ANA Reports Full Year Profit for Fiscal Year 2005

– second year of profitable international operations –
– record revenue and operating profit –

– all ANA Group business segments in the black –

TOKYO April 28, 2006 - ANA Group today reported a record consolidated revenue of ¥1.36 trillion and a record consolidated operating profit of ¥88.8billion, for the 2005 fiscal year ended March 31, 2006.  Consolidated net profit for the period was ¥26.7billion, 0.9 percentage points lower than the previous period due to changes in accounting methods relating to impaired losses.

“These sound financial results exceed our own forecast, which was revised upwards at the end of March,” said ANA President and CEO, Mineo Yamamoto.  “We were able to achieve record revenues and operating profit – both around 6% and 14% up on last year respectively, despite a number of factors beyond our control such as a severe winter, which saw many cancellations on our domestic services; anti-Japan demonstrations in China last April, which until very recently adversely affected leisure traffic between Japan and China; and the continued high price of kerosene.  We have our customers to thank, and the continuing efforts of our staff who work constantly to drive costs down while maintaining priority on safety and service.  However, we cannot sit on our laurels: oil prices are not likely to abate any time soon, and we need to ensure that we can continue to weather well the potential risks of a volatile environment as we approach the expansion of Haneda Airport in 2009,” he went on.

All business segments within the ANA Group – air transportation, travel services, hotels and other businesses – posted a net profit.  On an air transportation segment basis, airlines within the ANA Group* reported total revenue of ¥1.13 trillion, up 6.2% and an operating profit of ¥74.1 billion, or an 8.9% increase.
ANA Group airlines carried a total of 49.6 million passengers: 45.5 million domestic and 4.1 million international.  International passenger revenue hit an all time high of ¥229.2 billion, a year-on-year increase of 8.8%, which also made this ANA’s second year of profitable international operations since they began in 1986.  Domestic passenger revenue was ¥685 billion, a 4.0% increase.

For domestic services, capacity in terms of Available Seat Kilometres (ASKs) remained almost flat, with corresponding Revenue Passenger Kilometres (RPKs) and passenger numbers up 3.3% and 2.2% respectively, reflecting healthy demand for business travel and the effect of the Aiichi World Expo last summer on leisure traffic.  A 1.7% increase in unit price, as well as increased Super Seat Premium availability, better matching of demand and supply, closer ties with ground transportation providers and improvements in our network, thanks to the addition of the new Kobe Airport, added to the favourable result.

On the international front, strong demand for business travel on European and American routes and an 8.3% rise unit price helped to counterbalance the negative effect of anti-Japan demonstrations on leisure traffic to China.  The new Eco-wari fare discount fare, coupled with cost-saving initiatives such as greater roll out of e-ticketing, and the introduction of more efficient aircraft, also contributed to overall profitability.

ANA Group airlines carried 689,485 tonnes of cargo: 440,750 tonnes on domestic routes, and 248,735 tonnes on international routes, showing year-on-year growth of 4.3% and 6.1% respectively.  Domestically, more efficient operations were secured, and demand stimulated, by increasing the freighter fleet to three 767-300F aircraft.  These aircraft were also deployed on the buoyant China and Asian routes.  Overall, cargo operations reported an increase of ¥5.4 billion.
For the 2006 fiscal year, ending March 31, 2007, ANA is forecasting a consolidated net profit of ¥27 billion on revenue of ¥1.42 trillion.  Domestically, ANA will further promote its ‘simple and convenient’ products and services, and strengthen its network through closer ties with new entrant carriers in the market.  A ¥12 billion increase is expected for domestic services.

Internationally, the introduction of new aircraft, network improvements and the move to the new South Wing of Terminal 1 at Tokyo’s Narita airport, in conjunction with ANA’s Star Alliance partners, will permit ANA to further differentiate its products, giving rise to an expected increase of ¥15.5 billion in revenue.

In terms of cargo, the 2006 fiscal year will see the delivery of further freighter aircraft, and the start of express courier services, giving rise to an expected ¥17.5 billion increase in revenue.

An increase in fuel costs of ¥45 billion is forecast, and expected to give cause a lower operating profit than the previous fiscal year.

*ANA Group Airlines: ANA, Air Nippon (ANK), Air Japan (AJX), A-Net (Air Nippon Network), Air Next (NXA), Air Central (CRF)                          
All comparisons are year-on-year

For detailed results, please refer to the attached explanation.
ANA reports consolidated financial results for FY2005
Rob Henderson, ANA Public Relations: