JAPAN AIRLINES Co., Ltd. Investors’ Guide FY2019
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JAPAN AIRLINES Co., Ltd. Investors’ Guide FY2019
30,020 31,218 31,644 32,114 32,570 34,033 34,859
7,525 7,723 7,793 8,460 8,394 8,585 9,128 37,545 38,941 39,437 40,574 40,964 42,618 43,987
0
10,000
20,000
30,000
40,000
50,000
FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
International Passengers Domestic Passengers
406.6 437.5 454.8 448.7 415.2 462.9 530.6
485.2 487.4 487.5 501.2 498.6 518.2 528.0
87.8 91.9 98.3 91.5 78.2 92.0
100.0 259.2 292.5 304.1 295.2 296.8 310.0
328.4 1,238.8 1,309.3 1,344.7 1,336.6 1,288.9
1,383.2 1,487.2
0
200
400
600
800
1,000
1,200
1,400
1,600
FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
International passengers Domestic passengers
Cargo and mail Other businesses
Company Profile
Airports Served Passenger Traffic
Non-Financial Highlights Business Portfolio
※ As of March , 2019
Domestic 56 / International 39 (JAL operation only)
Large Boeing 777 AirbusA350 41 Medium Boeing 787/767 77 Small Boeing 737 63 Regional jet 52 Average fleet age 9.1
Operational rate Domestic and International routes total
On-time arrival rate Domestic and International routes total
International passengers
Domestic passengers
Cargo and mail
Other businesses
35.7%
35.5%
6.7%
22.1%
FY2018 JPY 1,483 bn
TOTAL
233aircrafts ( ⇧ 1 aircraft year over year) ※ As of June, 2019
(thousand passengers)
TOTAL
405destinations including alliances and codeshares
Europe/ Middle East
(5)
U.S.A./ Canada
(9)
Hong Kong (1)
East Asia (12)
Korea (2)
Southeast Asia/India
(8) Hawaii
(2)
Australia/ Guam/Tahiti
(3)
Taiwan (3)
The Best Asia-Pacific Major Airline for On-time Performance
Asia-Pacific Major Airlines: 1st Airline Alliance (oneworld): 1st
※Announced on January 23rd, 2019
Awarded 5-Stars in SKYTRAX World Airline Star Rating
5-Star Airline-The World Airline Star Ratings Best Economy Class Airline Seat 2018
(2 consecutive year, 3 wins in total)
98.6% ( 1.1pt year over year⇩)
85.1% ( 2.1pt year over year⇩)
years
(JPY bn)
1
＊From FY2015, figures for Revenue Passengers Carried include “Marketing Carriers’ on code-sharing flights operated by JAL”
As of October, 2019
Investment Highlights
World’s Top-class Cost / Risk Management
Stable Business / Favorable Competitive Environment
Solid Management Policy to Achieve Stability and Growth Simultaneously
Well-disciplined Financial Strategy
Fulfilling Shareholder Return
1
2
3
4
5
Favorable market environment, with access to both stable domestic and growing international markets
Japan has significant geographical advantages, while the Asia-Pacific region has high growth potential
Limited competition vs. LCCs due to regulations and favorable competitive environment
Perfect mix of a stable domestic business and a high-growth international business
Network/aircraft strategy that puts emphasis on high profitability over scale
FSC business pursues premium strategy, while LCC business aims to attract new customer segments
Well-disciplined policy that pursues investment efficiency, through improvement of ROIC
Strong balance sheet that enables high risk tolerance and financing capability
Financial measures taken to lower cost of capital, while avoiding excessive financial leverage
Strict cost management through the divisional profit management system to improve cost efficiency
Strong risk management system to overcome fluctuation risks in fuel prices/foreign exchange
Dividend policy and progressive share buybacks emphasizing stability, continuity, and predictability
Effort to realize total return ratio of 35~50% and Total Shareholder Return on Equity Ratio of over 3%
2
部分的にBOLDに
しています
As of October, 2019
* From fiscal year 2015, revenue passengers carried, load factor, revenue passenger kilometers and available seat kilometers include code-share tickets sold by other companies for JAL-operated flights *1 Load Factor: capacity utilization of an aircraft = ASK/RPK *2 RPK (Revenue Passenger Kilometers): total flight distance covered by revenue passengers = number of revenue passengers x distance flown ASK (Available Seat Kilometers): a unit of passenger transport capacity = total number of seats x distance flown *3 Yield = Passenger revenues / RPK *4 RASK (Revenue per Available Seat Kilometers) = Passenger revenues / ASK
34,036 35,390 36,109 40,305 40,633 42,013
44,659 44,745 46,235 47,696 50,563 50,621 51,836
54,925
0
10,000
20,000
30,000
40,000
50,000
60,000
FY2012FY2013FY2014FY2015FY2016FY2017FY2018
RPK
ASK
23,012 23,745 23,993 24,341 24,550 25,643 26,195
36,443 37,084 36,306 35,869 35,423 35,714 36,116
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
FY2012FY2013FY2014FY2015FY2016FY2017FY2018
RPK
ASK
13.3 13.1 13.4 14.0 14.1 14.5 14.6
0
2
4
6
8
10
12
14
16
FY2012FY2013FY2014FY2015FY2016FY2017FY2018
Core Business
63.1 64.0
66.1 67.9
69.3
71.8 72.5
60
65
70
75
80
85
90
FY2012FY2013FY2014FY2015FY2016FY2017FY2018
Load Factor*1 (%)
RPK / ASK*2 (Million passenger km / Million seat km)
RPK / ASK*2 (Million passenger km / Million seat km)
76.1 76.5 75.7
79.7 80.3 81.0 81.3
60
65
70
75
80
85
90
FY2012FY2013FY2014FY2015FY2016FY2017FY2018
Load Factor*1
(%)
International Passenger Business Domestic Passenger Business
Yield*3
(JPY) RASK*4
(JPY)
3
21.1 20.5 20.3 20.6 20.3 20.2 20.2
0
2
4
6
8
10
12
14
16
18
20
22
FY2012FY2013FY2014FY2015FY2016FY2017FY2018
Yield (ex. Fuel surcharge) 3 RASK (ex. Fuel surcharge)*4
100
105.6 106.9
112.5 112.5
119.4 120.8
90
100
110
120
130
FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
As of October, 2019
100
105.3
107.4 107.4 106.3
111.6 112.6
90
100
110
120
FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
(FY2012=100) (FY2012=100)
100
105.3
107.4 107.4 106.3
111.6 112.6
90
100
110
120
FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
100
105.6
106.9
112.5 112.5
119.4 120.8
90
100
110
120
130
FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
Financial Summary ①
Operating Revenue, OP Margin, Net Profit Margin Cash Flow
264 247 261 312
253 281 296
-129 -166 -199 -207 -215 -180 -186
-60 -61 -67 -49 -53 -55 -37
135 81 61
105 37
101 110
FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
Operating Activities Investing ActivitiesFinacing Activities FCF
1,238 1,309 1,344 1,336 1,288
1,383 1,487
15.8%
12.7% 13.4%
15.7% 13.2% 12.6% 11.8%
13.9% 12.7%
11.1% 13.1% 12.7%
9.8% 10.1%
FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
Operating Revenue OPM% NPM%(JPY bn) (JPY bn)
ROIC, ROA, ROE EBITDA, EBITDAR, EBITDA Margin, EBITDAR Margin
276 249
265 297
266 285 300 307
281 292 321
286 305 320
22.3% 19.1% 19.8%
22.3% 20.6% 20.6% 20.2%
24.8% 21.5% 21.8% 24.0% 22.2% 22.1% 21.5%
FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
EBITDA EBITDAR EBITDA Margin EBITDAR Margin
14.4% 12.0% 12.7%
14.0% 10.7%
10.1% 9.5%
16.9%
13.0% 12.8%
13.7% 10.3%
9.7% 9.1%
36.0%
26.5%
20.3% 21.5% 18.1%
13.3% 13.6%
FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
ROIC ROA ROE (JPY bn)
OP Margin above 10%
ROE above 10% ROIC above 9%
*1 Net profit attributable to owners of the parent
*1
4 As of October, 2019
Total Assets, Shareholder’s Equity, Shareholder’s Equity Ratio
*1 Net profit attributable to owners of the parent *2 Payout Ratio = Total dividends / Base profit for dividends calculation *3 Share repurchase of a particular fiscal year includes ones determined before the approval of financial reports of that fiscal year *4 Total return ratio = (Total amount of dividend + Amount of share repurchase) / Base profit for dividends calculation *5 Base profit for dividend calculation = (Net profit attributable to owners of the parent + income tax deferred) （From FY2019, income tax deferred is no longer excluded) *6 In the FY2019 total dividends and the payout ratio calculation, the number of shares issued at the end of FY2018, excluding treasury stock, is used
Net Profit, Total Dividends, Stock Repurchase, Payout Ratio
171.6 166.2 149.0
174.4
164.1 135.4 150.8
114.0
32.3 29.0 37.7 43.5 33.2 38.7 38.3 38.3
25.1% 29.4%
32.3% 33.7% 18.9% 20.0%
25.1% 25.0%
47.7% 44.5%
49.2%
FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019(Forecast)
Net Profit Total DividendsPayout Ratio Total Return Ratio
1,216 1,340
1,473 1,578 1,728 1,853 2,030
565 690 776 843
972 1,060
1,165
46.4% 51.5% 52.7%
53.4% 56.2% 57.2%
57.4%
FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
Total Assets Shareholder's Equity Equity Ratio (JPY bn)
Interest-bearing Debt, Net D/E, Net D/EBITDAR
Credit Rating
160.1
134.2
100.5 92.6
116.0 125.7 142.3
-0.3 -0.3 -0.3 -0.4
-0.3 -0.3 -0.3
-0.6 -0.8 -0.9
-1.0 -1.0 -1.1 -1.2
FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
Interest-bearing Debt Net D/E Net D/EBITDAR
※As of May 17, 2019
(X)
95 80
104 120
94 110 110 110
FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019
Dividend per share
* The dividend per share for FY2012 and FY2013 was recalculated with the assumption that stock split had been undertaken.
(JPY)
Credit rating by Rating and Investment Information, Inc., Japan Credit Rating Agency, Ltd.
R&I : Single A－(positive) JCR : Single A (stable)
Will be determined
30.0 20.0 20.0
*1
Share Repurchase *2 *4
*3
Financial Summary ②
(JPY bn)
(JPY bn)
5
*5
*5
*6
(Forecast)
As of October, 2019
• Aiming to maintain the target of profit margin 10% or above, achieve Operating Revenue 2 tn yen, Operating profit 250 bn yen and Market capitalization 3 tn yen
• Maintain safe operations and lead development of the airline industry
• Actively contribute to tackling social issues such as SDGs*1
• Service over 500 major cities in the world
• Have 50% of revenue from overseas sales for international passenger operations
• As a group of professionals that are able to dynamically accommodate with multi-cultural and diversified markets and environments
6
1 2 3
JAL Vision To realize the JAL Group Corporate Policy and become “The world’s most valued and preferred airline”,
we will focus on the following while continuing our unwavering efforts and determination in maintaining flight safety.
Transform JAL into a truly global airline
Create new values one step ahead of competitors
Achieve sustainable growth
Within this 10-Year Grand Design period, we will • Provide a stress-free travel
experience for all our customers • Create new businesses and services
that stimulate air travel demand • Adopt new technology and source
capabilities to improve quality and productivity, and to innovate customer experience
＊1 Global Sustainable Development Goals
JAL Vision and Grand Design
As of October, 2019
Compound Annual Growth Rate 2017-2037 RPK in billions ■ 2017 ■ 2037
340
129
0
50
100
150
200
250
300
350
400
450
500
UntilOCT2010
FromOCT2010
FromMAR312013
FromMAR302014
FromMAR292015
TargetBefore2020
Olympic
Naritra Haneda
International Passenger Business—Business Outlook
Air Passenger Traffic Forecast Geographical Advantages of Airports in Japan
Number of Visitors to Japan (thousand)
(year) Source: JNTO
Source: Japan Aircraft Development Corporation
Increase in Annual Number of International Flight Slots
(thousand slots)
7
JAL
Others
Share of Haneda Slot
Share of Narita Slot
JAL
Others
20% (2020)
10% (2020E)
CAGR (2015-2020) 7.47%
7,737
18,587
171 361
2,474
6,996
736 2,371
Middle East 6.0%
1,782
3,325
World 4.5%
Latin America 4.8%
North America 3.2%
Asia-Pacific 5.3%
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2020
2030
CAGR (2015-2020) 2.53%
Transit Travel Time Miles
Tokyo － London 12.5 5,975
Tokyo
Hong Kong
London
17.7 7,794
Singapore 18.6 8,359
Dubai 20.6 10,053
Travel to Europe = Advantageous Isolated Market =
408 1,051
Travel to US The Closest Asian City to US
Africa 3.8%
Europe 3.8%
Tokyo
SE Asia
US
Paralympic
As of October, 2019
1,910 4,004
International Passenger Business—Strategy ①
*1 RASK (Revenue per Available Seat Kilometers), excluding fuel surcharge = (Passenger revenues – fuel surcharge) / ASK
Significantly less seats than our competitors, leading to greater comfort
JAL’s strategy to pursue excellent quality and comfort, RASK ex. fuel surcharge*1 has been improving
JAL’s 787 Economy Class
8
New Passenger Service System
Further increase of load factor and yield
2
6
7
＋4%
Seat Number Increase
No Effect
Revenue Before
Business Class
100
Economy Class
＋4%
104
Revenue After
Cabin Configuration Optimization
Capacity expansion through optimal number of seats available without
increasing aircraft numbers
Impact of configuration optimization Earlier outcome than initial plan
Premium Seat Strategy
Premium seats on international flights, and greater comfort
L/F Number of Seats
Revenue Before
＋20% ▲15%
100 105
Revenue After
Revenue per Passenger
＋5%
Seat Reduction
Load Factor
Increase
Conceptual Image of Reconfiguration
Business Trunk Routes
Passenger Revenue Increase
Conceptual Image
Impact of SKY SUITE Reconfiguration
42 30
144 176
0
50
100
150
200
250
Before After
Total 186 Total 206 No.of Seats
Economy Class Business Class
FY17 FY18 FY19 FY20 FY21
Projection Results （JPY bn）
4.0
20.0
Increase in Revenue (Maximum) Effect of improving the balance (Estimate) Effect of improving the balance (Initial forecast)
Captures overflowing economy class demand mainly in short- and middle-haul routes by adding more
economy class seats
Ex) 787 +11%
787 Abreast Seat Pitch (inch)
JAL 8 34
Industry Standard
9 31
New System Effect Result and Projection Conceptual Image of Configuration Maximization
Mainly Short- and Middle-Haul Routes for Leisure, Transit and Inbound Passengers
Improved Functions of Overseas Websites
Reservation Control on Itinerary Basis
More Precise and Advanced Revenue Management
Promote mile redemption
More settlement methods
To be disclosed in due course As of October, 2019
Partners in EMEA: 8 Companies
Air France, Emirates Airlines, Finnair British Airways, Iberia, Qatar Airways, S7
Airlines, Aeroflot
Partners in Asia and Oceania: 17 Companies
China Airlines, Cathay Pacific Airways, China Southern Airlines, Fiji Airways, Garuda Indonesia, Jetstar Airways, Cathay Dragon,
Korean Airlines, Xiamen Airlines, Malaysia Airlines, China Eastern Airlines, Bangkok Airways Qantas Airways, Air Tahiti Nui, Vistara,
SriLankan Airlines, VietJet Air
Partners in Americas: ７ Companies
American Airlines, Alaska Airlines AeroMexico, Jetblue Airlines,
Hawaiian Airlines, LATAM Airlines, WestJet Airlines
（3 of them are JV partners)
（2 of them are JV partners ）
FY2017 343 Cities
FY2018 405 Cities
FY2020
500 Cities
Partners in the World*1: 32 Companies
（1 of them is a JV partner)
International Passenger Business—Strategy ②
Alliance Strategy
*1 Including companies with which we concluded basic agreements and yet to start partnership
Expanding partnerships with global partner airlines, with a target to service over 500 major cities worldwide during FY2020
9
JV Parttner
Oneworld Alliance
Sky Team Alliance
As of October, 2019
4.1%
-0.8%
-2.3%
3.5%
0.2% 2.5% 4.5% 1.8%
-4.0%
-10.4%
-1.7% -2.3% 2.0% 0.9% 0.2% 0.7%
-0.5%
3.1% 1.7%
11.6%
-11.3%
6.5%
-14.9%
21.3%
4.2% 9.1% 6.2%
-6.7%
-34.5%
7.4%
0.9%
7.0% 10.3% 10.8%
4.5%
-3.4%
13.8% 11.5%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18
DomesticInternational
Domestic Passenger Business—Business Outlook
Domestic & International Passenger Revenue Growth*
2008 Financial Crisis
2011 Great East Japan Earthquake
10
Source: Each company's reported data Numbers are of the sum of the three carriers (JAL, ANA, Skymark). Growth rate compared to the same period of the previous year
39.8%
37.0%
23.1%
Share of Haneda
Source: MLIT
Share of Number of Domestic Passengers
Share of Flight Slots of Haneda Airport
ANA
Japan has the world’s fourth largest domestic market, where there is little volatility with very limited competition
Haneda 60％ Osaka
(Itami) 8%
Domestic Passenger Market
Country Number of Passengers on Domestic Routes by Country in CY2014 (million)
1 USA 673.9 2 China 358.9 3 Brazil 98.1 4 Japan 91.6 5 India 67.4 6 Australia 60.8 Total 1,994.7 Source: IATA
#4
Competitiveness against ANA*1
*1 Competitiveness is calculated by Share of Number of Passengeres / Share of Seat
0.960
0.980
1.000
1.020
1.040
1.060
2013 2014 2015 2016 2017 2018
JAL
ANA
(Fiscal Year)
As of October, 2019
Domestic Passenger Business—Strategy ①
Introduce New Aircraft and Improve Cabin Comfort Domestic Flights:
‒ A350-900: install personal monitors and power sources from September 2019 for Haneda-Fukuoka lines, followed by subsequent expansion into other lines
‒ 787-8: intall personal monitors and power sources from October 2019 with a focus on Haneda-Osaka (Itami) lines
‒ Install personal power sources on 767/737 progressively ‒ Introduce the ATR42-600 (Hokkaido Air System)
International Flights: ‒ Fully-flat Business Class seats to be introduced on all Europe, North America, and
Australia flights Introduction of free Wi-Fi
‒ Free internet access without creating an account
11
Flights from Haneda / Itami account for nearly 70% of the domestic passengers in Japan Limited additional slots for Haneda and Itami
Limited space for newly entering LCCs are based in Narita and Kansai, which are far from downtown, lacking convenient accessibility
The share of LCC among domestic passengers has been around 10% in Japan
LCC in Japan
Kansai
Kobe Osaka
Kyoto
Tokyo Osaka
70km
15km Narita
Haneda
Tokyo
105km 40km
35km
45km
12km
Itami
75km
LCC
LCC
(million)
0.0%
2.1%
5.8% 7.6%
10.0% 9.7% 9.8%
0.0%
5.0%
10.0%
15.0%
20.0%
0
10
20
30
40
50
60
70
80
90
100
2011 2012 2013 2014 2015 2016 2017
FSC LCC LCC Share
As of October, 2019
Tokyo
Tokyo⇔Aomori 578km
Tokyo⇔Hakodate 696km
Aomori
Hakodate
Tokyo⇔Akita 451km
Akita
Osaka
Tokyo⇔Osaka 447km
Tokyo⇔Komatsu 340km
Komatsu
Okayama
Tokyo⇔Okayama 571km
Hiroshima
Tokyo⇔Hiroshima 666km
Tokyo⇔Fukuoka 911km
Fukuoka
Tokyo Station ⇕
Hiroshima Station JR: 4 hours Air: 3 hours 20 mins Tokyo Station
⇕ Aomori Station
JR: 3.5 hours Air: 3 hours
Domestic Passenger Business—Strategy ②
Improve Competitiveness by Establishing “Smart Airports” Establish “smart airports” to shorten waiting time significantly by using new technology (FY2020〜 Haneda, New Chitose, Itami, Fukuoka, and Naha airports) Expected to be more competitive against Shinkansen by establishing “smart airports” to shorten the processing time
Increase new self-check-in kiosks
Introduce self-baggage drop
Advanced security check
Before
After
Shinkansen
Traveling Time
Traveling Time
Traveling Time
Waiting Time
Waiting Time
Aim for zero waiting time at counters
Check-in
Automated gate
Tokyo Station ⇕
Hakata Station JR: 5 hours Air: 3.5 hours
“Smart Airports” could be a driver to increase a market share of
air transportation in areas where Shinkansen is still predominant
Source: Report on Passengers Flow in Japan by Ministry of Land, Infrastructure, Transport and Tourism *Distance: Air operating distance *Orange: Air, Gray: Shinkansen *Pie Chart : As of 2017 12
16%
84%
22%
78%
91%
9%
72%
28%
38%
62%
23%
77%
31%
69%
38%
62%
As of October, 2019
LCC Strategy
Passenger Business Portfolio from FY2020
Domestic Flights
Service Level and
Price Range
International Flights
Growth Opportunity
FSC (Full Service Carrier)
LCC Partners
Maintenance Control
Middle to Long Distance LCC
NEW
Low
High
Short Long
JAL will remain to be a premium airline to capture stable high-end demand ZIPAIR will explore to the growing price-sensitive market for further growth, where there is no low-cost competitor
13
Specializes in Premium Service for high-yield passengers Strengthens network through proactive partnership beyond
alliances Captures more inbound and transit passengers
Expand supply focusing on trunk routes with strong demand forecast
Introduce new aircrafts and services to maintain and improve RASK and L/F
International Business
Domestic Business
Captures more demand with new travel style on medium-and long-haul routes
Low-cost and high efficiency structure with good service
Low-cost because of JAL Group assistance
International Business
Deepen relationship with our Japanese LCC affiliate and contribute to inbound demand expansion through low-fares
Domestic Business
High
Low
Growing Market
Stable Market
Very Competitive Market
As of October, 2019
Fuel/FX Markets FY15 FY16 FY17 FY18
Singapore Kerosene (USD/bbl)
60.0 57.2 67.8 83.9
FX (JPY/USD) 120.5 108.6 111.2 110.5
Three-year aggregate market impacts have been minimal
FY16 FY17 FY18
0
Cost Management
Revenues and costs excluding fuel prices in foreign currencies have almost been set off. Hedging is conducted against exchange rate for fuel costs
Productivity improvement The increase in the personnel costs and the number of
employees in preparation for capacity expansion at Narita and Haneda in 2020 will fall within the range of ASK growth
100 104
100 103
113
95
100
105
110
115
FY2018 FY2019 (Plan) FY2020 (Plan)
number of employees ASK(incl. ZIPAIR) personnel
0
(FY18=100) 50% 30%
20% Fixed basic remuneration
Annual incentive(performance-linked bonus)
Long-term incentive(performance-linked share-based remuneration)
Remuneration System Remuneration Paid to Directors
Remuneration Paid to Employees Annual remuneration paid to employees are
performance-linked bonuses
*1 CASK (excludes ZIPAIR) = Air Transportation Segment Operating Expense(excluding fuel, and before the depreciation method change reflected )/ASK
CASK*1
Although CASK has been on a rise, due to up-front expenditure for response to airport facilities enhancement in Tokyo, JAL aims to lower CASK in FY2020 from increase in productivity
8.5 8.8 8.9 9.3 9.4 10.1 10.4 10.5
FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019(Plan)
FY2020(Plan)
(JPY)
Lower CASK in FY2020
14
Mitigate market risks Hedging policy
The fuel used on domestic routes, which is 40% of total fuel, is hedged because fuel surcharge is not collected on domestic routes
Revenues and costs excluding fuel prices in foreign currencies have almost been set off. Hedging is conducted against exchange rate for fuel costs
Hedging Fuel Cost Hedging Forex
Int’l 60%
Doms 40% Hedging
FSC*
Amount of usage Foreign Currency
Revenue
Fuel Cost
Excl. Fuel Cost
Foreign Currency Expense
*FSC: Fuel Surcharge
Market impact
FSC* and hedging
Remaining impacts
Impact for operating margin
Impacts of volatile fuel & FX market （y/y）
Impacts of fuel price and exchange rate volatility have been set off in an approximately three-year span
As of October, 2019
*1 Net profit attributable to owners of the parent *2 Payout Ratio = Total dividends / Base profit for dividends calculation *3 Share repurchase of a particular fiscal year includes ones determined before the approval of financial reports of that fiscal year *4 Total return ratio = (Total amount of dividend + Amount of share repurchase) / Base profit for dividends calculation *5 Base profit for dividend calculation = (Net profit attributable to owners of the parent + income tax deferred) （From FY2019, income tax deferred is no longer excluded) *6 In the FY2019 total dividends and the payout ratio calculation, the number of shares issued at the end of FY2018, excluding treasury stock, is used
Financial Strategy and Capital Policy
Shareholder Return
Financial Structure Capital Efficiency
171.6 166.2 149.0
174.4
164.1 135.4 150.8
114.0
32.3 29.0 37.7 43.5 33.2 38.7 38.3 38.3 18.9% 20.0%
25.1% 25.0% 25.1% 29.4%
32.3% 33.7%
18.9% 20.0% 25.1% 25.0%
47.7% 44.5%
49.2%
FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019(Forecast)
Net Profit Total DividendsPayout Ratio Total Returm Ratio(JPY bn)
Will be determined
30.0 20.0
*1
Share Repurchase
*2 *4
*3
20.0
Effort to realize payout ratio of 35%, total return ratio of 35~50%, and
Total Shareholder Return on Equity Ratio of over 3%
*1（ Total amount of dividend + Amount of share repurchase) / net profit attributable to owners of the parent *2 Cash flow from operating activities＋cash flow from investing activities
(Unit：JPY bn)
Cash & deposits
Projection at the end of
FY2020
Cash & deposits
projection at the end of
FY2018
330
Corporate Pension
Fund ▲80
Strategic Growth
Investment Line
Free Cash Flow*2 ・Debt
Utilization, etc. 2.6
months’ worth
of revenue Capital allocation
Injection planned in FY2019H1
Shareholder Returns 158
Shareholder Return
▲50
*Disclosed in the Rolling Plan 2019 in Feb 2019
*6
*5
*5
15
Shareholders’ equity ratio Credit rating Decrease cost of capital
Utilize debt Liquidity
Equity ratio reached approx. 60%. Having built strong financial structure, we will work to maintain the current level
Aim to achieve and maintain “A flat” or above credit rating by improving cash flows and securing fruits from our growth strategies
Decrease cost of equity through comprehensive information disclosure, IR, etc.
Utilize debt with discipline based on adequate debt repaying capacity with sufficient cash flow from operating activities
Based on our current scale of business operations, standard liquidity on hand is set at approximately 2.6 months’ worth of revenue (currently approx. 330 bn yen) for sufficient event risk tolerance as well as return on assets (ROA)
As of October, 2019
CAPEX and Depreciation
CAPEX Depreciation
16
(JPY 100mn)
810 827 858
885
957
1,108
1,241
0
200
400
600
800
1,000
1,200
1,400
FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
(JPY 100mn)
1,290
1,667
1,986 2,106
2,331
2,119
2,262
2,640
2,140
0
500
1,000
1,500
2,000
2,500
3,000
As of October, 2019
Stock Price
163.7
126.7
JAL Stock Price Nikkei 225 Stock Average
JAL Stock Price vs Nikkei 225 Stock Average (JPY-denominated)
JAL Stock Price vs Nikkei 225 Stock Average (USD-denominated)
17
0
50
100
150
200
250
300
222.7
172.3
0
50
100
150
200
250
300
(Sep-12=100) (Sep-12=100)
As of October, 2019
This content contains descriptions of the future expectations, outlooks, objectives and plans etc. of Japan Airlines Co., Ltd. (hereafter "the company") and related Group companies (hereafter "the Group"). These are based on information available at the time when these materials were created by the company (or as otherwise specified), and are created based on the forecasts at such time. These statements were created based on certain assumptions. These statements and assumptions include the subjective projections and judgments of our management, and due to various risks and uncertainties, these may be found to be inaccurate or unrealized in the future. Therefore, the actual results, earnings and financial conditions, etc. of the Group may differ from the projections of the company. These risks and uncertainties include, but are not limited to, the economic and social conditions of Japan and other countries and regions, soaring fuel costs, changes in the exchange rates between the yen and the dollar or other currencies, terrorist attacks or wars, infectious disease outbreaks, and various other risks related to the aviation business. Statements on this content regarding future information are, as mentioned above, valid at the time of creation (or as otherwise specified), and our company has no obligation to ensure that this information is updated with the latest available information. The information contained in this content is for informational purposes only, and is not intended as a recommendation, solicitation or request for the purchase of or trade in any securities or financial products. Although every effort has been made to ensure that the information posted on this content regarding the Group is correct, it includes unaudited financial information for which we provide no guarantee of its accuracy, completeness, fairness or reliability. The Company does not have any responsibility for any damages resulting from the use of this content. It should be noted that all rights with this content and other copyright of this material belongs to Japan Airlines Co., Ltd.
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