Supplementary Material for Financial Results Q3 FY2025 (FY2026 3) with explanation（636KB）

Skymark Airlines Inc.

Supplementary Material for Financial Results Q3 FY2025 (FY2026/3)

February 6, 2026

Highlights for Q3 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 for the cumulative Q3 reached a record high, as performance in Q3

1. progressed generally in line with the earnings forecast.

   • Average price per passenger increased JPY562 (+4.4%) year-on-year to JPY13,406 for Q1-Q3 driven by strategic fare increases measures.

   • The number of revenue passengers, which had been trending negative year-on-year due to intensified price competition, turned to a year-on-year increase in Q3 thanks to successful measures to optimize the number of passengers and average price per

     passenger.

     Operating income was slightly below the cumulative Q3 target due to an increase in provision for maintenance (originally expected in Q4). Ordinary income and items below exceeded targets due to the recording of foreign exchange gains resulting from yen

2. depreciation.

   • Operating income was below the cumulative Q3 target. While ongoing efforts to reduce controllable costs were more effective than expected, income was impacted by an increase in maintenance provisions to appropriately reflect soaring maintenance costs driven by inflation. This increase was originally planned for the fourth quarter but recorded in the third quarter as a timing difference, resulting in no impact on the full-year earnings forecast.

   • Ordinary income and income before income taxes, which serve as the basis for our dividends, exceeded targets due to foreign exchange gains on revaluation of foreign currency-denominated assets and liabilities.

3. First new Boeing 737-8 aircraft expected to be received in April 2026.

   • Skymark to become the first Japanese airline to receive the Boeing 737-8.

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This slide outlines our highlights for Q3 FY2025.

We start with the top line. Operating revenues were generally in line with plans, reaching a record high for Q1-Q3.

The average price per passenger increased 4.4% year-on-year to JPY13,406,

driven by strategic increases.

The number of revenue passengers, which had been trending negative year on year due to intensified price competition, turned to a year-on-year increase in Q3 thanks to successful measures.

The next point is about the state of our profit indicators. Regarding operating income, ongoing efforts to reduce controllable costs were more effective than expected. On the other hand, it was below the Q3 target due to an increase in maintenance provisions to appropriately reflect soaring maintenance costs driven by inflation. As this was originally planned for Q4 and represents a timing difference, there is no impact on the full-year earnings forecast. In addition, ordinary income, income before income taxes (which serve as the basis for our dividend calculation), and net income exceeded targets due to the recording of foreign exchange gains on the revaluation of foreign

currency-denominated assets and liabilities.

The third point is regarding the introduction of new aircraft. Delivery of the first Boeing 737-8 is expected in April 2026. Skymark will be the first airline in Japan to introduce this aircraft.

Our detailed financial results briefing begins on the next page.

Overview of Financial Results for Q3 FY2025

Operating revenues reached a record high. However, operating expenses increased due to a reduction in government support and increased personnel investments, resulting in lower operating profit

(JPY Bn)

Broke the record

90.0

78.2

81.7

82.8

62.5

60.0

35.6

30.0

0.0

Q1-Q3 Q1-Q3 Q1-Q3 Q1-Q3 Q1-Q3

FY2021 FY2022 FY2023 FY2024 FY2025

(JPY Bn)

5

5.2

3.4

1.6

0.4

0

▲5

▲10

▲ 11.3

▲15

Q1-Q3 Q1-Q3 Q1-Q3 Q1-Q3 Q1-Q3

FY2021 FY2022 FY2023 FY2024 FY2025

Note:

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

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This is an overview of our financial results for Q3 FY2025.

Operating revenues totaled JPY82.8 billion, a record high for the period up to Q3.

Operating expenses increased year-on-year due to the reduction in government support and increased personnel investments, resulting in operating income of JPY0.4 billion.

Ordinary income, income before income taxes, and net income totaled JPY0.9 billion, mainly due to foreign exchange gains.

0

675

747

697 726 676

668

624

574

640 641

660

648 90.0%

629

1,500

500

1,000

80.0%

500

0

70.0%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Apr May Jun Jul Aug Sep Oc月t Nov De月c

FY2023 FY2024

Revenue passengers

FY2025

Number of seats

2024

2025

YoY change

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94.9%93.4%92.0%92.4%Travel Demand

Through the appropriate control of load factor and average price per passenger, the number of revenue passengers in Q3 turned to year-on-year growth.

New fares for young passengers also contributed to early capture of bookings.

(Reference) Monthly Trends

Revenue passengers (in thousands), Revenue passengers

Number of seats (in thousands) (in thousands)

100.9%103.0%101.2%

3,000

100.0%

1,000

97.5%97.1%

2,500

2,435 2,441 2,453

2,418

2,503 2,523 2,514 2,463 2,510 2,536 2,528

2,156

692

2,082 2,024

2,045

2,099 2,051

740

2,000 1,890

1,951

1,993

1,945

707 733 715

1,856

4月

5月

6月

7月

8月

9月

12

11月

10

2024年

2025年

前年同 月比

有償旅客数 提 供座席数

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

As a result of efforts to appropriately control the load factor and average price per passenger in response to intensified price competition, the number of revenue passengers in Q3 turned to year-on-year growth, reaching 100.3%.

We believe that the introduction of new fares for young passengers, which helped the early capture of bookings, contributed to this improvement.

We will continue to enhance our revenue management efforts while seeking the optimal balance between load factor and average price per passenger.

Q1-Q3 FY2025

Average Price

per Passenger : JPY13,406vs. Q1-Q3 FY2024: +JPY562

11.1 (Reference) Q3 FY2025

Average Price

per Passenger : JPY13,230vs. Q3 FY2024: +JPY246

11.0 11.1

11.0

10.5

50%

54%

10.5

48%

40%

10.0

10.2 10.2

0%

0

Q1-Q3 Q1-Q3 Q1-Q3 Q1-Q3 Q1-Q3 Q1-Q3 Q1-Q3 Q1-Q3 Q1-Q3

FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 FY2025

Q1-Q3 Q1-Q3 Q1-Q3 Q1-Q3 Q1-Q3 Q1-Q3 Q1-Q3 Q1-Q3 Q1-Q3

FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 FY2025

Notes:

1. Load Factor is calculated as follows: RPK (revenue passenger kilometers) / ASK (available seat kilometers)

2. Yield is calculated as follows: Passenger Revenue / RPK

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80%

Load Factor and Yield Performance(Q1-Q3)

Efforts to improve average price per passenger resulted in a decline in load factor1, while yield2 increased s ignificantly To address an environment of intensifying price competition in non- business demand, we are capturing demand with dynamic pricing based on specific routes and flights

Load Factor

100%

COVID-19

Yield

(Unit: JPY) 13.5

COVID-19

90%

13.0

12.8

85% 84% 84%

83% 83%

60%

12.5

12.2

80%

12.0

12.0

70%

73%

11.5

9.5

30%

The next slide shows the load factor and yield.

While the load factor decreased by 3.2 percentage points year-on-year to 79.9%, yield increased by 5.5% to JPY12.8, and the average price per passenger increased by JPY562 to JPY13,406. In response to intensifying price competition in non-business demand, we are accurately capturing

demand by ensuring dynamic pricing based on specific routes and time slots.

We will continue to take action to address this severe competitive environment.

Changes in Operating Income (vs. Q1-Q3 FY2024)

Despite increased revenue and lower costs driven by reduced crude oil prices, operating profit declined.

This was due to an increase in operating expenses, including fuel costs and taxes, airport usage fees, and personnel expenses, resulting from reduced government support and strengthened investments in human resources

(Unit: JPY Bn)

1.6

Q1-Q3 FY2024

Market

fluctuations 1

+1.64

Fuel costs

and tax

▲1.48

▲1.2

0.4

Q1-Q3 FY2025

Revenue

increase

+1.15

Airport Usage Aircraft

Fees

▲0.94

lease

payment

+0.58

Maintenance

expenses Personnel

expenses

▲0.20

▲0.71

Depreciation Bonuses and

▲0.31 Amortization

▲0.42 Other expenses 2

▲0.53

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※2 Details of changes  in other expenses

▲0.18 ： Increase in system-related expenses

▲0.10 ： Increase in airport-related outsourcing expenses

※1 Details of changes  in market fluctuationsCost incurred from changes in difference between

exchange rate after hedging and oil price after hedging

+1.95： Fuel cost

▲0.11 ： Aircraft lease payment

▲0.18 ： Maintenance expense

▲0.01 ： Other expense

+ : Profit increase (revenue increase, cost decrease)

▲: Profit decrease (revenue decrease, cost increase)

This slide shows the detailed changes in operating income by factor.

In Q1-Q3, despite higher revenue from increased average prices and favorable market conditions due to lower crude oil prices, operating income declined by JPY1.2 billion year-on-year.

This was driven by higher fuel costs, fuel taxes, airport usage fees, and personnel expenses following the reduction in government support and strengthened personnel investment.

Details of Operating Expenses for Q3 FY2025

Major Changes from Previous Period (Q1-Q3 FY2024)

(Unit: JPY MM)

▲472

• Increase due to reduced government support

• Decrease due to market factors (low crude oil prices)

  +948

• Impact of termination of government support

  ▲474

• Decrease due to purchase of leased aircraft (Switched one in-service aircraft to ownership)

  +386

• Increase in heavy maintenance expenses due to inflation

  +710

• Increase in number of personnel, salary increases, etc.

• Recording of stock compensation expenses

  +423

• Increase due to purchase of leased aircraft and acquisition of a simulator for the new 737-8 aircraft

  +555

• Increase in various expenses such as system-related expenses, airport-related outsourcing expenses, and crew hotel costs

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This slide shows a detailed breakdown of operating expenses.

Total operating expenses for Q1-Q3 increased by approximately JPY2.3 billion compared to the same period last year. This change can be broken down into a decrease of JPY1.6 billion due to market factors resulting from lower crude oil prices, and an increase of JPY4.0 billion due to other factors. The main components of the JPY4.0 billion increase were fuel costs and fuel taxes due to reduced government support, airport usage fees due to the termination of government support, personnel expenses from strengthened personnel investment, and higher system and outsourcing costs driven by inflation.

In spite of this environment of increasing costs, we are continuing our thorough efforts to control manageable expenses.

Details on Respective Profit in Q1-Q3 FY2025Recorded foreign exchange gains on the revaluation of foreign currency-denominated assets and liabilities as of the end of Q3, due to a weaker yen

Change in Respective Profit

(Unit: JPY Bn)

0.4 0.9 0.9 0.9

No change

0.6

Operating Income

Ordinary Income

Income before Income Taxes

Net Income

Adjusted Net Income1

Reference: Foreign exchange gains/losses

Assets and liabilities denominated in foreign currencies are converted at the exchange rate as of the end of each quarter. If the yen appreciates compared to the exchange rate at the end of the previous quarter, a foreign exchange loss will be recorded in the accounts, while if the yen depreciates, a foreign exchange gain will be recorded.

Foreign exchange gains in Q3: JPY1.21 billion

＜Major Assets and Liabilities Denominated in Foreign Currencies＞

Skymark has more assets denominated in foreign currencies than liabilities

＜Exchange Rates at the End of Each Quarter＞

(Quarterly exchange rates)

・As of the end of Q4 FY2024: 149.5 JPY/US$

・As of the end of Q1 FY2025: 144.8 JPY/US$

・As of the end of Q2 FY2025: 148.8 JPY/US$

・As of the end of Q3 FY2025: 156.5 JPY/US$

JPY160

JPY140

Q1FY2025

Foreign exchange loss

Q3FY2025

Foreign exchange gain

Note:

2024/12 2025/3 2025/6 2025/9 2025/12

1. Dividends are based on adjusted net income. Adjusted net income = Income before income taxes × (1－effective tax rate 34.59%)、Annual dividend payout = Adjusted net income × Payout ratio of 35%

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This slide shows details for each profit indicator.

Due to the foreign exchange gains recorded on the revaluation of foreign currency-denominated assets and liabilities as of the end of Q1-Q3, ordinary income was approximately JPY0.9 billion.

In addition, there were no special gains or losses incurred, and therefore income before income taxes was also approximately JPY0.9 billion, and adjusted net income, which is the basis for our dividends, was approximately JPY0.6 billion.

Net income also did not vary significantly from income before income taxes, at approximately JPY0.9 billion.

Earnings Forecast for FY2025

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Next, let me explain our progress toward the earnings forecast.

Operating revenues are progressing generally as expected, in terms of both the average price per passenger and the number of revenue passengers.

Regarding operating income, while ongoing efforts to control manageable expenses have kept it generally in line with expectations, it was slightly below the target due to the impact of additional provision for maintenance. Since this additional provision was originally planned for Q4, it is a timing difference and has no impact on the full-year earnings forecast. Furthermore, we expect a reversal of the provision for engine maintenance of approximately JPY 1.0 billion in Q4, which will have a positive impact on operating income.

Ordinary income, income before income taxes, and net income significantly exceeded targets, primarily due to foreign exchange gains. This resulted from the revaluation of foreign currency-denominated assets and liabilities as of the end of Q3. The exchange rate was JPY 148.8 per US dollar at the end of Q2 and stood at JPY 156.5 at the end of Q3. This yen depreciation trend resulted in a foreign exchange gain of JPY 1.21 billion. Additionally, net income is subject to change based on the future business plan currently being prepared (fluctuations in income tax adjustments).

We will continue to work hard toward achieving our earnings forecast.

Details of Balance Sheet for Q3 FY2025 Net Operating Loss Carryforwards

Notes：

1. Total Debt: Short-term Bank Loans + Long-term Bank Loans + Lease Obligations (on-balance finance lease)

2. Net Debt: Total Debt － Cash and Bank Deposits

3. Net D/E Ratio: Net Debt / Equity

4. Taxable    income   (before   deduction    of  NOL  carryforwards)    is  generated   during   the  carryforward    period   of  NOL  carryforwards,   we  assume,   based  on  the  current  tax  system,  that                            

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This slide shows the balance sheet.

There is no significant movement in any of the items.