Supplementary Material for Financial Results Q1 FY2025 (FY2026 3) with explanation（605KB）

Skymark Airlines Inc.

Supplementary Material for Financial Results Q1 FY2025 (FY2026/3)

August 12, 2025

Highlights for Q1 FY2025

*In this material, definitions are, FY: fiscal year (from April 1 to March 31 of the next year), Q1: from April to June, Q2: from July to September, Q3: from October to December, Q4: from January to March

Operating revenues reached a record high, but fell short of the Q1 assumption1 in the

1. earnings forecast

   • The average price per passenger exceeded the Q1 target, rising by JPY 861 (+7.5%) year-on-year to JPY 12,330, driven by strategic price increases

   • While a decrease was anticipated due to the yield improvement strategy, the number of revenue passengers declined by 6.9% year-on-year to 1,856 thousand, exceeding expectations amid intensified price competition

     Despite posting a seasonal loss, all key profit metrics exceeded their Q1 targets,

2. supported by cost reductions from lower crude oil prices and a stronger yen

   • Operating loss improved year-on-year driven by controlling costs despite increased expenses resulting from reduced government support and increased personnel investments

   • Ordinary loss reflected foreign exchange losses on foreign currency-denominated assets and liabilities due to yen appreciation

3. Continued focus on evolution and transformation to a more profitable business structure

   • Various measures were implemented, including the introduction of new fares, preparations for launching web reservations for forward seats, revisions to various fees, and the expansion of cargo routes

4. Ordered six new Boeing 737-8s and three additional 737-10s

   • A total of 20 aircraft have been contracted to replace all of the current fleet of Boeing 737-800s

Note:

1. Hereafter, 'Q1 assumption' will be referred to as 'Q1 target'

Copyright © Skymark Airlines Inc.

2

This slide outlines our highlights for Q1 FY2025.

The first point is our top line. Operating revenues reached a record high in Q1, though they fell short of the target. While the average price per passenger exceeded the target due to strategic price increases, the number of revenue passengers decreased more than the assumed decrease from the higher average price per passenger, with the greater decrease stemming from intensifying price competition.

The second point concerns all key profit metrics. Though we recorded losses due to seasonality, all key profit metrics exceeded the Q1 targets, as expenses decreased due to lower crude oil prices and a stronger yen.

Operating loss improved year on year driven by controlling costs, mainly manageable expenses, although there were increases in expenses due to reduced government support and increased personnel investments. Ordinary loss reflected foreign exchange losses on foreign currency-denominated assets and liabilities resulting from yen appreciation.

The third point is our initiatives to evolve and transform into a more profitable business structure, which was set forth in our basic operational policy at the

beginning of the fiscal year. Various measures are being implemented, including the sales of the new Bonvo Young fares, preparations for web reservations for forward seats, revisions to various fees such as cancellation fees and pet fees, and expansion of cargo routes.

The fourth point is regarding the introduction of new aircraft. We have ordered six new Boeing 737-8s and three additional 737-10s to replace all of the current fleet of Boeing 737-800s. A total of 20 aircraft have now been contracted.

Our detailed financial results briefing begins on the next page.

Overview of Financial Results for Q1 FY2025

Operating revenues reached a record high, while the seasonal operating loss improved year-on-year

(JPY Bn)

25.0

22.1

Broke the record

23.5 23.5

20.0

16.2

15.0

10.0

8.9

5.0

0.0

Q1 Q1 Q1 Q1 Q1 FY2021 FY2022 FY2023 FY2024 FY2025

(JPY Bn)

0.0

▲ 1.4

▲ 2.1

▲ 1.6

▲ 2.2

▲5.0

▲ 6.1

▲10.0

Q1 Q1 Q1 Q1 Q1 FY2021 FY2022 FY2023 FY2024 FY2025

Note:

1. Income (loss) before income taxes ×(1－effective tax rate 34.59%)

Copyright © Skymark Airlines Inc.

3

This is an overview of financial results for Q1 FY2025

Operating revenues reached JPY23.5 billion, a record high for the ninth consecutive quarter.

With respect to costs, operating expenses decreased mainly due to lower crude oil prices and a stronger yen than in the previous year. As a result, operating loss was JPY1.6 billion, a year-on-year improvement of JPY0.5 billion, although still in the red.

Ordinary loss was JPY3.1 billion, mainly due to foreign exchange losses, and net loss was JPY2.7 billion, mainly due to income tax adjustments recorded as a profit. Adjusted net loss, which is the basis for our dividends, was JPY2.0 billion.

前年同月比

2025年

2024年

1月

2月

3月

4月

5月

6月

7月

Travel Demand

The number of passengers declined year on year due to a strategic increase in average price per passenger To respond to intensifying price competition in non-business demand, we implemented dynamic pricing strategies based on specific routes and time of day

Revenue passengers 102.9%

(in thousands)

98.6%

100.0%

1,000 97.3%

2,441

2,503 2,523 2,514

2,510

2,500

2,435

2,453

2,418

2,463

94.9%

93.4%

2,156

92.0% 92.4%

2,082

2,024

1,993

2,045

2,000 1,890

1,951

1,945

702

682

692

707

1,856

624

608

643

634

675 660 90.0%

624

574

640 641

1,500

500

1,000

80.0%

500

0

0

70.0%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Jan Feb Mar Apr May Jun Jul

FY2023 FY2024

FY2025

Number of seats

2024

2025

YoY change

Revenue passengers

Copyright © Skymark Airlines Inc.

4

Next, we will talk about the quarterly trend in travel demand.

The number of revenue passengers declined more than expected as a result of strategically raising the average price per passenger, and was 93% year on year in Q1. Given this, to respond to intensifying price competition in non-business demand, we are implementing dynamic pricing strategies based on specific routes and time of day.