Japan Airlines Co., Ltd. · TSE:9201
Japan Airlines — Q1 FY2023 Earnings Presentation
40 slides from Japan Airlines's earnings presentation, Aug 1, 2023
Slide 1: Financial Results 1st Quarter Mar/2024 (FY2023)
JAPAN AIRLINES Co., Ltd. Financial Results 1st Quarter Mar/2024（FY2023） Outdoor advertisement posted at Keikyu Haneda Airport Terminal 3 from March 29, 2023 August 1, 2023 ©Japan Airlines, ALL rights reserved.
Slide 2: Agenda: Performance Overview, Recent Topics, Details, References
SKYTRAX SKYTRAX SKYTRAX APEX 2023 Covid-19 Safety World Airline Star Health Safety Powered Rating World's Best Economy Class Rating by SimpliFlying Audit 5-Star Best Economy Class Airline seat 5-Star Diamond 1. PERFORMANCE OVERVIEW FOR FY23Q1 APEX APEX 2. RECENT TOPICS WORLD CLASS FIVE STAR 3. DETAI
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INTENTIONALLY LEFT BLANK ©Japan Airlines, ALL rights reserved.
Slide 4: Performance Overview for FY2023Q1
Performance Overview for FY2023Q1 ✔ Increased revenue/profit through steadily capturing the recovering passenger demand Revenue EBIT (1) / Profit or Loss (2) +32.6 Bn (3) (JPY Bn) (JPY Bn) (+9.4%) +112.5 Bn (+41.9%) Fuel/FX Markets Operational Preconditions/ASK FY22Q1 FY23Q1 y/y Vs. FY22Q1 Singapore K
Slide 5: Performance overview commentary
● Please take a look at the page 3 of our IR material. ● In the First Quarter of Fiscal year 2023, our revenue was 381.4 Billion Yen, which is an increase of 112.5 billion yen year on year, due to the steady recovery of passenger demand. This is also a record-high first-quarter revenue after bankrupt
Slide 6: FY2023Q1 Performance by Business Domain
FY2023Q1 Performance by Business Domain ✔ Revenue and EBIT improved significantly from recovering passenger demand ✔ Cargo maintains revenue above pre-pandemic levels despite a decrease ✔ LCC’s EBIT improved. Mileage, Lifestyle and Infrastructure increased its EBIT Revenue by Business Domain EBIT by
Slide 7: Business domain commentary
● On this page, I will explain the result of each business domain using internal management figures ● The full-service carrier business domain posted an EBIT profit of 23.1 billion yen for the First Quarter. ● As for the LCC business domain, it resulted in an EBIT loss of 0.9 billion yen, and the Mile
Slide 8: Agenda: Recent Topics
1. PERFORMANCE OVERVIEW FOR FY23Q1 2. RECENT TOPICS 3. DETAILS OF FINANCIAL RESULTS FOR FY23Q1 4. REFERENCES ©Japan Airlines, ALL rights reserved. 5
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INTENTIONALLY LEFT BLANK ©Japan Airlines, ALL rights reserved.
Slide 10: Recent Topics
RECENT TOPICS Full Service Carrier LCC Expansion of Network ZIPAIR started service on the San Francisco route in June and the Manila route in July! International Route ■ Expanded to 3 routes ■ Load Factor is increasing ■ Haneda - Dalian route began service in July 2023 for US West Coast ■ Haneda - D
Slide 11: Recent topics commentary
● This page shows our recent topics of our Full-service carrier, LCC and the Mileage, Lifestyle and Infrastructure business domains. ©Japan Airlines, ALL rights reserved. 6-S
Slide 12: Agenda: Details of Financial Results
1. PERFORMANCE OVERVIEW FOR FY23Q1 2. RECENT TOPICS 3. DETAILS OF FINANCIAL RESULTS FOR FY23Q1 4. REFERENCES ©Japan Airlines, ALL rights reserved. 7
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INTENTIONALLY LEFT BLANK ©Japan Airlines, ALL rights reserved.
Slide 14: Details of financial results for FY2023Q1
Details of financial results for FY2023Q1 Consolidated Financial Results Vs. FY19Q1 Vs. FY22Q1 FY19Q1 FY22Q1 FY23Q1 Diff. y/y Diff. y/y Revenue 348.8 268.8 381.4 +32.6 +9.4% +112.5 +41.9% Full Service Carrier 284.3 218.4 308.1 +23.8 +8.4% +89.7 +41.1% International PAX 130.6 62.4 147.5 +16.9 +12.9% +85
Slide 15: Consolidated results commentary
● Page 8 shows our consolidated results. ©Japan Airlines, ALL rights reserved. 8-S
Slide 16: Changes in EBIT (Revenues/Expenses)
Details of financial results for FY2023Q1 Changes in EBIT (Revenues／Expenses) + stands for profit increase（ revenue increase, cost decrease ) RPK y/y ： +75.2% ▼ stands for profit decrease ( revenue decrease, cost increase ) ASK y/y ： +36.8% ＋58.9 Bn Domestic Cargo/ Mileage, （JPY Bn） Passenger Mail Life
Slide 17: EBIT change commentary
● This page shows the factors behind the improvement in EBIT through revenue and expense. ● Revenues increased significantly in all business areas except for the cargo business. Total revenue increased by 112.5 billion yen. ● Costs linked to the scale of operations and the number of passengers increa
Slide 18: Changes in EBIT (Market and other impact)
Details of financial results for FY2023Q1 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 ＋58.9 Bn Currency Market ▼5.1 Bn (Excl. Market Impact) Revenue +5.3 Bn Rev
Slide 19: Market impact commentary
● This page shows the improvement of EBIT divided into market impacts and other factors. ● The impact of the market was 11.8 billion yen. ● On the other hand, we have achieved an improvement of 47.0 billion yen through factors other than the market. ©Japan Airlines, ALL rights reserved. 10-S
Slide 20: Int'l & Domestic Passenger Operations (Full Service Carrier)
Details of financial results for FY2023Q1 Int’l & Domestic Passenger Operations (Full Service Carrier) ✔ Int’l PAX: Strong demand for Japan-bound flights, recovery seen for flights from Japan ✔ Domestic PAX: Actively stimulated leisure demand, June’s passengers at pre-pandemic levels Passenger Demand（V
Slide 21: Passenger demand commentary
● On this page, I will explain the result of passenger demand for the full-service carrier business. ● International passengers showed a strong recovery, and the number of passengers in the First Quarter showed 65% compared to the pre-pandemic level, while we had expected a recovery to 61%. ● Domest
Slide 22: Int'l & Domestic Passenger Operations data
Details of financial results for FY2023Q1 Int’l & Domestic Passenger Operations (Full Service Carrier) International Passenger FY19Q1 FY22Q1 FY23Q1 Vs. FY19Q1 Vs. FY22Q1 Passenger Revenue (JPY Bn) 130.6 62.4 147.5 +12.9% +136.1% Passengers (’000) 2,429 728 1,571 ▼35.3% +115.6% RPK (MN passenger km) 1
Slide 23: Passenger business commentary
● This page shows the performance of the Full-Service carrier passenger business. ● For international passengers, the number of passengers recorded at a level of 65% compared to 2019 and revenue per passenger increased by 75%. This resulted in the revenue to reach 113% of the pre-pandemic level. ● F
Slide 24: Cargo
Details of financial results for FY2023Q1 Cargo ✔ International cargo recorded revenue higher than pre-pandemic levels by transportation of high value-added goods through our good transportation quality ✔ Maximized volume particularly between Asia and North America by utilizing both our own and other
Slide 25: Cargo commentary
● This page shows the performance of our Cargo business. ● For the international cargo business, we saw a decline in total air cargo demand, and our volume decreased by 10.7% year-on-year in the First quarter. ● In addition, the easing of the supply-demand balance, the unit price decreased by 48.1%
Slide 26: LCC
Details of financial results for FY2023Q1 LCC ✔ ZIPAIR achieved operating profit margins close to 15% through higher rates of aircraft utilization and increased seat number. It has also started service on the San Francisco route in June and the Manila route in July, showing steady growth ZIPAIR SPRING
Slide 27: LCC commentary
● This page shows the performance of our LCC business. ● The number of passengers of ZIPAIR is steadily increasing along with the recovery of the passenger demand. They recorded approximately 15% of operating profit margin for the 1st quarter. ● Spring Japan has allocated resources to domestic routes
Slide 28: Expenses
Details of financial results for FY2023Q1 Expenses ✔ Actual fixed costs for FY23Q1 was 123.1 billion yen, achieved through steady cost control Major Operating Expense Items Vs. FY19Q1 Vs. FY22Q1 （JPY Bn） FY19Q1 FY22Q1 FY23Q1 Diff. y/y Diff. y/y Fuel 63.6 69.8 79.4 +15.7 +24.7% +9.5 ＋13.7% Landing and na
Slide 29: Expenses commentary
● This page shows the breakdown of costs. ● Operating expenses for the First Quarter increased by 49.9 billion year-on-year to 353 Billion Yen due to the impact of market conditions as well as increased costs linked to the scale of operations. ● The actual fixed cost was 123.1 billion yen. We will co
Slide 30: Fuel Costs
Details of financial results for FY2023Q1 Fuel Costs Changes in fuel costs Hedge Ratio (As of End of Jun./2023) （JPY (JPY Bn) Bn） Hedging Volume Market and others +16.4 ▼28.3 +14.9 79.4 FX 69.8 +6.4 101.8 ＋9.5 Bn (＋13.7%) FY21Q3 FY22Q1 FY23Q1 FY23 FY24 FY25 Fuel Hedging FX Hedging Foreign currency ❏
Slide 31: Fuel cost and hedging commentary
● This page explains our fuel cost and hedging. ● Fuel costs for the First Quarter was 79.4 billion yen, which increased by 9.5 billion yen year-on-year. ● The graph on the top right shows our current hedge progress. ● At the bottom is a conceptual diagram of our fuel and currency hedging policies f
Slide 32: Balance Sheet and Cash Flow
Details of financial results for FY2023Q1 Balance Sheet and Cash Flow BS ✔ Equity ratio is 38.9% and Net D/E ratio is x0.0 both in terms of credit rating evaluation basis, kept at a healthy level CF ✔ Cash flow from Operating Activities is 123.6 billion yen, Free Cash Flow is 88.0 billion yen of inflow
Slide 33: Balance sheet and cash flow commentary
● Finally, I will explain our balance sheet and cash flow. ● The equity ratio on a credit rating basis is 38.9% and the net D/E ratio on a credit rating basis is 0.0 times. ● Our cash position at the end of June 2023 was 716.0 billion yen, which is a 76.7 billion yen increase from the end of March 20
Slide 34: Agenda: References
1. PERFORMANCE OVERVIEW FOR FY23Q1 2. RECENT TOPICS 3. DETAILS OF FINANCIAL RESULTS FOR FY23Q1 4. REFERENCES ©Japan Airlines, ALL rights reserved. 18
Slide 35: Details of FY2023 Full-Year Performance Forecast
Details of FY2023 Full-Year Performance Forecast ※From presentation material announced on May 2, 2023 Partial correction has been made (1) FY22 FY23 EBIT by Business Domain (JPY Bn) FY22 FY23 (JPY Bn) Results Forecast Diff. y/y Results Forecast Revenue 1,375.5 1,658.0 +282.4 +20.5% Full Service Carri
Slide 36: [Reference] FY2023 Earnings Forecast (Air transportation Segment)
[Reference] FY2023 Earnings Forecast（Air transportation Segment） Vs. CY19(%) Vs. FY22(%) （Actual number shown for L/F） （Actual number shown for L/F） International Passenger CY19 (4) FY22 FY23 Full-year 1st Half 2nd Half Full-year 1st Half 2nd Half (Forecast) (Forecast) (Forecast) (Forecast) (Forecas
Slide 37: [Reference] Operation Performance by Geographic Segment
[Reference] Operation Performance by Geographic Segment (Full Service Carrier) Passenger Revenue Revenue Passengers Carried FY23Q1 (%） Vs. FY19Q1 Vs. FY22Q1 ('000) FY23Q1 Vs. FY19Q1 Vs. FY22Q1 Component Ratio America 37% +41.6% +108.4% America 393 ▼1.7% +60.1% Europe 16% +17.6% +121.8% Europe 135 ▼3
Slide 38: [Reference] Fleet Information
[Reference] Fleet Information End of FY22 (March 31, 2023) End of FY23Q1 (June 30, 2023) Diff. Owned Leased Total Owned Leased Total Airbus A350-900 12 4 16 12 4 16 0 Boeing 777-300ER 13 0 13 13 0 13 0 Large Boeing 777-200ER 3 0 3 1 0 1 ▼2 Large-sized Total 28 4 32 26 4 30 ▼2 Boeing 787-9 19 3 22 19
Slide 39: Fly into tomorrow.
Fly into tomorrow. Finance & Investor Relations Japan Airlines ©Japan Airlines, ALL rights reserved. 23
Slide 40: 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