JAPAN AIRLINES Co., Ltd.
Financial Results
MAR/2016（FY2015）

April 28th, 2016

CONTENTS
P.1

P.2

P.3

P.5

P.6

P.21

Overview of Mar/2016 Financial Results
Operating Profit

Operating Revenue（JPY Bn）（JPY Bn）

1,360

250

1,344.7
1,340▲8.0Bn（▲0.6%）

20%＋29.5Bn（+16.4%）

1,336.6

200

1,320

1,300

Mar/2015 Mar/2016

18%

14%
12%

Mar/2015
Full-Year

Operational Results・Fuel/FX Markets
Mar/2016
y/y

15.7%

13.4%

100

Mar/2016
Full-Year

209.1

16%

179.6

150

Mar/2015
Full-Year（OP Margin）

Mar/2016
Full-Year10%

 Operating profit was 209.1 billion
y/yyen due to an increase in domestic
passenger and decline in fuel prices,

ASK
Int’l flights+1.3%

Singapore Kerosene(USD/bbl)

103.5

60.0 ▲42.0%

Dom. flights▲1.2%

Dubai Crude Oil(USD/bbl)

87.6

Total

+0.2％

FX Rate (JPY/USD)

108.4

47.2 ▲46.1%  The operating profit margin was
15.7%, above our target of 10% or
120.5 +11.2%
more.

etc.,

1

Operating revenue decreased by 0.6% year-on-year to 1 trillion 336.6 billion yen.
Operating profit increased by 16.4% year-on-year to 209.1 billion yen.
When we announced our second-quarter financial results and Medium Term Management
Plan, we had forecast an operating profit of 204 billion yen for fiscal 2015, but we wereable to achieve an additional 5.1 billion yen in operating profit above our forecast owing tolower fuel prices and by increasing revenues and lowering costs.
The operating profit margin was 15.7%, and we achieved our financial target of 10% ormore for last fiscal year, too.

1-S

Dividend for Mar/2016
Dividend(1)

Mar/2016
Mar/2015

Net Income

New
Announcement

Dividend per share for FY3/16

Announcement on
January 29,2016

149.0 JPY Bn

174.4 JPY Bn

172.0 JPY Bn+1.3 JPY Bn▲0.4 JPY Bn－

150.3 JPY Bn

174.0 JPY Bn

172.0 JPY Bn

× 25%

× 25%

× 25%

Total amount for
dividend

37.7 JPY Bn

43.5 JPY Bn

43.1 JPY Bn

Total number ofshares issued

362.704 Mn

362.704 Mn

362.704 Mn

104.00 JPY

120.00 JPY

119.00 JPY

25.3%

24.9%

－

(2)

Income Tax-Deferred
Income available fordividend

Dividend per share
Payout ratio(1) Subject to annual general meeting approval(2) Net Income Attributable to Owners of the Parent

FY3/1616.00 JPY
increase

120.00JPY(+15.4%)
FY3/15104.00JPY

Dividend Calculation

2

As mentioned earlier, we will allocate approximately 25% of total net income
attributable to owners of parent after deducting income tax deferred as the total
dividend amount. Therefore, we will pay 120 yen per share for fiscal 2015, which isan increase of 16 yen from the previous fiscal year.

2-SProgress of Management Targets
Targets

Progress

Flight Safety
Achieve Zero Aircraft Accidents1 andSerious Incidents2

FY3/133

FY3/14

FY3/15

FY3/163

Aircraft Accidents

1

0

2

1

Serious Incidents

2

1

0

3

FY3/13

FY3/14

FY3/15

FY3/16

Customer
Loyalty5

3rd

1st

1st

1st

Word of Mouth6

2nd

2nd

1st

2nd

Customer
Loyalty5

6th

6th

3rd

5th

Word of Mouth6

3rd

2nd

3rd

3rd

FY3/13

FY3/14

FY3/15

FY3/16

Indicator

Customer Satisfaction
Achieve “No. 1 in Customer
Satisfaction4” by Mar/2017

Indicator
Int’l

Dom.

FinanceAchieve “10%+ operating profit marginfor 5 consecutive years and 50%+
shareholders’ equity ratio at the end of
Mar/2017”
1.
2.
3.
4.
5.
6.

Indicator
Ope. Profit Margin

15.8%

12.7%

13.4%

15.7%

Shareholders’ equity ratio

46.4%

51.5%

52.7%

53.4%

Fatal or serious human injury as a result of aircraft operations, aircraft crash, collision or fire, damage which needs major repair works, etc.
An incident involving circumstances that there was a high probability of an accident, such as overrunning and emergency evacuation.
Cases are delisted which problems of our operations were not pointed.
Customer Loyalty rate, Word by Mouth rate: JCSI values (Japanese Customer Satisfaction Index) announced by Japan Productivity Center, Service Productivity and Innovation for Growth
Customer Loyalty: The customer’s intention to receive the service next time
Word of Mouth: The customer’s intention to share the experience with family, friends or other people through blogs, etc.

3I will explain the progress we have made with the three management targets set out inthe Medium Term Management Plan.
As for safety, we had one aircraft accident and three serious incidents in fiscal 2015.
In fiscal 2016, we aim for zero aircraft accident and zero serious incident and will
maintain flight safety, which is the foundation for the JAL Group.
Regarding customer satisfaction, our international passenger service ranked first in the
Repeat Intention Rate for the third consecutive year, but it could not maintain its ranking
in the Recommendation Intention Rate. Our domestic passenger service could notelevate its ranking in neither the Repeat Intention Rate nor the Recommendation
Intention Rate. In fiscal 2016, we will do our best to improve our services and rank No. 1
in customer satisfaction.
Our financial targets are to achieve an operating profit margin of 10% or above for fiveconsecutive years and an equity ratio of 50% or above by the end of fiscal 2016.
3-S

Management Topics
Route Network, Products and Services
 Int’l：Boeing 777-200ER revamped with ” JAL SKY SUITE Ⅲ”
from July 2016 to be introduced on the route in order JAL Express Tag Service for domestic flights will be introduced at
Sapporo, Osaka, Fukuoka and Okinawa airport following Haneda.

Tokyo/Haneda=Bangkok, Singapore, Honolulu
 Dom.：Introduction of our new products ”JAL SKY NEXT” will becompleted during FY3/17(JAL SKY SUITE Ⅲ

Boeing 777-200ER)

Promoting Women’s Active Participation, CSR Activities
 JAL was selected as “Health and Productivity Brand 2016”
and ”Nadeshiko Brand 2016” by the Ministry of Economy Trade JAL and Aeon signed an agreement of emergency transportation.
 Support victims of The 2016 Kumamoto Earthquake.

and Industry, and Tokyo Stock Exchange for 2 consecutive years.

※announced on 21/01/2016※announced on 16/03/2016（Special designed aircraft operated from 29April to support
Kumamoto and Oita area struck by the earthquake ）4In our route network, products and services, we revamped our international 777-200ER
aircraft into the SKY SUITE Ⅲ (three), and will progressively introduce them on
Bangkok, Singapore and Honolulu routes from July 2016. As a result, flights on almost
all of our medium- and long-haul routes will be operated with SKY SUITE aircraft.
Also, JAL Express Tag Service will be available for use at Sapporo, Osaka, Fukuoka
and Okinawa airports, following Haneda airport.
In recognition of contributing to career development of female staff, we were selected
as a Health and Productivity Management Brand 2016 and Nadeshiko Brand by the
Ministry of Economy, Trade and Industry and the Tokyo Stock Exchange, as in theprevious year.
We have been cooperating in supporting victims of the 2016 Kumamoto Earthquake,
which struck Kyushu Area on April 14.

4-S

Mar/2017 Earnings Forecast
Operating Revenue

Operating Profit（JPY Bn）
1,360（OP Margin）（JPY Bn）
220

1,336.6

1,340+6.3JPY Bn（+0.5%）▲8.1JPY Bn

1,343.0

209.1
200

1,320
1,300

Mar/2016
Results

Mar/201720%

180

Forecast（▲3.9%）

201.0

15.7%

Mar/2016
Results

15%

15.0%
10%

Mar/2017
Forecast

Operational Preconditions・Fuel/FX Markets
Mar/2016
Results

Mar/2017
Forecast y/y
ASKInt’l flights▲0.6%

Dom. Flights

▲0.0%

Total

▲0.3%

Mar/2017
Forecasty/ySingapore Kerosene(USD/bbl)

60.0

50.0

▲16.7%

Dubai Crude Oil(USD/bbl)

47.2

36.0

▲23.7%FX Rate (JPY/USD)

120.5

123.0

+2.1%

※FY3/17 Forecast is not changed from an announcement on 18 Feb .

5

We forecast operating revenue to increase by 6.3 billion yen to 1 trillion 343 billion yen,and operating profit to decrease by 8.1 billion yen to 201 billion yen. We project lower
earnings on higher revenues, but will put forth group-wide efforts to achieve higher
earnings led by higher revenues.
The operating profit margin is estimated at 15.0%, and we expect to achieve our financial
target of 10% or above again in the fiscal year ending March 31, 2017.
We have not changed our earnings forecast for the fiscal year ending March 31, 2017from the one announced on February 18, 2016.

5-S

Overview of Consolidated Financial Results
Consolidated Financial Results(JPY Bn)

Mar/2015

Mar/2016

y/y

4Q(Jan-Mar)
Mar/2016 (5)y/y1,336.6 billion yen, ▲0.6%
y/y.

1,344.7

1,336.6

▲0.6%

313.2

1,196.2

1,205.2

+0.7%

281.9

▲1.5%

1,165.0

1,127.4

▲3.2%

274.0

▲2.4%

1,034.6

1,014.3

▲2.0%

246.7

▲0.8%

179.6

209.1

+16.4%

39.1

▲5.5%

161.5

190.8

+18.1%

35.2

▲6.5%

Net Income(1)

13.4%
175.2
149.0

15.7%
209.2
174.4

+2.3pt
+19.4%+17.1%

12.5%
38.7
30.7

ASK (MN seat km)

84,00384,196+0.2%

20,682 The operating profit margin▲0.3ptwas 15.7%.
+2.5%
+4.8%
 Ordinary income was 209.2
billion yen, +19.4% y/y.
+0.4%

RPK (MN passenger km)

60,10362,411+3.8%

15,190+2.9%

EBITDA Margin (%) (2)

19.8%

22.3%

+2.5pt19.8%

 Net income was 174.4
billion yen, +17.1% y/y.
+0.3ptEBITDAR Margin (%) (3)

21.8%

24.0%

+2.3pt21.5%▲0.3pt

8.9

9.3

9.6

12.3

12.0

+0.5
▲0.3

+0.5
▲0.1

Operating Revenue
Air Transportation Segment

Operating Expense
Air Transportation Segment

Operating Profit
Air Transportation Segment

Operating Profit Margin(%)
Ordinary Income

UNIT COST (Yen) (4)Incl. Fuel
Notes: 1.
2.
3.
4.
5..

11.9

Net income attributable to owners of the parent
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 costs, transactions (revenues / expenses) with a related company)/ASK
The results for 4Q (January to March) are calculated by deducting the results of 3Q (April to December) from full-year(April to March)▲2.8%

 Operating revenue was Operating profit was 209.1
billion yen, +16.4% y/y.

6Operating revenue decreased by 0.6% year-on-year to 1 trillion 336.6 billion yen.
Operating expense decreased by 3.2% year-on-year to 1 trillion 127.4 billion yen,mainly due to a sharp drop in fuel prices. We will continuously strive to maximize
revenues and minimize expenses.
As a result, operating profit for fiscal 2015 was 209.1 billion yen, operating profit
margin was 15.7%, and EBITDAR margin was 24.0%.

6-SChanges in Operating Profit
Mar/2016 Full-Year(JPY Bn)+29.5Bn
Impact From Currency Market ▲21.1Bn
Revenue
Cost
Fuel
Ex. Fuel

▲6.0
▲1.3%

▲18.0%+54.3

Domestic
Passenger Cargo & Mail

+13.7
+2.8%

Other
Revenue

▲6.8

+13.9

▲6.9%

+7.8%

179.6

Mar/2015
Full-Year

Fuel＋9.8Bn▲30.9Bn▲20.2Bn▲10.7BnASK y/y ： +0.2%
RPK y/y ： +3.8%

Int’l
Passenger

Aircraft
Depreciation
Maintenanceand▲7.3 Leases Personnel(+16.4%)

▲1.0
▲1.1%

▲9.7

Other Cost

▲4.1%

▲22.2

Expenses ofSales oftraveltravelAgency,Agency,Incidental
Incidental
Business(※) Business(※)▲5.6%+19.3%

▲22.8

+23.5

▲18.3%+22.1%“Other cost” includes
・Landing andnavigation fees
・sales commission
・other209.1（（※）includes the resale offuel to a related company

Revenue ▲8.0Bn

Expenses +37.5Bn

Mar/2016
Full-Year 7In revenue, domestic passenger operations enjoyed strong demand, but bothinternational passenger and international cargo revenues decreased to result in a declineof total 8 billion yen revenue from the previous year.
International passenger revenue decreased by 6 billion yen due to the decrease in fuelsurcharge revenue, though passenger numbers grew due to strong inbound demand.
Domestic passenger revenue increased by 13.7 billion yen year-on-year, as passenger
numbers grew due to changes in customer mix through revenue management andmeasures to stimulate demand.
Expenses declined by 37.5 billion yen year-on-year due to a sharp drop in fuel prices.

7-S

International Passenger Operations (Operating Results)
International Passenger
Mar/2015

Mar/2016y/y

4Q(Jan-Mar)
Mar/2016(1)

454.8

448.7

▲1.3%

102.7

ASK (MN seat km)

47,69648,327+1.3%

11,979

RPK (MN passenger km)

36,10938,069

+5.4%

9,318

Passenger Revenue(JPY Bn)

Passengers (’000)
L/F (%)
Yield (JPY)(2)
Unit Revenue (JPY)(3)Revenue per
Passenger (JPY)(4)

7,793

8,080

+3.7%

75.7%

78.8%

+3.1pt

12.6

11.8

▲6.4%

2,013
77.8%

y/y

 Passenger Revenue was 448.7

billion yen, 6.0 billion yen
declined y/y basis.
▲5.6%
 ASK was up 1.3% and RPK+1.9%
was up 5.4% y/y, resulting in
L/F 78.8%, up 3.1pt.

+3.5%

+1.4%
+1.1ptFactors of changes in Revenue per
Passenger(estimate)
Fuel
Surcharge

FX/Net Unit
Price, etc.

Total

11.0 ▲8.7%

9.5

9.3

▲2.6%

8.6 ▲7.4%

58,36255,537▲4.8%

51,042 ▲6.9%

▲5%

▲11%

Notes:
1. The results for 4Q (January to March) are calculated by deducting the results of 3Q (April to December) from Full-Year (April to March)
2. Yield = Passenger Revenue / RPK
3. Unit Revenue=Passenger Revenue / ASK
4. Revenue per Passenger = Passenger Revenue / Passengers+6%8ASK on international routes increased by 1.3% year-on-year and RPK increased by 5.4%.
As a result, the load factor rose by 3.1 percentage points to 78.8%.
Revenue per passenger decreased by 4.8%, but as seen in the chart in the lower rightcorner, taking into account that unit revenue declined by approximately 11% due to thedecrease in fuel surcharge revenue, unit revenue is calculated to have risen around 6%
excluding fuel surcharge.

8-S

International Passenger Operations (Change in Revenue)
Mar/2016 Full-Year▲6.0Bn(▲1.3%)(JPY Bn)

454.8

448.7
▲21.5

 Although revenue per passenger
declined due to a decrease in fuelsurcharge, revenue management
and expansion of JAL SKY SUITE
contributed to an increase in L/F
and net unit price.

+15.4

 Inbound demand grew, mainly on
・Fuel Surcharge（▲）
・FX（＋）
・Net Unit Price （＋） etc.

Mar/2015
Full-Year

Revenue per
Passenger

North America, South East Asia
and China routes.

・Strong demand for
inbound passengers

Number of
Passengers

Mar/2016
Full-Year9When examining international passenger revenue by factor, the decrease in fuelsurcharge revenue drove down revenue by 21.5 billion yen, but net unit revenue
increased through revenue management as shown by the arrow on the right on page 8.
Passenger numbers uplifted revenue by 15.4 billion yen due to thriving inbound demand,
mainly on North America, Southeast Asia and China routes.
As a result, international passenger revenue decreased by 6 billion yen year-on-year to448.7 billion yen.

9-S

Domestic Passenger Operations (Operating Results)
Domestic Passenger
Mar/2015
Passenger Revenue

Mar/2016y/y

4Q (Jan-Mar)
Mar/2016 (1)

y/y

487.5

501.2

+2.8%

117.1

+2.3%

ASK (MN seat km)

36,30635,869

▲1.2%

8,702

▲1.6%

RPK (MN passenger km)

23,99324,341

+1.5%

5,872

+2.1%

Passengers (’000)

31,644

32,114

+1.5%

7,736

+2.0%

(JPY Bn)

66.1%

67.9%

+1.8pt67.5%+2.5ptYield (JPY) (2)

20.3

20.6

+1.3%

19.9

+0.1%

Unit Revenue (JPY) (3)

13.4

14.0

+4.1%

13.5

+4.0%

15,407

15,609+1.3%

15,135+0.3%

L/F (%)

Revenue per
Passenger (JPY) (4) Passenger revenue was501.2 billion yen, up 2.8%y/y.
 ASK was ▲1.2% while
RPK was +1.5% y/y
resulting in L/F 67.9%, up
1.8pt.
 Yield and revenue perpassenger increased by
1.3% y/y.

Notes:
1. The results for 4Q (January to March) are calculated by deducting the results of 3Q (April to December) from Full-Year (April to March)
2. Yield = Passenger Revenue / RPK
3. Unit Revenue=Passenger Revenue / ASK
4. Revenue per Passenger = Passenger Revenue / Passengers

10ASK on domestic routes decreased by 1.2% year-on-year, but RPK increased by 1.5%.
As a result, the load factor increased by 1.8 percentage points year-on-year to 67.9%.
Through revenue management and measures to boost demand, yield increased by 1.3%
year-on-year and unit revenue increased by 1.3%. As a result, domestic passenger
revenue increased by 2.8% year-on-year to 501.2 billion yen.

10-S

Domestic Passenger Operations (Change in Revenue)
Mar/2016 Full-Year(JPY Bn)+13.7Bn(+2.8%)
501.2
+7.3

487.5

+6.4

 Changes in customer mix throughrevenue management
・Well-reputed JAL SKY NEXT・Increase of individual passengers
 High-yield passenger percentage
increased in holiday season• Boost demand• Inbound Tourists, etc.

 Increase in passenger numbers
through measures to boost demandetc..
・New Ultra Sakitoku, special
discount fare (Apr. 2015~)

・Revenue management, etc.

Mar/2015
Full-Year

Revenue per
Passenger

Number of
Passengers

Mar/2016
Full-Year・Increase in non Japanese tourists
visiting Japan.

11By factor, revenue per passenger uplifted revenue by 6.4 billion yen year-on-year due tochanges in customer mix through revenue management.
Passenger numbers uplifted revenue by 7.3 billion yen year-on-year due to the new
Ultra Sakitoku discount fare and increasing inbound passengers demand, although ASK
decreased by 1.2% year-on-year.

11-SMajor Operating Expense Items
Operating Expenses(JPY Bn)differencey/y

Although increase in somecost items due to the weak
yen and service
enhancements, we will
maintain cost reduction
initiatives.

Mar/2016

difference

282.5

228.1

▲54.3

▲19.3%

47.4▲12.0 ▲20.2%

Landing andnavigation fees

81.6

82.2

+0.6

+0.7%

20.0

▲0.2

▲1.4%

Maintenance

40.6

47.9

+7.3

+18.0%

10.3+0.5+5.5%  Fuel costs decreased by

Fuel

y/y

4Q
(Jan-Mar)
Mar/2016 (1)Mar/2015

54.3 billion yen due tolower fuel prices(including
increase of 20.2 billion yen
due to the weak yen).

Sales
Commissions(Air Transport)

24.3

24.4

+0.1

+0.7%

5.9

▲0.2

▲4.8%

Aircraft
Depreciation

67.4

72.2

+4.7

+7.1%

18.4

+1.3

+7.7%

Aircraft Leases

27.2

23.4

▲3.7

▲13.7%

5.5▲2.0 ▲27.3%

Personnel

240.2

249.9

+9.7

+4.1%

62.9

+1.6

Expenses of travel
agency / Incidental
business etc （2）

106.6

83.1

▲23.5

▲22.1%

19.0▲5.4 ▲22.2%  Personnel costs increased

Other

294.3

315.8

+21.4

+7.3%

84.3

+9.7

+13.1%

1,165.0

1,127.4

▲37.5

▲3.2%

274.0

▲6.8

▲2.4%

Total Operating
Expenses

ASK y/y ：+0.2%

+2.7%



Increase in maintenancecosts due to the weak yen.

by 9.7 billion yen, due toincrease in wages,
bonuses and exchange
rates, etc.

Notes:.
1. The results for 4Q (January to March) is calculated by deducting the results of 3Q (April to December) from full year (April to March)
2. Includes the resale of fuel to a related company

12Fuel costs decreased by 54.3 billion yen to 228.1 billion yen. We will explain in detail on page 14.
Maintenance costs increased, mainly due to the weaker yen.
Personnel costs increased by 9.7 billion yen year-on-year due to increases in basic wage andbonuses, exchange rates, and such.

The decrease in costs relating to travel agency and trading is attributed to a significant decrease in
trading of aircraft parts by a maintenance subsidiary, and the change to net accounting last fiscal
year for reselling of fuel to a related airline. For FY2016 onwards, there would be no such changes.

Other costs increased by 21.4 billion yen, mainly due to cost increases for service enhancements
and the weaker yen.

Operating expenses on the whole decreased by 3.2% year-on-year to 1 trillion 127.4 billion yen.
We will continue our efforts to reduce costs.

12-S

Maximizing Profit per ASK
To build the foundation for stable business operations in the medium and long term and enhanceservices and products, we will proactively assign resources to human resources andproducts and services to maximize profit per ASK
（JPY）

20

104

15
12.5

10

95

8.5

12.7

8.8

13.7

12.9

8.9

9.3

105

100
ユニットレベニュー
Air operation revenue per （Left)
ASK
95

ユニットコスト
Unit Cost （Left）
ユニットプロフィット
Profit per ASK （Right）

5

90

0

85
FY3/13

FY3/14

FY3/15（VS FY11）（Figurein FY2011 as 100）

FY3/16

Air operation revenue per ASK =（Air operation revenue － Fuel surcharge － Revenue from fuel resale to a related company）/ASK
Unit Cost=（Air operation expenses － Fuel costs － Fuel costs for resale to a related company ）/ASKProfit per ASK= (Air operation revenue per ASK) － (Unit Cost)

13

As we have emphasizing service quality (as we have not been increasing ASK somuch), we have focused on expenditures to improve services for the customers, andUnit Cost has increased. However, we will pursue efforts to improve cost-efficiency.
Air transport revenue per ASK excluding fuel surcharge revenue and fuel reselling
revenue increased beyond the increase in Unit Cost, and we achieved an increase inprofit per ASK. Profit per ASK for the fiscal year ended March 31, 2016 is 104, with
the index set to 100 in fiscal 2011.

13-S

Impact of Fuel and FX Markets
Hedge Ratio of Fuel Costs(As of End of FY Mar/2017)

Transition of Fuel Cost by factors
300
250▲103.8

60%

+29.2

FX
+20.2

40%

(▲19.3%)FX

Approx.
Approx.

50%

40%

20%

▲54.3Bn
Mar/2015

Fuel

80%

228.1

150

(JPY Bn)

Volumeincrease /Hedging etc.,

282.5

200

100

100%

MarketApprox.

Approx.

10%

10%

Approx.

Approx.

5%

5%

0%

Mar/2016

Mar/2017

Mar/2018

Mar/2019

Fuel / FX Markets
Mar/2015

Singapore Kerosene(USD/bbl)
Dubai Crude Oil(USD/bbl)
FX Rate (JPY/USD)

103.5
87.6
108.4

Mar/2016

y/y60.0 ▲42.0%
47.2 ▲46.1%
120.5+11.2%

Sensitivity for Fuel Costs

Mar/2017
Forecast

50.0
36.0
123.0

(Without Hedging) Mar/2017

Crude Oil
(Change in 1 USD/bbl）

FX(Change in 1 JPY/USD)

2.7 JPY Bn
Per Year
1.0 JPY Bn
Per Year
14

The chart in the upper left corner shows the factors for decrease in fuel costs.
Although the fuel costs decreased by 103.8 billion yen year-on-year due to lower fuelprices, the weaker yen drove fuel costs upward by 20.2 billion yen, and loading volume andgains and losses on hedging, by 29.2 billion yen. As a result, fuel costs decreased by 54.3
billion yen from the previous year.
The hedging ratio of fuel costs is shown in the chart in the upper right corner.
The hedging ratio of foreign currency for fuel costs for fiscal 2016 was estimated to be
60% when we announced the Medium Term Management Plan, but as a result ofrecalculation, it is estimated to be 50％.

14-S

Major Balance Sheet Items
Consolidated Balance Sheet Summary as of Mar/2016(JPY Bn)

End of
Mar/2015

End of
Mar/2016

difference

1,473.3

1,578.9+105.5

Cash and Deposits

364.9

420.3

+55.3

Balance ofInterest-bearing Debt (1)

100.5

92.6

▲7.9

Future Rental Expenses
under Operating Leases

125.0

96.9

▲28.1

Shareholders’ Equity

776.4

843.0

+66.6

Shareholders’Equity Ratio(%)

52.7%

53.4%

+0.7ptD/E Ratio（x） (2)

0.1x

0.1x

▲0.0x

ROE（%） (3)

20.3%

21.5%

+1.2pt

ROA（%） (4)

12.8%

13.7%

+0.9ptTotal Assets

Notes:
1. Accounts Payable-installment Purchase included
2. On-balance sheet Interest-bearing Debt / Shareholders' Equity
3. (Net Income Attributable to owners of the parent ）/（average of shareholder’s equity at beginning and end of fiscal year）
4. (Operating Profit) / (Average of Total Assets at beginning and end of fiscal year) The balance of interestbearing debt decreased by
7.9 billion yen to 92.6 billion
yen as a result of
repayment.
 Shareholders’ Equity Ratio
was 53.4%.

15

The balance of interest-bearing debt decreased by 7.9 billion yen from the previous fiscal
year-end to 92.6 billion yen after repaying long-term loans and lease obligations.
Off balance unexpired lease fees decreased by 28.1 billion yen from the previous year to
96.9 billion yen.
The equity ratio was 53.4%, up 0.7 percentage points from the previous year, as a resultof posting net profit. As we changed the preconditions of calculating projected benefit
obligations, retirement benefit obligations increased by approximately 50 billion yen, andnet assets decreased accordingly.

15-S

Major Cash Flow Items（Results）(JPY Bn)

Mar/2015

Difference

Mar/2016

Net Income Before Income Taxes
and Non-controlling Interests

169.9

207.3

+37.4

Depreciation and Amortization

85.8

88.5

+2.6

5.3

16.4

+11.1

261.1

312.3

+51.2

▲198.6▲210.6

▲12.0

▲0.6

3.4

+4.0

▲199.2▲207.2

▲7.9

61.8

105.1

+43.2

Repayment of Interest-bearing Debt (4)

▲51.1

▲33.3

+17.7

Cash Dividend, Other

▲16.2

▲16.2

▲0.0

Cash Flow from Financing Activities

▲67.3

▲49.6

+17.6

Total Cash Flow (5)

▲5.4

55.5

+60.9

EBITDA

265.5

297.7

+32.1

EBITDAR

292.7

321.1

+28.4

Other

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

16Cash flow from operating activities increased by 51.2 billion yen year-on-year to 312.3
billion yen.
Cash flow from investing activities shows a cash outflow of 207.2 billion yen, resulting in
an increase of 7.9 billion yen year-on-year.
Cash flow from financing activities shows a cash outflow of 49.6 billion yen for repaying
interest-bearing debt and paying dividends, to result in a cash inflow of 55.5 billion yen in
total.

16-S

Mar/2017 Earnings Forecast (Consolidated)
Operational Preconditions

Consolidated Financial Results

Mar/2016
Results

Mar/2017
Forecast

Int’l

+1.3%

▲0.6%

+0.3%

Doms

▲1.2%

▲0.0%

+1.7

+0.3%

TOTAL

+0.2％

▲0.3%

85.0

▲6.5(3)

▲7.2%

+5.4%

+1.2%

295.0

305.0

+9.9

+3.4%

Doms

+1.5%

▲0.6%

1,127.4

1,142.0

+14.5

+1.3%

TOTAL

+3.8％

+0.5%

FUEL

228.1

202.0

▲26.1

▲11.5%

Other Costs

899.3

940.0

+40.6

+4.5%

209.1

201.0

▲8.1

▲3.9%

Mar/2017
Forecast

difference

1,336.6

1,343.0

+6.3

+0.5%

Int’l Passenger

448.7

450.0

+1.2

Dom.
Passenger

501.2

503.0

Cargo and Mail

91.5

Other

Mar/2016
Results(JPY Bn)
Revenue

Expenses

Operating Profit
Operating Profit
Margin(%)

15.7%

y/y

RPK* Int’l* y/yMar/2016
Results

Mar/2017
Forecast

Singapore Kerosene(USD/bbl)

60.0

50.0

15.0%

▲0.7pt▲7.8%

Dubai Crude Oil(USD/bbl)

47.2

36.0

FX (JPY/USD)

120.5

123.0

Ordinary Income

209.2

193.0

▲16.2

Net Income (1)

174.4

192.0

+17.5(4)+10.0%

9.3

9.8

+0.5

-

Unit Cost (JPY) (2)ASK*

Note: 1. Net income attributable to owners of the parent
2. Unit Cost = Air Transportation Segment Operating Cost (excluding fuel costs etc.) / ASK
3. Includes the 8.0 billion yen decrease by offsetting international cargo sales commissions
4. Due to application of new tax effect accounting guideline, we expect to report about 30.0 billion yen of income tax deferred at the end of Mar/2017. However, income tax deferred to be deducted fromthe calculation of dividend.

17As explained earlier, we estimate operating revenue to increase by 6.3 billion yen to 1 trillion 343
billion yen for the fiscal year ending March 31, 2017.

Operating profit is estimated to decrease by 8.1 billion yen to 201 billion yen, and ordinary income todecrease by 16.2 billion yen to 193 billion yen. However, we will continuously put in efforts throughout
the JAL Group to achieve higher earnings on higher revenues.

Net income is projected to increase by 17.5 billion yen to 192 billion yen by posting income tax
deferred.

Regarding market assumptions, we expect 50 U.S. dollars per barrel for Singapore kerosene, and an
exchange rate of 123 yen per U.S. dollar.

17-SChanges in Operating Profit/ Forecast Mar/2017(JPY Bn)

Impact From Currency Market ▲2.5Bn＋0Bn▲2.5Bn▲2.5Bn▲0Bn

Revenue
Cost
Fuel
Ex. Fuel▲8.1Bn（▲3.9%）
+26.1

209.1

+1.2

+1.7

▲6.5

▲40.6

+9.9

201.0

Mar/2016

Int’lDomestic

Full-Year

Passenge

Passenger

Revenue

Cargo & Mail

+6.3 Bn

Other Revenue

Fuel

Other Cost

Mar/2017(Excl. Fuel)

Full-Year

Expenses ▲14.5 Bn
18

We will strive to increase revenues by raising unit revenue of international and domestic
passengers, although we may see a decrease in fuel surcharge revenue.
As for expenses, fuel costs are expected to decrease by 26.1 billion yen, but personnel
costs are projected to increase by 21 billion yen year-on-year, as we will make focusedinvestments to strengthen our basis for growth to achieve sustainable growth. As a result,costs excluding fuel costs are expected to increase by 40.6 billion yen.
Operating profit for the fiscal year ending March 31, 2017 is estimated to decrease by 8.1
billion yen year-on-year to 201 billion yen, but we will continue to strive to improve ourearnings.

18-S

Mar/2017 Earnings Forecast (Consolidated Balance Sheet)
We aim to improve our credit rating, maintain shareholder’s equity ratio of 50% or above, andincrease financial stability.
Balance Sheet（JPY Bn）
Total Assets

4.

End of
Mar/2016
Results

1,578.9

End of
Mar/2017
Forecast

1,761.0

Diff.

+182.0

Balance ofInterest-bearing
debts

92.6

88.0

▲4.6

Shareholders’Equity843.0

1,035.0+191.9

Shareholders’Equity Ratio(%)

53.4%

58.8%(3)+5.4ptROE (1)

21.5%

20.4%

▲1.1ptROA (2)

1.
2.
3.

Fundamental Capital Policy

13.7%

12.0%

▲1.7ptSafetyAccumulate retained earnings to
prepare against risks
Maintain shareholders’ equity
ratio at a safer level.

Increasefinancingcapability

Improve credit rating.
To aim for “single A flat” (4)Capitalefficiency

Achieve capital efficiency
exceeding cost of shareholders’equity. Maintain ROE at 10% or
above

Return toshareholders

Consider increasing return toshareholders on building a solid
financial foundation(Net profit attributable to owners of the parent）/（average of shareholder’s equity at beginning and end of fiscal year）(Operating profit ) / (average of total assets at beginning and end of fiscal year)
Due to application of new tax effect accounting guideline, we expect to report about 30.0 billion yen of income tax deferred at
the end of Mar/2017.
Credit rating by Rating and Investment Information, Inc., Japan Credit Rating Agency, Ltd.

19

Interest-bearing debt is seen to decrease by 4.6 billion yen to 88 billion yen at the end of
fiscal 2017 after repaying lease obligations and long-term loans.
Shareholders’ equity is estimated to reach 1 trillion 35 billion yen, as we expect to post
approximately 30 billion yen in income tax deferred at the end of fiscal 2016. As a result,the equity ratio is expected to rise up to 58.8%.

19-S

Mar/2017 Earnings Forecast (Cash Flow)
Make relevant capital investments based on strict investment discipline.
Secure return on investment and maximize Free Cash Flow
Cash Flow
Mar/2016
Results

Mar/2017
Forecast

Cash Flow fromOperating Activities

312.3

268.0

▲44.3

Cash Flow from
Investing Activities 1▲207.2▲243.0

▲35.7

105.1

25.0

▲80.1

（JPY Bn）

Free Cash Flow 1
Cash Flow from
Financing Activities

1.

Use of cash flows（Mar/2017 ）
Diff.

▲49.6

▲50.0

▲0.3

EBITDA

297.7

298.0

+0.2

EBITDAR

321.1

318.0

▲3.1

Exclude deposits and withdrawals from deposit accounts（JPY Bn）
300

268.0

200

100

Cash flowfromoperatingactivities

Aircraft Investments (newaircraft & spare parts), groundfacilities, and sales of assets etc.

243.0
Cash flowfrominvestingactivities

Free CashFlow（FCF）

43.5

25.0

Mar/2016
Dividend

0

Image of Aircraft Investment* If FOREX remains JPY123/USD

FY15
FY3/16

FY16
FY3/17

FY17
FY3/18

FY18
FY3/19

Utilization of Cash(repayment ofdebt etc.)20 Cash flow from operating activities is seen to decrease by 44.3 billion yen year-on-year due to an increase incorporate tax payment, and shows a cash inflow of 268 billion yen. In cash flow from investing activities, we will betaking delivery of many aircraft in fiscal 2016 and expect an increase in expenditures of 35.7 billion yen year-onyear, resulting in a cash outflow of 243 billion yen.

 As a result, free cash flow is projected to decrease by 80.1 billion yen compared to the year before, and amount to
25 billion yen.

 In the fiscal year ending March 31, 2017, free cash flow will be less than total dividend. But we will strictly control
cash flows so that from next fiscal year we can cover dividends, repayment of loans, and funds for strategic
investments through free cash flow.

 For your reference, at the end of the material, we have provided results of international passenger revenue bymajor routes, a list of aircraft in our fleet, and our earnings forecast of our international and domestic passenger
businesses for the fiscal year ending March 31, 2017. We would appreciate it if you could refer to the information.
20-SFly into tomorrow.

Finance & Investor Relations, Japan Airlines

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

Revenue ratio

Mar/2016

4Q(JanMar)
Mar/2016

Mar/2015

+3.7%

+4.8%

35.5%

38.0%

37.0%

Trans Pacific

Europe▲11.4%▲17.4%

16.5%

15.0%

12.0%

EuropeAsia/Oceania

▲1.1%

▲8.2%

36.5%

36.0%

39.0%

China

▲3.5%

▲12.1％

11.5%

11.0%

12.0%

(%)
Trans Pacific

4Q(JanMar/2016
Mar)
Mar/2016(‘000)

Mar/2015 Mar/2016

1,868

2,015

635

Asia/Oceania
China

4Q(JanMar)
Mar/2016

y/y

495

612

+7.9%
▲3.7%

129

+8.7%
▲7.7%

4,033

4,160

+3.1%

1,058

▲0.6%

1,256

1,292

+2.9%

330

+1.8%

ASK
(MN seat km)

y/y

Load Factor
4Q(JanMar)
Mar/2016

Mar/2015 Mar/2016y/yTrans Pacific

18,21919,615

4,941

Europe

7,730

7,405

+7.7%
▲4.2%

Asia/Oceania

18,21917,884

China

3,527

3,421

y/y

(%)

Mar/2015 Mar/2016

Trans Pacific

80.0%

80.3%

1,615

+9.0%
▲9.0%

Europe

75.3%

▲1.8%

4,533

▲1.6%

Asia/Oceania

▲3.0%

889

+6.9%

China

y/y

4Q(JanMar)
Mar/2016

y/y

78.3%

+0.2pt74.9%+0.3pt▲0.4pt72.4%+0.2pt

73.4%

80.3%

+6.9pt

80.8%

66.5%

70.8%

+4.3pt69.3%+3.2pt▲3.5ptRPK(MN passenger km)

Mar/2015 Mar/2016

Trans Pacific

14,574

15,742Europe5,819

Asia/Oceania
China

y/y

4Q(JanMar)
Mar/2016

y/y

3,868

5,545

+8.0%
▲4.7%

1,170

+9.2%
▲8.8%

13,371

14,359

+7.4%

3,662

+2.4%

2,344

2,421

+3.3%

616

+1.8%

21

《Supplemental Reference》
Number of Aircraft Mar/2016
End of Mar/2015
Owned

LeasedEnd of Mar/2016
Total

Owned

LeasedDifference
Total

Boeing 777-200

13

0

13

12

0

12

▲1

Boeing 777-200ER

11

0

11

11

0

11

Boeing 777-300

7

0

7

4

0

4

▲3

Boeing 777-300ER
Large-sized Total

13
44

0
0

13
44

13
40

0
0

13
40

▲4

Boeing 787-8

20

0

20

23

0

23

+3

Boeing 787-9

0

0

0

3

0

3

Boeing 767-300

13

0

13

9

0

9

+3
▲4

Boeing 767-300ER

24

8

32

28

4

32

-

57

8

65

63

4

67

+2

Boeing 737-400

12

0

12

12

0

12

-

Boeing 737-800

21

29

50

22

29

51

+1

33

29

62

34

29

63

+1

Embraer 170

15

0

15

17

0

17

+2

Bombardier CRJ200

9

0

9

9

0

9

Bombardier D8-400

9

2

11

8

2

10

▲1

Bombardier D8-400CC

0

0

0

2

0

2

+2

SAAB340B

13

0

13

13

0

13

-

Bombardier D8-300

1

0

1

1

0

1

-

Bombardier D8-100

4

0

4

4

0

4

-

51

2

53

54

2

56

+3

185

39

224

191

35

226

+2

Middle-sized Total

Small-sized Total

Regional Total
TOTAL

22

《Supplemental Reference》
Earnings Forecast Mar/2017（ Air transportation Segment ）International Passenger Operations
Mar/2016
Results
Passenger Revenue(JPY Bn)y/y （%）

Mar/2017
Forecast

Full-year（Forecast）

1H(Forecast)

2H(Forecast)

448.7

450.0

+0.3%

▲3.3%

+4.4%

ASK
(MN seat km)

48,32748,045

▲0.6%

▲0.1%

▲1.0%

RPK
(MN passenger km)

38,06938,517

+1.2%

▲0.0%

+2.4%

Passengers (’000)

8,080

8,053

▲0.3%

▲0.9%

+0.2%

L/F (%)

78.8%

80.2%

80.2%

79.8%

80.6%

Yield (1) （JPY）

11.8

11.7

▲0.8%

▲3.3%

+2.0%

Unit Revenue (2) （JPY）

9.3

9.4

+0.9%

▲3.2%

+5.5%

55,53755,915

+0.7%

▲2.5%

+4.2%

Revenue per Passenger (3)（JPY）

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

23

《Supplemental Reference》
Earnings Forecast Mar/2017（ Air transportation Segment ）Domestic Passenger Operations
Mar/2016
Results

Mar/2017
Forecasty/y （%）
Full-year（Forecast）

1H(Forecast)

2H(Forecast)

Passenger Revenue(JPY Bn)

501.2

503.0

+0.3%

+0.8%

▲0.0%

ASK
(MN seat km)

35,86935,860

▲0.0%

▲1.3%

+1.3%

RPK
(MN passenger km)

24,341

24,193

▲0.6%

▲0.3%

▲0.9%

Passengers (’000)

32,11431,962

▲0.5%

+0.2%

▲1.1%

L/F (%)

67.9%

67.5%

67.5%

67.5%

67.4%

Yield (1) （JPY）

20.6

20.8

+1.0%

+1.0%

+0.9%

Unit Revenue (2) （JPY）

14.0

14.0

+0.4%

+2.1%

▲1.3%

Revenue per Passenger (3)（JPY）

15,60915,742

+0.9%

+0.6%

+1.1%

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

24This contents 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), andare 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 tovarious 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. Theserisks 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 contents regarding future information are, as mentioned above, valid at the time of creation (oras 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 contents is for informational purposes only, and is not intended as arecommendation, 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 contents regarding the Group iscorrect, 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 thiscontents.
It should be noted that all rights with this contents and other copyright of this material belongs to Japan Airlines Co.,
Ltd.