JAL Group announces consolidated financial results

TOKYO, Japan – JAL Group (JAL) today announced the consolidated financial results for the nine months of the fiscal year of 2015 – the period from April 1 to December 31, 2015.

TOKYO, Japan – JAL Group (JAL) today announced the consolidated financial results for the nine months of the fiscal year of 2015 – the period from April 1 to December 31, 2015.

During the reporting period of consolidated financial results for the first nine months of the fiscal year (April 1 to December 31, 2015)(hereinafter referred to as the “third quarter”), Japan’s economy continued to recover moderately, though weakness was seen in some areas. Consumer spending generally remained robust. Overseas economies recovered in general with some exceptions, such Asian emerging economies as China, where weakness was observed. On the other hand, the number of foreign visitors to Japan increased significantly by 47.1% year-on-year to 19,737 thousand in total from January to December 2015. Fuel prices, which greatly affect our fuel purchasing costs, international passenger revenue and international cargo revenue, declined from the previous year, but the Japanese yen remained weaker against the U.S. dollar.

Under these economic conditions, JAL Group strived to increase a sense of profitability amongst its employees through JAL Philosophy and the amoeba management system, realize greater management efficiencies, provide the finest service to its customers anchored in its strong commitment to flight safety, and thus achieve the targets in the JAL Group Medium Term Management Plan Rolling Plan 2015 announced on February 18, 2015.

As a result, operating revenues in the third quarter was 1,023.4 billion yen (up 0.1% year-on-year), operating expense was 853.3 billion yen (down 3.5% year-on-year), and consequently, operating income came to 170.0 billion yen (up 23.0% year-on-year), ordinary income was 170.4 billion yen (up 24.0% year-on-year), and net income attributable to owners of the parent was 143.6 billion yen (up 20.1% year-on-year).

(1) JAL Group Consolidated Results for the Period April 1 – December 31, 2015

Unit: Billions of yen Fiscal Year 2014
(Apr. 1 – Dec. 31, 2014) Fiscal Year 2015
(Apr. 1 – Dec. 31, 2015) Difference
vs. Prior Year % vs. Prior Year

Operating Revenues 1,022.3 1,023.4 + 1.0 100.1
International Passenger
Domestic Passenger
Int. and Dom. Cargo
Others 345.9
373.0
63.1
240.2 345.9
384.1
60.4
232.7 – 0.0
+ 11.1
– 2.6
– 7.4 100.0
103.0
95.8
96.9
Operating Expenses 884.1 853.3 – 30.7 96.5
Operating Income 138.2 170.0 + 31.7 123.0
Operating Margin 13.5% 16.6% + 3.1 points –

Ordinary Income 137.4 170.4 + 33.0 124.0
Net Income attributable to owners of the parent 119.6 143.6 + 24.0 120.1

Figures are rounded down to the nearest tenth of a billion yen while percentages are rounded off to the first decimal place.

(2) Air Transportation Segment

International Passenger

In international passenger operations, passenger traffic increased as a result of capturing the robust demand from inbound travelers especially on North America, China and Southeast Asia routes.
In route operations, we launched four weekly services between Narita and Dallas/Fort Worth on November 30, 2015 using the newly revamped 787-8 called JAL SKY SUITE 787. Load factors have been high and flight frequency will be increased to daily services from March 20, 2016. Dallas/Fort Worth Airport is the main hub of our joint business partner, American Airlines (AA). By using AA’s extensive network across the U.S. and Central and South America, customers are sure to enjoy their travels with greater convenience.

On the product side, we progressively introduced JAL SKY SUITE aircraft, installed with fully-flat seats in Business Class with unrestricted aisle access and “New Spacious Economy” seats offering more space than the standard economy seating.

In January 2016, JAL was recognized by FlightStats, a U.S. global flight tracker which analyzes on-time arrival rates of airlines, etc., as the best performing airline for on time arrivals of domestic and international flights from January to December 2015 in the Major International Airlines category. Furthermore, JAL placed first in the Asia-Pacific Major Airlines category, and also the Airline Alliance category as a member of the oneworldยฎ alliance. As a result, JAL ranked first in all three applicable categories and became a Triple Crown winner for the fourth time after 2010*, 2012 and 2013.
*In 2010, the Alliance category was not established. JAL was winner in the Asia Regional Airlines category (does not exist currently).

As a result of the above, the capacity of international flights in the third quarter when measured in Available Seat Kilometers (ASK) increased by 1.1% year-on-year, demand when measured in Revenue Passenger Kilometers (RPK) increased by 6.1% year-on-year, the Load Factor (L/F) was 79.1%, up 3.7 percentage points year-on-year, and international passenger revenue came to 345.9 billion yen, down 0.0% from the previous year.

Domestic Passenger

In airport services, we introduced “JAL Express Tag Service” at Haneda Airport domestic counters aimed to save time to check in baggage, under the concept of “JAL Smart Style” to provide simple, convenient and speedy services.

Taking part in the project to revitalize regional Japan through the joint efforts of central and local governments, we launched regional revitalization promotions using “Furusato discounts (*)” to do our part in inspiring more customers to see different parts of Japan.
(*) A common name used for creating travel products, which deduct a certain amount through a subsidy as part of “Urgent Assistance Grant for Regional Citizens, Daily Life, etc.”

As a result of the above, capacity of domestic flights during the reporting period decreased by 1.1% year-on-year when measured in Available Seat Kilometers (ASK), demand increased by 1.2% in terms of Revenue Passenger Kilometers (RPK), while the Load Factor (L/F) increased by 1.5 percentage points year-on-year to 68.0%. Domestic passenger revenue increased by 3.0% year-on-year to 384.1 billion yen.

International and Domestic Cargo

In international cargo operations, we continued to promote sales of “J TEMPยฐ,” a temperature -controlled transport service using special equipment, and “J SOLUTIONS PHARMA,” a specialized transport service for pharmaceuticals.

As a result, cargo volume for the reporting period when measured in Revenue Cargo Ton Kilometers (RCTK) increased by 2.3% year-on-year and revenue was 42.4 billion yen, down 4.1% year-on-year due to a decrease in fuel surcharge, etc.

In domestic cargo operations, we secured shipments exceeding the previous year through aggressive sales, despite the decrease in JAL’s capacity. Cargo volume for the reporting period when measured in Revenue Cargo Ton Kilometers (RCTK) increased by 1.7% year-on-year, but revenue was 17.9 billion yen, decreased by 4.3% due to changes in the route structure and such.

(3) JAL Group Consolidated Financial Position

FY2014
As of March 31, 2015 The Third Quarter of FY2015
As of December 31, 2015 Difference
Total Assets (billion yen) 1,473.3 1,545.7 + 72.4
Net Assets (billion yen) 800.7 894.6 + 93.9
Equity Ratio *1(%) 52.7 56.2 + 3.5 points
Interest-bearing Debt
(billion yen) 100.5 79.8 – 20.7
Debt/Equity Ratio *2 0.1 0.1 – 0.0

Figures are rounded down to the nearest tenth of a billion yen while percentages are rounded off to the first decimal place.
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) Consolidated Financial Forecast for the Fiscal Year Ending March 31, 2016

The consolidated earnings forecast remains the same as the full-year forecast announced in “Consolidated Financial Results for the Six Months Ended September 30, 2015” on October 30, 2015.

Unit: Billions of yen Operating Revenues Operating Income Ordinary Income Net Income attributable to owners of the parent
Previous Forecast
(Announced on October 30, 2015) 1,347.0 204.0 202.0 172.0

(5) Dividend Policy

We intend to pay 25% of net income for the fiscal year belonging to parent after adjusting income tax deferred to our shareholders as dividends. According to our full-year consolidated earnings forecast, we expect to pay a year-end dividend of 119 yen per share.

Dividends per Share
Fiscal Year End Total
Fiscal Year 2015 119.00 yen 119.00 yen
Fiscal Year 2014 104.00 yen 104.00 yen

JAL Group announces consolidated financial results

JAL Group (JAL) today announced the consolidated financial results for the first six months of the fiscal year of 2015 – the period from April 1 to September 30, 2015.

JAL Group (JAL) today announced the consolidated financial results for the first six months of the fiscal year of 2015 – the period from April 1 to September 30, 2015.

During the reporting period (hereinafter referred to as the “second quarter”), the Japanese economy continued to recover at a moderate pace with the pace of consumer spending remaining generally robust. Global economies recovered in general with some exceptions such as China and Korea, where weakness was observed. On the other hand, the number of international visitors to Japan, which affects passenger revenue, increased significantly over the previous year. Fuel prices, which greatly affect our fuel purchasing costs, were lower than what they were last year, but the Japanese yen remained weak against the U.S. dollar. Under these conditions, JAL Group strived to increase a sense of profitability amongst employees through JAL Philosophy and the amoeba management system, realize greater management efficiencies, provide the finest service to its customers anchored in its strong commitment to flight safety, and thus achieve the targets in the JAL Group Medium Term Management Plan Rolling 2015 announced on February 18, 2015.

As a result, operating revenue in the second quarter was 687.9 billion yen (up 0.6% year-on-year), operating expense was 567.9 billion yen (down 3.9% year-on-year), and consequently, operating income came to 119.9 billion yen (up 29.2% year-on-year), ordinary income was 122.6 billion yen (up 33.7% year-on-year), and net income attributable to owners of the parent was 103.3 billion yen (up 28.7% year-on-year).

JAL Group announces consolidated financial results

JAL Group (JAL) today announced the consolidated financial results for first quarter of fiscal year 2015 – the period from April 1 to June 30, 2015.

JAL Group (JAL) today announced the consolidated financial results for first quarter of fiscal year 2015 – the period from April 1 to June 30, 2015.

During the reporting period of consolidated financial results for the first quarter of the fiscal year (April 1 to June 30, 2015) (hereinafter referred to as the “first quarter”), the Japanese economy has been recovering at a moderate pace with consumer spending showing signs of improvement. The global economy is recovering in general, though some economy has shown weakness. Due to robust inbound demand, the number of international visitors to Japan has increased significantly from the previous year. Fuel prices, which greatly affect our fuel purchasing costs, have been low compared to the year before. On the other hand the Japanese yen depreciated in the foreign exchange market.

Under these economic conditions, JAL Group strived to increase management efficiency and provide unparalleled service to the customers, anchored in its strong commitment to flight safety, and thus achieve the targets in JAL Group Medium Term Management Plan Rolling Plan 2015 announced on February 18, 2015.

As a result of the above, consolidated operating revenue increased by 1.6% year-on-year to 312.0 billion yen and operating expense declined by 4.4% to 275.7 billion yen, while operating profit increased by 94.6% from the previous year to 36.2 billion yen and ordinary income increased by 131.7% to 39.2 billion yen. Net income attributable to owners of parent for the first quarter was 32.6 billion yen, up 120.7% from a year ago.

International Passenger

In international passenger operations, we attracted robust inbound demand especially on China and Southeast Asian routes, while outbound business demand remained steady. As a result, passenger traffic results increased significantly, contributing to an increase in international passenger revenue over the previous year.

On the product side, following the Boeing 777-300ER and Boeing 767-300ER, we have introduced the “New Spacious Economy” seats on the Boeing 787 since FY2014 with services available on Tokyo (Narita) =New York (JL004/003), Paris, Helsinki and Delhi routes. While the industry norm is a 9-abreast economy layout, JAL’s Boeing 787 Economy Class offers 8-abreast seating and spacious seats, which have won excellent customer reviews.

As a result of the above, international capacity in the first quarter when measured in Available Seat Kilometers (ASK) increased by 2.4% year-on-year, demand when measured in Revenue Passenger Kilometers (RPK) increased by 8.9% year-on-year, the Load Factor (L/F) was 77.9%, up 4.6 percentage points year-on-year, and international passenger revenue came to 109.4 billion yen, up 2.1% from the previous year.

Domestic Passenger

In route operations, we increased flights between Tokyo (Haneda) = Sapporo (New Chitose), Tokyo (Haneda) = Okinawa (Naha) and between Osaka (Itami) = Sapporo (New Chitose) routes. Services by JAL SKY NEXT with new cabin interiors, launched in FY2014, were progressively expanded to routes bridging Osaka (Itami) and regional cities, in addition to routes flying in and out of Tokyo (Haneda). And from April, JAL started code-sharing with Amakusa Airlines on three routes; Amakusa=Fukuoka, Amakusa= Kumamoto and Kumamoto=Osaka (Itami), aiming to increase the customers’ convenience and contribute to the regional economy.

Sales-wise, we offered a new discount called “Ultra Sakitoku” to reserve flights 75 days prior to the boarding date. During the Golden Week holidays, we increased flights usable at discount fares. These flights were in great demand by many customers for flying home or vacationing.

As a result of the above, domestic supply during the reporting period decreased by 1.0% year-on-year when measured in Available Seat Kilometers (ASK), demand increased by 0.1% in terms of Revenue Passenger Kilometers (RPK), while the Load Factor (L/F) increased by 0.7 point year-on-year to 63.1%. Domestic passenger revenue increased by 3.9% year-on-year to 109.9 billion yen.

International and Domestic Cargo

In international cargo operations, as special shipments from Japan to North America owing to the U.S. west coast port strike showed signs of settling down, we improved revenue management to efficiently capture transit shipments in order to steadily secure shipments and maximize revenues.

As a result, the volume of international cargo in terms of Revenue Cargo Ton Kilometers (RCTK) in the first quarter increased by 9.4% year-on-year, and international cargo revenue increased by 5.1% to 14.7 billion yen.

In domestic cargo operations, shipments of parcels were steady and strong. As a result, the volume of domestic cargo during the reporting period when measured in Revenue Cargo Ton Kilometers (RCTK) increased by 9.7% from the year, but domestic cargo revenue was 5.7 billion yen, or decreased by 0.5% from the previous year, due to intensifying competition.

JAL Group announces consolidated financial results

TOKYO, Japan – JAL Group (JAL) today announced consolidated financial results for the nine months ended December 31, 2013.

TOKYO, Japan – JAL Group (JAL) today announced consolidated financial results for the nine months ended December 31, 2013.

During the reporting period of consolidated financial results for the third quarter of the fiscal year (April 1 to December 31, 2013)(hereinafter referred to as the “third quarter”), Japan’s economy has been on a moderate recovery track with a last-minute surge in demand ahead of the increase of consumption tax. Exports have shown movements of picking up and the effects of Japanese government policies have been developing, while household income and business investment have increased. However, the slowdown of overseas economies has been a downside risk to the Japanese economy.

Under these economic conditions, JAL Group strived to increase management efficiency and deliver the highest standard of service, founded on its strong commitment to flight safety, in an effort to achieve the targets of Rolling Plan 2013 of the Medium Term Management Plan announced on April 30, 2013.

As a result of the above, consolidated operating revenues and operating expenses increased to 989.9 billion yen (up 5.1%) and to 852.4 billion yen (up 8.7%) respectively year-on-year, while operating income and ordinary income declined to 137.4 billion yen (down 13.1%) and 131.2 billion yen (down 14.9 %) respectively from the previous year. Net income declined to 123.5 billion yen (down 12.2%) from a year ago.

(1) JAL Group Consolidated Financial Results for the Period April 1, 2013 – December 31, 2013

Unit: Billions of yen
Fiscal Year 2012

(Apr. 1, 2012 – Dec. 31, 2012)
Fiscal Year 2013

(Apr. 1, 2013 – Dec. 31, 2013)
Difference

vs. prior year
% vs. prior year

Total Operating Revenues
942.0
989.9
+ 47.8
105.1

International Passenger

Domestic Passenger

Int. and Dom. Cargo

Others
308.3

373.4

57.5

202.6
331.3

374.9

60.1

223.5
+ 22.9

+ 1.4

+ 2.5

+ 20.9
107.5

100.4

104.4

110.3

Total Operating Expenses
783.8
852.4
+ 68.5
108.7

Operating Income
158.1
137.4
– 20.6
86.9

Operating Margin
16.8%
13.9%
– 2.9 points

Ordinary Income
154.2
131.2
– 23.0
85.1

Net Income
140.6
123.5
– 17.1
87.8

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

(2) Air Transportation Segment

International Passenger

In international passenger operations, we took steps to maximize revenue such as expanding our Boeing 787 network, and enhance our product and service lineup, including the introduction of newly designed cabin seats.

Regarding route operations, we resumed operations of the Boeing 787 from/after June 1, 2013 on Narita=Boston, Narita=San Diego, Haneda =Beijing routes, etc., and inaugurated the Narita=Helsinki route on July 1, 2013 to increase product competitiveness and operational cost-efficiency.

Sales-wise, to promote sales during the winter low season, special time-limited fares were offered to short-haul Asian destinations and to Helsinki, and to counter the decline in load factor in Business Class during the year-end holidays, we offered time-limited fares on business class travel for leisure passengers to improve the load factor and maximize revenue.

On the product side, the JAL SKY SUITE 777, a fully revamped Boeing 777-300ER with sweeping upgrades in spaciousness, comfort and functionality in every class, was deployed between Narita and Los Angeles in November 2013, and will be put into service between Narita and Chicago in January 2014, in addition to current services on Narita=London, Narita=New York and Narita=Paris routes. Additionally, new Boeing 767-300ER “JAL SKY SUITE 767” featuring fully-flat seats in Business Class with direct access to the aisle and the JAL SKY WIDER in Economy Class will be progressively expanded to long-haul Southeast Asia routes and to Honolulu. JAL’s inflight Internet service, JAL SKY Wi-Fi, is now available on flights between Narita and New York/Chicago/Los Angeles/London/Paris/Frankfurt and Jakarta. In this way, we will continuously enhance our products and services.

As a results, international supply when measured in available-seat-kilometer (ASK) increased by 4.4% year-on-year, demand in terms of revenue-passenger-kilometer (RPK) increased by 4.4% year-on-year, while the load factor (L/F) increased 0.1 point to 76.2%. International passenger revenue increased by 7.5% year-on-year to 331.3 billion yen.

Domestic Passenger

In domestic passenger operations, we implemented demand-boosting measures and allocated aircraft according to changes in demand to maximize profitability.

In route operations, we endeavored to expand our domestic network following the addition of flight slots at Haneda and Itami airports. Flights were increased on routes to and from Haneda, and the Haneda=Chubu route was opened to improve connectivity to international flights. At Itami, scheduled flights to Matsuyama/Hakodate/Misawa were resumed, and a total of 18 flights were increased on 16 routes.

In sales activities, we offered a new discount fare called Tokubin Discount 21 from October 27, 2013 to make traveling more affordable. During the year-end holidays, we increased flights for users of Sakitoku Discount and Super Sakitoku fares. Many customers used them to travel home or enjoy the holidays. To boost leisure demand, we collaborated with Disneyland in various projects to celebrate their 30th anniversary, as an official sponsor of Tokyo Disney Resort ยฎ since its opening in 1983.

As a result of the above, domestic supply during the reporting period increased by 2.6% year-on-year when measured in available-seat-kilometer (ASK), demand increased by 2.9% in terms of revenue-passenger-kilometer (RPK), while the load factor (L/F) increased by 0.2 point year-on-year to 63.7%. Domestic passenger revenue increased by 0.4% year-on-year to 374.9 billion yen.

International and Domestic Cargo

Regarding international cargo operations, in addition to a recovery in outbound demand from Japan since last autumn, we strove to increase volume and maximize revenue by attracting perishable commodities overseas, amongst others. Though the environment remained severe, we managed to secure demand surpassing the previous year. During the reporting period, the volume of international cargo in terms of revenue-cargo-ton-kilometer (RCTK) increased by 9.8% year-on-year, and international cargo revenue increased by 6.1 % year-on-year to 40.5 billion yen.

Domestic cargo operations were affected by a decline in perishable commodities due to adverse weather conditions, and a partial shift to surface transport, but sales staff strengthened relationships with customers and acquired new shipments to maximize revenue. During the reporting period, the volume of domestic cargo in terms of revenue-cargo-ton-kilometers (RCTK) increased by 2.0% year-on-year, and domestic cargo revenue increased by 1.2% to 19.6 billion yen.

(3) JAL Group Consolidated Financial Position

FY2012

As of Mar. 31, 2013
The Third Quarter of FY2013

As of Dec.31, 2013
Difference

Total assets (billion yen)
1,216.6
1,305.1
+ 88.5

Net assets (billion yen)
583.1
688.1
+ 104.9

Equity ratio *1(%)
46.4
51.2
+ 4.8 points

Interest-bearing debt (billion yen)
160.1
128.2
– 31.9

Debt/Equity Ratio *2
0.3
0.2
– 0.1

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

[Consolidated Financial Forecast for the Fiscal Year Ending March 31, 2014]

Unit: Billions of yen
Operating Revenues
Operating Income
Ordinary Income
Net Income

Previous forecast

(Announced on October 31, 2013)
1,286.0
155.0
144.0
128.0

New forecast
1,291.0
158.0
147.0
148.0

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.

[Dividends]

Dividends per Share

1st Quarter End
2nd Quarter End
3Rd Quart End
Fiscal Year end
Total

Year Ended March 31, 2013



190.00 yen
190.00 yen

Year Ended March 31, 2014 (Forecast)

147.00 yen
147.00 yen

Note: Revisions to the most recently disclosed dividend forecasts: Yes

[Reasons for Revisions of Financial Forecast for Fiscal Year Ending March 31, 2014]

Consolidated operating revenues for the full year are expected to increase by 5.0 billion yen from the previously announced forecast, due to the growth of travel demand on international routes. Consolidated operating expenses for the full year are expected to increase by 2.0 billion yen from the previous forecast resulting from raising fuel prices and other expenses increased. Consolidated operating income for the full year is expected to increase by 3.0 billion yen.

Consolidated net income is expected to increase by 20 billion yen, due to an increase of 3.0 billion yen in operating income, Income Tax-Deferred amounting to 15.0 billion and extraordinary income is expected to increase by 2.0 billion yen. As a result, we have revised our forecast for the full year upward from the previously announced forecast.

Our forecast includes the addition of Income Tax-Deferred, etc. based on Tax-Effect Accounting. Due to the nature of Tax-Effect Accounting, we must depend on forecasts and estimates of future phenomena, and as they may fluctuate due to changes in the situation, we have decided not to include them in the calculation of dividends. Therefore, we intend to use approximately 20% of consolidated net income for the full year, excluding Tax-Deferred for paying dividends.

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Linda Hohnholz

Editor in chief for eTurboNews based in the eTN HQ.

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