Japan Airlines Co., Ltd. · TSE:9201

Japan Airlines — Q2 FY2019 Earnings Presentation

33 slides from Japan Airlines's earnings presentation, Oct 31, 2019

  1. Slide 1: Financial Results 2nd Quarter Mar/2020 (FY2019)

    JAPAN AIRLINES Co., Ltd. Financial Results 2 nd Quarter Mar/2020（FY2019） JAL Supports Japan National Rugby Team and Japan National Wheelchair Rugby Team. October 31, 2019 JAL Supports Japan National Rugby Team and Japan National Wheelchair Rugby Team.

  2. Slide 2: Today's Topics

    Today’s Topics P.3 P.7 P.15 P.21 FlightStats SKYTRAX The best on-time Health and Productivity The World’s Best Economy Class Asia-Pacific Airline Management Brand The Best Economy Class Seat FTE SKYTRAX Accessibility Leadership Award 5-Star Airline (Note) Regarding figures in tables of this material

  3. Slide 3: Overview of Financial Results for 1st Half Mar/20

    Overview of Financial Results for 1st Half Mar/20  Combined with increase in Domestic Business and decrease in International Passenger and Cargo revenue altogether, Operating Profit decreased​ Operating Revenue Operating profit・Net profit (1)・Operating profit margin （JPY Bn） （JPY Bn） Figures in ( )

  4. Slide 4: Air Transport Recent Topics

    Recent Topics  Allocation of Haneda Slots  Environmentally friendly aircraft for domestic routes  Toward Sustainable Development  More accessible services for all passengers Haneda Int’l slot allocation Codeshare Expansion A350・787 Launch (※) Including  12 Slots Allocated late night slot  Cath

  5. Slide 5: Dividends and Share Repurchases

    Dividends and Share Repurchases Share Repurchases Total 20 Billion Share Repurchases and its Cancellation Considering the Current Share Price Level  Aims for fair valuation on the equity capital market Resolution Date April 26, 2019 October 31, 2019 Duration May 7, 2019 to September 20, 2019 Novemb

  6. Slide 6: Intentionally Left Blank

    JAPAN AIRLINES INTENTIONALLY LEFT BLANK

  7. Slide 7: Consolidated Financial Results

    Consolidated Financial Results 1st Half 1st Half 2nd Quarter （JPY Bn） Diff. y/y Diff. y/y Mar/19 Mar/20 (Jul-Sep)(6) Operating Revenue 750.1 759.8 +9.6 +1.3% 404.1 ▲3.9 ▲1.0％ International Passenger 269.2 266.0 ▲3.1 ▲1.2% 138.1 ▲6.2 ▲4.3％ Domestic Passenger 268.1 276.8 +8.7 +3.3% 152.8 +2.0 +1.3％ Ca

  8. Slide 8: Changes in Operating Profit (Revenues / Expenses)

    Changes in Operating Profit（ Revenues ／ Expenses ） 1st Half Mar/20 （JPY Bn） ＋ stands for profit increase (revenue increase, cost decrease) ▲ stands for profit decrease (revenue decrease, cost increase) ▲15.5 Bn ASK y/y ： ＋2.2% (▲16.0%) RPK y/y ： ＋2.2％ ▲10.3 Bn (▲10.6%) Other Revenues Fuel Cargo & Ma

  9. Slide 9: Changes in Operating Profit (Market / Others)

    Changes in Operating Profit（ Market ／ Others ） 1st Half Mar/20 (JPY Bn） ＋ stands for profit increase (revenue increase, cost decrease) ▲ stands for profit decrease (revenue decrease, cost increase) Impact From Currency Market ▲0.0 Bn ▲15.5 Bn Revenues ▲1.7 Bn (▲16.0%) Expenses +1.6 Bn ▲10.3 Bn Fuel

  10. Slide 10: International Passenger Operations

    International Passenger Operations International Passenger Change in Revenue （JPY Bn） 1st Half 1st Half y/y 2ndQuarter y/y ▲3.1 Bn Mar/19 Mar/20 (Jul-Sep)(4) (▲1.2%) Passenger The Passenger Service Revenue 269.2 266.0 ▲1.2% 138.1 ▲4.3% System Effects Included (JPY Bn) 269.2 Passengers 266.0 (’000) 4

  11. Slide 11: Domestic Passenger Operations

    Domestic Passenger Operations Domestic Passenger Change in Revenue 1st Half 1st Half 2ndQuarter （JPY Bn） y/y y/y ＋8.7 Bn Mar/19 Mar/20 (Jul-Sep)(4) (＋3.3%) Passenger Revenue 268.1 276.8 +3.3% 152.8 +1.3% (JPY Bn) ・ Demand Rise during the Long Holidays(＋) The Passenger ・ Increase in Individual Passen

  12. Slide 12: Major Operating Expense Items

    Major Operating Expense Items Operating Expenses 1st Half 1st Half 2nd Quarter （JPY Bn） Diff. y/y Diff. y/y Mar/19 Mar/20 (Jul-Sep)(4) Fuel 125.3 127.7 +2.3 +1.9% 64.0 ▲0.9 ▲1.4％ Landing and navigation fees 43.2 43.5 +0.2 +0.6% 22.0 +0.1 +0.7％ Maintenance 36.7 39.9 +3.2 +8.9% 20.7 +2.5 +14.3％ Sales

  13. Slide 13: Impact of Fuel and FX Markets

    Impact of Fuel and FX Markets Hedge Ratio Fuel Cost Breakdown by Factors (As of End of Sep/2019) (JPY Bn) Volume 140 increase/ 100% Market Hedging Fuel FX 125.3 FX +9.0 127.7 80% ▲6.0 ▲0.6 60% Approx. Approx. 40% 40% 40% Approx. Approx. ＋2.3Bn 20% 20% (＋1.9%) 20% Approx. Approx. 5% 5% 0% 90 FY2019 F

  14. Slide 14: Major Balance Sheet Items and Cash Flow Items

    Major Balance Sheet Items and Cash Flow Items Consolidated Balance Sheet End of End of 1st Half （JPY Bn） Mar/19 Mar/20 Diff. Remarks Total Assets 2,030.3 1,928.8 ▲101.4 Certificate of Deposits etc. included Cash and Deposits 522.0 395.9 ▲126.0 Including cash out of 82.7 bil. yen to Corporate Pension

  15. Slide 15: FY2019 Earnings Forecast

    FY2019 Earnings Forecast Only revenue forecast has been revised Future economic trends and air transport demand will be closely monitored under the recent unforeseeable circumstances  Market assumption has been revised  Actual results up to Q2, full-year ASK, and the recent trend of passenger and

  16. Slide 16: FY2019 Earnings Forecast (Reference)

    《 Reference 》 FY2019 Earnings Forecast Consolidated Balance Sheet End of End of FY2018 FY2019 （JPY Bn） Diff. Previous New Results (1) Forecast Forecast (1) Disclosed on April 26, 2019 Total Assets 2,030.3 2,040.0 2,010.0 ▲30.0 Balance of Interest-bearing 142.3 167.0 171.0 +4.0 debts (2) NOPAT/Averag

  17. Slide 17: FY2019 Earnings Forecast (Air transportation Segment)

    《 Reference 》 FY2019 Earnings Forecast (Air transportation Segment) y/y（%） International Passenger FY2018 FY2019 Full-year 1st Half 2nd Half Operations （Forecast） （Result） (Forecast) Passenger Revenue (JPY Bn) 530.6 524.0 ▲1.3％ ▲1.2％ ▲1.4％ Passengers (’000) 9,128 9,165 +0.4％ ▲0.5％ +1.3％ ASK (MN seat

  18. Slide 18: Revenue of International Routes by Geographic Segment

    《 Reference 》 Revenue of International Routes by Geographic Segment Passenger Revenue Proportion of whole Int’l 1st Half 2nd Quarter (%) Mar/19 Mar/20 y/y y/y 2nd Quarter 1st Half 1st Half America +9.8% +4.0% 26% 29% 28% Europe ▲5.7% ▲8.1% 18% 17% 18% Asia/Oceania ▲2.7% ▲4.2% 30% 30% 29% China ▲2.1%

  19. Slide 19: Number of Aircraft

    《 Reference 》 Number of Aircraft End of Mar/19 End of 1st Half Mar/20 (March 31, 2019) (September 30, 2019) Diff. Owned Leased Total Owned Leased Total Airbus A350-900 0 0 0 3 0 3 +3 Boeing 777-200 12 0 12 12 0 12 - Boeing 777-200ER 11 0 11 11 0 11 - Boeing 777-300 4 0 4 4 0 4 - Boeing 777-300ER 13

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  21. Slide 21: ESG Management towards achievement of SDGs

    《Reference》 ESG Management towards achievement of SDGs ※Originally disclosed on February 25,2019 In this Medium Term Management Plan, we look to identify priority issues from the viewpoint of ESG management. And strive to solve social issues through to achieve SDGs *1 in 2030. 2030 Fields Priority I

  22. Slide 22: ESG

    《Reference》 ESG  Contribute to achieve SDGs, through our business activities, toward the realization of a sustainable society and corporate value increase  Established The JAL Group Code of Conduct “Commitment to Society” Environmental Social Governance ・High transparency and strict ・Low-Carbon In

  23. Slide 23: Financial Strategy and Capital policy①

    《Reference》 Financial Strategy and Capital policy① ※Originally disclosed on February 25,2019 Capital investments will be made within cash flow from operating activities. Approximately 2/3 of the total investment will be actively used for growth investment to increase corporate value. Aircraft invest

  24. Slide 24: Financial Strategy and Capital policy②

    《Reference》 Financial Strategy and Capital policy② ※Originally disclosed on February 25,2019 We will strategically allocate capital to increase corporate value, while maintaining a firm financial structure with high capital efficiency. Improve asset efficiency Further increase Capital allocation and

  25. Slide 25: Financial Strategy and Capital policy③

    《Reference》 Financial Strategy and Capital policy③ ※Originally disclosed on February 25,2019 （Partial update ） Stable financial structure with high capital efficiency Enhancement of shareholder return and capital allocation for corporate value increases Financial structure Capital efficiency Shareho

  26. Slide 26: Fly into tomorrow.

    Fly into tomorrow. Finance & Investor Relations, Japan Airlines ©Japan Airlines, ALL rights reserved. 26

  27. Slide 27: ZIPAIR Presentation for Investors Meeting

    ZIPAIR Presentation for Investors Meeting ZIPAIR Tokyo Inc. 2019/10/31 27 ©ZIPAIR Tokyo Inc.

  28. Slide 28: Progress of Preparation for Launching Routes

    Progress of Preparation for Launching Narita = Bangkok May 14, 2020 (Plan) Routes Narita = Seoul July 1, 2020(Plan) 787-8 (290 Seats) Aircraft The first two aircrafts are ones used by JAL Newly painted aircraft arrived at Narita on 27 October LCC-specialized Passenger Service System (PSS, different

  29. Slide 29: Profit making structure: Basic Structure

    Profit making structure = Basic Structure = Toward destinations where there is no LCC competitors (ex. Transpacific) Topline ⇒ Superior competitive position (no competing LCC) ⇒ Demand capturing with low fares High Productivity Minimized Indirect Cost Productivity will be doubled Efficient Operation

  30. Slide 30: Revenue/Cost Structure (Conceptual Image)

    Revenue/Cost Structure (Conceptual Image) ① Airfare Revenue (Fare multiplied by Passenger Number) covers operating cost ②Ancillary Revenue brings profits Cost Conceptual Image CASK Revenue JAL Seat Improved Lean ZIPAIR Conceptual Image CASK Number Turnover Back- CASK RASK Increase Office ZIPAIR Airf

  31. Slide 31: CASK Comparison

    CASK Comparison (EBIT used, ZIPAIR Fifth year forecast, fuel cost included) ZIPAIR will be at competitive level with other LCCs Japanese Yen Air Asia 3.9 Wizz Air 3.9 Noweigean 5.2 ZIPAIR approx. 5.5 Vueling 6.8 Easyjet 7.3 southwest 7.8 ※Source: Each Airlines’ Annual Report 2018 FX/ GBP-JPY: 140.05

  32. Slide 32: (Reference) 787 Operators

    (Reference) 787 Operators ZIPAIR will use JAL’s Know-how for 787 long-haul flight operations such as maintenance and flight operation 787 Operators Delivered Aircrafts 894 ANA 74 United 46 Ranking JAL 42 American 42 Air Canada 37 32 ※ Source: The Boeing Company; as of SEP 2019 ©ZIPAIR Tokyo Inc.

  33. Slide 33: 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

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