China Airlines Ltd. · TWSE:2610
China Airlines — Q3 2020 Earnings Presentation
29 slides from China Airlines's earnings presentation, Dec 1, 2020
Slide 1: Legal Disclaimer - 2020 Investor Conference
• The information contained in this presentation, Legal China Airlines including all forward-looking information, is subject to change without notice, whether as a Disclaimer result of new information, further events or 2020 Investor Conference otherwise, and China Airlines(the “Company”) undertakes
Slide 2: Agenda for 2020
1. First Three Quarters Financial Results Agenda for 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 2
Slide 3: First Three Quarters Financial Results for 2020
First Three Quarters Financial Results for 2020 3
Slide 4: Operating Performance – 2020Q3
Operating Performance – 2020Q3 Consolidated Financial Statistics TWD 100 Million 2019Q3 2020Q3 YoY % Operating Revenue 430.05 266.12 -38.12% Net Operating Income(Loss) 14.62 -3.57 - Net Income(Loss) After Tax 4.96 -8.17 - Net Income(Loss) Attributable to Owners of the company 3.40 -7.08 - Earnings(L
Slide 5: Operating Performance – 2020Q1-Q3
Operating Performance – 2020Q1-Q3 Consolidated Financial Statistics TWD 100 Million 2019Q1-Q3 2020Q1-Q3 YoY % Operating Revenue 1,263.02 854.84 -32.32% Net Operating Income(Loss) 27.96 -5.8 - Net Income (Loss) After Tax 0.58 -23.75 - Net Loss Attributable to Owners of the company -3.46 -20.22 - Loss
Slide 6: Composition of Op. Revenue - CI
Composition of Op. Revenue - CI 4% Other Op. Rev. 2020 Passenger Revenue Cargo Revenue 72% Q1-Q3 24% Other Op. Rev. 2019 Passenger Revenue 67% Cargo Revenue 29% Q1-Q3 4% Passenger, Cargo and other operating revenue accounted for 24%, 72% and 4% respectively in the first three quarters of 2020. 6
Slide 7: Composition of Op. Expenses - CI
Composition of Op. Expenses - CI 1.9% 1.6% Sales&General Adm. Pax Service Others Airport & Ground Rental & 2020 Fuel Handling Personnel Depreciation Maitenance Q1-Q3 21.9% 12.1% 16.5% 23.0% 19.4% 3.5% 3.6% Sales&General Adm. Pax Service Airport & Ground Rental & Others 2019 Fuel Personnel Maitenance
Slide 8: Financial Risk Management – Fuel (CI)
Financial Risk Management – Fuel (CI) Fuel Cost 2019Q1-Q3 2020Q1-Q3 YoY% Jet Fuel (MOPS) USD/BBL 77.69 44.04 -43.3% Fuel Consumption 10KBBL 1,300.39 1,026.71 -21% Fuel Expend TWD/100Million 333.14 166.23 -50.1% Hedging Loss TWD/100Million 0.14 0.34 142.9% Total Fuel Cost TWD/100Million 333.28 166.57
Slide 9: Impact of COVID-19 Pandemic: Industry Environment Update
Impact of COVID-19 Pandemic Industry Environment Update 9
Slide 10: Air Travel Recovery Slower Than Expected
Air Travel Recovery Slower Than Expected IATA forecast global passenger traffic will not return to pre-COVID-19 levels until 2024 and full-year 2020 traffic to be down 66% compared to 2019. Previous Forecast -63% Latest Forecast -66% Source： IATA Economics 10
Slide 11: IMF Upgraded 2020 Economic Forecast
IMF Upgraded 2020 Economic Forecast The global economy is projected to contract by 4.4% in 2020 — an upward revision from an estimate of -4.9% made in June due to the better-than-expected growth in advanced economies and Mainland China. Major Economies 2020→2021 Economic Growth Rate Euro Zone Mainla
Slide 12: Impact of COVID-19 Pandemic: Operational Performance Update
Impact of COVID-19 Pandemic Operational Performance Update 12
Slide 13: Passenger Performance
Passenger Performance Revenue Composition by Region Australia/ TWD 78.82 Billion New Trans Pacific Zealand Ocean 9% 21% Europe 12% ▼73.8% Hong Kong 4% South East TWD 19.07 Billion Asia 21% North East Asia Mainland 25% China 2019 Q1-Q3 2020 Q1-Q3 8% • Passenger revenue decreased by 73.8% to TWD 19.07
Slide 14: Passenger Operation Index
Passenger Operation Index ASK (MN) Load Factor Yield (TWD) 39,255 2.47 80.7% 2.30 ▼68.0% ▼19.3ppt ▲7.4% 61.4% 12,569 2019Q1-Q3 2020Q1-Q3 2019Q1-Q3 2020Q1-Q3 2019Q1-Q3 2020Q1-Q3 ASK and load factor decreased by 68.0% and 19.3ppt respectively while yield increased by 7.4% in the first three quarters o
Slide 15: Impact on Passenger Traffic
Impact on Passenger Traffic 5,000 4% 0% 4,000 3,240 -23% 3,253 3,229 3,271 3,331 3,315 3,128 3,194 3,157 2,984 3,000 -40% 2,309 -65% 2,000 1,150 -80% -97% -98% -97% -95% -94% -93% 1,000 156 187 232 89 53 86 - -120% Round Trips Jan Feb Mar Apr May Jun Jul Aug Sep 2019 2020 YoY% • CAL provided a minim
Slide 16: Passenger Impact- Skeletal Network
Passenger Impact- Skeletal Network Region Route Adjustments Los Angeles/San Francisco 3 Flights/wk, Vancouver 2 Flights/wk, New North America York 2 Flights/mth Europe Amsterdam 2 Flights/wk, Frankfurt/ London 1 Flight/wk Sydney 1 Flight/wk, Melbourne/ Brisbane 2 Flights/mth, Auckland 1 Oceania Flig
Slide 17: Cargo Performance
Cargo Performance Revenue Composition by Region Australia/ New Zealand TWD 55.89 Billion Europe 3% 9% Hong Kong North East 4% ▲77.4% Asia 5% TWD 31.05 Billion Mainland China Trans Pacific 6% Ocean 58% South East Asia 15% 2019Q1-Q3 2020Q1-Q3 • Cargo revenue totaled TWD 55.89 billion, a 77.4% increase
Slide 18: Cargo Performance Index
Cargo Performance Index FATK (MN) Load Factor Yield (TWD) 6,286 12.44 5,860 ▲ 7.3% 71.5% 66.3% ▲ 5.2ppt ▲53.4% 8.11 2019 Q1-Q3 2020Q1-Q3 2019Q1-Q3 2020Q1-Q3 2019Q1-Q3 2020Q1-Q3 FATK increased by 7.3% and load factor grew 5.2 ppt with a 53.4% rise in yield in the first three quarters of 2020. 18
Slide 19: Response to COVID-19
Response to COVID-19 - Passenger - Cargo 19
Slide 20: 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, taking advantage of sixth traffic rights. Gradually resume flights to align w
Slide 21: Resuming Operation with Safety Procedures
Resuming Operation with Safety Procedures CAL was also rated as the top safest airlines to fly during COVID-19 by Safe Travel Barometer in August, having implemented numerous pro-traveler health and safety initiatives. Clean Cabin Cabin Crew Protective Equipment Sky Boutique Duty Free PA Announcemen
Slide 22: CAL Ranked Top Global Cargo Carrier in 2019
CAL Ranked Top Global Cargo Carrier in 2019 With a fleet of 18 Boeing 747-400 freighters in operation and well-established network, CAL holds the edge on air cargo capacity during COVID-19. Freight Tonnes Airlines Carried ('000) Airlines FRTK(m) 1st Emirates 2,413 1st Qatar Airways 13,024 2nd Qatar
Slide 23: Expanding Cargo Service to Seize the window of Opportunity
Expanding Cargo Service to Seize the window of Opportunity CAL leverages Taiwan’s strategic position and cargo capacity to make 10% more cargo flights per week. • Utilize CAL 18 747-400 freighters • Make the most of belly capacity of passenger aircraft • Improve operational efficiency with 3 upcomin
Slide 24: Post-COVID-19 Outlook
S28. CHINA AIRLINES ©) | Post-COVI D-19 Outlook — 24
Slide 25: 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 and 6th traffic right will complement. • Family visit and leisure travel will recover first. • Local staycation becomes popular. Passenger • Internati
Slide 26: 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. • Vaccines against CO
Slide 27: Proactive COVID-19 Response Strategies
Proactive COVID-19 Response Strategies Integrate 01 Conserve cash-flow 02 Maintain business 03 sales and & lower the continuity marketing cost and stability strategy 04 Rebuild passenger 05 Comply with regulations confidence to promote in air travel safe travel 27
Slide 28: Giving Back to Society and Creating Social Value
Giving Back to Society and Creating Social Value CAL wins awards for seventh consecutive year at the “Oscars” of Taiwan Corporate Sustainability- Taiwan Corporate Sustainability Awards (TCSA) and two consecutive year at Global Corporate Sustainability Awards (GCSA). 28
Slide 29: Thank you
Thank you # We fly We fight # We will all be fine 2020.12 China Airlines│No.1, Hangzhan S. Rd., Dayuan Dist., Taoyuan City, Taiwan TEL│03.399.8888