Press Release
Results of Japan Airlines Corporation and Consolidated Subsidiaries for the Fiscal Year Ended March 31, 2007
Tokyo May 9, 2007: Japan Airlines Corporation announced today the consolidated financial results of the JAL Group for FY2006, the fiscal year ended March 31, 2007. The announcement includes the Group's consolidated financial targets for FY2007 the year ending March 31, 2008.
1. JAL Group Consolidated FY2006 Financial Results
|
Units: Japanese yen () billions* |
FY 2006 Results (Year ending Mar 31, 2007) |
FY 2006 Forecast (Announced on Feb 6, 2007*) |
FY2005 Results (Year ending Mar 31, 2007) |
Difference between FY 2005 & FY 2006 Results |
|
Total operating revenues |
2,301.9 |
2,268.0 |
2,199.3 |
102.5 |
|
International passenger |
724.8 |
729.0 |
690.2 |
34.6 |
|
Domestic passenger |
675.6 |
672.0 |
659.9 |
15.6 |
|
International cargo |
190.5 |
189.0 |
180.5 |
9.9 |
|
Other |
710.8 |
678.0 |
668.5 |
42.2 |
|
Total operating expenses |
2,278.9 |
2,255.0 |
2,226.2 |
52.7 |
|
Operating income (loss) |
22.9 |
13.0 |
- 26.8 |
49.7 |
|
Ordinary income (loss) |
20.5 |
0.5 |
- 41.6 |
62.1 |
|
Net income (loss) |
- 16.2 |
3.0 |
- 47.2 |
30.9 |
Figuresrounded down to the nearest tenth of a billion yen.
*FY 2006 Forecast announced on February 6, 2007 in JALCorporation &Consolidated SubsidiariesFY2006 Third Quarter Results
Total operating revenues for FY2006 the year ended March 31, 2007 were 2,301.9 billion Japanese yen, up 4.6% on the same period last year. International passenger demand was strong, particularly in terms of first and business class demand. International passenger revenue increased by 34.6 billion yen to 724.8 billion yen, a 5.0% year-on-year improvement.
Domestic passenger demand showed signs of recovery with individual passenger sales up on last year. Compared to FY2005, domestic passenger revenue went up by 15.6 billion yen (1.6%) to a total of 675.6 billion yen. International cargo revenue was 190.5 billion yen, up 9.9 billion yen on the previous fiscal year.
Compared to the previous year, international passenger unit price increased in FY2006 by 13.1% due to an increase in high yield business demand, and the continued use of the fuel surcharge to offset the high cost of fuel. Domestic passenger unit price increased by 1.5% on the previous year, mainly due to the increase in the number of individual passengers. The unit price of international cargo also rose by 6.1% due to high yield cargo out of Japan and revisions to the fuel surcharge. As a result, JAL recorded a year-on-year operating revenue increase of 102.5 billion yen.
During FY2006, total operating costs went up by 2.3% to 2,278.9 billion yen compared to FY2005. Despite a 43.6 billion yen increase in the airline's fuel bill compared to the same period last year, steady cost reform coupled with the introduction of contingency measures, such as fuel consumption reductions, fuel surcharges, and a 10% basic wage reduction, helped to limit the overall increase in operating costs.
As a result, JAL Group posted a FY2006 operating profit of 22.9 billion yen, 49.7 billion yen up on FY2005, and an ordinary profit of 20.5 billion yen compared to an ordinary loss of 41.6 billion yen in FY2005.
JAL Group recorded a net loss of 16.2 billion yen, primarily due to the removal of 54.4 billion yen of deferred tax asset from its balance sheet, and an extraordinary loss of 6 billion yen resulting from a special early retirement program JAL launched in March 2007. This was compared to a net loss in FY2005 of 47.2 billion yen.
2. Summary of Air Transportation Segment Results
Operating Revenue
a) International Passenger
Against the backdrop of a business recovery in Japan, international passenger demand was strong, particularly in terms of business travelers. Passenger demand was especially strong on short and medium-haul routes, such as South Korea and Southeast Asia routes, as well as China routes on which JAL significantly increased flight frequency.
Through network restructuring by shifting to high profit routes, suspending low profit routes and aircraft downsizing, supply measured in available seat kilometers (ASK) decreased by 9.5% from the previous year. Passenger demand measured in revenue seat kilometers (RPK), however, decreased by only 7.2%. As a result, the international seat load factor (L/F) increased by 1.7 points to 71.1%.
Unit price increased by 13.1% from the previous year due to an increase in high yield business demand resulting from service improvement measures such as the expansion of the JAL Shell Flat seat onto more routes; proactive sales efforts; and the continued use of the international passenger fuel surcharge to offset the high cost of fuel. As a result, passenger revenue increased 5.0% from the previous year to 724.8 billion yen.
The number of international passengers carried by JAL Group airlines decreased by 5.1% to 13,467,241. (FY2005 total: 14,187,626).
b) DomesticPassenger
In addition to the introduction of discount fares, and the launch of seasonal promotional campaigns to stimulate demand, JAL increased the number of Class J seats - JAL's domestic business class seat - on aircraft to meet customer demand.
The number of individual passengers increased, but group passenger numbers declined slightly when compared to the previous year, a result of the effect the Aichi Expo had in boosting demand in Japan during 2005, and for example decreased demand from skiers due to poor snowfall in FY2006.
Supply measured in available seat kilometers (ASK) increased by 0.9% from the previous year, and passenger demand measured in revenue passenger kilometers (RPK) increased by 0.8%. Unit price increased by 1.5% from the previous year due to fare increases. Domestic passenger revenue increased by 2.4% from the previous year to 675.6 billion yen.
The number of domestic passengers carried by JAL Group airlines increased by 0.3% to 43,984,840. (FY2005 total: 43,848,755).
c) International Cargo
Cargo traffic from Japan to North America showed signs of recovery, and cargo traffic from Japan to the high growth market of China throughout FY2006 was strong. Cargo traffic from Europe to Japan was weak due to the effects of a high Euro. Cargo traffic from Southeast Asia dropped below last year's levels due to a reduction in supply in terms of cargo space resulting from international passenger flight route restructuring. At the same time, freighter operations were expanded to high growth markets such as China.
Measured in revenue cargo ton kilometers (RCTK), international air cargo demand decreased by 0.6% on the previous year. Due to an increase in high yield cargo traffic out of Japan and fuel surcharges, unit price rose by 6.1% and revenue increased by 5.5% from the previous year to 190.5 billion yen.
The volume of international cargo carried was 770,781 tons, down just 0.7% on the year before.
Operating Costs & Foreign Exchange
a) Fuel costs
The average market price for aircraft fuel increased from US$72.1 per barrel (Singapore Kerosene) for the previous fiscal year to US$79.7 per barrel for the fiscal year ended March 31, 2007. JAL tried to limit the full effect of increased fuel prices by conducting a wide range of measures including fuel hedging, and fuel consumption reductions. As a result, the JAL Group's FY2006 fuel bill increased by 11.6% or by 43.6 billion to a total of 420.8 billion yen.
b) Personnel costs
Personnel costs decreased by 44.1 billion yen from the previous year due to 10% basic wage reduction introduced in April 2006, and a revision to the company's pension system.
c) Foreign exchange
The average yen-to-dollar exchange rate for the fiscal year ended March 31, 2007 was 117.0 to US$1.00 compared to the previous fiscal year's average rate of 112 to US$1.00. However, the negative effect of the exchange rate on operating income was partially limited by US dollar hedging.
3. Financial Indicators
|
|
FY06 year ended Mar 31,2007 |
FY05year ended March 31,2006 |
Difference |
|
Total Assets (billion yen) |
2,091.2 |
2,161.2 |
- 70.0 |
|
Stockholders' Equity (billion yen) * |
311.0 |
148.0 |
163.0 |
|
Capital to Asset Ratio (%)* |
14.9% |
6.9% |
+ 8 points |
|
Interest-bearing debt on balance sheet (billion yen) |
1026.1 |
1,236.4 |
- 210.2 |
|
Debt/ Equity Ratio (on balance sheet) * |
3.3 |
8.4 |
-5.1 |
Figuresrounded down to the nearest tenth of a billion yen.
Debt /Equity Ratio(on balance sheet) = interest bearing debts (on balance sheet) divided by stockholders equity.
* Stockholders'Equity does not include minority stockholders'equity due to new accounting procedures.
Total assets decreased by 70 billion yen due to the removal of 54.4 billion yen of deferred tax assets from the balance sheet, and the sale of fixed assets etc.
Interest bearing debts decreased by 210.2 billion yen from previous year due to efforts to increase asset efficiency and shrink external loans.
Equity capital increased through the public share offering in July 2006. As a result, the capital to asset ratio equity increased 8 points to 14.9%, and the debt/ equity ratio decreased to 3.3.
4) JAL Group Consolidated FY2006 Fourth Quarter Result
Units: Japanese yen-billions
|
Period: January-March 2007 |
4th Quarter FY06 (Year ending March 2007) |
4th Quarter FY05 (Year ended March 2006) |
Difference |
Same period % comparison on previous year |
|
Operating revenue |
567.7 |
530.0 |
37.6 |
107.1% |
|
International Passenger |
175.5 |
162.0 |
13.5 |
108.4% |
|
Domestic passenger |
160.7 |
155.7 |
5.0 |
103.2% |
|
International cargo |
44.9 |
41.9 |
3.0 |
107.3% |
|
Other |
186.4 |
170.3 |
16.0 |
109.4% |
|
Operating expenses |
538.9 |
556.0 |
- 17.0 |
96.9% |
|
Operating income (loss) |
28.7 |
- 25.9 |
54.7 |
- |
|
Ordinary income (loss) |
28.2 |
- 30.7 |
59.0 |
- |
|
4thQuarter Net income (loss) |
- 6.8 |
- 24.1 |
17.2 |
- |
Figuresrounded down to the nearest tenth of a billion yen.
5. JAL Group Consolidated Financial Targets
|
Unit: Japanese yen () billions |
FY 2007 (Year ending March 31, 2008) |
Difference vs. FY 2006 |
|
Total operating revenues |
2197.0 |
- 104.9 |
|
International passenger |
724.0 |
- 0.8 |
|
Domestic passenger |
691.0 |
15.4 |
|
International cargo |
192.5 |
2.0 |
|
Other |
589.5 |
- 121.3 |
|
Operating income |
35.0 |
12.1 |
|
Ordinary income |
21.0 |
0.5 |
|
Net income |
7.0 |
23.2 |
*Figuresrounded down to the nearest tenth of a billion yen.
Key assumptions used for above figures: 120 = US$1.00; average aircraft fuel price = $75 per barrel
In FY2007, the year ending March 31 2008, operating revenue is expected to decrease by 104.9 billion yen compared to FY2006, mainly because JALUX will no longer be a JAL Group subsidiary.
JAL Group's international passenger business is expected to be strong in terms of demand, mainly due to the marked recovery of demand on China routes to which JAL Group has increased flight frequency. Service improvements, such as membership of oneworld which the airline joined on April 1 2007, and the planned introduction of a premium economy class cabin towards the end of FY2007 will help to strengthen its competitiveness.
As for domestic passenger business, in FY2006 the JAL Group showed signs of recovery with increases in both passenger numbers and unit price. The company will build on this moderate growth in order to increase its market share in Japan in FY2007 by strengthening its product offering through for example the introduction of a First Class seat and by strengthening its corporate sales activities.
The Group will continue to improve profitability by cost restructuring, by implementing personnel cost, fuel cost and other cost reduction measures, and will focus its resources on its core air transport business segment in order to achieve sustainable growth.
In FY2007, JAL Group forecasts operating income of 35.0 billion yen, an improvement of 12.1 billion yen on FY2006. A net income of 7 billion yen is forecast for FY2007, an improvement of 23.2 billion on FY2006.
In this fiscal year, JAL Group will push ahead with its efforts to rebuild the business foundation of the organization by implementing the FY2007-2010 Medium Term Revival Plan - announced on February 6 2007 - in order to realize its targets of sustained growth and continuous stable profits.
Based on the above targets, JAL Group does not expect to pay a dividend for the fiscal year ending March 31, 2008.
6. JAL Corporation and Consolidated SubsidiariesComparativeConsolidated Statements of Operations for the Year Ended March 31, 2007
|
Units: Japanese yen ()millions |
FY2006 (Year ending March 2007) |
FY2005 (Year ending March 2006) |
|
Operating revenues |
2,301,915 |
2,199,385 |
|
Operating expenses |
2,278,997 |
2,226,220 |
|
Operating costs |
1,885,211 |
1,839,190 |
|
Selling, general & administrative expenses |
393,785 |
387,029 |
|
Operating income (loss) |
22,917 |
- 26,834 |
|
Non-operating income |
33,834 |
26,378 |
|
Non-operating expenses |
36,175 |
41,152 |
|
Ordinary income (loss) |
20,576 |
- 41,608 |
|
Extraordinary profit |
52,413 |
30,471 |
|
Extraordinary loss |
20,933 |
35,303 |
|
Income before income taxes |
52,055 |
- 46,440 |
|
Income taxes, current |
9.953 |
8,419 |
|
Income taxes, deferred |
54,424 |
- 9,966 |
|
Minority interests |
3,945 |
2,350 |
|
Net income |
- 16,267 |
- 47,243 |
7. JAL Group: International Data- Passengers/RPK/ASK /Load FactorsFY2006
(JAL, JAA and JALWAYS only)
|
ROUTE |
PAX NBR FY2006 |
y.o.y % |
RPK 000s FY2006 |
y.o.y % |
ASK 000s FY2006 |
y.o.y % |
FY2006L/F%
|
FY2005 L/F% |
|
Transpacific |
2,967,106 |
88.5 |
23,150,023 |
89.5 |
29,858,527 |
89.4 |
77.5 |
77.5 |
|
Europe |
1,399,051 |
90.5 |
12,999,195 |
90.5 |
17,047,965 |
82.7 |
76.3 |
69.7 |
|
S.E.Asia |
4,226,297 |
97.4 |
14,594,925 |
99.6 |
22,883,243 |
95.5 |
63.8 |
61.1 |
|
Oceania |
727,190 |
90.2 |
5,068,042 |
90.4 |
7,323,910 |
94.5 |
69.2 |
72.4 |
|
Guam |
531,064 |
60.8 |
1,352,050 |
61.8 |
1,869,721 |
63.1 |
72.3 |
73.8 |
|
Korea |
1,700,460 |
102.9 |
1,796,505 |
106.0 |
2,545,699 |
100.6 |
70.6 |
67.0 |
|
China |
1,911,681 |
118.2 |
3,624,111 |
118.9 |
6,441,604 |
108.4 |
56.3 |
51.3 |
|
Others |
4,392 |
1132.0 |
13,072 |
1111.6 |
16,342 |
1138.0 |
80.0 |
81.9 |
|
TOTAL |
13,467,241 |
94.9 |
62,597,923 |
92.8 |
87,987,011 |
90.5 |
71.1 |
69.4 |
RPK = Revenue Passenger Kilometers (product of distance flown multiplied by revenue passengers carried)
ASK=Available Seat Kilometers (capacity)
Seat L/F = Seat Load Factor, the percentage of seats filled per flight
8. ConsolidatedJAL GroupAirTransportSegmentRevenue for the year ended March 31, 2007
|
Units: |
FY2005 Year ended March 31, 2006 |
FY2006 Year ended March 31, 2007 |
Change y.o.y |
||
|
Japanese yen () millions |
Amount |
% |
Amount |
% |
% |
|
International |
|
|
|
|
|
|
Passenger operations |
690,226 |
39.9 |
724,889 |
40.3 |
105.0 |
|
Cargo operations |
180,573 |
10.4 |
190,500 |
10.6 |
105.5 |
|
Mail-service operations |
8,441 |
0.5 |
9,200 |
0.5 |
109.0 |
|
Luggage operations |
2,270 |
0.1 |
1,975 |
0.1 |
87.0 |
|
Subtotal |
881,513 |
50.9 |
926,565 |
51.5 |
105.1 |
|
Domestic |
|
|
|
|
|
|
Passenger operations |
659,998 |
38.1 |
675,680 |
37.5 |
102.4 |
|
Cargo operations |
29,440 |
1.7 |
28,938 |
1.6 |
98.3 |
|
Mail-service operations |
10,819 |
0.6 |
10,858 |
0.6 |
100.4 |
|
Luggage operations |
265 |
0.0 |
298 |
0.0 |
112.3 |
|
Subtotal |
700,523 |
40.4 |
715,774 |
39.7 |
102.2 |
|
Other revenues |
54,935 |
3.2 |
60,917 |
3.4 |
110.9 |
|
Incidental business revenues |
96,010 |
5.5 |
98,262 |
5.4 |
102.3 |
|
Total revenues |
1,732,983 |
100.0 |
1,801,520 |
100.0 |
104.0 |
9. JAL GroupConsolidatedTrafficStatisticsYears ended March 31,2007& 2006
|
|
FY2006 Year ended March 31, 2007 |
FY2005 Year ended March 31, 2006 |
Change % or points |
|
INTERNATIONAL |
|
|
|
|
Passenger number |
13,467,241 |
14,187,626 |
94.9% |
|
Revenue passenger Kilometers (000) |
62,597,923 |
67,434,613 |
92.8% |
|
Available seat Kilometers (000) |
87,987,011 |
97,174,777 |
90.5% |
|
Revenue seat load Factor |
71.1% |
69.4% |
+ 1.7 points |
|
Revenue cargo ton Kilometers (000) |
4,515,812 |
4,541,293 |
99.4% |
|
Mail ton kilometers (000) |
164,336 |
161,690 |
101.6% |
|
Revenue ton Kilometers (000) |
10,481,369 |
10,954,502 |
95.7% |
|
Available ton kilometers (000) |
15,769,219 |
16,414,876 |
96.1% |
|
Revenue weight load factor |
66.5% |
66.7% |
- 0.2 points |
|
DOMESTIC |
|
|
|
|
Passenger number |
43,984,840 |
43,848,755 |
100.3% |
|
Revenue passenger Kilometers (000) |
33,187,684 |
32,910,535 |
100.8% |
|
Available seat Kilometers (000) |
51,864,339 |
51,415,813 |
100.9% |
|
Revenue seat load factor |
64.0% |
64.0% |
- 0.0 points |
|
Revenue cargo ton Kilometers (000) |
400,507 |
388,443 |
103.1% |
|
Mail ton kilometers (000) |
86,985 |
85,519 |
101.7% |
|
Revenue ton Kilometers (000) |
2,968,868 |
2,938,796 |
101.0% |
|
Available ton kilometers (000) |
6,073,609 |
6,034,514 |
100.6% |
|
Revenue weight l/factor |
48.9% |
48.7% |
+ 0.2 points |
|
TOTAL |
|
|
|
|
Passenger number |
57,452,081 |
58,036,381 |
99.0% |
|
Revenue passenger Kilometers (000) |
95,785,607 |
100,345,148 |
95.5% |
|
Available seat Kilometers (000) |
139,851,350 |
148,590,590 |
94.1% |
|
Revenue seat load factor |
68.5% |
67.5% |
+ 1.0 points |
|
Revenue cargo ton Kilometers (000) |
4,916,319 |
4,929,736 |
99.7% |
|
Mail ton kilometers (000) |
251,321 |
247,209 |
101.7% |
|
Revenue ton Kilometers (000) |
13,450,237 |
13,893,298 |
96.8% |
|
Available ton Kilometers (000) |
21,842,828 |
22,449,390 |
97.3% |
|
Revenue weight l/f |
61.6% |
61.9% |
- 0.3 points |
###
For customer & general enquiries, please contact your local JAL office:www.jal.co.jp/en/information/inter/branch/
Journalists with media enquiries, please contact the press office: stephen.pearlman@jal.com / Tel: 81-3-5460-3109 www.jal.com/en/corporate/
|
| FY2006 Result.pdf |
