ANA : Financial Results for the Nine Months Ended December 31, 2018

TOKYO, Jan. 29, 2019 -ANA HOLDINGS INC. (hereinafter 'ANA HD') today reports its financial results for the nine months ended Dec. 31, 2018.

• Overview

  • ・Japan's economy has continued to experience a gradual recovery with personal consumption picking up in accordance with continued improvements in corporate earnings and the employment environment.

  • ・Although the occurrence of numerous natural disasters throughout Japan had an impact, underpinned by robust demand, strong performance in international passenger service and international cargo service resulted in operating revenues in Air Transportation increasing year-on-year. Meanwhile, operating income decreased year-on-year due to factors such as expenses caused by the investment for safety, quality and personnel and the rising fuel cost caused by the rise of the crude oil price.

  • ・The ANA Group renewed its in-flight safety video based on the theme of the traditional Japanese art form of Kabuki in December. In addition to ensuring information on safety in the aircraft is clearly conveyed to our passengers, it provides an opportunity for passengers from around the world to come in contact with Japanese traditional performing art and culture.

  • ・Also, the ANA Group was ranked first for Customer Satisfaction in the International Aviation division in the JCSI (Japanese Customer Satisfaction Index) survey conducted by the Service Productivity and Innovation for Growth (SPRING) organization in Japan for the first time, with the quality of the Group's service being highly acclaimed.

Under these economic conditions, increased revenues mainly in Air Transportation resulted in operating revenues of 1,568.4 billion yen, while operating income was 156.6 billion yen and ordinary income was 154.1 billion yen due to an increase in operating expenses. As a result of the special income recorded during the previous fiscal year due to the inclusion of Peach Aviation Limited as a consolidated subsidiary, and the special loss booked during this period due to the settlement of a class action in the US, net income attributable to owners of the parent decreased year-on-year to 106.8 billion yen.

'As a result of steadily increasing and robust demand, operating income for the third quarter alone was 51.4 billion yen, an increase of 500 million yen compared to the third quarter of the previous year, despite continued declines in the first half of the fiscal year due to natural disasters and other factors,' said Ichiro Fukuzawa, CFO, Senior Vice President, ANA HD. 'This is a great turning point and also a good sign for further profitability.'

• Air Transportation
  1. Domestic Passenger Service

  • ・In domestic passenger service, although the number of passengers declined year-on-year due to factors such as repeated natural disasters and the cancellation of flights due to inspection and maintenance of Rolls-Royce engines, revenues increased year-on-year as a result of the capture of steady business demand and demand for domestic travel by visitors to Japan, in addition to the offer of various discount fares to match demand.

  • ・In terms of the route network, in addition to the Chubu-Miyako route and Fukuoka-Ishigaki route that have changed to year-round operation since this summer schedule, efforts were also made to capture demand by expanding direct flights to Ishigaki Island and Miyako Island from various locations throughout Japan.

  • ・In terms of sales and service, efforts were made to stimulate travel demand from within and outside Japan through the implementation of the Let's Go to Hokkaido project to aid with relief efforts in Hokkaido, and the Reduced ANA International and Domestic Fares on Flights to or from Kansai International Airport campaign.

  • ・Furthermore, taking into consideration its customers' voices, ANA improved on-time operations with the cooperation of our passengers, such as by introducing a boarding procedure using easily understandable 'boarding groups' from October and changing the cut-off time for passing through airport security at Haneda Airport Terminal 2 for Japan domestic flights from 15 minutes prior to departure to 20 minutes prior to departure from December.

As a result, revenues from domestic passenger service increased by 2.1 billion yen (up 0.4% year-on-year).

•  2. International Passenger Service

  • ・In international passenger service, both the number of passengers and revenues increased year-on-year due to strong business demand originating in Japan and the capture of robust inbound demand.

  • ・In terms of the route network, the number of flights on the Haneda-Bangkok route was increased to three per day from June, bringing the total number of flights to five per day when combined with the Narita-Bangkok route. In addition, efforts were made to further expand the network, such as commencing code-sharing flights and a mileage program partnership with Alitalia from October to strengthen demand for travel between Japan and Italy.

  • ・In terms of sales and service, the use of miles to book seats in Premium Economy with ANA award tickets and the option to book upgrades from Economy Class to Premium Economy using miles and upgrade points were introduced. Efforts were also made to improve convenience and enhance service to customers, such as beginning to provide Tsukiji Gindaco's 'Takoyaki' (Octopus Dumpling) as a light snack in Business Class from December as part of an effort to spark interest in Japanese food among increasing inbound visitors.

As a result, revenues from international passenger service increased by 49.2 billion yen (up 11.0% year-on-year).

•  3. Cargo Service

  • ・In international cargo service, cargo from Japan to overseas destinations performed well backed by robust cargo demand centered on automotive parts and electronic components bound for North America and Europe. Regarding inbound cargo from overseas, in addition to cargo to Japan performing well, ANA endeavored to capture demand through steps such as chartering air freighter carriers. The cargo volume decreased year-on-year due to the decline in connecting cargo traffic via Japan, but revenues increased year-on-year as a result of strengthening yield management.

As a result, revenues from domestic cargo service decreased by 2.3 billion yen (down 9.8% year-on-year) and revenues from international cargo service increased by 10.6 billion yen (up 12.1% year-on-year).

•  4. LCC

  • ・In the LCC segment, both the number of passengers and revenues increased year-on-year due to the expansion of the route network and the capture of robust inbound travel demand.

  • ・In the route network, Peach Aviation Limited expanded its network by beginning a new Okinawa-Kaohsiung route in April and the Kansai-Kushiro route in August, while Vanilla Air Inc. expanded its network by establishing the Narita-Ishigaki and the Okinawa-Ishigaki routes in July, and increased flights on the Okinawa-Taipei route in October.

  • ・In marketing, Peach Aviation Limited implemented the Osaka and Kansai won't be defeated! campaign to restore travel demand that dropped off due to the impact of the typhoon in September, while Vanilla Air Inc. worked to capture demand through measures such as a 5th anniversary sale.

  • ・Since last November, the Representative Director and CEO of Peach Aviation Limited is concurrently serving as Representative Director and President of Vanilla Air Inc. in order to accelerate the integration of the two companies planned during the fiscal year 2019.

As a result, revenues from the LCC segment increased by 4.8 billion yen (up 7.5% year-on-year).

•  5. Others

  • ・Other revenues in Air Transportation business, including revenues from the mileage program, in-flight sales revenue, and revenue from maintenance contracts, were 156.1 billion yen, while revenues for the same period a year ago were 144.8 billion yen (up 7.8% year-on-year).

• Airline Related, Travel Services, Trade and Retail, and Others

  • ・In Airline Related business, operating revenues were 217.1 billion yen (up 2.6% year-on-year) and operating income was 12.2 billion yen (up 6.9% year-on-year) because of an increase in contracts with various airlines for ground handling services such as at Fukuoka Airport, and an increase in in-flight catering contracts with foreign airlines.

  • ・In domestic travel service, operating revenues decreased year-on-year due to slow growth in customers primarily bound for Hokkaido and Okinawa due to the impact of the Hokkaido Eastern Iburi earthquake and several typhoons. In overseas travel service, despite steady turnover in the Hawaii market where a focused effort was made to strengthen sales and in Europe where there was a focus on tours accompanied by guides, operating revenues decreased year-on-year due to slow growth in customers in other regions. As a result, operating revenues were 115.2 billion yen (down 5.4% year-on-year) and operating income was 1.3 billion yen (down 63.0% year-on-year). Furthermore, the DOCOICO smartphone service enabling customers to find where they want to go based on photos that match their preferences was launched in December to stimulate travel demand.

  • ・Although operating revenues in Trade and Retail were 114.2 billion yen (up 7.2% year-on-year) due to the capture of inbound demand in the retail business including the ANA DUTY FREE SHOP (airport duty free stores) and an increase in turnover of fresh foods in the Food business, operating income was 2.9 billion yen (down 17.4% year-on-year) due to the impact of a decrease in income in the Aerospace & Electronics business and the Lifestyle Industry business.

  • ・Although operating revenues in Other business were 29.2 billion yen (up 3.8% year-on-year) due to strong performance in the airline security business, operating income was 1.9 billion yen (down 16.3% year-on-year) due to a decrease in brokerage fees for land sales in the real estate business.

• Outlook for the FY2018(April 2018 - March 2019)

  • ・The company has not revised the consolidated financial forecast.

Contact :ANA Corporate Communications, TEL [phone], [e-mail]

About ANA
Following the 'Inspiration of Japan' high quality of service, ANA has been awarded the respected 5-Star rating every year since 2013 from SKYTRAX. ANA is the only Japanese airline to win this prestigious designation six years in a row. Additionally, ANA has been recognized by Air Transport World as 'Airline of the Year' three times in the past 10 years - 2007, 2013 and 2018, becoming one of the few airlines winning this prestigious award for multiple times.
ANA was founded in 1952 with two helicopters and has become the largest airline in Japan, as well as one of the most significant airlines in Asia, operating 78 international routes and 118 domestic routes. ANA offers a unique dual hub model which enables passengers to travel to Tokyo and connect through the two airports in the metropolitan Tokyo, NARITA and HANEDA, to various destinations throughout Japan, and also offers same day connections between various North American, Asian and Chinese cities.
ANA has been a member of Star Alliance since 1999 and has joint venture partnerships with United Airlines, Lufthansa German Airlines, Swiss International Airlines and Austrian Airlines.
Besides the full service and award winner carrier ANA, the ANA Group has two LCCs as consolidated subsidiaries, Vanilla Air Inc. and Peach Aviation Limited. The ANA Group carried 53.8 million passengers in FY2017, has approximately 39,000 employees and a fleet of 260 aircraft. ANA is a proud launch customer and the biggest operator of the Boeing 787 Dreamliner.
For more information, please refer to the following link.
https://www.ana.co.jp/group/en/