index ASK (MN) Load Factor Yield (TWD) 79.8% 2.32 2.34 ▼14.2ppt 65.6% ▲0.9% 25,821 ▼56.5% 11,227 2019H1 2020H1 2019H1 2020H1 2019H1 2020H1 ASK and load factor decreased by 56.5% and 14.2ppt respectively while yield increased by 0.9% in 2020H1. 16
Slide 17: Impact on Passenger Traffic
Impact on Passenger Traffic 5,000 4% 0% 4,000 3,240 -23% 3,253 3,229 3,271 3,194 3,128 2,984 3,000 -40% 2,309 -65% 2,000 1,150 -80% 1,000 -97% -98% -97% 89 53 86 - -120% Round Trips Jan Feb Mar Apr May Jun 2019 2020 YoY change(%) • CAL provided a minimum passengers-carried schedule to meet market de
Slide 18: Passenger Impact- Skeletal Network
Passenger Impact- Skeletal Network Region Route Adjustments Los Angeles/ San Francisco 2 Flights/wk、Vancouver 1 Flight/wk、New North America York 1~4 Flights/mth Europe Amsterdam/ Frankfurt/ London 1 Flight/wk Oceania Sydney/ Melbourne/ Brisbane 2 Flights/mth Northeast Asia Tokyo1~2 Flights/wk Jakart
Slide 19: Cargo Performance
Cargo Performance Revenue Composition by Region Australia/ New Zealand 2% TWD 34.45Billion Europe 9% Hong Kong 4% ▲64.6% North East TWD 20.93Billion Asia 5% Mainland China 7% Trans Pacific South East Ocean 58% Asia 15% 2019H1 2020H1 • Cargo revenue totaled TWD 34.45 billion, a 64.6% increase, in 202
Slide 20: Cargo Performance Index
Cargo Performance Index FATK (MN) Load Factor Yield (TWD) 3,852 3,894 12.52 ▲ 1.1% 70.6% 65.8% ▲ 4.8ppt ▲51.8% 8.25 2019H1 2020H1 2019H1 2020H1 2019H1 2020H1 FATK increased by 1.1% and load factor grew 4.8 ppt with a 51.8% rise in yield in 2020H1. 20
Slide 21: Response to COVID-19
Response to COVID-19 - Passenger - Cargo 21
Slide 22: 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. Gradually resume flights to align with boarder reopening and regional busines
Slide 23: Resuming Operation with Safety Procedures
Resuming Operation with Safety Procedures CAL is committed to providing passengers a safe and comfortable travel experience by implementing enhanced measures to ensure travel safety. Prepare for travel On board • Clean Cabin • Cabin Crew Protective • Sky Boutique Pre-Order Equipment • COVID-19 Servi
Slide 24: Expanding Cargo Service to Seize the window of Opportunity
Expanding Cargo Service to Seize the window of Opportunity COVID-19 has significantly disrupted global supply chain, also led to air cargo capacity crunch stemming from the evaporation of the belly capacity of passenger aircraft. • Utilize CAL 18 747-400 freighters • Make the most of belly capacity
Slide 25: Post-COVID-19 Outlook
SES CHINA AIRLINES °) Post-COVID-19 Outlook
Slide 26: New Normal of Air travel in Post-Covid-19 Age
New Normal of Air travel in Post-Covid-19 Age Market • Domestic and regional air travel will recover first. • 3rd/4th traffic rights will be dominant. • Business travel will recover first, followed by family visit and leisure travel. • Local staycation becomes popular. Passenger • International trav
Slide 27: Post-COVID-19 Cargo Market Outlook
Post-COVID-19 Cargo Market Outlook Potential Business • COVID-19 has led to a major change in consumer behavior toward online channels. Online demand for essentials and entertainment has increased. • Work-from-home triggers a jump in demand for chips, laptops and network goods. Market Challenge • Ap
Slide 28: Proactive COVID-19 Response Strategies
Proactive COVID-19 Response Strategies Reduce cost and conserve cash Create business resiliency Integrate sales and marketing strategy Rebuild passenger confidence in air travel Comply with regulations to promote safe travel 28
Slide 29: Thank you
Thank you # We fly We fight # We will all be fine 2020.08 China Airlines│No.1, Hangzhan S. Rd., Dayuan Dist., Taoyuan City, Taiwan TEL│03.399.8888