Financial Results
1st Quarter Mar / 2014 (FY2013)31 July, 2013

TOPICS

P.2

P.4

P.5

1

Overview of 1st Quarter FY3/14 Financial Results
Operating Profit

Operating Revenue（JPY Bn）（JPY Bn）

294.1

Operating Profit Margin

60

15%

11.0%

286.7
40

280

31.4

＋2.6%

10%

7.5%

22.0
20

250

1st Quarter
FY3/130

1ST Quarter
FY3/14

1ST Quarter
FY3/13

1ST Quarter
FY3/140%

 Despite weak Yen, Operating Profit for 1ST
Quarter FY3/14 was 22.0 Bn JPY.

FX Markets

FX (JPY/USD)

5%1Q
FY3/131Q
FY3/14

Difference

81.4

99.0

+21.6%

 Moving steadily towards achieving ourtarget OP of 140.0 Bn JPY, and also trying
to exceed the target.
2 In the first quarter, operating revenue was 294.1 billion yen due to the growth inboth international and domestic passenger revenue.

 On the other hand, our Operating Profit declined by 9.3 billion yen to 22 billion
yen because of the cost increase for the weak Yen and the suspension of Boeing
787 operations.
 We are moving forward steadily towards not only achieving our operating profit
target of 140 billion yen but also trying to exceed the target.

2

Impact from Current FX Markets
Breakdown of the Impact on Our Operating Profit(JPY Bn)
FX impact▲10.6 Bn
Revenue

Expenses(Excl. Fuel)

+5.3

▲4.5

31.4

Excl. FX
+1.2 Bn

FUEL

▲11.4

Revenue

Expenses

+2.0

▲0.8

20.8

1Q FY3/13(1USD=81.4JPY)

Estimated Operating Profit
without FX impact

22.0

1Q FY3/14(1USD=99.0JPY)

3 This page shows the breakdown of the impact from the current foreign exchange market
on our operating profit of the 1st quarter.
 The weak Yen made a 5.3 billion yen raise on our revenue, 4.5 billion yen impact on ourfuel excluded cost, and 11.4 billion yen on our fuel cost. Our operating profit without the
impact was estimated as 20.8 billion yen for the 1st quarter.

 We assume that our revenue increased by 2.0 billion yen and our cost increased by 0.8
billion yen without the FX impact.
 As a result, our operating profit was 22 billion yen.

3

Operations of Boeing 787
Boeing 787 Operations
 Operations of Boeing 787 resumed from
June 1, 2013.
 Narita-Helsinki Routes operation newly
started from July 1.
 The reservation is growing steadily.

Current Reservations (as of 25JUL) (**)
Newly Launched Routes (*)
All 787 Routes
All Int’l Routes(*) Boston, San Diego, Helsinki

JUL

AUG

82%
79%
83%

83%
78%
78%

(**) Incl. Non-Revenue Passengers

Impact of grounded Boeing 787
Financial Impact (Bn JPY) The financial impact remained as assumed.

Revenue

ExpensesProfit

▲4.8

2.2

▲2.6
4

 June 1st, we resumed 787 operations, and now we are operating 787s to 7 cities over 8
routes.
 On July 1st, we launched a new service using Boeing 787 between Narita and Helsinki,building our network to boost our customers’ convenience, with Helsinki as a gateway
bridging Japan and Europe.
 The number of reservation of our 787 operating routes are growing steadily.

4Consolidated Financial Results
Consolidated Financial Results 1st Quarter FY3/14
1st Quarter
FY3/13

JPY Bn

Revenue
Air transportation segment

Operating Expense
Air transportation segment

Operating Profit
Air transportation segment

Operating Profit Margin(%)

Ordinary Income
Net Income
ASK（MN seat km）
RPK（MN passenger km）
EBITDA Margin (%) (1)
EBITDAR Margin (%) (2)Unit Cost (yen) (3) (4)Incl. Fuel
Notes:

1.
2.
3.
4.

1ST Quarter
FY3/14% y/y

 Revenue:
294.1Bn JPY, y/y +2.6%

286.7

294.1

+2.6%

259.1

262.9

+1.5%

255.3

272.0

+6.5%

230.8

244.4

+5.9

31.4

22.0

▲29.8%  Operating Profit Margin:

28.3

18.4

▲34.8%

11.0%
30.7
26.9

7.5%
19.6
18.3

▲3.5pt▲35.9%▲31.9%

19,951
13,38618.0%
20.7%

20,705
13,711
14.2%
16.8%

+3.8%
+2.4%
▲3.8pt▲3.9pt

8.5
11.6

8.5
11.8

+0.0
+0.2

EBITDA Margin = EBITDA / Revenue EBITDA=Operating Profit + Depreciation
EBITDAR Margin = EBITDAR / Revenue EBITDAR=Operating Profit + Depreciation+ Aircraft Leases
Unit Cost = Air Transportation Segment Operating Cost (excluding fuel cost) / ASK
Unit Costs are calculated based on 32 consolidated companies for both previous and current year.

 Operating Profit:
22.0 Bn JPY, y/y ▲29.8%

7.5%

5

Operating revenue for the first quarter increased by 2.6% year-on-year to 294.1 billion yen,mainly due to an increase in revenue per passenger on international flights, and anincrease in the number of passengers on domestic flights.
Operating expense increased by 6.5% from the previous year to 272.0 billion yen, mainly
due to an increase in fuel costs caused by an increase in supply and the weak yen. We willcontinuously strive to minimize the expenses by increasing profit consciousness throughour divisional profitability management system.
 Our Unit Cost remained 8.5 yen without fuel costs.
 As a result, the operating profit was 22.0 billion yen, the operating profit margin was 7.5%,
and the EBITDAR margin remained at 16.8%.

5Changes of Operating Profit
1st Quarter FY3/14
ASK y/y： +3.8%
RPK y/y： +2.4%（JPY Bn）▲9.3Bn(▲29.8%)Int’lPassenger

+3.0
31.4

Domestic
Passenger

+0.5
+0.5%

Int’l
Cargo

▲0.1
▲1.5%

+3.1%

Other
Revenue

Fuel

+4.0

▲6.6

Operation
Coupled
Cost

▲1.6

+5.8%
▲10.7%▲8.0%

Revenue
Coupled
Cost▲0.8

Other Cost

▲7.5

▲8.1%

22.0
▲4.7%

1Q
FY3/13

Revenue +7.3 Bn JPY

Expenses +16.7 Bn JPY

1Q
FY3/146

 Compared to the same period last year, revenue of international passenger and domestic
passenger operations increased by 3.0 billion yen and 0.5 billion yen respectively. The
aggregate revenues, including other revenues, increased by 7.3 billion yen.

 As for expenses, fuel costs increased significantly year-on-year due to an increase insupply and the weak yen. Despite an increase in expenditures for new products andservices, we were able to minimize the increase in other expenses.
 Through these efforts, operating profit declined by 9.3 billion yen year-on-year to 22.0
billion yen.

6

International Passenger Operations (Operating Results)
International Passenger
1Q FY3/13
Passenger Revenue(JPY Bn)

1Q FY3/14

% y/y

95.9

98.9

+3.1%

ASK（MN seat km）

10,853

11,260+3.7%

RPK（MN passenger km）

7,961

8,180

+2.8%

Passengers（’000）

1,803

1,781

▲1.2%

L/F（%）

73.4%

72.6%

▲0.7ptYield（JPY）(1)

12.0

12.1

+0.4%

Unit Revenue（JPY）(2)

8.8

8.8

▲0.6%

53,18755,543+4.4%

Revenue perpassenger（JPY）(3)

Notes:
1. Unit Revenue=Passenger Revenue / ASK
2. Yield = Passenger Revenue / RPK
3. Revenue per Passenger = Passenger Revenue / Passengers

 International Passenger
Revenue:
JPY98.9Bn, y/y +3.1%
 Load Factor:
72.6%, y/y ▲0.7pt
 Revenue per passenger:y/y +4.4 %7 ASK and RPK of international flights increased by 3.7% and by 2.8% respectively fromlast year. As a result, load factor declined slightly to 72.6%, but remains strong as last year.
On the other hand, due to an increase in passengers on mid to long haul routes such as
Southeast Asia, as well as an increase in revenue per passenger of overseas passengers
to Japan due to the weak yen, yield and revenue per passenger increased by 0.4% and4.4% respectively year-on-year. Consequently, passenger revenue increased by 3.1% to98.9 billion yen.

7

International Passenger Operations (Changes of Revenue)
1st Quarter FY3/14

 Strong Demand on Southeast Asia:
Load Factor 71.9% （y/y +3.3%）+3.0Bn(+3.1%)
▲0.7

98.9

+3.7
- Stagnant China and Korea- Strong Southeast Asia

95.9

 JAL SKY SUITE 777:
Deployed on Narita=New York routefollowing ongoing services to
London- Weak Yen- Passenger Mix

1Q
FY3/13

Revenue per
Passenger

Number of
Passengers

1Q
FY3/148In the first quarter, demand on China and Korea routes was stagnant, while demand on
Southeast Asia routes was strong in terms of both load factor and unit revenue.
In May, we launched JAL SKY SUITE 777, which offers greater comfort and amenities inevery Class, to New York, following ongoing services to London. This contributed to
improving demand and yield of our Business Class.
As a result, international passenger revenue for the first quarter increased by 3.1% yearon-year to 98.9 billion yen.

8

Domestic Passenger Operations (Operating Results)
Domestic Passenger
1Q FY3/13

1Q FY3/14% y/y

Passenger Revenue(JPY Bn)

108.2

108.8

+0.5%

ASK（MN seat km）

9,097

9,444

+3.8%

RPK（MN passenger km）

5,425

5,531

+2.0%

Passengers（’000）

7,112

7,360

+3.5%

L/F（%）

59.6%

58.6%

▲1.1ptYield（JPY）(1)

20.0

19.7

▲1.4%

Unit Revenue（JPY）(2)

11.9

11.5

▲3.2%

15,224

14,783▲2.9%

Revenue perpassenger（JPY）(3)

Notes:
1. Unit Revenue=Passenger Revenue / ASK
2. Yield = Passenger Revenue / RPK
3. Revenue per Passenger = Passenger Revenue / Passengers

 Domestic Passenger
Revenue :108.8 Bn JPY, y/y +0.5%
 Revenue per passenger:y/y ▲2.9%
 Number of passenger: y/y
+3.5%

9

ASK and RPK increased by 3.8% and 2.0% respectively year-on-year. As a result, loadfactor declined slightly from the previous year to 58.6%.
Meanwhile, due to a strong demand of group passengers, yield and revenue perpassenger declined by 1.4% and 2.9% respectively. However, the number of revenue
passengers increased along with the increase in supply, and consequently, domestic
passenger revenue increased by 0.5% year-on-year to 108.8 billion yen.

9

Domestic Passenger Operations (Changes of Revenue)
1st Quarter FY3/14

 Network Expansion:+0.5Bn(+0.5%)

108.8

108.2

▲3.5

- Passenger Mix

1Q
FY3/13

Revenue per
Passenger

4.0

Tokyo (Haneda)=
Nagoya (Chubu)

ResumedOsaka (Itami) = Misawa,
Hakodate, Matsuyama
Sapporo=Niigata

Frequency
Increase

Osaka (Itami) = Fukuoka,
Hanamaki, Sendai, Oita,
Niigata, Miyazaki etc.

 Group Passenger Growth:Tie-up with Tokyo Disney Resort® 30th
anniversary- Prompt supply adjust- Other Measures

Number of
Passengers

New
Route

1Q
FY3/1410 In the first quarter, we expanded our domestic network significantly due to an increase indeparture and landing slots at Tokyo-Haneda airport and Osaka-Itami airport.
 When examining passenger mix, group passengers accounted for an especially large
margin mainly due to the tie-up with Tokyo Disney Resort ® 30th Anniversary.

 Meanwhile, due to the relative increase of group passengers, revenue per passenger
declined. However, by increasing flights and assigning aircraft efficiently, many customers
used our flights, and consequently, domestic passenger revenue increased by 0.5% yearon-year to 108.8 billion yen.

10

Major Operating Expense Items
Breakdown of Operating Expenses(JPY Bn)

1Q FY3/13 1Q FY3/14 Difference

% y/y

Fuel

61.6

68.3

+6.6

+10.7%

Landing fees

18.6

20.0

+1.4

+7.6%

Maintenance

6.9

9.6

+2.7

+39.3%

Sales Commissions(Air Transport)

5.0

5.4

+0.4

+7.9%

Aircraft Depreciation

15.0

14.6

▲0.3

▲2.4%

Aircraft Leases

7.8

7.7

▲0.0

▲0.5%

Personnel

56.4

58.4

+1.9

+3.4%

Other

83.7

87.7

+4.0

+4.8%

Total Operating
Expenses
ASK +3.8% y/y

255.3

272.0

+16.7

+6.5%

 Fuel cost increased by 6.6
Bn JPY due to an increasein supply and weak Yen

 Maintenance cost
increased by 2.7 Bn JPY
due to an increase inoutsourcing for interiorrenovation, and weak Yen.
 Personnel Costs increasedby 1.9 Bn JPY for theemployee bonus level.
 As a FX impact, operating
expenses increased by
15.9 Bn JPY.
11 Fuel costs increased by 10.7% from previous year caused by a weak yen and increase in
our supply.
Maintenance cost increased by 2.7 billion yen due to an increase in outsourcing for thecabin interior refurbishment, and weak yen.
 Personnel costs increased by 3.4%, due to an increase in bonus levels from the year
before.

11

Major Balance Sheet Items
Consolidated Balance Sheet Summary End of 1st Quarter FY3/14
End of FY2012
2013/3/31

End of 1Q FY3/14
2013/6/30

Difference

1,216.6

1,223.7

+7.0

347.9

340.4

▲7.5

160.1

149.2

▲10.8

Off-balance Sheet
Lease Payments

207.1

203.8

▲3.3

Shareholder’s Equity

565.0

551.4

▲13.5

Shareholder’sEquity Ratio(%)

46.4%

45.1%

▲1.4pt

0.3x

0.3x

▲0.0

▲0.3x

▲0.3x

▲0.0

（JPY Bn）

Total Assets
Cash and Deposits
Balance ofInterest-bearing Debt (1)D/E Ratio（x） (2)Net D/E Ratio（x） (3)Notes:
1. Accounts Payable-installment Purchase included
2. D/E Ratio ＝ (On-balance sheet Interest-bearing Debt) ÷(Shareholders' Equity)
3. Net D/E Ratio ＝ (On-balance sheet Interest-bearing Debt - Cash and Cash Equivalents) ÷ (Shareholders' Equity) The balance of interestbearing debt is reduced to149.2 Bn JPY after
repayment Shareholders' equity ratio
decreased by 1.4pt to45.1% for the payment ofdividend12 As we repaid lease debts, the balance of interest-bearing debt declined by 10.8 billion yen
year-on-year to 149.2 billion yen.
 The shareholder’s equity ratio decreased by 1.4 points from the previous period to 45.1%
due to payment of the dividend. As we posted the net profit in this quarter, we are moving
forward steadily towards achieving our equity ratio target of 50%, as set out in the MidTerm Management Plan.
 We will continue to accumulate capital in order to achieve our 50% target as quickly as
possible.
Thank you for your attention.

12

Major Cash Flow Items(JPY Bn)

1Q FY3/13

1Q FY3/14% y/y

Net income before income taxes andminority interests

30.4

20.9

▲9.4

Depreciation

20.1

19.6

▲0.4

Other

16.1

17.8

+1.6

66.6

58.4

▲8.2

▲25.8

▲25.8

+0.0

+0.4

+1.8

+1.3

▲25.3

▲23.9

+1.3

41.3

34.4

▲6.8

Repayment of Interest-bearing Debt (4)

▲11.4

▲10.8

+0.5

Other

▲7.9

▲30.8

▲22.9

▲19.3

▲41.6

▲22.3

Total Cash Flow (5)

21.9

▲7.2

▲29.1

EBITDA

51.5

41.7

▲9.7

EBITDAR

59.3

49.5

▲9.8

Cash Flow from Operating Activities
Capital Expenditure (1)OtherCash Flow from Investing Activities (2)Free Cash Flow (3)Cash Flow from Financing Activities

Notes:
1. Expense due to purchases of fixed assets
2. Exclude deposits and withdrawals from deposit accounts
3. Cash Flow from Operating Activities + Cash Flow from Investing Activities
4. Repayment of Long Term Debt + Repayment of Lease Debt
5. Cash flow from Operating Activities + Cash Flow from Investing Activities + Cash Flow from Financing Activities

13

TOPICS

1

《Supplemental Reference》
Impact from Fuel and Currency Markets
Hedging Ratio for Fuel Costs (As of End of 1Q FY3/14)
100%

Approx.
80%

80%

FUEL
60%

FX

Sensitivity for Fuel Costs(Without Hedging)

Crude Oil
(Change in 1 USD/bbl）

2.0 Bn JPY
Per Year

FX(Change in 1 JPY/USD)

2.5 Bn JPY
Per YearApprox.
40%

40%
20%

Approx.
Approx. 25%
15%

Approx. Approx.
5%

5%

0%
FY2013

FY2014FY2015Result and Assumptions
Singapore Kerosene (USD/bbl)
CIFJ (Crude Oil) (USD/bbl)
FX Rate (JPY/USD)

FY13 Plan

1Q FY3/13

1Q FY3/14

% y/y

127
114
95

130.9
124.3
81.4

118.4
111.1
99.0

▲9.5%
▲10.6%+21.6%
14

《Supplemental Reference》
Revenue of International Routes by Geographical segment
Passenger Revenue (% of the whole int’l revenue)(%)

1Q FY3/13

1Q FY3/14

Passengers

y/y(‘000)

1Q FY3/13

1Q FY3/14

y/yTrans Pacific

32.5%

33.0%

+0.5ptTrans Pacific

396

400

+1.0%

Europe

19.0%

19.0%

▲0.0ptEurope

161

157

▲2.3%

Asia/Oceania

36.0%

37.5%

+1.5ptAsia/Oceania

945

976

+3.2％

China

12.5%

10.5%

▲2.0pt

China

299

247

▲17.6%ASK(MN seat km)

1Q FY3/13

Load Factor
1Q FY3/14

y/y

(%)

1Q FY3/13

1Q FY3/14

y/yTrans Pacific

3,808

4,007

+5.2%

Trans Pacific

79.3%

77.7%

Europe

2,055

1,963

Europe

74.0%

75.3%

Asia/Oceania

4,157

4,424

▲4.5%
+6.4%

▲1.6pt+1.2ptAsia/Oceania

68.7%

70.6%

+1.9pt

832

864

+3.8%

China

67.7%

53.8%

▲13.9pt

China

RPK(MN passenger km)

1Q FY3/13

1Q FY3/14

y/yTrans Pacific

3,021

3,113

+3.0%

Europe

1,521

1,477

▲2.9%

Asia/Oceania

2,854

3,124

+9.5%

564

465

▲17.5%

China

15

《Supplemental Reference》
Number of Aircraft in Service
Number of Aircraft (Consolidated)
End of Mar/2013
2013/3/31
Owned

Boeing 777-200
Boeing 777-200ER
Boeing 777-300
Boeing 777-300ER
Large-sized Total
Boeing 787-8
Boeing 767-300
Boeing 767-300ER
Middle-sized Total
MD90
Boeing 737-400
Boeing 737-800
Small-sized Total
Embraer 170

Bombardier CRJ200
Bombardier D8-400
SAAB340B
Bombardier D8-300
Bombardier D8-100
Regional Total
TOTAL

Leased

15
11
7
13
46
7
16
14
37
2
14
18
34
12
9
9
9
1
4
44
161

End of Jun/2013
2013/6/30
Total

0
0
0
0
0
0
0
18
18
0
2
31
33
0
0
2
2
0
0
4
55

15
11
7
13
46
7
16
32
55
2
16
49
67
12
9
11
11
1
4
48
216

Owned

15
11
7
13
46
9
16
14
39
0
12
18
30
12
9
9
9
1
4
44
159

Leased

0
0
0
0
0
0
0
18
18
0
2
31
33
0
0
2
2
0
0
4
55

Changes
Total

15
11
7
13
46
9
16
32
57
0
14
49
63
12
9
11
11
1
4
48
214

+2
+2
▲2
▲2
▲4
▲2

16

Fly into tomorrow.

Contact:
Finance, Japan Airlines+81-3-5460-3068

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