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Jul 31, 2013
JAL Group Announces Consolidated Financial Results for First Quarter of Fiscal Year 2013

TOKYO July 31, 2013: The JAL Group (JAL) announced today, the consolidated financial results for the first quarter (April 1, 2013 ~ June 30, 2013) (hereinafter “the first quarter”) of fiscal year 2013*.

*Fiscal year 2013 is from April 1 to March 31, 2014. 

 

During the reporting period of consolidated financial results for the first quarter of fiscal year 2013, exports showed recovery on track and effects of various Japanese government policies permeated through Japan’s economy. Corporate earnings improved, leading to an increase in household income and investments, and signs of an economic rebound were seen. 

 

On the other hand, Japan’s economy came under downward pressure by the deceleration in overseas economies. Under these economic conditions, JAL Group strived to achieve greater management efficiency founded on a strong commitment to maintain flight safety, and to provide customers with unparalleled services so as to achieve the targets set out in Rolling Plan 2013 of the JAL Group Mid-Term Management Plan. 

 

As a result of the above, consolidated operating revenue increased by 2.6% year-on-year to 294.1 billion yen and operating expense increased by 6.5% to 272.0 billion yen, while operating profit declined by 29.8% from the previous year to 22.0 billion yen and ordinary income declined by 35.9% to 19.6 billion yen. Net income for the first quarter was 18.3 billion yen, down 31.9% from a year ago. 

 

(1)   JAL Group Consolidated Results for the Period April 1 - June 30, 2013

Unit: Billions of yen

1st Quarter FY2012

(April 1 - June 30, 2012)

1st Quarter FY2013

(April 1 - June 30, 2013)

Difference

vs. prior year

% vs. prior year

Total Operating Revenue

286.7

294.1

+7.3

102.6%

International Passenger

Domestic Passenger

Int. and Dom. Cargo

Others

95.9

108.2

19.1

63.4

98.9

108.8

18.9

67.3

+3.0

+0.5

-0.1

+3.9

103.1%

100.5%

99.2%

106.3%

Total Operating Expense

255.3

272.0

+16.7

106.5%

Operating Income

31.4

22.0

-9.3

70.2%

Operating Margin

11.0%

7.5%

-3.5%

-

Ordinary Income

30.7

19.6

-11.0

64.1%

Net Income

26.9

18.3

-8.6

68.1%

Figures are rounded down to the nearest tenth of a billion yen.

 

(2)   Air Transportation Segment

International Passenger

In international passenger operations, we strived to expand our network following the resumption of Boeing 787operations, and improve our products and services by installing new cabin seats.

From June 1, we restarted daily services of the Boeing 787 from Narita to Boston and to San Diego, after a temporary flight reduction, and assigned the 787 to fly between Haneda and Beijing, and Narita/Haneda and Singapore. To flexibly respond to changes in demand, we temporarily reduced flights between Narita and Beijing to improve profitability, while assigning larger aircraft between Narita and Honolulu (JL782/781) to meet thriving demand on this route.

To respond to low demand especially in April, special time-limited fares were introduced in advance on certain routes to stimulate demand. In particular, special fares were offered for Narita=San Diego flights, inaugurated in December 2012, in order to lure business passengers and boost leisure demand.

Under the slogan “the highest quality 1 class above”, JAL SKY SUITE 777, based on the configuration of the Boeing 777-300ER refurnished with sweeping upgrades in spaciousness, comfort and functionality in every Class, was deployed between Narita and New York, as well as between Narita and London where it was first rolled out. Of special note, JAL SKY SUITE was recognized as the best Business Class seat of all global airlines in SKYTRAX’s World Airline Award 2013, distinguishing JAL as the first Japanese airline to win the Best Business Class Airline Seat. JAL SKY Wi-Fi service providing Internet connections onboard was introduced aboard Narita=London/Frankfurt flights, in addition to New York, Chicago, Los Angeles and Jakarta flights.

As a result of the above, International supply when measured in Available-seat-kilometer (ASK) increased by 3.7% year-on-year, demand in terms of revenue-passenger-kilometer (RPK) increased by 2.8% year-on-year, and the Load Factor (L/F) declined 0.7 points year-on-year to 72.6%.International passenger revenue increased by 3.1% year-on-year to 98.9 billion yen. 

 

Domestic Passenger

We strived to maximize profitability of domestic passenger operations by striking a balance between supply and demand, and implementing measures to boost demand.  

In route operations, we strived to expand the domestic network significantly following the increase of departure and landing slots at Haneda and Itami. We increased flights to and from Haneda, and inaugurated flights between Haneda and Chubu to improve connectivity to international flights. At Itami, we resumed scheduled flights between Itami and Matsuyama/Hakodate/Misawa, and increased a total of 18 flights on 16 routes.

As an Official Sponsor of Tokyo Disney Resort® since it opened, JAL launched a project in collaboration with Tokyo Disney Resort® to celebrate its 30th anniversary and boost leisure demand. Six aircraft were painted with special Disney livery and dubbed JAL Happiness Express. Many customers have used these aircraft.

Consequently, domestic supply during the first quarter increased  by 3.8% year-on-year when measured in available-seat-kilometer (ASK), demand increased by 2.0% in terms of revenue-passenger-kilometer (RPK), and the Load Factor (L/F) declined by 1.1 points year-on-year to 58.6%. Domestic passenger revenue increased by 0.5% year-on-year to 108.8 billion yen. 

 

International and Domestic Cargo

In international cargo operations, amid stagnant overall outbound demand from Japan, sales sections carried out sales activities aggressively to effectively use Belly space on passenger flights and improved revenue management in order to maximize revenue. Sales promotion of J SOLUTIONS PHARMA, a value-added service with advance temperature control recommended for pharmaceuticals, etc., was improved, and sales increased. Sales staffs also strive to capture perishables, etc. to promote the use of J LINK, which provides seamless connections between domestic and international flights via Haneda airport. The volume of international cargo transported during the first quarter in terms of revenue-cargo-ton-kilometer (RCTK) increased by 5.5% year-on-year, and international cargo revenue declined by 1.5% year-on-year to 12.8 billion yen due to tough competition.

Domestic cargo operations were affected by downsizing of aircraft on major routes and a reduction in perishable shipments due to bad weather, but sales staff did their best to maximize revenue by improving customer relations and capturing new shipments. The volume of domestic cargo transported during the first quarter in terms of revenue-cargo-ton-kilometers (RCTK) increased by 1.6% year-on-year, and domestic cargo revenue increased by 0.6% year-on-year to 6.0 billion yen. 

 

(3)   JAL Group Consolidated Financial Position

FY2012

As of March 31, 2013

1st Quarter FY2013

As of June 30, 2013

Difference

Total assets (billion yen)

1,216.6

1,223.7

+7.0

Net assets (billion yen)

583.1

568.7

-14.4

Capital ratio *1(%)

46.4

45.1

-1.4 points

Interest-bearing debt (billion yen)

160.1

149.2

-10.8

Debt/Equity Ratio *2

0.3

0.3

- 0.0

Figures are rounded down to the nearest tenth of a billion yen while percentage points are rounded up to the nearest tenth.

Note:

1. Shareholders’ equity is total net assets excluding minority interests

2. Debt-to-equity ratio is interest-bearing debt divided by shareholders equity 

 

(4) Forecast of JAL Group Consolidated Financial Results

There is no revision in the forecast of consolidated financial results for the year ending on March 31, 2014 announced on April 30, 2013. It remains as follows:

Unit: Billions of yen

Operating Revenue

Operating Income

Ordinary Income

Net Income

Forecast for the full fiscal year ending March 31, 2014

1,272

140

127

118

Note: The forecast above represents estimates of future results based on the information available at the time of release and the company’s reasonable judgment on this information. They are inherently subject to risks which may result in a divergence in the actual result from the forecasts and estimates contained herein.  

 

   20130731_Attachment.pdf

 

   20130731 - JAL Announces Financial Results for Q1 FY2013.pdf    

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