North America

ANA - North America

Inspiration of JAPAN

Press Release
ANA Reports Financial Results for Fiscal Year 2008
- Falling Demand brings Revenue and Operating Profit Down and Takes Airline into the Red -

TOKYO April 30, 2009 - Against the backdrop of the global recession triggered by last year’s financial market turmoil, ANA Group today posted its first full-year net loss in six years due to an unprecedented fall in demand for domestic and international air travel – in particular high-yield business travel, in the latter half of the year under review – and a sharp drop in demand for air cargo services. For the twelve month period, revenue was down 6.4% to $14.2 billion (1.39 trillion yen), and the Group fell into a net loss of $42.8 million (4.2 billion yen). This compares with the $652.6 million (64.1 billion yen) profit posted in the previous year, a much larger than normal result boosted by an extraordinary gain on the sale of ANA’s hotel properties in June 2007. Operating profit for fiscal 2008 weighed in at $76.4 million (7.5 billion yen), down 91% year-on-year from $858.2 million (84.3 billion yen). No recurring profit was posted.

Airlines within ANA Group carried a total of 47.1 million passengers over 56.9 billion Revenue Passenger Kilometres (RPKs). This compares with 50.3 million passengers who flew on 61.2 billion RPKs in the previous term, and represents a year-on-year fall of 6.4% and 7% respectively. Capacity, in terms of Available Seat Kilometres (ASKs) was down 4.2%, to 87.1billion, from 90.9 billion.

“2008 was a disastrous year for business in general, with airlines around the world hit by the lack of consumer confidence and commercial activity, and ANA was no exception,” said ANA executive vice president, Finance, Tomohiro Hidema. “We achieved more than $183.2 million (18 billion yen) in cost savings, but this was outstripped by a fall in revenue of over $970 million (95.2 billion yen). This was caused primarily by a drop in passenger revenues on both international and domestic routes of around 6%, and especially by the fall in demand for overseas business travel, which was depressed by more than 25% on Europe and North America routes for the final three months of the year under review. This came in spite of our efforts to spur demand on all fronts, however, we were able to contain our net loss to a level smaller than originally feared. Looking forward, while we expect the recession to continue, leaving us in an operating environment the like of which we have never seen before, we will push on with initiatives to increase demand and reduce costs, so that we can ride out the worst and engineer a return to the black. And we will continue with our readiness plans for the expansion of airport capacity in the Tokyo area, which will be the single biggest business chance for us in recent history,” he continued.

The following results refer to the twelve month period April 01, 2008 - March 31, 2009. Results for the fourth quarter (January 1 - March 31, 2009) are given for reference only and appear in the right of each table.

Consolidated Financial Performance unit: million USD rounded to nearest (billion yen rounded down)
  FY 2008 FY 2007 Change %Y/Y 4Q/ 2008 Change
Revenue 14,175.9 (1392.5) 15,146 (1487.8) -970.1 (-95.2) -6.4 2,902.4 (285.1) -622 (-61.1)
Operating costs 14,098.5 (1384.9) 14,286.9 (1403.4) -188.4 (-18.4) -1.3 3,236.3 (317.9) -385.8 (-37.9)
Operating profit/ loss 76.4 (7.5) 858.2 (84.3) -781.8 (-76.8) -91 -332.9 (-32.7) -235.2 (-23.1)
Non-operating profit/ loss -75.3 (-7.4) -283 (-27.8) 207.7 (20.3) --- 101.8 (10.0) 231.1 (22.7)
Recurring profit/ loss 0 575.2 (56.5) -575.2 (-56.4) -99.8 -2,300.7 (-226) -3.1 (-0.3)
Extraordinary profit/ loss -45.8 (-4.5) 597.6 (58.7) -643.4 (-63.2) --- -12.2 (-1.2) 527.3 (51.8)
Net profit/ loss -42.8 (-4.2) 652.6 (64.1) -695.4 (-68.4) --- -138.5 (-13.6) 408.2 (40.1)

 

ANA Group consists of airlines, travel and other businesses. Each business segment performed as follows:

Performance by business segment (consolidated) unit: million USD rounded to nearest (billion yen rounded down)
  FY 2008 FY 2007 Change 4Q/ 2008 Change
Revenue Operating profit Revenue Operating profit Revenue Operating profit Revenue Operating profit Revenue Operating profit
Air Transport 12,516.5
(1229.5)
47.8
(4.7)
13,250.5
(1301.6)
793
(77.9)
-734
(-72.1)
-745.2
(-73.1)
2,557.3
(251.2)
-333.9
(-32.8)
-539.6
(-53.0)
-238.2
(-23.4)
Travel 1,921
(188.7)
-6.1
(-0.6)
2,191.8
(215.3)
10.2
(1)
-270.8
(-26.6)
-16.3
(-1.7)
414.3
(40.7)
-10.2
(-1.0)
-92.6
(-9.1)
3.1
(0.3)
Others 1,508.7
(148.2)
33.6
(3.3)
2,024.8
(198.9)
51.9
(5.1)
-516.1
(-50.7)
-18.3
(-1.8)
357.3
(35.1)
10.2
(1.0)
-173.1
(-17.0)
4.1
(0.4)

Domestic Air Transport
ANA introduced a variety of leisure and business travel discount fares aimed at giving customers wider choice and greater flexibility. It also developed an “ANA Suica” credit card with IC functionality in conjunction with a local railway company, so that customers could seamlessly pass from trains to aircraft using just one card. Throughout the year, the Group ran several sales campaigns aimed at spurring demand and increasing the competitiveness of its customer offering, for example to Okinawa and Hokkaido. In spite of this, the slowdown within the Japanese economy during the period under review, the global recession biting in September, and increasing competition from other domestic airlines and the railways prompted a manifest fall in demand.

Domestic Air Transport (consolidated) revenue given as million USD rounded to nearest (billion yen rounded down)
  FY 2008 FY 2007 Change %Y/Y 4Q/ 2008 % Y/Y
Revenue 7,119 (699.3) 7,528.3 (739.5) -409.3 (-40.1) -5.4 1,526 (149.9) -12.0
No of passengers (x1,000) 42753 45557 -2804 -6.2 9,526 -11.6
Available Seat Kilometers (million km) 59222 62651 -3429 -5.5 13,978 -8.4
Revenue Passenger Kilometers (million km) 37596 39928 -2331 -5.8 8,442 -11.3
Load Factor (%) 63.5 63.7 -0.2 --- 60.4 ---

International Air Transport
As with the domestic market, flexible and extremely price competitive fares were introduced to stimulate demand for individual travel. Network efficiencies were also gained and profitability improved through frequency reductions, route suspensions and down gauging aircraft. However, the fall in demand for overseas business travel was compounded by a drop in leisure demand on several Asia routes: China, due to the Sichuan earthquake and food safety scares, amongst others; Thailand, due to the closure of its main international gateway, Suvarnabhumi airport; and India, due to the terrorist attacks in Mumbai.

International Air Transport (consolidated) revenue given as million USD rounded to nearest (billion yen rounded down)
  FY 2008 FY 2007 Change %Y/Y 4Q/ 2008 % Y/Y
Revenue 2,962.4 (291) 3,171.1 (311.5) -208.7 (-20.5) -6.6 526.3 (51.7) -27.9
No of passengers (x1,000) 4432 4827 -394 -8.2 1,027 -13.4
Available Seat Kilometers (million km) 27905 28285 -380 -1.3 6,651 -5.7
Revenue Passenger Kilometers (million km) 19361 21291 -1930 -9.1 4,368 -16.0
Load Factor (%) 69.4 75.3 -5.9 --- 65.7 ---

Cargo
Volumes carried on domestic routes increased during the twelve months under review, thanks in part to a change in the designation of small packages transported for Japan Post from ‘mail’ to ‘cargo’, and an off-peak charging structure introduced to take advantage of quieter afternoon and holiday periods. On the international front, ANA aggressively captured demand for cargo flows from China and the rest of Asia to North America and Europe, resulting in increased volumes for the full financial year. However, demand tailed off from November in the wake of the global recession and unit price fell in the face of increasing competition, bringing down revenue compared with the previous year.

Cargo (consolidated) revenue given as million USD rounded to nearest (billion yen rounded down)
    FY 2008 FY 2007 Change %Y/Y 4Q/ 2008 % Y/Y
Domestic Revenue 335.9 (33) 310.5 (30.5) 25.4 (2.5) 8.3 76.35 (7.5) 3.6
Freight carried (1,000 tonnes) 475 463 12 2.7 108 -1.4
Tonne Kilometres (mil) 464 444 20 4.4 107 1.4
International Revenue 702.4 (69) 734 (72.1) -31.6 (-3.1) -4.3 99.8 (9.8) -46.1
Freight carried (1,000 tonnes) 354 333 22 6.5 68 -17.3
Tonne Kilometres (mil) 1653 1645 8 -0.5 329 -22.8

Outlook for FY2009
ANA Group expects the global recession that started in September 2008, and the present harsh operating conditions, to continue through the coming twelve months. However, preparations for increased capacity at the metropolitan airports of Narita and Haneda, and the expansion opportunities this affords, will continue. The Group will also endeavour to stimulate demand for domestic and overseas travel, and carry out further cost-reduction and efficiency enhancing initiatives, in order to return ANA to a net profit. At present, no decision has been taken as to whether or not a dividend will be paid at the end of the term.

Forecast for FY 2009 (April 1, 2009 – March 31, 2010) unit: million USD rounded to nearest (billion yen rounded down)
  FY 2009 Change
Revenue 13,743.3 (1350) -432.7 (-42.5)
Operating income 356.3 (35) 278.9 (27.4)
Recurring income 50.9 (5) 49.9 (4.9)
Net income 30.5 (3) -73.3 (-7.2)


Assumptions: USD 50/ bbl; Singapore Kerosene: USD 63/ bbl; exchange rate: USD 1=JPY 95

 
Contact Rob Henderson, ANA Public Relations: r.henderson@ana.co.jp

Notes for Editors
– All monetary figures are given in billions of yen rounded down; other figures and percentages are rounded up.
– All comparisons are year-on-year.
– ANA Group airlines comprise: All Nippon Airways (ANA), Air Nippon (ANK) Air Japan (AJX), Air Nippon Network (A-Net), Air Next (NXA) and Air Central (CRF).
– ¥98.23 = $1
 
ANA Reports Financial Results for Fiscal Year 2008