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1©ANA2009
Jan 30, 2009
All Nippon AirwaysPerformance Review for the 3rd Quarter FY08and the Way Forward
2©ANA2009
ANA Group Corporate Philosophy
- Our Commitments -
On a foundation of security and reliability,
the ANA Group will:
Create attractive surroundings for customers
Continue to be a familiar presence
Offer dreams and experiences to people around
the world
安全は経営の基盤であり社会への責務である。
私たちはお互いの理解と信頼の
確かなしくみで安全を高めていきます
私たちは一人ひとりの責任ある
誠実な行動により安全を追求します
ANA Group Safety PrinciplesANA Group Safety Principles
Number one in quality
Number one in customer satisfaction
Number one in value creation
Number one in quality
Number one in customer satisfaction
Number one in value creation
With passenger and cargo transportation in Japan, elsewhere in Asia, and around the world as its core field of business, the ANA Group aims to be one of the leading corporate groups in Asia.
With passenger and cargo transportation in Japan, elsewhere in Asia, and around the world as its core field of business, the ANA Group aims to be one of the leading corporate groups in Asia.
ANA Group Corporate Vision
ANA Group Corporate Philosophy
Being the leader in Asia means that we will become
Safety is our promise to the public and is the foundation of our business.
Safety is assured by an integrated management system and mutual respect
Safety is enhanced through individual performance and dedication
3©ANA2009
FY08 3Q Financial Results P5Outlook for FY08 P6The Way Forward P7Contingency Plan FY09 P8Plan for FY09 Air Transportation P9 - 11
(1) Domestic Passenger Operations P9(2) International Passenger Operations P10(3) Cargo Operations P11
Next Mid-term Corporate Strategy P12Looking Forward P13
Contents
5©ANA2009
-25
-20
-15
-10
-5
0
5
10
15
20
25
N.America Europe China Asia-100
-50
0
50
FY08 3Q Financial Results
Revenue decreased due to unforeseen weakening demandRevenue decreased due to unforeseen weakening demand
Revenue and profit decreased in all segments due to rapidly weakening demand
Demand down on all international passenger routes
Implemented cost reduction plan for FY08 2H
-40.2123.8EBITDA
-108.59.4Net Income
-56.022.7Recurring Income
-49.637.6Air Transportation
-53.640.3Op. Income
-19.0978.2Air Transportation
-34.11,107.4Op. Revenue
vs. LYFY08 3Q 9 monthsFYFY0808 3Q Highlight3Q Highlightss
FYFY0808 3Q Results3Q Results
1 Q1 Q
FY08FY08
CargoCargo
FYFY0808 Air TransportationAir Transportation Revenues (vs. LY)Revenues (vs. LY)(JPY bil)2 Q2 Q 3 Q3 Q
1 Q1 Q 2 Q2 Q 3 Q3 Q
FYFY0808 International Passenger Revenue International Passenger Revenue ((vs. LYvs. LY))(JPY bil)
2.0
1.0
0
-1.0
-2.0
International International PassengerPassenger
5.0
0
-5.0
-10.0 Domestic Domestic PassengerPassenger
(JPY bil)
6©ANA2009
Outlook for FY08
Revised guidance reflecting weakening demandRevised guidance reflecting weakening demand
-26-917Net Income
N.D.
-10
5.5
8
1,237
1,400
CurrentRevision
-3Dividends (yen)
-3929Recurring Income
-46.552Air Transportation
-4755Op. Income
-651,302Air Transportation
-601,460Op. Revenue
ChangePreviousRevision
SupplySupply Reduction Reduction ((Feb Feb 09 ~)09 ~) Cost ReductionCost ReductionBoard members’compensationAdvertising and sales related costOther manageable costs
Reduce Narita-Mumbai (Daily to 3/W)Suspend Kansai-Dalian/ShenyangReduce Narita-Shanghai (3/D to 2/D)Downgauge Narita-Bangkok (B777 to B767)
(JPY Billion; N.D.: Not Determined)
FY08 Revised OutlookFY08 Revised Outlook
Revise business plan and further cut supply
Additional cost reduction for FY08 4Q on top of the existing FY08 2H cost reduction plan
Measures for FYMeasures for FY0808 4Q 4Q
Additional Additional pplan for FY08 4Qlan for FY08 4Q
++
2.0 2.0 bilbil yen improvementyen improvement
7©ANA2009
The Way Forward
ImplementImplement Contingency Plan FY09 in response to world recessionContingency Plan FY09 in response to world recession
World recession bitesGDP growth projection for 2009
Japan -1.4%; US -1.6%; Europe -1.2%; China +7.1%
Severe impact on air transportation service
Respond to crisis and get ready for Haneda and Narita airport expansion
Source: GDP: Blue Chip Economic Indicators 2009.1 Air Traffic Demand: IATA 2008.12
-6
-4
-2
0
2
4
6
8
2007 2008 2009 2010 2011RPKRTKUSEuropeJapan
Contingency Plan FYContingency Plan FY0909
Short-term Mid-termMeasuresMeasures
6.95.1-5.0-1.54.8RTK
5.20.9-3.02.06.7RPK
1.2
2.4
1.2
2010
--1.21.02.6Europe
--1.61.32.0US
--1.40.42.0Japan
2011200920082007
Air Traffic Demand Projection for 2009: RPK -3.0%; RTK -5.0%
GDP and Air Traffic Demand ProjectionGDP and Air Traffic Demand Projection
1010--13 13 MidMid--termtermCorporate StrategyCorporate Strategy **
* * Tentative name for next midTentative name for next mid--term corporate strategy term corporate strategy ((FYFY20102010--13)13)
GDP
8©ANA2009
Contingency Plan FY09
Transform business structure by revising network and enhancing pTransform business structure by revising network and enhancing profitabilityrofitability
Deal appropriately with changes in the operating environment, Deal appropriately with changes in the operating environment, weather the immediate crisis, and carry efforts forward into FY1weather the immediate crisis, and carry efforts forward into FY100
Pillars of the Contingency Plan FY09Pillars of the Contingency Plan FY09
Reduce supply to meet demandEnhance profitability through reallocation of resourcesPrepare for expansion of Haneda and Narita airports in FY10
Reduce scale of and postpone investment in line with the revised business planContinue to give priority to investmentin deploying fuel-saving aircraft and other innovations
Largest-ever cost reductions, centered on fixed costsPursue cost effectiveness through further innovation(Revamping of business structure, passenger service, and airport service)
Reduce capacity and revise networkReduce capacity and revise networkin response to reduced demandin response to reduced demand
Restrain capital expenditureRestrain capital expenditureStrengthen fundamental cost structureStrengthen fundamental cost structure
9©ANA2009
0
20
40
60
80
100
FY08 FY09
Plan for FY09 Domestic Passenger Operations
Better allocate resources to improve profitability and strengtheBetter allocate resources to improve profitability and strengthen competitivenessn competitiveness
Measures for FYMeasures for FY0909
FY08EFY08E FY09EFY09EFY07FY07
ASKASK
2007 = 100
08-11 Mid-term Corporate Plan
FY08 projection +Contingency Plan FY09
94
92
ASK ASK –– Domestic passenger operationsDomestic passenger operations
100100
9090
Enhancing network profitabilityEnhancing network profitability
HanedaHaneda--KobeKobeKansaiKansai--HanedaHaneda/Kochi/Kochi//Matsuyama/KagoshimaMatsuyama/KagoshimaChubuChubu--Fukuoka/AkitaFukuoka/Akita//YonagoYonago/Tokushima/TokushimaKobeKobe--OkinawaOkinawa
HanedaHaneda--SapporoSapporo
ItamiItami--NaritaNarita
KobeKobe--Sendai suspendedSendai suspended
FukuokaFukuoka--SendaiSendai
FukuokaFukuoka--IshigakiIshigaki
97ASK
FYFY0909 ASKASK (%(%vs. FYvs. FY08)08)
Revise network throughmore effective use of resources
Strengthen profitability and competitiveness on major routes
Utilize code sharing and seasonal flights on local routes
Narrowbody
Code share
100100 9999
Code share
No. of flights No. of flights -- Domestic passenger operationsDomestic passenger operations
93%93%
96%96%
129%129%
FY08FY08** FY09EFY09E*Initial plan (prior to reductions) FY08 initial plan = 100
SapporoSapporo--Niigata/FukuokaNiigata/Fukuoka--Okayama/HiroshimaOkayama/HiroshimaKansaiKansai--MemanbetsuMemanbetsu
NiigataNiigata--OkinawaOkinawa
ReducedReduced
Seasonally Seasonally reducedreduced
IncreasedIncreased
ReinstatedReinstated
Suspended/reduced routesSuspended/reduced routes Increased routesIncreased routes
Wide bodyMid-sized
Wide bodyMid-sized
Regional
Narrowbody
Regional
Year roundYear round
10©ANA2009
Reduce supply to meet demand and adjust use of aircraft to imprReduce supply to meet demand and adjust use of aircraft to improve profitabilityove profitability
FY08EFY08E FY09EFY09EFY07FY07
100100
9090
110110
ASKASK
2007 = 100
ASK ASK –– International Passenger OperationsInternational Passenger Operations
107
91
75Resort
91Asia
89China
91Europe
98N.America
92ASK
FYFY0909 ASKASK (%(% vs.FY08vs.FY08))
ChinaChinaNagoya-Tianjin (suspend)Nagoya- Guangzhou (suspend)Narita-Guangzhou (reduce)Narita-Shanghai (temporarily reduce)
Kansai-Dalian/Shenyang (seasonally suspend)Kansai-Beijing (downgauge)
N. AmericaN. AmericaNarita-Washington(downgauge ⇒ B777-200ER)
AsiaAsia
Narita-Mumbai(temporarily reduced)
Narita-Bangkok (downgauge)
EuropeEuropeNarita-ParisNarita-Frankfurt(downgauge⇒ B777-300ER)
FYFY0909 Route planRoute plan
Reduce supply to meet sudden drop in demand
Respond to changes in China marketwith reduced supply
Downgauge aircraft toimprove profitability
Measures for FYMeasures for FY0909
Plan for FY09 International Passenger Operations
08-11 Mid-term Corporate PlanFY08 projection +Contingency Plan FY09
11©ANA2009
Flexibly expand network from FY09 2H in line with trends in demaFlexibly expand network from FY09 2H in line with trends in demandnd
FY08EFY08E FY09EFY09EFY07FY07
ATKATK
FY07 = 100
FreighterFreighter ATK (Dom./ATK (Dom./intint.).)
266
146
121Asia
121China
-Europe
145N. America
138Freighter ATK
FYFY0909 ATKATK (%(%vs. FYvs. FY08)08)
100100
200200
150150
250250
Okinawa
Shanghai
Kansai
SeoulTianjin
Hong Kong
HanedaNarita
FYFY0909 Okinawa Hub NetworkOkinawa Hub Network
Taipei
20082008 20092009
Freighter introduction planFreighter introduction plan
Returned in FY09
131ATK
FY09 FY09 ATKATK (%(%vs. FY08vs. FY08))
* Tianjin expected start from Mar.09
1111
B767B767--300F300F
B767B767--300BCF300BCF ((convertedconverted))
B767B767--200F200F ((leasedleased))
widewide--body body ((leasedleased))
77
Introduced in 2H (plan)
No. of No. of aircraftaircraft
Measures for FYMeasures for FY0909
Slow supply in line with trends in demand
Delay introduction of wide-body aircraft by six months
Commence Okinawa hub model
Plan for FY09 Cargo Operations
08-11 Mid-term Corporate PlanFY08 projection +Contingency plan FY09
55
1010
12©ANA2009
Next Mid-term Corporate Strategy
Priorities for 10Priorities for 10--13 Mid13 Mid--term Corporate Strategyterm Corporate Strategy
Priority Management IssuesPriority Management Issues
1010--13 13 MidMid--term Corporate Strategyterm Corporate Strategy
Business StrategyBusiness StrategyEvolve domestic business model
Reevaluate international route network portfolioDevelop cargo operations as a third core business, in line with trends in demand
Marketing StrategyMarketing Strategy
Fundamental strengthening of Group business structureFundamental strengthening of Group business structure
Product StrategyProduct Strategy HR StrategyHR Strategy
InnovationInnovation GroupGroup SafetySafety CSRCSRGlobalizationGlobalization
Pursue value Pursue value orientedorientedmanagementmanagement
Strengths and growth opportunitiesStrengths and growth opportunities
Expansion of Expansion of HanedaHaneda and Naritaand Narita Maximum utilization of B787Maximum utilization of B787
Vision: Become No.1 in Asia in Quality, Customer Satisfaction anVision: Become No.1 in Asia in Quality, Customer Satisfaction and Value Creationd Value Creation
13©ANA2009
Looking Forward
Working on new 10Working on new 10--13 Mid13 Mid--term Corporate Strategy based on priority management issuesterm Corporate Strategy based on priority management issues
0808--1111MidMid--termtermCorporateCorporateStrategyStrategy
2008 2009 2010 2011 2012
Number 1 in Number 1 in Asia in terms Asia in terms of Quality, of Quality, Customer Customer
Satisfaction, Satisfaction, and Value and Value CreationCreation
2013
1010--13 13 MidMid--term Corporate Strategy term Corporate Strategy (Tentative name)(Tentative name)
ContingencyContingencyPlan FYPlan FY0909
Focus on Focus on
KeywordsKeywordsGroupGroup
Pursue Pursue vvalue alue orientedorientedmmanagementanagement
GlobalizationGlobalization InnovationInnovation
SafetySafety CSRCSR
priorityprioritymanagement issuesmanagement issues
14©ANA2009
Forward-Looking Statements. This material contains statements based on ANA’s current plans, estimates, strategies and beliefs; all statements that are not statements of historical fact are forward-looking statements. These statements represent the judgments andhypotheses of the Company’s managers based on currently available information.
Air transportation, the Company’s core business, involves government-mandated costs that are beyond the Company’s control, such as airport utilization fees and fuel taxes. In addition, conditions in the markets served by the Company are subject to significant fluctuations.
It is possible that these conditions will change dramatically due to a number of factors, such as trends in technologies, demand, prices and economic environments, foreign exchange rate fluctuations, and others. Due to these risks and uncertainties, it is possible that the Company’s future performance will differ significantly from the contents of this material. Accordingly, there is no assurance that the forward-looking statements in this material will prove to be accurate.
Cautionary Statement
15©ANA2009
Investor Relations Financial Information Presentation
http://www.ana.co.jp/eng
TEL: +81-(0)3-6735-1030 FAX: +81-(0)3-6735-1185 e-mail: [email protected] Relations, All Nippon Airways Co., Ltd.
Thank you.This material is available on our website.