China Airlines Ltd. · TWSE:2610
China Airlines — Q3 2024 Earnings Presentation
38 slides from China Airlines's earnings presentation, Nov 21, 2024
Slide 1: China Airlines 2024 2nd Investor Conference
China Airlines 2024 2nd Investor Conference Nov. 21 ’24
Slide 2: Safe Harbor Notice
Safe Harbor Notice • The information disclosed in this presentation and its accompanying announcements, including content relating to business outlooks, financial operations, and business forecasts, is based on information derived from internal corporate data and external economic developments as a
Slide 3: Agenda
Agenda • 2024Q1-Q3 Operating Outcomes • Market Overview and Outlook • Passenger Market, Performance & Strategies • Cargo Market, Performance & Strategies • Fleet Development • Sustainability Actions and Achievements 3
Slide 4: 2024 Q1-Q3 Operating Performance
2024 Q1-Q3 Operating Performance
Slide 5: 2024 Q1-Q3 Financial Performance
2024 Q1-Q3 Financial Performance (TWD 100 Million) 2024 Q1-Q3 2023 Q1-Q3 Diff. YoY Operating revenue 1,509.3 1,375.6 133.7 9.7% Passenger revenue 971.5 866.2 105.3 12.2% Cargo revenue 428.6 424.3 4.3 1.0% Other operating revenue 109.2 85.1 24.1 28.3% Net Operating Income 133.5 90.7 42.8 47.2% Net In
Slide 6: Group Financial Ratio
Group Financial Ratio CAL Financial Ratios trend 103% 100% Under continuously profit Current ratio +35ppt v.s 19Q4 88% Debt ratio -7ppt v.s 19Q4 79% 77% 75% 68% 73% 74% 72% CAL’s financial condition and ratios are gradually Current Ratio Debt Ratio optimized. 50% 2019/12 2023/12 2024/06 2024/09 Base
Slide 7: The Growth Operating Revenue
The Growth Operating Revenue The operating revenue over the first nine months of 2024 increased by 7% compared with the same period last year. Both passenger and cargo revenue remained growth, especially in North East Asia, South East Asia and Long-Haul flight. Quarterly revenue NTD100 million 420 +
Slide 8: Cost Breakdown and Comparison
Cost Breakdown and Comparison Fuel (Percentage decreasing due cost remain approx. the same) 34% 32% Labor (Percentage increasing due employee increased and wage growth) Rental & Depr. (Pct. decreasing due fleet phased out and lease termination) 15% 17% Maint. 17% 14% Airport (Percentage increasing d
Slide 9: Fuel Cost Analysis
Fuel Cost Analysis 2024 2023 YoY Q1-Q3 Q1-Q3 Despite a 1.8% increase in the Jet fuel (MOPS) fuel consumption compared to USD/BBL 97.4 103.6 -6.0% the same period in 2023, the Fuel average fuel price in first three Consumption 1,147.1 1,127.2 1.8% 10K/BBL quarters of 2024 decreased by Fuel Cost 6% fr
Slide 10: Crude Oil and Jet Fuel Price Trends
Crude Oil and Jet Fuel Price Trends SinJet and Brent Price USD/BBL The crude oil market still remains 180 Crack 173.7 well-supplied. And with the Brent moderate economic data and 150 Jet Fuel oil demand from China, the 120 market continues to lower its oil 89.8 82.9 demand growth expectations. 90 11
Slide 11: The Risk Management of Residual Value for Owned Fleet
The Risk Management of Residual Value for Owned Fleet Aligning with fleet disposal plan, CAL implemented the risk management of residual value for owned aircraft to mitigate the operational impact on aircraft disposal. Sale-and- Accelerated Sale of Leaseback Depreciation Aircraft In order to increas
Slide 12: Long-term Rating upgraded to twA-
Long-term Rating upgraded to 「twA-」 In October 2024, the long- Long-Term Rating「twA-」 term rating of CAL has upgraded as 「twA-」 from 「 twBBB+」 by Taiwan Short-Term Rating「twA-2」 Ratings since 2001. It will definitely enhance the Outlook「Stable」 company’s image and get opportunity to have better fina
Slide 13: Stable Development of Company Operations and Financial Status
Stable Development of Company Operations and Financial Status 1. In the first three quarters of 2024, CAL’s consolidated and individual operating revenues and net profits after tax reached historical highs. 2. Stable company operation has led to sustained growth in book value per share, along with c
Slide 14: Market Overview and Outlook
& CHINA AIRLINES :¥) Market Overview and Outlook
Slide 15: 2024-2025 Global Economics Outlook
2024-2025 Global Economics Outlook • Global GDP growth stabilizes amid easing inflation; however, geopolitical tensions, trade protectionism, and tighter monetary policies pose certain risks, leading to a 2025 growth forecast on par with 2024. GDP（%）Forecast Europe China Japan USA 4.8 4.5 1.1 1.2 0.
Slide 16: Global Passenger Market Overview
Global Passenger Market Overview • Global passenger traffic has been on a steady climb since April 2021, reaching 40 consecutive months of growth by August 2024. IATA forecasts an 11.6% increase in passenger traffic for 2024. • The Asia-Pacific region is expected to achieve double-digit growth in 20
Slide 17: Taoyuan Airport Passenger Market
Taoyuan Airport Passenger Market - nearing pre-pandemic level, with connecting passengers on the rise. • Taoyuan Airport Passenger Traffic reaches 33.46 million from January to September, achieving 91.6% of 2019 levels and growing 34.2% compared to 2023. • Taiwanese carriers strengthen sixth freedom
Slide 18: Global Cargo Market Review
Global Cargo Market Review • Global trade growth, economic recovery, and constraints on maritime shipping capacity have driven continued growth in air cargo demand. Air cargo demand in 2024 is expected to increase by 15% compared to 2023. • According to IATA's June outlook report, international carg
Slide 19: Taoyuan Airport Cargo Market
Taoyuan Airport Cargo Market -transshipment is on the rise, driven by the dynamic e-commerce growth in Asia-Pacific. • Taiwanese carriers' expansion in North American routes, coupled with increased cargo capacity in passenger aircraft, has driven a sustained growth in transshipment. From January to
Slide 20: Strategic Route Optimization in Response to Industry Dynamics
Strategic Route Optimization in Response to Industry Dynamics Industry Dynamics Response & Strategies • Aircraft manufacturing supply chain • Aircraft fleet strategy ensures stable shortages are hindering capacity expansion. capacity. • Inflation is driving up operating costs, Passenger • Flexible f
Slide 21: Enhancing the Passenger Experience
Enhancing the Passenger Experience • China Airlines continues to elevate its cabin offerings, with the A321neo fleet featuring the industry's latest cabin interiors, including spacious seating, extra-large screens, and a diverse selection of in-flight entertainment. The onboard dining experience has
Slide 22: Passenger Market, Performance & Strategies
Passenger Market, Performance & Strategies
Slide 23: 2024 Q1-Q3 Passenger Operational Results
2024 Q1-Q3 Passenger Operational Results 2024 Q1-Q3 2023 Q1-Q3 +/- (%) Hong Kong , 3% Oceania, 7% Passenger North revenue 813 742 +9.6% America, (TWD 100 million) 23% Revenue 2024 Q1-Q3 passenger 859 691 +24.2% North East Asia, 29% Passenger (‘000) Available Seat Revenue Kilometer 354 316 +12.1% Sou
Slide 24: Capacity (ASK) increased up to 12.1% & Revenue up to 9.6%
Capacity (ASK) increased up to 12.1% & Revenue up to 9.6% of 2024 Q1-Q3 Long-Haul S.E. Asia ASK YoY：7.6% ASK YoY：9.0% （PAX revenue YoY：1.7%） （PAX revenue YoY：20.6%） ASK up to 12.1% Revenue up to 9.6% China & in 2024 Q1-Q3 Japan、Korea Hong Kong ASK YoY：28.9% ASK YoY：26.4% （PAX revenue YoY：29.5%） （PAX
Slide 25: Capacity (ASK) Reached 90% & Revenue up to 109% of pre-COVID19
Capacity (ASK) Reached 90% & Revenue up to 109% of pre-COVID19 Long-Haul S.E. Asia ASK：105% ASK：91% （PAX revenue：148%） （PAX revenue：112%） ASK up to 90% Revenue up to 109% China & in 2024Q1~Q3 Japan、Korea Hong Kong ASK：77% ASK：48% （PAX revenue：106%） （PAX revenue：51%） ※ 2024 Q1~Q3 vs.. 2019 Q1~Q3(ASK
Slide 26: Passenger Operation Strategy
Passenger Operation Strategy Steady Development Continuous Innovation • Take advantage of Taiwan’s • Provide a unique journey to passengers geographic position as a transit hub. with enhanced digitalized customer service. • Develop bilateral tourism by integrating local resources. • Upgrade member s
Slide 27: Cargo Market, Performance & Strategies
Cargo Market, Performance & Strategies
Slide 28: 2024 Q1-Q3 Cargo Operational Results
2024 Q1-Q3 Cargo Operational Results 2024 vs 2023 vs 2019 Q1-Q3 Q1-Q3 Q1-Q3 Oceanic, Hong Kong, 2% 3% Cargo revenue North East (TWD 100 million) 426.6 +1.1% +35.4% Asia, 4% China, 5% Revenue Freight Ton Kilometer 38.7 -4.8% -0.5% South East (100 million) Asia, 10% 2024 Q1-Q3 Available Freight Cargo
Slide 29: The international cargo market is expected to maintain stable growth
The international cargo market is expected to maintain stable growth • According to the latest World Economic Outlook by the International Monetary Fund (IMF), the global economy is expected to show moderate growth in the next two years. • The World Trade Organization (WTO) also predicts growth in G
Slide 30: Cargo Operation Strategy
Cargo Operation Strategy Optimize Network and Strengthen Revenue Management ⚫ After the last 777F is delivered, 10 777Fs and 8 744Fs will be deployed on both long and short-haul routes, leveraging high cargo capacity and fuel efficiency to enhance operational performance. ⚫ Focus on market trends su
Slide 31: Fleet Plan
& CHINA AIRLINES :¥) Fleet Pla n
Slide 32: Passenger Fleet - Sustain Operational Capacity
Passenger Fleet－Sustain Operational Capacity 2024.SEP End of 2024 End of 2025 Remark 777-300ER 10 10 10 Extend Leasing 2025 Commencing 787-9 - - 2 Introduction A350-900 15 15 15 Return Flight / A330-300 16 16 10 Extend Leasing 737-800 10 10 8 A321neo 13 14 19 Continue to Introduce Total Passenger Fl
Slide 33: Cargo Fleet - Continuous fleet renewal
Cargo Fleet－Continuous fleet renewal 2024.SEP End of 2024 End of 2025 Remark Maintain Capacity 744F 8 8 8 With 8 747F 777F 9 9 10 Continue to Introduce Total Cargo Fleets 17 17 18 2024 2024 Introduce 777F 2024 H1 x 2 Phase out 747-400F Sold x 5 2025 x 1 With the phase-out of the 744F fleet and the f
Slide 34: Sustainable Operation
& CHINA AIRLINES :¥) Sustainable Operation
Slide 35: Key Implementations for ESG
Key Implementations for ESG Environmental Society Governance ✓ Transported 70,000 units of medical supplies ✓ Operational Strategy – Capitalizing ✓ 5Rs：Reduce、Reuse、Recycle、 ✓ Contributed to public welfare, on global passenger recovery Refuse、Repair, Implementing fuel, charitable, and community oppo
Slide 36: Driving Value Chain Sustainability with Corporate Partners
Driving Value Chain Sustainability with Corporate Partners • Third participation in the SkyTeam The Aviation Challenge, TAC : Utilizing SAF and partnering with CTBC Bank and ENEOS Corporation to achieve Carbon Reduction Goals。 • Industry First in Taiwan: Signed an MoU with corporate client Holin Glo
Slide 37: Continuously Achieving Excellence
Continuously Achieving Excellence Ranked 2nd in Global Aviation Industry 8consecutive years selected for DJSI Emerging Market Index 2016-2023 7 consecutive years Sustainability Yearbook 2017-2024 10 2022-2023 Top Sustainability Report award consecutive years Taiwan Corporate Sustainability Award 201
Slide 38: Thank you
& CHINA AIRLINES :¥) Thank you