ANA s Growth Strategy Shinya Katanozaka Member of the Board of Directors, Senior Executive Vice President All Nippon Airways Co., Ltd. January 08, 2013
ANA s History 2 Rising to the Challenges ~ Always one step ahead ~ Boeing787 2016 Introducing MRJ 2012 Launching LCC service Launching JV with LH JAPAN 2011 Boeing787 introducing Launching joint venture with UA/CO 2010 Inauguration of Haneda international service 2009 Okinawa Cargo Hub introduced Star Alliance 1999 Joined Star Alliance L1011 1986 International service inauguration 1952 Nippon Helicopter (NH) established
Current Performance Consolidated operating revenues and operating expenses ( bil) (FY2001-2011) 1,500 1,400 1,300 1,200 Op. Revenues Op. Expenses 1,411 1,314 Medium-term performance targets 1,100 1,000 900 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 Operating margin of 10% or above Air transportation business revenues (FY 2011) Domestic Passenger Share (FY2011) International Passenger Share (FY2011) Cargo & Mail 128(10.1%) Other 162(12.9%) International Passenger 320 (25.4%) Domestic Passenger 651 (51.6%) 36.6% 13.2% 50.2% 67.7% 14.9% 17.4% ( bil) Total 1,262 (Source: MLIT) Company calculated revenue passengers on ANA flights and code-share flights operated by our partner airlines. ***To/From Japan (Source: MIDT) 3
Growth Strategy Our goal : Being the Leading Airline in Asia Continuing growth as a network airline FY2012 (Plan) Op. Revenues 1,500 billion Op. Income 110 billion Key Strategy Introducing Boeing787s Expanding Joint Venture Launching LCC Stable and sustainable growth Increase corporate value Op. Margin 10% or more JAPAN Become a leader in the LCC market 4
Introducing Boeing Dreamliner Increasing Fleet Competitiveness through Fuel-efficient Boeing787-9 200 150 100 The number of fuel-efficient aircraft 50 0 B787-8 B787-9 B777 B737NG others Composition ratio* (No. of Aircraft) 200 100 50 226 Fuel-efficient Aircraft 226 223 223 226 57.0% 58.8% 47.8% 52.9% 39.8% Mar.12 Mar.13(E) Mar.14(E) Mar.15(E) Mar.16(E) 100% 80% 60% 40% 20% (No. of Seats) 260 250 240 230 220 210 200 190 180 170 160 150 140 Seats and flight range B767-300ER (*202 seats) B777-300ER (*247 seats) B777-200ER (*223 seats) 130 9,000 10,000 11,000 12,000 13,000 14,000 15,000 16,000 17,000 (Source: Boeing Commercial Airplanes Fact Sheet) (*) ANA Configuration B787-8 (*158 seats) Fuel-consumption per ASK B787-9 (250 seats) (km) 120% Domestic Flight International Flight Mar.12 Mar.13 Mar.14 Mar.15 Mar.16 Total (E) (E) (E) (E) Orders B787-8 6 20 27 32 35 36 B787-9 4 8 30 Total 6 20 27 36 43 66 The numbers of B787-8/-9 are revised projections after PR release on Jun 19, 2012 ANA s aircraft for both domestic and international routes are included. Aircraft used by AirAsia Japan and Peach are not included. This slide contains forward-looking statements and actual results may differ materially. Please see Disclaimer on slide 2. 100% 80% 60% 40% 20% 0% 83% 79% 787-8 767-300 787-8 767-300ER (Survey Methodology: Performance Software provided by Boeing) Calculation based on actual fuel consumption from 26 Oct. 2011 to 30 Apr. 2012.
Expanding Joint Venture Expanding Network through Joint Venture X FY2012 X Joint Action Harmonized Network Harmonized Pricing Joint Sales Joint Marketing Anti Trust Immunity Potential Initiatives Optimize Schedule New Route Expansion Aircraft Upsizing Revenue Pooling etc. 6
Launching LCC Service Background of ANA s decision to establish own LCCs Market Share LCC 35.7% LCC 30.5% LCC 14.2% First Flight: March, 2012 Stock Share: ANA 34% First Eastern 33% Routes: DOM&INT routes from/to Kansai Europe N. America Asia Service Brand: Peach LCC Expanding Routes to/from Japan NE. Asia 6.9% Jet Star / SQ-LCC Spring / Cebu / Macau Jeju / Air Asia X First Flight: August, 2012 Stock Share: ANA 67% Air Asia 33% JAPAN Routes: DOM&INT routes from/to Narita Service Brand: AirAsia 7
Launching LCC Service Demand Created by LCC in NA and EU and High Potential in Asia Passengers Traffic by Airline Segment LCC Capacity Share of Total Seats* LCC FSC(incl. Charter Service) (Passengers/million) 1,000 800 600 400 200 North America 2001-2011 CAGR LCC +9.8% FSC +0.2% 40.0% 35.0% 30.0% 25.0% Europe 35.9% N. America 29.7% 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20.0% Asia/Pacific 19.1% (Passengers/million) 1,400 1,200 1,000 800 600 400 200 0 Europe 2001-2011 CAGR LCC +16.0% FSC +0.9% 15.0% 10.0% 5.0% 0.0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 NE. Asia 6.9% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 (Source: CAPA) (*) Seat capacity share in each region (Source: Euromonitor International 2011) 8
Launching LCC Service Location of Tokyo and Osaka Airports Direct Distance: Approx 400km Osaka Tokyo Tokyo Station International JAPAN Domestic/International Direct Distance:Approx 40km Kobe Itami Domestic Narita Domestic/International Haneda Direct Distance: Approx 60km Domestic/International Kansai Osaka Station Domestic/International 9
Launching LCC Service Strength and Weakness of ANA and LCC Demand Type Business VFR Pleasure Transit ANA Popularity in Japanese Market Strength Weakness Network / Joint Venture / Alliance Cabin Product & Service Airport Facilities (Lounge / Counter ) FFP (including Partner s Service) Value of Web Site & Fun Page (SNS) Evolution Diversification Connection Popularity in Non-Japanese Market Weakness Strength Promptness Landslide Low Fare LCC Cost Competitiveness 10
Launching LCC Service Entering New Growth Area while Expanding International Network Long Haul New Demand 777 787 International Network Long and Medium-haul Boeing 787 Joint Venture Short Haul <Narita Hub> International Short-haul & A320 Domestic <Kansai Hub> Leisure / Low Yield International Network Short-haul 767 737 Haneda / Narita Slot Expansion Domestic Network Pacific JV ASEAN Business / High Yield (The above illustration is not to scale) 11
Launching LCC Service As Expected, No Significant Cannibalization of ANA by Peach Passenger numbers of ANA and Peach on competing routes (March-November) Osaka=Sapporo Route Osaka=Fukuoka Route 1,200,000 1,000,000 Kansai Itami Kobe Kansai 80% 800,000 700,000 Kansai Itami Kansai 80% 70% 70% 600,000 800,000 500,000 60% 600,000 60% 400,000 50% 400,000 300,000 40% 50% 200,000 200,000 100,000 30% 0 2010 2011 2012 ANA L/F (Right Axis) 40% 0 2010 2011 2012 ANA L/F (Right Axis) 20% 12
Promoting Multi-brand Strategy Implementing Group Reorganization and Cost Restructuring Holding Company Transition (April 1, 2013) 100 billion cost reduction ANA Holding Company (FY2012 ~ FY2014) Consolidated Subsidiaries 100% 100% ANA Operating Company ANA WINGS 48.0 billion Personnel 100% *67% Air Japan AirAsia Japan 16.5 billion Investments Maintenance Equity-Method Subsidiaries and Affiliates 38.7% Other Operating Companies Peach Aviation Other Operating Companies 10.5 billion 7.0 billion Service Commissions Facilities Strategic Investments (Future) 18.0 billion Procurement * 67% based on voting rights (51% based on economic interest) 13
Current Issues for Full-service Carriers 14 Convenient Service for Connection Passenger Airport Functions Spot / Passenger Boarding Bridge Transit Access Airline Lounge Airport Transit Hotel Transit Visa Curfew Cost Reduction Landing Fee Expenditure for Facilities Fuel Tax Common Needs for FSC and LCC
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