Japan Airlines Co., Ltd. · TSE:9201
Japan Airlines — Q1 FY2020 Earnings Presentation
51 slides from Japan Airlines's earnings presentation, Aug 3, 2020
Slide 1: Financial Results 1st Quarter Mar/2021 (FY2020)
JAPAN AIRLINES Co., Ltd. Financial Results 1st Quarter Mar/2021（FY2020） 『Team Asahikawa』（Handwritten by JAL Asahikawa Airport Office, JAL Engineering Asahikawa Airport Maintenance Office）and JAL Cabin Attendants) August 3, 2020 ©Japan Airlines, ALL rights reserved.
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Slide 3: Today's Topics
Today’s Topics P.3 P.12 P.16 P.20 P.23 IFRS is adopted from the fiscal year ending Mar 2021, instead of the Japanese standard. Accordingly, figures in the previous years are also calculated in IFRS as well for comparison analysis. Japan Institute of FTE SKYTRAX SKYTRAX Information Technology Accessi
Slide 4: Explanation of performance and initiatives in four time scales
Today, I will explain our performance and initiatives in four different time scale; Past, Current and Near Future and Future. As we have already explained, we have applied IFRS from this fiscal year. To make a comparative analysis, we have also applied IFRS to the previous year’s results. ©Japan
Slide 5: The Current Overview and Immediate Initiatives
Financial Results 1st Quarter Mar/2021 THE CURRENT OVERVIEW AND IMMEDIATE INITIATIVES NEAR FUTURE INITIATIVES TOWARD THE NEW NORMAL ©Japan Airlines, ALL rights reserved. 3
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Slide 7: Overview of Financial Results for 1st Quarter Mar/21
Overview of Financial Results for 1st Quarter Mar/21 Large drop in revenue due to COVID-19 spread No interim dividends are paid to secure liquidity at hand as first priority Revenue(1) EBIT (1)(2)/Profit or Loss (1)(3)/EBIT Margin(1)(4) （JPY Bn） （JPY Bn） EBIT Profit or Loss EBIT Margin（EBIT Marg
Slide 8: Explanation of first quarter results
On this slide, I will explain the first quarter result of Fiscal Year 2020. We will use EBIT, which represents the result of our business and investment, as our target index instead of Operating Profit that we had used for a long time. Due to the spread of COVID-19, Revenue decreased to 76.3 b
Slide 9: Consolidated Financial Results for 1st Quarter Mar/21
(1) Consolidated Financial Results for 1st Quarter Mar/21 1st Quarter 1st Quarter （JPY Bn） Mar/20 Mar/21 Diff. y/y Revenue 348.8 76.3 ▲272.4 ▲78.1% International Passenger 130.6 2.7 ▲127.8 ▲97.9% Domestic Passenger 127.1 18.9 ▲108.1 ▲85.1% Cargo / Mail 22.7 26.5 +3.8 +16.9% Other Revenue (2) 68.
Slide 10: Explanation of consolidated financial results
This slide shows the details of the consolidated financial result of the first quarter result. ©Japan Airlines, ALL rights reserved. 5-S
Slide 11: Changes in EBIT (Revenues/Expenses)
Changes in EBIT（Revenues／Expenses） (1) （JPY Bn） (2) ＋ stands for profit increase (revenue increase, cost decrease) ASK y/y： ▲80.8% ▲ stands for profit decrease (revenue decrease, cost increase) RPK y/y： ▲94.2％ ▲150.9 Bn 19.9 1st Quarter Mar/20 Int’l Passenger ▲131.0 ▲127.8 Other Others(4) Expenses ▲
Slide 12: Explanation of EBIT changes
This slide shows the ups and downs of EBIT. Revenue fell largely due to COVID-19, except Cargo and Mail. Operating Expense decreased by 125 billion yen year-on-year due to aircraft operating cost reduction and fixed cost reduction. ©Japan Airlines, ALL rights reserved. 6-S
Slide 13: International/Domestic Passenger Operations
International/ Domestic Passenger Operations Capacity was reduced largely as demand falls rapidly in COIVD-19 Domestic demand is gradually coming back in June International Passenger (1) Domestic Passenger (2) (2) Int'l PAX No. Int'l Capacity (2) Dom PAX No. Dom Capacity Dom L/F (2) (Y/Y) Int'l
Slide 14: Explanation of passenger business
On this slide, I will explain International and Domestic Passenger Business. International passenger demand disappeared due to travel restrictions imposed by many countries. Passenger Number decreased by 98.6% year-on-year. Domestic long-distance travel was also discouraged, then Passenger Num
Slide 15: Cargo / Mail
Cargo / Mail Tight supply-demand situation continues as capacity is being reduced worldwide Cargo flights with passenger aircraft totaled to 3,754 from Apr to Jun ZIPAIR also started cargo flights on Narita= Bangkok routes from Jun Revenue exceeded previous year (+17% yoy) due to price incre
Slide 16: Explanation of cargo and mail
For Cargo and Mail, the supply-demand situation became very tight due to large capacity reduction worldwide. We operated about 3,800 cargo flights using passenger aircrafts from April to June. Price hiked in that situation, so the revenue actually increased by 16.9% year-on- year. ZIPAIR start
Slide 17: Major Operating Expense Items
(1) Major Operating Expense Items Revenue- and capacity-linked costs decrease as approximately 40% of revenue reduction (108.4 Bn JPY) Fixed cost also steadily decreases more than estimated （Details on P.18） 1st Quarter 1st Quarter （JPY Bn） Diff. y/y Mar/20 Mar/21 Revenue 348.8 76.3 ▲272.4 ▲78.1
Slide 18: Explanation of operating expenses
On this slide, Revenue- and capacity-linked costs decreased by about 40% to 108.4 billion yen year-on-year. Fixed cost also reduced by 16.6 billion yen year- on-year. More details will be explained later. Please note our fixed cost reduction is going well. It will exceed our original plan. ©Japan
Slide 19: Liquidity at hand
Liquidity at hand 394.3 Bn JPY Liquidity at hand remains as of the end of June by prompt capital-raising and reduction of capital expenditure Total capital-raising reached to appx. 500 Bn JPY level with unused credit line since Feb Cash burn rate is decreasing as cancelled tickets are decrease
Slide 20: Explanation of liquidity at hand
On this slide, Liquidity at Hand will be explained. Since February, we have raised about 300 billion yen. Our credit line, which remains still unused, also increased by 150 billion yen to the total of 200 billion yen. As of the end of June, our Cash on Hand is 394.3 billion yen. Our monthly
Slide 21: Summary of Consolidated Statement of Financial Position and Cash Flow
Summary of Consolidated Statement of Financial Position and Cash Flow(1) The 394.3 Bn JPY of Cash and 200 Bn JPY of Credit Line make our long-term fund BS enough, while the repayment within one year remains at 50.7 Bn JPY D/E Ratio is still at a sound level in spite of the increased interest-bea
Slide 22: Explanation of financial position and cash flow
This slide explains Consolidated Statement of Financial Position and Cash Flow. Cash at hand is 394.3 billion yen as of the end of the quarter. Repayment within one year including lease payments is just 50.7billion yen, which means we have a good amount of long-term fund. Upon capital raising, w
Slide 23: Near Future Initiatives
Financial Results 1st Quarter Mar/2021 THE CURRENT OVERVIEW AND IMMEDIATE INITIATIVES NEAR FUTURE INITIATIVES TOWARD THE NEW NORMAL ©Japan Airlines, ALL rights reserved. 12
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Slide 25: Current Outlook (COVID-19 Impact)
Current Outlook（COVID-19 Impact) International Passenger Business remains unchanged due to travel restrictions Domestic Passenger Business recovers as leisure demand in addition to business demand gradually recovers to a 75% yoy level in capacity International Passenger (1)(2) Domestic Passenger
Slide 26: Explanation of current situation and countermeasures
From this slide, I will explain the current situations and our immediate countermeasures. For International Passenger Business, travel restrictions still continue so that our capacity reduction for August and September will be around 90% level of previous year. In August, out of cargo flights, s
Slide 27: Safety and Comfort
Safety and Comfort Appeal of Flysafe Environment In-cabin air is replaced in two to three Cabin in Cabin minutes Air flows from top to bottom In-cabin Air Flow Image Passengers do not get on/off during cruise Passengers face to the same direction HEPA Filter is equipped HEPA Filter HEPA HE
Slide 28: Explanation of Flysafe hygiene measures
This slides explains our Flysafe Hygiene measures. We would like to appeal to the public that there has been no in-cabin infection case reported ever in the world. This is because an in-cabin environment is suitable for prevention. We would like to reiterate that the in-cabin environment is safe
Slide 29: Contribution as Social Infrastructure
Contribution as Social Infrastructure Supports logistic network 医薬品写真待ち Domestic chartered flights for Cabin loading of Special containers with increasing parcel demand medical supplies temperature control for pharmaceuticals Chartered rescue flights Social Engagement Completes social roles by provi
Slide 30: Explanation of social mission
On this slide, we are fulfilling our social mission as public transportation provider. We support logistic network within Japan and between Japan and the rest of the world by operating cargo flights as many as possible to carry medical supplies. Also, chartered flights were operated for those
Slide 31: Toward the New Normal
Financial Results 1st Quarter Mar/2021 THE CURRENT OVERVIEW AND IMMEDIATE INITIATIVES NEAR FUTURE INITIATIVES TOWARD THE NEW NORMAL ©Japan Airlines, ALL rights reserved. 16
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Slide 33: To Recover Demand
To Recover Demand Immediate 2 nd Half of FY20 FY21 or later “Go To Travel Campaign” Promotion Ease of Travel Restriction External Environments COVID-19 Testing Expansion through Establishment of PCR Testing Center Mid- & Long-haul LCC ZIPAIR Starts to Operate to Bangkok(※) ・Seoul (※)・Honolulu ※ star
Slide 34: Explanation of demand recovery measures
This slide explains our counter measures for a near future. Demand stipulating initiatives will be taken. For International Passenger Business, JAL will cooperate with governmental authorities to establish PCR centers to promote demand recovery. To limit contact with others, SMART AIRPORT wi
Slide 35: Cost and CAPEX Reduction Initiatives
Cost and CAPEX Reduction Initiatives Cost Reduction CAPEX Reduction The revenue- and capacity-linked costs were Total 80 Bn JPY reduction is aimed by steadily reduced by40% of a rev. reduction level adding 30 Bn JPY more to the previous (108.4 Bn JPY reduction from Apr to Jun (1) ), forecast of 50 B
Slide 36: Explanation of cost reduction measures
On this slide, I will explain our current and further cost reduction measures. For fixed cost reduction, our initial target was 60 billion yen reduction against our forecast. In the first quarter, we have already achieved almost half of the target, 29 billion yen. To cut fixed cost further, 30 m
Slide 37: Future Demand Scenarios
Future Demand Scenarios The consolidated financial earnings forecast for Mar/21 cannot be provided at this moment but will be provided as soon as the COVID-19 effect becomes foreseeable For references, some demand and revenue scenarios and their impact on profits are shown as below Int’l Pax Deman
Slide 38: Explanation of demand scenarios
I will explain recovery of air transport demand on this slide. At this moment, our consolidated earnings forecast for this fiscal year is not determined because the spread of COVID-19 is not foreseeable at all. We will disclose our forecast as soon as when it becomes available. However, for yo
Slide 39: Toward the New Normal
Financial Results 1st Quarter Mar/2021 THE CURRENT OVERVIEW AND IMMEDIATE INITIATIVES NEAR FUTURE INITIATIVES TOWARD THE NEW NORMAL ©Japan Airlines, ALL rights reserved. 20
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Slide 41: Toward the New Normal①
Toward the New Normal① Changes in Business Environments Industry Society JAL Group New Normal and Work Style Slow Recovery on Increase of interest-bearing Reform International Travel Debts Changes in Society and the Changes in Business Demand Local Economy Industry Reform Environmental
Slide 42: Explanation of business environment changes
Lastly, I will explain the changes to our business environment in the “new normal” and the new direction that our group should head to. There will be a significant change for the entire society and the airline industry. For the JAL Group, the increase of interest-bearing debts will inevitably
Slide 43: Toward the New Normal②
Toward the New Normal ② JAL’s Measures Reconstruction of a firm Improve Safety and Accelerated Initiatives financial Structure Comfort Measures for Social Issues facing Heightened hygiene standards Society Structural Reform and promoting minimal contact Measures for Environmental • Fixed cost
Slide 44: Explanation of JAL's measures
Firstly, we will implement structural reforms, improve efficiency and reduce investments during the early onset to reconstruct a firm financial structure. We will also improve safety and comfort measures by strengthening hygiene standards and promoting less-contact during travel, which is a new
Slide 45: References
REFERENCES ©Japan Airlines, ALL rights reserved. 23
Slide 46: Introduction to reference slides
The following slides show Revenue of International Routes by Geographical Segment, Number of Aircraft and Major changes by IFRS Application. This ends my presentation. Thank you very much for your attention. ©Japan Airlines, ALL rights reserved. 23-S
Slide 47: Revenue of International Routes by Geographic Segment
《Reference》 Revenue of International Routes by Geographic Segment Passenger Revenue Revenue Passengers Carried (1) (2) y/y Component Ratio (‘000) 1Q Mar/20 1Q Mar/21 y/y (%) 1Q Mar/21 1Q Mar/20 1Q Mar/21 America 399 8 ▲97.8% America ▲98.4％ 29% 22% Europe 195 3 ▲98.1% Europe ▲97.3% 16% 21% Asia/Ocean
Slide 48: Number of Aircraft
《 Reference 》 Number of Aircraft End of Mar/20 End of 1st Quarter Mar/20 (March 31, 2020) (June 30, 2020) Diff. Owned Leased Total Owned Leased Total Airbus A350-900 4 1 5 2 4 6 +1 Boeing 777-200 11 0 11 11 0 11 - Boeing 777-200ER 11 0 11 11 0 11 - Boeing 777-300 4 0 4 4 0 4 - Boeing 777-300ER 13 0
Slide 49: Major Changes by IFRS Adoption
《Reference》 Major Changes by IFRS Adoption Profit/Loss Statement Due to changes in accounting rules for mileage points, revenue allocated to mileage points is deferred as a liability, and recognized when miles are redeemed (The impacts to Profit/loss are limited) Our main index for performance w
Slide 50: Fly into tomorrow.
Fly into tomorrow. Finance & Investor Relations, Japan Airlines ©Japan ©Japan Airlines, ALL Airlines, ALL rights rightsreserved. reserved.
Slide 51: 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