Japan Airlines Co., Ltd. · TSE:9201
Japan Airlines — Q3 FY2023 Earnings Presentation
42 slides from Japan Airlines's earnings presentation, Feb 2, 2024
Slide 1: Financial Results 3rd Quarter Mar/2024 (FY2023)
JAPAN AIRLINES Co.,Ltd. Financial Results 3rd Quarter Mar/2024（FY2023） February 2, 2024 ©Japan Airlines, ALL rights reserved.
Slide 2: Agenda
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 FY23Q3 APEX WORLD CLASS Wi-Fi in Eastern Asia 2024APEX"Best 2. R
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INTENTIONALLY LEFT BLANK ©Japan Airlines, ALL rights reserved.
Slide 4: Performance Overview for FY2023Q3
Performance Overview for FY2023Q3 ✔ Increased revenue/profit vs pre-pandemic levels, achieved by swiftly recovering capacity ahead of others and steadily capturing the recovering passenger demand ✔ No changes made to consolidated financial results forecast and dividend forecast Revenue EBIT (1) / Net
Slide 5: Performance overview commentary
● At the end of December 2023, our revenue was 1 trillion and 249.3 billion Yen, which is a 243 billion yen increase year on year, due to the steady recovery of passenger demand. This is also 136 billion yen more than the pre-Covid level of revenue in FY2019. ● EBIT was 128.9 billion yen, and Net Pr
Slide 6: FY2023Q3 Performance by Business Domain
FY2023Q3 Performance by Business Domain ✔ Revenue and EBIT improved significantly, driven by Full Service Carrier ✔ LCC’s EBIT made profitable. Mileage, Lifestyle and Infrastructure steadily recorded profit Revenue by Business Domain EBIT by Business Domain Full Service Carrier Cargo and Mail LCC(1) Fu
Slide 7: Business domain commentary
● This page shows the result of each business domain using internal management figures ● The full-service carrier business domain posted an EBIT profit of 97.7 billion yen for the Third Quarter, mainly due to the EBIT increase of the Full-Service Passenger business domain. ● As for the LCC business
Slide 8: Agenda
1. PERFORMANCE OVERVIEW FOR FY23Q3 2. RECENT TOPICS 3. DETAILS OF FINANCIAL RESULTS FOR FY23Q3 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 Carrirer（Int'l 貨物・郵便 Passenger） LCC（ZIPAIR） New Aircraft A350-1000 Haneda - New York started ■Narita - Vancouver route to begin service on March 13, service on January 24 2024 ■A350-1000 will be launched on the Haneda - Dallas route ■Expanded to 9 destinations, aiming for
Slide 11: Recent topics commentary
● This page shows our recent topics. ©Japan Airlines, ALL rights reserved. 6-S
Slide 12: Initiatives for SAF (1)
Initiatives for SAF(1) （Developments on Domestic SAF Production） ■Steady progress made toward the goal of replacing 10% of all fuel on board with SAF by 2030, especially with developments on production of Japan-made SAF. FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024～ FY2025 Target Replace 1% of J
Slide 13: SAF commentary
● This page shows our recent topics of our SAF, sustainable aviation fuel. ● As a result of requests from the Japanese Aviation Industry, the Japanese government has provided initial investment support to SAF producers for the investment in such as plants and established new tax credit measures base
Slide 14: Agenda
1. PERFORMANCE OVERVIEW FOR FY23Q3 2. RECENT TOPICS 3. DETAILS OF FINANCIAL RESULTS FOR FY23Q3 4. REFERENCES ©Japan Airlines, ALL rights reserved. 8
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INTENTIONALLY LEFT BLANK ©Japan Airlines, ALL rights reserved.
Slide 16: Details of financial results for FY2023Q3
Details of financial results for FY2023Q3 Consolidated Financial Results Q3 (Apr. to Dec.) Q3 (Oct. to Dec.) (JPY Bn) Vs. FY19Q3 Vs. FY22Q3 Vs. FY22Q3 FY19Q3 FY22Q3 FY23Q3 FY23Q3 Diff. y/y Diff. y/y Diff. y/y Revenue 1,112.7 1,005.5 1,249.3 +136.6 +12.3% +243.7 +24.2% 428.4 +41.3 +10.7% Full Service Car
Slide 17: Consolidated results commentary
● This page onwards shows the results for the third quarter of this year. ● Page 9 shows our consolidated results. ©Japan Airlines, ALL rights reserved. 9-S
Slide 18: Changes in EBIT (Revenues/Expenses)
Details of financial results for FY2023Q3 Changes in EBIT (Revenues／Expenses) + stands for profit increase（ revenue increase, cost decrease ) RPK y/y ： +40.5% ▼ stands for profit decrease ( revenue decrease, cost increase ) ASK y/y ： +19.8% ＋94.2 Bn （JPY Bn） Domestic Cargo/ Mileage, Passenger Mail Life
Slide 19: EBIT change commentary
● This page shows the factors behind the improvement in EBIT through revenue and expense. ● Revenues in the international and domestic passenger business, LCC business, and Mileage, Lifestyle and Infrastructure business increased significantly as 243.7 billion yen year on year. ● As for expenses, co
Slide 20: Changes in EBIT (Market and other impact)
Details of financial results for FY2023Q3 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 ＋94.2 Bn Currency Market ▼9.4 Bn Revenue +13.5 Bn (Excl. Market Impact) Co
Slide 21: Market impact commentary
● This page shows the EBIT improvement by divided into market impact and other factors. ● Jet fuel prices were lower than the previous year, resulting in a 8.4 billion yen improvement in EBIT year on year. ● Excluding the impact of market conditions, EBIT improved by 85.8 billion yen. ©Japan Airline
Slide 22: Int'l & Domestic Passenger Operations
Details of financial results for FY2023Q3 Int’l & Domestic Passenger Operations (Full Service Carrier) ✔ Int’l PAX: Strong inbound demand. Outbound demand expected to recover toward March ✔ Dom. PAX: Although demand slow around Jan., revenue per passenger above forecast Passenger Demand（VS.CY2019）(1)
Slide 23: Demand and unit price commentary
● This page shows the current demand and unit price situations. ● As for international passenger demand, we had assumed a 71% recovery in the third quarter compared to 2019, the recovery was about 70%. Currently we see a slight slowdown in the Japanese outbound market. However, we expect a recovery
Slide 24: Int'l & Domestic Passenger Operations (Full Service Carrier)
Details of financial results for FY2023Q3 Int’l & Domestic Passenger Operations (Full Service Carrier) Q3 (Apr. to Dec.) Q3 (Oct. to Dec.) International Passenger FY19Q3 FY22Q3 FY23Q3 Vs. FY19Q3 Vs. FY22Q3 FY23Q3 Vs. FY22Q3 Passenger Revenue (JPY Bn) 401.3 287.1 471.7 +17.5% +64.3% 157.3 +27.0% Passe
Slide 25: Passenger business commentary
● This page shows the performance of the Full-Service Carrier passenger business. ● The number of passengers on international routes were 68% compared to FY2019, and revenue per passenger increased by 74% compared to FY2019. As a result, passenger revenues exceeded the pre-Covid level by approximate
Slide 26: Cargo
Details of financial results for FY2023Q3 Cargo ✔ International cargo strived to capture demand between Asia/China and North America, amid a slow recovery in demand for cargo to/from Japan ✔ Revenue exceeded pre-pandemic levels by maximizing volume, through high value-added cargo such as pharmaceutic
Slide 27: Cargo commentary
● This page shows the performance of our Cargo business. ● For the international cargo business, the carried cargo weight decreased by 9.4% year-on-year due to slowing demand. However, the speed of its decline has slowed. ● Unit prices have finally stopped falling. It is gradually turning around. ●
Slide 28: LCC
Details of financial results for FY2023Q3 LCC ✔ ZIPAIR scheduled to begin service on the Vancouver route in March, expanding its destination to 9 cities mainly in North America and Asia, to record strong profits. Q3 (Apr. to Dec.) Q3 (Oct. to Dec.) ZIPAIR FY22Q3 FY23Q3 Vs. FY22Q3 FY23Q3 Vs. FY22Q3 Pas
Slide 29: LCC commentary
● This page shows the performance of our LCC business. ● ZIPAIR has continued to grow steadily, capturing the strong international passenger demand. ● Spring Japan had been experiencing sluggish demand from China, but with the launch of flights to Shanghai in December, we expect demand to recover. ©
Slide 30: Expenses
Details of financial results for FY2023Q3 Expenses ✔ Actual fixed costs was 375.7 billion yen, achieved through steady cost control Major Operating Expense Items Q3 (Apr. to Dec.) Q3 (Oct. to Dec.) （JPY Bn） Vs. FY19Q3 Vs. FY22Q3 Vs. FY22Q3 FY19Q3 FY22Q3 FY23Q3 FY23Q3 Diff. y/y Diff. y/y Diff. y/y Fuel 18
Slide 31: Cost commentary
● This page shows the breakdown of cost. ● Total operating expenses increased by 139.5 billion yen from the previous year to 1 trillion and 129.6 billion yen, due to the impact of market conditions such as the depreciation of yen, as well as an increase in expenses linked to the scale of operations
Slide 32: Fuel Costs
Details of financial results for FY2023Q3 Fuel Costs Changes in fuel costs Hedge Ratio (As of End of Dec./2023) （JPY (JPY Bn) Bn） Hedging Volume Market and others +34.1 ▼63.0 +40.0 FX 266.2 241.6 +13.4 101.8 ＋24.5Bn (+10.2%) FY21Q3 FY22Q3 FY23Q3 FY23 FY24 FY25 Fuel Hedging FX Hedging Foreign currency
Slide 33: Fuel cost and hedging commentary
● This page explains our fuel cost and hedging. ● Fuel costs for the third quarter was 266.2 billion yen, which increased by 24.5 billion yen from the previous year. ● The upper right graph shows the current progress of hedging. The lower part of the graph shows a conceptual diagram of our fuel and
Slide 34: Balance Sheet and Cash Flow
Details of financial results for FY2023Q3 Balance Sheet and Cash Flow BS ✔ Equity ratio is 40,1% 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 273.2 billion yen. Free Cash Flow maintained at previous year'
Slide 35: Balance sheet commentary
● The equity ratio on a credit rating basis is 40.1% and the net D/E ratio on a credit rating basis is 0.0 times. ● Our cash position at the end of December 2023 was 684.0 billion yen, which is a 44.8 billion yen increase from the end of March 2023. A safe level of liquidity is still secured. ● Cash
Slide 36: Agenda
1. PERFORMANCE OVERVIEW FOR FY23Q3 2. RECENT TOPICS 3. DETAILS OF FINANCIAL RESULTS FOR FY23Q3 4. REFERENCES ©Japan Airlines, ALL rights reserved. 19
Slide 37: Operation Performance by Geographic Segment (Full Service Carrier)
[Reference] Operation Performance by Geographic Segment (Full Service Carrier) Passenger Revenue Revenue Passengers Carried Q3 (Apr. to Dec.) Q3 (Oct. to Dec.) Q3 (Apr. to Dec.) Q3 (Oct. to Dec.) FY23Q3 FY23Q3 ('000) (%） Component Vs. FY19Q3 Vs. FY22Q3 Component Vs. FY22Q3 FY23Q3 Vs. FY19Q3 Vs. FY22
Slide 38: Fleet Information
[Reference] Fleet Information End of FY22 (March 31, 2023) End of FY23Q3 (December 31, 2023) Diff. Owned Leased Total Owned Leased Total Airbus A350-1000 0 0 0 1 0 1 +1 Airbus A350-900 12 4 16 12 4 16 0 Large Boeing 777-300ER 13 0 13 13 0 13 0 Boeing 777-200ER 3 0 3 0 0 0 ▼3 Large-sized Total 28 4 32
Slide 39: Details of FY2023 Full-Year Performance Forecast
[Reference] Details of FY2023 Full-Year Performance Forecast ※From presentation material announced on October 31, 2023 FY22 FY23 EBIT by Business Domain (JPY Bn) FY22 FY23 FY23 Initial New Results Forecast Forecast Diff. (JPY Bn) Initial New Results Forecast Forecast Revenue 1,375.5 1,658.0 1,684.0 +
Slide 40: FY2023 Full-Year Forecast Balance Sheet and Cash Flow
[Reference] FY2023 Full-Year Performance Forecast Balance Sheet and Cash Flow ※From presentation material announced on October 31, 2023 FY23 FY23 End of FY22 (Initial (New （JPY Bn） Balance Sheet (Results) Forecast) Forecast) Diff. Total Assets 2,520.6 2,544.0 2,642.0 +98.0 Balance of Interest-bearing
Slide 41: Fly into tomorrow.
Fly into tomorrow. Finance & Investor Relations Japan Airlines ©Japan Airlines, ALL rights reserved. 24
Slide 42: 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