Japan Airlines Co., Ltd. · TSE:9201
Japan Airlines — Q3 FY2017 Earnings Presentation
31 slides from Japan Airlines's earnings presentation, Jan 31, 2018
Slide 1: Financial Results 3rd Quarter Mar/2018 (FY2017)
JAPAN AIRLINES Co., Ltd. Financial Results 3 rd Quarter Mar/2018（FY2017） January 31, 2018
Slide 2: Today's Topics
Today’s Topics P.1 P.2 P.3 P.12 ※JAL Corporate Website ※the CONTRAIL Project
Slide 3: Overview of Financial Results for 3rd Quarter Mar/18
Overview of Financial Results for 3rd Quarter Mar/18 3 rd Quarter Mar/18 (FY2017) 3 rd Quarter resulted in an increase in both revenue and profit compared to the previous year. Considering the recent conditions such as fuel price trends and the surrounding market demands, the full year earnings
Slide 4: Overview of the 3rd quarter financial results (commentary)
Now, I will present an overview of the 3 rd quarter financial results for the fiscal year ending March 31, 2018. Operating revenue increased by 70.5 billion yen, up 7.2% year-on-year, to 1,046 billion yen. Operating profit increased by 7.9 billion yen, up 5.8% year-on-year, to 145.2 billion yen,
Slide 5: Recent Topics
Recent Topics JAL Focus Refine our full service carrier business and expand new business domains, leveraging its know-how and customer base for further growth Route Network System Service Haneda – London(Heathrow) Renewal of Passenger Best Asia-Pacific Airline Flight Increase（2017.10.29～) Serv
Slide 6: Recent topics commentary
In this page, I will explain the recent topics in the view points of the full service carrier business domain and the new business domain. About the full service carrier business domain, we increased the flight frequency on the Tokyo (Haneda)=London route and Tokyo (Narita)=Bangkok route from Octo
Slide 7: Consolidated Financial Results
Consolidated Financial Results Consolidated Financial Results 3rd Quarter Mar/18 （JPY Bn） 3Q 3Q 3rd Quarter Diff. y/y ratio Diff. y/y ratio FY2016 FY2017 (Oct-Dec)(5) Operating Revenue 975.4 1,046.0 ＋70.5 ＋7.2% 353.7 +30.1 +9.3% Air Transportation Segment 877.2 950.5 +73.3 +8.4% 323.2 +31.7 +10.9% O
Slide 8: Intentionally Left Blank
‘2 Neen JAPAN AIRLINES INTENTIONALLY LEFT BLANK
Slide 9: Changes in Operating Profit (Revenues / Expenses)
Changes in Operating Profit（ Revenues ／ Expenses ） 3 rd Quarter Mar/18 (FY2017) （ JPY Bn ） ＋ stands for profit increase (revenue increase, cost reduction) ▲ stands for profit decrease (revenue decrease, cost increase) ASK y/y： ＋1.2% ＋7.9Bn RPK y/y： ＋3.8% (＋5.8%) Other Revenues Fuel ＋10.2 ▲10.0 Cargo
Slide 10: Changes in operating profit commentary
Now, I will explain the changes in operating profit. Revenues from International Passenger increased by 32 billion yen due to strong demand for high yield passenger out of Japan as well as more fuel surcharge revenues and such. Revenues from Domestic Passenger increased 17.6 billion yen year on ye
Slide 11: Changes in Operating Profit (Market / Others)
Changes in Operating Profit（ Market ／ Others ） 3 rd Quarter Mar/18 (FY2017) （ JPY Bn ） ＋ stands for profit increase (revenue increase, cost reduction) ▲ stands for profit decrease (revenue decrease, cost increase) Impact from Currency Market ▲6.3 Bn +7.9Bn (Excl. Market Impact) Revenue ＋5.9Bn (+5.8%
Slide 12: Market impact and others commentary
This page explains changes in operating profit from the viewpoints of market impact and others. Despite fuel cost increase caused by higher fuel prices, fuel surcharge revenue and the hedging effect also contributed to increase operating profit by 5.2 billion yen compared to the previous year. Ap
Slide 13: International Passenger Operations
International Passenger Operations International Passenger Change in Revenue （JPY Bn） 3Q 3Q 3rd Quarter y/y ratio y/y ratio ＋32.0Bn FY2016 FY2017 (Oct-Dec)(4) +10.2% Passenger Revenue 314.4 346.4 +10.2% 117.1 ＋15.6% (JPY Bn) 346.4 +4.9 Passengers 6,279 6,373 +1.5% 2,163 ＋4.7% ＋27.2 (’000) 314.4 ASK
Slide 14: International passenger commentary
On international routes, number of passenger increased 1.5% as a result of increased capacity by new routes and increased frequency, together with the strong demand. Revenue per passenger rose by 8.6% year on year for our revenue management initiatives and such. Net Unit Price without fuel surcharg
Slide 15: Domestic Passenger Operations
Domestic Passenger Operations Domestic Passenger Change in Revenue 3Q 3Q 3rd Quarter （ JPY Bn ） y/y ratio y/y ratio FY2016 FY2017 (Oct-Dec)(4) Passenger Revenue ＋17.6Bn 380.8 398.5 ＋4.6% 133.5 ＋4.7% (＋4.6%) (JPY Bn) Passengers ・Increase in individual passengers (+) 24,623 25,919 +5.3% 8,749 +3.0% ・R
Slide 16: Domestic passenger commentary
Next, on domestic routes. Number of passenger increased by 5.3% as a result of new demand creation by promotional fares increased group passengers demand due to the recovery from a plunge in demand by the 2016 Kumamoto Earthquakes. While revenue per passenger decreased by 0.6% year on year due to
Slide 17: Major Operating Expense Items
Major Operating Expense Items Operating Expenses (JPY Bn) 3Q 3Q 3rd Quarter Diff. y/y ratio Diff. y/y ratio FY2016 FY2017 (Oct-Dec)(3) Fuel 147.8 157.9 ＋10.0 ＋6.8% 55.9 +7.1 +14.7% Landing and navigation fees 60.9 62.5 ＋1.5 ＋2.5% 21.2 ＋0.9 ＋4.5% Maintenance 40.9 51.3 ＋10.4 ＋25.6% 15.5 ＋2.2 ＋17.3% Sa
Slide 18: Operating expense commentary
Please refer to page 8 for major operating expense items, which stood almost as planned. We will continue to make utmost efforts to control our costs. 8-S
Slide 19: Impact of Fuel and FX Markets
Impact of Fuel and FX Markets Hedging Ratio for Fuel Costs Transition of Fuel Cost by Factors (as of end of December 2017) (JPY Bn) Volume 180 loaded/ 100% FX Hedging Fuel FX Market +6.4 80% ▲12.9 160 +16.6 60% Approx. Approx. Approx. Approx. 157.9 40% 40% 140 ＋10.0Bn 40% 30% 30% (＋6.8%) Approx. App
Slide 20: Fuel and FX impact commentary
Now, I will explain impact of fuel and FX markets. In our earning forecast which we announced on October 31,2017, we set markets forecast as 60 US Dollars per barrel for Singapore Kerosene and 115 Japanese Yen for 1 US Dollar. But now market condition exceeds our forecast in fuel markets. Please l
Slide 21: Progress of Strategic Expenditures
Progress of Strategic Expenditures ※Reproduce, announced on April 28, 2017 Strategic Expenditures（y/y +JPY 21.5Bn） Increased to JPY 22.0 Bn in the previous forecast on October 31,2017 No change from the latest forecast Maintenance（y/y + JPY 10.0Bn） As planned Others（y/y + JPY 10.0Bn） As plan
Slide 22: Strategic expenditures commentary
This page shows the progress we have made with respect to “strategic expenditures” that we presented at our briefing on April 28th. These “strategic expenditures” are expenses for future growth and one of the reasons for cost increases this fiscal year. Strategic expenditures, engine maintenance c
Slide 23: Major Balance Sheet Items and Cash Flow Items
Major Balance Sheet Items and Cash Flow Items Balance Sheet End of Mar/17 End of 3rd Quarter Mar/18 (JPY Bn) Diff. 2017/3/31 2017/12/31 Total Assets 1,728.7 1,798.8 ＋70.0 Cash and Deposits (1) 404.0 386.8 ▲17.1 Balance of Interest-bearing Debt (2) 116.0 105.1 ▲10.9 Future Rental Expenses under Opera
Slide 24: Financial Strategy
※Reproduce, announced on October 31, 2017 《 References 》 Financial strategy Maintain both strong financial structure and high capital efficiency Financial structure Capital efficiency Shareholders’ Decrease cost of capital・ Credit rating Utilize debt Liquidity equity ratio Equity ratio reached A
Slide 25: Benefit
※Reproduce, announced on July 31, 2017 《 References 》 Recent Topics（Innovation of Passenger Service System） New system* will go live on Nov 16, 2017 Aim to increase our passenger revenue by 1% or more as early as possible. As from FY19, the Benefit will exceed the Cost to contribute to our profitabi
Slide 26: FY2017 (Mar/18) Earnings Forecast
《 References 》 ※No change from the latest forecast on October 31,2017 FY2017 (Mar/18) Earnings Forecast P/L Operational Preconditions FY2016 FY2017 FY2016 FY2017 (JPY Bn) Result Forecast y/y Result Forecast Operating Revenue 1,288.9 1,366.0 ＋77.1 ASK* Int’l +0.1% ＋2.7% International Doms ▲1.2% ＋1.2%
Slide 27: FY2017 (Mar/18) Revised Earnings Forecast
《 References 》 FY2017 (Mar/18) Revised Earnings Forecast Balance Sheet End of FY2016 End of FY2017 End of FY2017 （JPY Bn） Diff. Results Previous Forecast New Forecast Total Assets 1,728.7 1,820.0 1,817.0 ▲3.0 Balance of Interest-bearing debts 116.0 130.0 127.0 ▲3.0 Shareholders’ Equity 972.0 1,048.0
Slide 28: Revenue of International Routes by Geographic Segment
《 References 》 Revenue of International Routes by Geographic Segment Passenger Revenue Q3 Q3 Component Ratio (%) Cumulative 3Months Q3 Q3 Q3 y/y y/y FY2016 FY2017 3 Months America ＋14.5% ＋20.7% 26% 27% 26% Europe ＋19.2% ＋23.3% 16% 17% 15% Asia/Oceania ＋6.8% ＋14.4% 33% 32% 35% China ＋9.5％ ＋19.7％ 10%
Slide 29: Number of Aircraft
《 References 》 Number of Aircraft End of Mar/17 End of 3 rd Quarter Mar/18 (2017/3/31) (2017/12/31) Diff. Owned Leased Total Owned Leased Total 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 0 13 13 0 13 - Large-sized Total 40 0 4
Slide 30: Fly into tomorrow.
Fly into tomorrow. Finance & Investor Relations, Japan Airlines
Slide 31: Disclaimer
Disclaimer This contents 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 cre