JAPAN AIRLINES Co., Ltd.
Financial Results
3rd Quarter Mar/2022（FY2021）

February 2, 2022
On New Year’s Day, 2022
Mt. Fuji and the first sunrise from A350 “New Year Sunrise Flight”©Japan Airlines, ALL rights reserved.

SKYTRAX

APEX

APEX
WORLD CLASS

Health Safety Powered Covid-19 Safety Rating
5 Starby SimpliFlying Audit
Diamond

SKYTRAX

SKYTRAX

SKYTRAX

2021
The World’s Best
Economy Class

5-Star Airline

COVID-19 Excellence Award
The Best
Economy Class Seat

1. PERFORMANCE OVERVIEW FOR
The 8thIR Good Visual Award

3rd Quarter FY21
2. RECENT OUTLOOK
3. RECENT INITIATIVES
4. DETAILS OF FINANCIAL RESULTS
FOR 3rd Quarter FY21

「PRIDE Index 2021」
Gold

JobRainbow

Best Workplace
D&I Award

Ministry of Internal Affairs andCommunications

5. REFERENCES

NPO J-Win

2021 J-Win Diversity Award「Top 100 Telework Pioneers 」Advanced Achievement Award
Executive Management Award
Awards of the Minister

Health and Productivity
Management Brand

IFRS is adopted from FY2020. Accordingly, figures for FY2019 are also calculated under IFRS for comparison.
All figures include LCC (2) unless otherwise noted.
The 3rd Quarter results (October to December) are calculated by deducting the results of 1 st Half (April to September)from 3rd Quarter (April to December).
For SPRING JAPAN, as the results from acquisition of the subsidiary until the end of June are minor, passenger revenue
from July is included as passenger revenue for LCC.
Note (1) Regarding figures in tables of this material, amounts are rounded down to the nearest hundred million yen, and the second decimal point inratios is rounded off to one decimal point (2) LCC = Low Cost Carrier©Japan Airlines, ALL rights reserved.

2

PERFORMANCE OVERVIEW FOR 3rd Quarter FY21

EBIT (1)/Profit or Loss (2)Revenue（JPY Bn）1,200.0（JPY Bn）▼614.2 Bn(▼55.2%)

1,112.7

Profit or Loss

▼212.7▼128.3▼183.3

200.0

114.6

100.0

800.0

74.8

0.0

+141.9 Bn(+39.8%)498.4▼ 100.0

356.5

400.0

EBIT

EBIT Margin(3)10.3%▼ 200.0▼ 300.0▼297.9 Bn▼294.1 +110.8 Bn▼ 400.0

0.0
FY19Q3

FY20Q3

FY21Q3FY19Q3

Fuel/FX Markets
FY20Q3

FY21Q3

FY20Q3

FY21Q3Operational Preconditions/ASK
y/y

Vs. FY19Q3

Vs. FY20Q3

Singapore Kerosene(USD/bbl)

38.3

77.2

+101.6%

International Routes▼56.9%+141.1%

Dubai Crude Oil(USD/bbl)

37.6

71.3

+89.6%

Domestic Routes▼34.9%+15.9%FX Rate (JPY/USD)

106.6

110.7

+3.8%

Total

▼48.1%+56.5%(1) EBIT= Profit/Loss before Financing and Income tax (Profit/Loss before Tax – Finance Income /Expenses) (2) Profit/Loss = Quarterly Profit Attributable to Owners of Parent(3) EBIT Margin =EBIT / Revenue©Japan Airlines, ALL rights reserved.

3➢ Thank you for participating in our conference call for the third Quarter
Financial Result Reporting.
➢ The third quarter Revenue was 498.4 billion yen. It was down by 55.2% whencompared with the pre-COVID level of the third quarter of fiscal year 2019,
but it was up by about 40% year-on-year.
➢ EBIT became a loss of 183.3 billon yen and Net Loss became 128.3 billion yen.
➢ However, the performance is rapidly improving. EBIT increased by 110.8
billion yen year-on-year. EBIT for the three months from October toDecember has improved by 37.6 billion yen from the EBIT of the three monthsof July to September of this year 2021, which was a loss of 69.1 billion yen.

©Japan Airlines, ALL rights reserved.

3-S1. PERFORMANCE OVERVIEW FOR
3rd Quarter FY21
2. RECENT OUTLOOK
3. RECENT INITIATIVES
4. DETAILS OF FINANCIAL RESULTS
FOR 3rd Quarter FY21
5. REFERENCES©Japan Airlines, ALL rights reserved.

4

INTENTIONALLY LEFT BLANK©Japan Airlines, ALL rights reserved.

EBIT, EBITDA and CASH BURN
✓ Cash burn diminished and EBITDA turned positive in the Q3 period✓ Q3 performance was in line with the performance forecast✓ 350 billion yen was financed through hybrid financing, and the total liquidity athand, together with the unused credit line of 300 billion yen, is 818.3 billion yen
EBIT・EBITDA(1)Cash Burn(2)EBITDA turned
positive in Q3（JPY Bn）（JPY Bn）

11.8

20.0

Q1

Q2

Q3

0.0

Q1

Q2

Q3

0

▼ 20.0▼23.2▼ 40.0

▼31.5
▼39.2

▼ 60.0▼69.1▼ 80.0Approx.
10～15/monthApprox.
14/month

Cash-burn
diminished▼82.6▼ 100.0
EBITDA(1) EBITDA=EBIT + Depreciation

EBIT(2) Operating Cash Flow (one-time factors excluded) + Repayment of Interest-bearing Debts©Japan Airlines, ALL rights reserved.

5➢ On this slide, I will explain EBITDA and Cash burn.

➢ In this third quarter period, the passenger revenue increased because mainly
the domestic passenger demand rapidly recovered. Also, International Cargorevenue continued to be good.
➢ Moreover, we strived to reduce costs even further altogether.

➢ Consequently, for the third quarter period from October to December, wehave succeeded in turning EBITDA positive for the first time since theoutbreak of COVID-19 and also succeeded in diminishing cash burn.
➢ Liquidity at hand increased to 518.3 billion yen at the end of December
because of the hybrid financing of 350 billion yen.
➢ Together with the unused credit line of 300 billion yen, we have secured
enough liquidity at hand.

©Japan Airlines, ALL rights reserved.

5-SPASSENGER and CARGO DEMAND✓ While Omicron variant makes the situation unclear, the current performance forecast
remains unchanged because of cargo revenue increase and cost cut•

Domestic Passenger would recover rapidly if COVID infection slows down•International Cargo demand is expected to remain strong because the demand shift fromocean shipment will continue•

Actual Fixed Cost will be further decreased to an about 470 billion yen level per annum (30billion yen less than the original forecast )✓ Considering the unclear situations, no dividends will be planned in order to ensure further
risk torelance
Passenger Demand（vs. pre-COVID(1)）
80%

Int'l Pax

Dom Pax

Q3 Ave.
59.9%

Int'l Cargo

Dom Cargo

150%

60%

40%

Cargo Demand（vs. pre-COVID(1)）

Q2 Ave.
34.0%

Q1 Ave.
29.2%

125%
100%
75%

20%

Q2 Ave.
8.1%

Q1 Ave.
6.2%

Q3 Ave.
10.1%

50%
25%
0%

0%
Apr May Jun

Jul

Aug Sep Oct Nov Dec Jan

Apr May Jun Jul Aug Sep Oct Nov Dec Jan©JapanAirlines, ALL rights reserved.
(1) Compared with FY2019 results, but the figure of passenger demand in January is based on performance forecasts disclosed upon FY19Q3 financial
reports.

６

➢ This slide shows the recent Passenger and Cargo demand.
➢ In International Passenger, border restrictions still continue but we captured a transit
demand between North America and Asia to make the passenger number about 10% of
the pre-COVID level.
➢ Domestic Passenger recovered rapidly after the lift of the state of emergency declaration
so the passenger number became about 60% of the pre-COVID level. For the New Yearholidays, we adequately increased our capacity to make the passenger number about
85% of the pre-COVID level.
➢ Cargo demand remained strong. In International Cargo, the price level is more thandouble of the pre-COVID level.
➢ Going forward, Omicron variant has made the situation complicated. There is a risk of low
demand, however, there is also a chance of rapid demand recovery if the infection settles
soon.
➢ With further increase of the international cargo revenue and the cost-cutting efforts, wewill keep the current performance forecast unchanged for the time being. We will
immediately disclose an updated performance forecast if necessary.
➢ The overall demand trend is on the rise but in order to ensure risk tolerance, our yearend dividend is forecasted to be none. We would like to ask for shareholders’
understanding.
©Japan Airlines, ALL rights reserved.

6 -S

1. PERFORMANCE OVERVIEW FOR
3rd Quarter FY21
2. RECENT OUTLOOK
3. RECENT INITIATIVES
4. DETAILS OF FINANCIAL RESULTS
FOR 3rd Quarter FY21
5. REFERENCES©Japan Airlines, ALL rights reserved.

7

INTENTIONALLY LEFT BLANK©Japan Airlines, ALL rights reserved.

RECENT INITIATIVES
ESG
Transition Bond

Actions to climate change

The world’s first transition bonds in theaviation industry (1)SAF(Sustainable Aviation Fuel) Development
and Promotion

The first airline model example
selected by the Japanese government✓ Joint SAF Purchase with Alliance Members

PurposeUse ofproceeds

Accelerating initiatives for
decarbonization

Upgrading our main assets,aircrafts, to fuel-efficient models(A350・787 etc.)• JAL and 8 alliance members
jointly purchase SAF from
Aemetis Inc. in California(2)• Will be used for scheduled
flights departing from San
Francisco from FY2024
Carbon Offsetting

SecondParty
Opinion✓ JAL Carbon Offsetting(3) has
Obtained a second party opinion to
been renewed
our overall ESG strategy initiatives• Corporate service will be provided
from Sustainalytics, an external
review body with excellent reputation • Easier usability including easier accessglobally
by smartphones

Maturity & Amount：5 years 10 billion yen, 10 years 10 billion yen（scheduled）
Timing：March, 2022 (Scheduled)(2) Press Release URL：https://www.oneworld.com/news/2021-11-30-oneworldmembers-to-purchase-blended-sustainable-aviation-fuel-from-Aemetis-in-industryleading-commitment(3) JAL Carbon Offsetting details：
https://www.jal.com/en/sustainability/environment/climate-action/emission_trading/(1) Sustainability initiatives including transition bond： https://www.jal.com/en/sustainability/©Japan Airlines, ALL rights reserved.
8➢ On this slide, I will explain our ESG initiatives.
➢ Today, we decided to issue the world’s first transition bonds in the airline
industry. With this financing, we will upgrade to more fuel-efficient aircrafts
to accelerate our net-zero emission initiatives.

➢ Sustainalytics, an external review body with excellent reputation globally gavea second party opinion to our mid- and long-term SDGs initiatives. Also, thisbonds has been selected as a “model example” by the Japanese government
for the first time as an airline.
➢ We have announced joint purchase of Sustainable Aviation Fuel, SAF, withoneworld alliance members in order to achieve our goal of using SAF for atleast 10% of the total fuel consumption by fiscal year 2030. SAF will bepurchased jointly from an American company, Aemetis, to start using SAF for
our flights departing from San Francisco from fiscal year 2024.
➢ Also, we renewed JAL Carbon Offsetting to make it more user-friendly. Also,
we will start a corporate service that enables companies to assess and offset
the total CO2 emission that is produced by their employees’ flights throughemission trading.
©Japan Airlines, ALL rights reserved.

8-S

1. PERFORMANCE OVERVIEW FOR
3rd Quarter FY21
2. RECENT OUTLOOK
3. RECENT INITIATIVES
4. DETAILS OF FINANCIAL RESULTS
FOR 3rd Quarter FY21
5. REFERENCES©Japan Airlines, ALL rights reserved.

9

INTENTIONALLY LEFT BLANK©Japan Airlines, ALL rights reserved.

DETAILS OF FINANCIAL RESULTS FOR 3rd Quarter FY21
Consolidated Financial Results（JPY：Bn ）Q3 (April to December)
FY19Q3
FY21Q3
Diff.
y/y

FY19Q3

FY20Q3

1,112.7

356.5

498.4

▼614.2

International PAX

401.3

18.8

48.4

Domestic PAX

427.9

136.9

Cargo / Mail

69.1

Other Revenue (1)Operating Expense

Q3 (October to December)
FY20Q3
FY21Q3
Diff.
y/y

FY20Q3Diff.

y/y▼55.2%+141.9+39.8%

207.8

+46.0

+28.5%▼352.9▼87.9%+29.5+156.8%

18.6

+8.9

+92.2%

174.4▼253.5▼59.2%+37.5+27.4%

84.5

+17.2

+25.6%

90.9

161.0

+91.9

+133.0%+70.1+77.1%

62.6

+25.2

+67.3%

214.2

109.8

114.5

▼99.7

▼46.5%

+4.7

+4.3%

41.9

▼5.2

▼11.2%

1,005.5

655.4

687.9

▼317.6▼31.6%

+32.4

+5.0%

244.9

+8.9

+3.8%

Fuel

189.6

73.5

101.8

▼87.8

▼46.3%+28.2+38.4%

42.8

+13.9

+48.2%

Excluding Fuel

815.9

581.8

586.1

▼229.8▼28.2%

+4.2

+0.7%

202.1

▼4.9

▼2.4%

7.4

4.7

6.1

▼1.3

▼18.3%+1.3+28.8%

5.6+1.6+39.5%

EBIT

114.6

▼294.1▼183.3▼297.9-+110.8

-

▼31.5

+38.6

-

EBIT Margin (%)

10.3％

-

-

-

-

-

-

-

-

-

Profit or Loss

74.8

▼212.7▼128.3▼203.1

-

+84.4

-

▼23.3

+28.1

-

ASK (MN seat km)

69,07022,90135,830▼33,240▼48.1%+12,928+56.5%

14,029+3,369+31.6%RPK (MN pax km)

58,776

8,923

13,089▼45,686▼77.7%+4,165+46.7%

6,031+1,351+28.9%EBITDA Margin (%) (3)

21.1%

-

-

-

-

-

-

5.7%

-

-

Revenue

Others (2)(1) Other Revenue = Travel Agency, Mileage, Ground Handling or etc.
(2) Others = Gain or Loss on Sales of Flight Equipment, Other Revenue, Share of Profit or Loss of Investment and Income/Expenses from Investment©Japan Airlines, ALL rights reserved.
(3) EBITDA Margin = EBITDA / Revenue

10➢ I would like to explain the details of the third Quarter financial results.

©Japan Airlines, ALL rights reserved.

10-S

DETAILS OF FINANCIAL RESULTS FOR 3rd Quarter FY21
Changes in EBIT (Revenues／Expenses)
ASK y/y： +56.5%
RPK y/y： +46.7%+ stands for profit increase（ revenue increase, cost decrease )▼ stands for profit decease ( revenue decrease, cost increase )＋110.8 Bn(JPY：Bn）

16.6 Bn yen of Personnel cost reduction throughemployment subsidies and secondment★：the above reduction is included in those accounts▼183.3★

▼294.1
Cargo & Mail
＋70.1

Domestic
Passenger
Int'l
+37.5
Passenger
+29.5

Other
Revenues(1) Fuel▼28.2 Maintenance

+4.7

▼7.5

+4.3%
▼38.4%▼17.6%

FSC(3)・FX

+1.4
+1.3
+2.7

+4.9%

▼4.0%

Landing &Navigations fees
Sales Commissions+156.8%

FSC
FX
(TTL)

+3.2%

+28.8%FY21Q3+77.1%+27.4%

FY20Q3

Other★
Expenses
Personnel
Others(2)Aircraft
▼9.6
+9.5
+1.3
+3.4
★

FSC
+9.5
FX
+5.7
(TTL) +15.2

FSC
FX
(TTL)

Revenue +141.9 Bn(+39.8%)+0+0

FSC TTLFX TTL
(TTL)

+10.9
+7.1
+18.0

+3.7
▼2.9

Services
Expenses of Travel
AgencyOther than above

▼12.4

Total

▼9.6

▼2.7

Subsidies+4.6

Others

▼3.3
Total

+1.3

+4.6

Expenses ▼32.4 Bn(▼5.0%)(1) Other Revenues = Travel Agency, Mileage, Ground Handling or etc.
(2) Others = Gain or Loss on Sales of Flight Equipment, Other Revenue, Share of Profit or Loss of Investment and Income/Expenses from Investment (3) FSC=Fuel Surcharge©Japan Airlines, ALL rights reserved.

11➢ This slide shows ups and downs of Revenues and Expenses year-on-year.
➢ Revenue increased by 141.9 billion yen year-on-year through the passenger
number increase along with the rapidly-recovering domestic passenger
demand and large sales increase in the still-good Cargo business.

➢ Expenses increased by just 32% of the revenue increase in spite of thevariable cost increase due to capacity increase and fuel price increase. Fixedcost decreased, led by reduction in aircraft cost and personnel cost year-onyear, so the total expenses increased by 32.4 billion yen, up only 5% year-onyear.
➢ Consequently, EBIT improved by 110.8 billion yen.

➢ Excessive human resources were effectively used to reduce their cost by 16.6
billion yen through secondment or employment subsidies.

©Japan Airlines, ALL rights reserved.

11-S

DETAILS OF FINANCIAL RESULTS FOR 3rd Quarter FY21
International Passenger Operations (Full Service Carrier)✓ The passenger number gradually recovered toward the end of December as transit
passenger demand was captured and the border restriction was temporarily eased
Int'l Pax

Int'l L/F

Int'l Capacity (Seat No.)

40%

(Vs. 2019)

50%
40%

20%

30%
20%

0%

10%
Apr May Jun

Jul

Aug Sep

International Passenger (1)Oct

Nov Dec

Apr May Jun

Jul

Aug SepOct

Q3 (April to Dec.)
FY19Q3

FY20Q3

FY21Q3

Nov Dec

Q3 (Oct. to Dec.)

Vs.FY19Q3 Vs.FY20Q3

FY21Q3

Vs.FY20Q3

Passenger Revenue（JPY Bn）

401.3

18.8

47.0

▼88.3%+149.9%17.9+85.7%

Passengers（’000）

7,325

246

594

▼91.9%+140.9%241+78.9%ASK（MN seat km）

41,463

7,295

16,831▼59.4%+130.7%

6,089+52.5%

RPK（MN passenger km）

36,753

1,493

4,089

▼88.9%+173.8%1,647+104.5%L/F（%）

88.6%

20.5%

24.3%

▼64.3pt+3.8pt27.0%+6.9ptRevenue per Passenger（JPY） (2)54,78476,303

79,171+44.5%+3.8%

74,449+3.8%

Yield（JPY）(3)

10.9

12.6

11.5

+5.5%

▼8.7%

10.9

▼9.2%

Unit Revenue（JPY）(4)

9.7

2.6

2.8

2.9

+21.7%(1) 2021年7月26日時点の見通し▼71.1%+8.3%(2) LCCを除く(1) Figures for LCC are excluded (2) Revenue per Passenger = Passenger Revenue / Passengers(3) Yield = Passenger Revenue / RPK (4) Unit Revenue = Passenger Revenue / ASK©Japan Airlines, ALL rights reserved.

12➢ I will explain the operation of International Passenger, Domestic Passenger
and Cargo.
➢ This slide shows the International Passenger operation.
➢ Border restrictions in many countries are still in place, therefore we captured
an expat demand and a transit demand between Asia and North America forthis third quarter as well. A base demand is gradually recovering, and ourpassenger number is on the rise.
➢ As a result, International Passenger revenue increased 2.5 times larger yearon-year.

©Japan Airlines, ALL rights reserved.

12-S

DETAILS OF FINANCIAL RESULTS FOR 3rd Quarter FY21
Domestic Passenger Operations (Full Service Carrier)✓ Demand recovered rapidly after the lift of state of emergency declaration✓ Adequate operation captured 85% (vs. 2019) of passenger demand for New Year holidays✓ “Award Anytime” for domestic flights will increase award ticket demand
Dom Pax

Dom L/F

Dom Capacity (Seat No.)

100%

80%

(Vs. 2019)

80%

60%

60%

40%

40%
20%

20%

0%

0%

Apr May Jun

Jul

Domestic Passenger (1)Apr May Jun

Aug Sep Oct Nov Dec

Jul

Aug Sep

Q3 (April to Dec.)
FY19Q3

FY20Q3

FY21Q3

Oct

Nov Dec

Q3 (Oct. to Dec.)

Vs.FY19Q3 Vs.FY20Q3

FY21Q3

Vs.FY20Q3

Passenger Revenue（JPY Bn）

427.9

136.9

174.0

▼59.3％+27.1％

84.3+25.3％

Passengers（’000）

29,1499,720

11,987▼58.9％+23.3％

5,832+14.9%ASK（MN seat km）

27,606

15,48817,885▼35.2％+15.5％

7,190

+9.8%

RPK（MN passenger km）

22,022

7,427

8,912

▼59.5％+20.0％

4,329+11.8%

L/F（%）

79.8%

48.0%

49.8％

▼29.9pt+1.9pt60.2%+1.1ptRevenue per Passenger（JPY） (2)14,68314,088

14,523

▼1.1％

+3.1％

14,461+9.0%

Yield（JPY）(3)

19.4

18.4

19.5

+0.5％

+5.9％

19.5

+12.0%

Unit Revenue（JPY）(4)

15.5

8.8

9.7

▼37.2％+10.1％

11.7+14.1%(1) Figures for LCC are excluded (2) Revenue per Passenger = Passenger Revenue / Passengers(3) Yield = Passenger Revenue / RPK (4) Unit Revenue = Passenger Revenue / ASK©Japan Airlines, ALL rights reserved.

13➢ This slide shows Domestic Passenger results.
➢ The domestic passenger demand rapidly recovered soon after the lift of thestate of emergency declaration.
➢ Our timely-manner capacity expansion further increased our passenger
number to the 85% level of pre-COVID for New Year holidays.
➢ Then, the total passenger number increased 1.2 times larger year-on-year,
which clearly shows the steady demand recovery.
➢ We are taking revenue maximizing measures including Award Anytime thatenables our JAL mileage members to book a flight for award ticket even in apeak season to stimulate domestic passenger demands and to improve JAL
mileage usability.

©Japan Airlines, ALL rights reserved.

13-S

DETAILS OF FINANCIAL RESULTS FOR 3rd Quarter FY21
Cargo
✓ International Cargo demand and price increased significantly y/y due to a shift from ocean
shipment✓ Achieved significant increase of revenue y/y through actively operating cargo flight with own
passenger aircrafts and chartered freighters
VolumeInt'l Cargo

International

Unit Price
Dom Cargo

Int'l Cargo

150%

300%

125%

250%

100%

200%

75%

150%

50%

100%

25%

(Vs. 2019)0%

Domestic

50%(Vs. 2019)0%
Apr May Jun

Jul Aug Sep Oct Nov Dec

Apr May Jun

×3.0

150.0

Revenue Cargo Ton/kilometer(million Ton kilometer)

133.3◼ Strong parcel demand continued

Jul Aug Sep Oct Nov Dec

Int’l Cargo 3Q (April to Dec.)

Int’l Cargo
Revenue(JPY Bn)◼ North America-bound demands are
extremely strong◼ Demands of auto parts or electricparts remains strong

Dom Cargo

Int’l Cargo 3Q (Oct. to Dec.)

Int’l Cargo
Revenue(JPY Bn)

×3.5

Revenue Cargo
Ton/kilometer(million Ton kilometer)

(1)

3,000

52.5
50.0

+29%

100.0

1,000

2,000

50.0

44.7

1,000

1,838

FY19

+36%

28.0

66.6
1,342

FY20

2,364

FY21
Int’l Cargo Revenue (JPY Bn)

25.0

500

15.0
626

FY19

855

566

FY20

FY21

Revenue Cargo Ton/kilometer (million Ton kilometer)©Japan Airlines, ALL rights reserved.

14➢ This slide shows Cargo operations.
➢ International Cargo still continues to be good. As a result, the revenue for thethird quarter increased about three time larger than the pre-COVID level.
➢ Especially, the revenue for the peak season from October to December
increased 3.5 times larger.
➢ The disruption in ocean shipment can be prolonged. Consequently, thedemand and the price level are expected to continue to be on the rise for thetime being especially with North America-bound shipment.

➢ We are fully utilizing our own passenger aircraft and chartered freighters to
capture high-yield international cargo for further increase cargo revenue.

©Japan Airlines, ALL rights reserved.

14-S

DETAILS OF FINANCIAL RESULTS FOR 3rd Quarter FY21
Expenses
Breakdown of Operating Expenses (JPY: Bn)

Actual Fixed Cost (1)✓ Actual Fixed Cost for the Q3 period (April to Dec.) was 346.7
billion yen(y/y ▼22.8 billion yen) , steadily moving toward a
470-billion yen level per annum by further cost cutting✓ Actual fixed cost is just 50% of the total operating expense,
which shows resilience to a drastically-changing environment

Actual Fixed Cost
Fixed Cost (except Actual Fixed Cost)
Revenue and Capacity Linked Cost

FY20Q3369.5

56%Decreased by

655.4

22.8 BnFY21Q3346.7

50%(1) Actual Fixed Cost: (Total Fixed Cost) – (costs that may be variable according to operational size andnumber of passengers, temporary or additional costs in association with the structural restructuring)

687.9

Major Operating Expense Items（JPY：Bn ）Q3 (April to Dec.)
Vs. FY19Q3
FY21Q3
Diff.
y/y

Vs. FY20Q3
Diff.
y/y

Q3 (Oct. to Dec.)
Vs. FY20Q3
FY21Q3
Diff.
y/y

FY19Q3

FY20Q3

Fuel

189.6

73.5

101.8

▼87.8

▼46.3%+28.2+38.4%

42.8

+13.9

+48.2%

Landing and navigation fees

65.2

29.7

25.9

▼39.2

▼60.2%▼3.7▼12.7%

9.7▼2.2▼18.6%

Maintenance
Sales commissions(Air Transport)
Services (2)

58.8

42.6

50.2

▼8.6

▼14.7%+7.5+17.6%

15.7+2.8+21.8%

13.9

2.3

5.2

▼8.6

▼62.2%+2.9 +126.8%

2.3

+0.8

+60.2%

35.4

8.0

10.8

▼24.6

▼69.5%+2.7+33.5%

4.2+0.8+25.6%

Other variable cost (3)

159.4

67.3

76.2

▼83.1

▼52.2%+8.9+13.2%

29.2

▼2.4

▼7.8%

Aircraft (4)

97.6

105.7

102.3

+4.7

+4.9%

▼3.4

▼3.2%

33.2

▼5.5

▼14.3%

Personnel (4)

226.3

193.1

183.6

▼42.7

▼18.9%

▼9.5

▼4.9%

61.0

▼1.1

▼1.9%

Other fixed cost(4)

158.9

132.7

131.5

▼27.3

▼17.2%

▼1.1

▼0.9%

46.4

+1.8

+4.2%

1,005.5

655.4

687.9

▼317.6▼31.6%

+32.4

+5.0%

244.9

+8.9

+3.8%

Total Operating Expenses

Variable
factors or onetime factors
are excluded(2) Services = Expenses regarding inflight services, airport lounges, cargo equipment, etc.
(3) Other Variable cost = Travel agency, Mileage, Ground handling or etc.
©Japan Airlines, ALL rights reserved.
15(4) These are nominal fixed costs however that include variable parts that are linked to capacity or passenger numbers and one-time/additional expenses
due to business restructuring➢ On this slide, I will explain the expenses.

➢ The operating expense increased by just 5% year-on-year to 687.9 billion yen, while
ASK increased by 56.5% year-on-year.
➢ The Actual Fixed Cost for the third quarter period was 346.7 billion yen, reduced by
22.8 billion year-on-year.
➢ In the previous financial reporting of the second quarter, we revised our Actual Fixed
Cost forecast from the original 500 billion yen to 475 billion yen because of further cost
reduction of 25 billion yen. I would like to say, we have been successful in cutting costeven further.
➢ As a result, our full-year Actual Fixed Cost will be at a 470 billion yen level.

➢ Also, the ratio of Actual Fixed Cost to the total operating cost remains at 50% even withthe decreased numbers of flights due to COVID-19 so that we maintain structural
flexibility to react to external changes in a timely manner.
➢ The increase of the variable costs is just 32% of the revenue increase. Despite the fuelprice hike, flexible capacity control and reduction in landing fees and fuel taxes
enabled us to control our cost management.
➢ We will strive to cut costs even further altogether.
©Japan Airlines, ALL rights reserved.

15-S

DETAILS OF FINANCIAL RESULTS FOR 3rd Quarter FY21
Summary of Consolidated Statement of Financial Position and Cash FlowBS✓ Equity Ratio and Net D/E Ratio for credit rating was improved by the hybrid financing toa solid level of 42.9% and 0.2x, respectively

CF✓ Operating cash flow turned to 9.1 billion yen of inflow, and EBITDA turned positive of 11.8
billion yen in the Q3 period (Oct. to Dec. 2021)
Balance Sheet

End of FY20

End of FY21Q3

Total Assets
Cash and Deposits
Balance of Interest-bearing Debt
Repayment within one
year (※1)
Shareholders’ Equity (1)2,107.2
408.3
515.1
69.6
(20.5)
947.4

Shareholders’ Equity Ratio(%)(※2) (2)45.0%

2,312.6
518.3
879.4
66.6
(14.6)
817.7
35.4%(42.9%)
1.1x
0.4x（0.2x)

D/E Ratio (x) (3)0.5xNet D/E Ratio (x) (※3) (4)0.1xCash Flow
Cash Flow from Operating Activities
Depreciation and Amortization
Cash Flow from Investing Activities
Capital Investment
Free Cash Flow (5)Cash Flow from Financing Activities
Total Cash Flow (6)EBITDA (7)FY20Q3▼179.8
135.8
▼73.0
▼79.3
▼252.9378.9
126.0▼158.3

FY21Q3▼86.7
132.6▼137.7▼145.3▼224.4
334.0
109.6
▼50.6

Diff.

（JPY Bn）+205.4+110.0+364.3▼2.9 ※1 Figures in brackets represent aircraft lease payment
within one year(▼5.8)▼129.7▼9.6pt ※2 Figures in brackets represent Equity Ratio for credit
rating adding the hybrid financing

+0.5x

+0.3x

※3 Figures in brackets represent Net D/E Ratio for credit
rating adding the hybrid financing

Diff.
+93.1
▼3.1
▼64.6
▼65.9
+28.5
▼44.8
▼16.3
+107.6(1) Equity attributable to owners of the parent(2) Ratio of equity attributable to owners of the parent tototal assets(3) Interest-bearing Debt/ Shareholders' Equity(4) (Interest-bearing Debt – Cash and Deposits) /Shareholders' Equity(5) Cash Flow from Operating Activities + Cash Flow from
Investing Activities(6) Cash flow from Operating Activities + Cash Flow from
Investing Activities + Cash Flow from Financing Activities(7) EBITDA=EBIT+ Depreciation©Japan Airlines, ALL rights reserved.

16➢ This slide shows balance sheet and cash flow.
➢ 350 billion yen of the hybrid financing and the unused credit line of 300 billion
yen enabled us to secure enough amount of liquidity at hand. Our liquidity at
hand at the end of December is more than 800 billion yen.

➢ Equity ratio for credit rating became 43%, and net D/E ratio for credit rating is0.2. Despite the prolonged difficult situations, we are able to maintainfinancial soundness.
➢ Because of demand recovery mainly in Domestic Passenger, the third quarter
period from October to December cash flow turned positive for the first timesince the fourth quarter of FY2019. It turned to 9.1 billion yen of cash inflow.
EBITDA also turned positive of 11.8 billion yen.
➢ The following pages are for your references.

➢ This concludes my presentation. Thank you so much for your attention.

©Japan Airlines, ALL rights reserved.

16-S

1. PERFORMANCE OVERVIEW FOR
3rd Quarter FY21
2. RECENT OUTLOOK
3. RECENT INITIATIVES
4. DETAILS OF FINANCIAL RESULTS
FOR 3rd Quarter FY21
5. REFERENCES©Japan Airlines, ALL rights reserved.

17Originally disclosed on Nov 2,2021《Reference》

FULL-YEAR PERFORMANCE FORECAST MAR/2022✓ Full-year performance forecast is expected to improve significantly y/y to EBIT ▼198 billion yen
and Net loss ▼146 billion yen✓ The 2nd half is expected to improve from the 1st Half by about EBIT 100 billion yen✓ Full-year actual fixed cost is expected to be 475 billion yen, 25 billion yen less than the initialand previous year’s level of 500 billion yen
Full-year Performance Forecast（Bn Yen）

FY2020ResultActual Fixed Cost(3) vs. Initial Plan

EBIT Improvement

FY2021
Forecast

Diff.

y/y

Revenue

481.2

766.0

+284.7+59.2%

Int’l PAX

27.9

93.0

+65.0

+232.5%

Dom PAX

174.0

297.0

+122.9+70.7%

Cargo / Mail

128.8

201.0

+72.1

+56.0%

Other Revenue (1)

150.4

175.0

+24.5

+16.3%

OperatingExpense

885.0

974.0

+88.9

+10.1%

Others (2)

5.5

10.0

+4.4

+81.6%

EBIT▼398.3▼198.0+200.3-

Profit or Loss

▼286.6▼146.0+140.6-

Expense
etc.

▼80.0

25 Bn

2nd Half
EBIT

Reduction▼46.0

Initial

Revenue+180.0
1st Half
EBIT▼151.8

Plan

500.0

Forecast

475.0

100 BnAbout
improvement• Steady increase in Dom. Pax.
Revenue• Good revenue continues in
Cargo• Personnel： about 20 Bn yen
reduced• Services or Rent： about 5 Bn yen
reduction【2nd Half Fuel/FX Markets Assumptions】
・Singapore Kerosene：90USD/bbl
・Dubai Crude Oil：83USD/bbl
・FX：110 yen/USD

Sensitivity※
・Fuel：about 0.4 Bn（1USD/bbl）
・FX： about 0.3 Bn（1yen/USD）(1) Other Revenue = Travel Agency, Mileage, Ground Handling or etc.
(2) Others = Gain or Loss on Sales of Flight Equipment, Other Revenue, Share of Profit or Loss of Investment and Income/Expenses from Investment(3) Actual Fixed Cost: (Total Fixed Cost) – (costs that may be variable according to operational size and number of passengers, temporary or additional※For the 2nd Half only,
Hedging included.
©Japan Airlines, ALL rights reserved.

18

《Reference》

Operation Performance by Geographic Segment(1)(Full Service Carrier)Passenger Revenue(%)

America
EuropeQ3 (April to Dec.)
FY21Q3Component Vs.FY19Q3 Vs. FY20Q3
Ratio

Revenue Passengers Carried
Q3 (Oct. to Dec.)
FY21Q3Component Vs. FY20Q3
Ratio

Hawaii/Guam

48%
16%
26%
7%
3%

▼79.9%▼88.8%▼90.2%▼91.9%▼97.5%+295.1%+92.5%+98.8%+27.9%+253.6%

45%
16%
29%
7%
3%

+157.7%+68.8%+65.5%▼20.8%+245.4%

Total

100%

▼88.3%+149.9%100%+85.7%

Asia/Oceania
China(‘000)

America

FY21Q3Q3 (April to Dec.)
Vs. FY19Q3 Vs. FY20Q3

Europe23964▼80.2%▼89.4%+270.1%+92.2%

9325+165.7%+58.3%

Asia/Oceania

235▼93.1%+100.0%101+54.8%

China

36▼96.9%+36.6%

12▼20.3%

Hawaii/Guam18▼97.9%+358.2%8+307.1%

Total

594

▼91.9%+140.9%241+78.9%ASK(MN seat km)

America
EuropeAsia/Oceania
China
Hawaii/Guam
Total

Load Factor

Q3 (April to Dec.)

FY21Q3

8,224
3,476
4,681
180
269
16,831Q3 (Oct. to Dec.)

Vs. FY19Q3

Vs. FY20Q3▼34.9%▼43.2%▼67.4%▼93.4%▼95.2%▼59.4%+137.8%+109.0%+131.8%+106.7%+301.7%+130.7%FY21Q3

2,900
1,237
1,751
65
135
6,089

America+44.4%+46.8%+68.1%+18.0%+210.0%+52.5%

EuropeAsia/Oceania
China
Hawaii/Guam

Total

2,240
598
1,065
71
113
4,089

America
EuropeAsia/Oceania
China
Hawaii/GuamTotal

Q3 (April to Dec.)
FY21Q3Q3 (Oct. to Dec.)

Vs. FY19Q3

Vs. FY20Q3

90.1%
89.8%
87.6%
81.8%
90.1%
88.6%

17.8%
18.5%
24.6%
57.0%
36.8%
20.5%

27.2%
17.2%
22.8%
39.8%
42.0%
24.3%

FY21Q3

29.7%
19.2%
26.9%
38.7%
37.5%
27.0%

Vs. FY20Q3

16.6%
17.5%
27.0%
55.5%
28.4%
20.2%

(1) Figures for LCC are excluded

Q3 (April to Dec.)
FY21Q3(%)

Vs. FY20Q3

RPK(MN passengerkm)

Q3 (Oct. to Dec.)
FY21Q3
Vs. FY20Q3

Q3 (Oct. to Dec.)

Vs. FY19Q3

Vs. FY20Q3▼80.3%▼89.1%▼91.5%▼96.8%▼97.7%▼88.9%+264.0%+95.0%+114.6%+44.4%+359.0%+173.8%FY21Q3

862
237
470
25
50
1,647

Vs. FY20Q3+158.2%+61.1%+67.5%▼17.7%+310.3%+104.5%©Japan Airlines, ALL rights reserved.

19

《 Reference 》

Fleet Information
End of FY20 (March 31, 2021)

Owned

LeasedTotal 1

End of FY21Q3 (December 31, 2021)

Total 2

Owned

LeasedTotal 1

Large

Airbus A350-900

4

4

8

8

10

4

14

14

+6

Boeing 777-300ER

13

0

13

13

13

0

13

13

-

Boeing 777-300

4

0

4

0

4

0

4

0

-

Boeing 777-200ER

11

0

11

6

9

0

9

5

▼1

Boeing 777-200

9

0

9

0

8

0

8

0

-

41

4

45

27

44

4

48

32

+5

Boeing 787-9

17

3

20

20

19

3

22

22

+2

Boeing 787-8

27

0

27

27

26

0

26

26

▼1

Boeing 767-300ER

29

0

29

29

29

0

29

29

-

Boeing 767-300

2

0

2

2

1

0

1

0

▼2

75

3

78

78

75

3

78

77

▼1

43

18

61

61

47

13

60

60

▼1

Small-sized Total

43

18

61

61

47

13

60

60

▼1

Embraer 170 / Embraer 190

32

0

32

32

32

0

32

32

-

De Havilland DHC-8-400CC

5

0

5

5

5

0

5

5

-

Large-sized Total

MiddleFSC（1）Middle-sized Total

Small

Boeing 737-800(2)

Regional

(2)

(2)

(2)

(2)

SAAB340B

3

0

3

2

1

0

1

0

▼2

ATR42-600 / ATR72-600

10

1

11

11

12

1

13

13

+2

50

1

51

50

50

1

51

50

-

Total

209
2
0

26
0
0

235
2
0

216
2
0

216
3
(3)
0

21
0
6

237
3
6

219
3
6

+3
+1
+6

LCC Total

2

0

2

2

211

26

237

218

3
219

6
27

9
246

9
228

+7
+10

Regional Total
FSC
LCC

Diff.

Total 2

retired aircraft Total2 of Mar/21 and Dec/21
excludedretired aircraft
excluded

Boeing 787-8
Boeing 737-800
FSC – LCC Total(1) FSC=Full Service Carrier (2) The difference between Total 1 and Total 2 is retired aircraft. (3) An increase due to SPRING JAPAN’s consolidation ©Japan Airlines, ALL rights reserved.

20

Fly into tomorrow.

Finance & Investor Relations, Japan Airlines©Japan Airlines, ALL rights reserved.

21

Disclaimer
This content contains descriptions of the future expectations, outlooks, objectives and plans etc. ofJapan 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 werecreated 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 befound 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 anduncertainties include, but are not limited to, the economic and social conditions of Japan and othercountries 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 toensure that this information is updated with the latest available information. The information contained inthis content is for informational purposes only, and is not intended as a recommendation, solicitation orrequest for the purchase of or trade in any securities or financial products. Although every effort has been
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belongs to Japan Airlines Co., Ltd.

©Japan Airlines, ALL rights reserved.

22