Skymark Airlines : Financial Results for the Fiscal Year ended March 2024（FY2023） Q&A Summary（284KB）

Financial Results for the Fiscal Year ended March 2024（FY2023） Q&A Summary

Financial Results for the Fiscal Year ended March 2024 (FY2023)

May 15, 2024(Wed)

17:00－17:40

Respondents:

Representative Director, President and

Executive Officer: Hayao Hora

Representative Director, Senior Managing

Director and Executive Officer:

Shigehiro Nishioka

Senior Managing Director and Executive

Officer: Manabu Motohashi

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.

Q1. The average price per passenger for FY2024 is projected to be up by JPY 629 (up by 4.9%) compared to the previous year. Is there a possibility that the results will exceed the target?

A. In FY2023, we had been working on yield management while also being aware of customers' tolerance toward price changes. We do not foresee any major changes in the situation in FY2024 and believe that this target is fully achievable.

Q2. In the FY2024 forecast for operating expenses, "Other" expenses are projected to increase. Please explain the details?

A. "Other" expenses are likely to be higher than in the previous year primarily due to the buildup of various expenses. These will include an increase in system-related and airport- related outsourcing costs, and in accommodation costs for pilots and flight attendants.

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Financial Results for the Fiscal Year ended March 2024（FY2023） Q&A Summary

Q3. Regarding the sensitivity to exchange rate and fuel fluctuations in the forecast for FY2024, if the exchange rates and Dubai crude oil prices remain at current levels, the operating income will decline. How will you respond to this?

A. We are aware that the yen is currently weaker and crude oil is higher than our market assumptions. In terms of the impact of market conditions on operating income, we are considering measures such as (1) efforts to reduce costs, and (2) raising the average price per passenger in conjunction with improving the quality of our service.

About 8 million customers use Skymark every year, so a JPY 100 increase in the average price per passenger would increase the revenue by approximately JPY 800 million. You can see how this will have a big impact considering our level of profit.

Q4. What are the assumptions and approach behind the costs in the Mid-term Business Targets?

A. In addition to reduced government subsidies as a factor that will increase costs, we plan to make investments to secure human resources. On the other hand, maintenance costs are forecast to remain high in FY2024 as in the previous year. However, they are expected to fall to a certain degree in FY2028, the final year of our Mid-term Business Targets.

Q5. You have said that the delivery date for the six leased B737-8s has been pushed back. What will you do if they won't be delivered as planned, if there are further delays?

A. We are not looking to purchase the current B737-800 as a substitute for the new B737-8. But we are considering to maintain the size of our business operations by extending the lease terms of the 29 aircraft currently in operation (of which 24 are under lease) and improving the aircraft operation rate by reviewing timetables and other measures.

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Financial Results for the Fiscal Year ended March 2024（FY2023） Q&A Summary

Q6. Has there been any progress regarding the reallocation of flight slots at Haneda Airport? And could you tell us more about the increase in number of flight slots at Kobe Airport and Fukuoka Airport?

A. In terms of the reallocation of flight slots at Haneda Airport, the second Haneda Slot Allocation Standards Review Subcommittee was held last month where presentations were given by the airlines. Issues under discussion at this meeting included how to view the impact of the COVID-19 over the past three years and what performance indicators should be used.

The number of flight slots at Kobe Airport is expected to increase from 80/day to 120/day in the spring of 2025. And the number of flight slots at Fukuoka Airport is expected to increase with the opening of the second runway in March 2025.

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