Financial Results for the Fiscal Year ended March 2025 (FY2024)
May 15, 2025 (Thu)
17:30－18:20
Respondents:
Representative Director, President and Executive Officer: Manabu Motohashi Director and Executive Officer: Keisuke Takaki
Executive Officer, Finance & Accounting / IR: Kaoru Tagami
Please be advised that the following text has been edited/modified from the original Q&A conversations for clarity.
A. The business environment has not changed significantly; the main reasons for this
development are adjustments to our revenue management policy and fare revisions in the winter timetable, which have enhanced the effectiveness of our revenue management. We also believe that this is the result of our meticulous attention to price elasticity in our
revenue management operations.
Q2. What specific efforts were made to control operating expenses in FY2024, particularly with regard to manageable costs?A. The primary effort has been the reduction of outsourcing costs. Specifically, we have achieved cost savings by handling certain airport operations in-house instead of outsourcing them. The accumulation of such self-initiated measures has contributed to effective cost control.
Q3. In your FY2025 earnings forecast, the average unit price is projected to increase by 9.1% year on year, which is a higher rate of increase than your competitors. Is this not influenced by passenger demand?A. While certain price differentials exist when comparing FY2024 results with those of other companies, we believe that even with an increase in the average price per passenger as projected in our FY2025 earnings forecast, we can still maintain our price competitiveness, although the price differential may narrow.
Q4. What is your policy for the cargo business? Additionally, will the strengthening of the cargo business affect on-time performance in any way?A. We will expand our cargo transportation routes and aim to diversify our earnings. Although the figure includes commission income and other revenues, ancillary revenue is expected to increase by approximately 51% between FY2025 and FY2029. Although it does not account for a large percentage of overall operating revenue, we believe that the high profit margin in this area will make a meaningful contribution to our earnings.
In addition, since on-time performance is one of our strengths and an important factor affecting average price per passenger, we will ensure that operations are managed to maintain on-time performance.
Q5. What is the current status of passenger demand and average price per passenger?A. The situation varies from month to month and from route to route, but we have achieved a certain level of increase in average price per passenger. In particular, routes to and from Kobe are performing relatively well, partly due to the impact of the Osaka-Kansai Expo in 2025.
Q6. How do you plan to increase yield from FY2025 to FY2029? Please also tell us how feasible your plans are.A. A 9.7% year-on-year increase is planned for FY2025, followed by a more gradual increase compared to the growth rate in FY2025. We will continue to pursue customer satisfaction, enhance the value of our offerings, and strive to increase the average price per passenger accordingly.
Q7. What do you consider to be an appropriate level for future price differentials versus your competitors?A. Pricing strategies will differ from company to company, and we will therefore refrain from mentioning a specific appropriate price differential. However, we have a large number of customers who use our services for leisure and VFR (visiting friends and relatives), and our mission is to provide services at affordable prices. Our policy is to reflect increased costs in prices appropriately alongside service improvements, while keeping fares at affordable
levels versus competitors.
Q8. What initiatives will contribute to significant growth in FY2026 onward?A. From FY2026 onward, the improvements in fuel efficiency through the introduction of new fuel-efficient aircraft and the expansion of the scale of flight operations by increasing the number of aircraft will contribute significantly. In addition, we plan to enhance our marketing efforts by implementing and utilizing a customer relationship management (CRM) system that utilizes customer data.
Q9. What is the status of your plan to introduce new aircraft, including the possibility of further delays?A. We will be replacing our current fleet of 29 aircraft over the next several years. However, since the introduction of new aircraft involves many stakeholders, including Boeing, suppliers, and the Civil Aviation Bureau, there is a possibility that the process may not proceed entirely as planned. While anticipating potential schedule adjustments, we will focus on measures within our control, such as exploring alternative options. In the event of delays, we will maintain our business scale by extending contracts for retiring aircraft.