ANA Group, Japan’s largest airline group, today reported its consolidated financial results for the first three months (April – June) of fiscal year 2012.

Operating revenues during the period rose by 12.5 per cent to 343.1 billion, helping ANA return to profitability for the quarter. Operating income reached 11.0 billion compared with a loss of 8.1 billion the previous year, while recurring profit was 4.6 billion (14.4 billion loss) and net income for the period was .6 billion (8.4 billion loss).

Passenger revenues and numbers grew on both domestic and international services compared with the same period in 2011 when demand was significantly affected by the Great East Japan Earthquake. The increase in traffic levels also reflected measures to stimulate demand in domestic markets through the introduction of new affordable fares and the launch of new international routes.

Although the Japanese economy continues to recover gradually, ANA is facing a number of headwinds in the shape of a slowing world economy, the growing government debt crisis in Europe and increased competition, both through the liberalization of Japanese aviation and slot expansion at Tokyo’s airports and the start of full-scale operations by Low Cost Carriers in Japan.

In response to this, ANA is expanding its routes as a network carrier and continue the cost-competitive measures as set out in the Group Corporate Strategy for FY2012-13.

The following results refer to the three month period April – June, 2011. Results for the first quarter of fiscal year 2011 are given for reference only and appear in the right side of each table.

Consolidated Financial Performance                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 unit: billion yen (rounded down)                                                     

Performance by business segment (consolidated)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         unit: billion yen (rounded down)                                                     

*1 Operating income/loss in each business is applied to segment profits.

Domestic Passenger Services

・        Demand for domestic travel services was solid after being significantly affected by the earthquake last year. Passenger revenue rose by 14.6 billion, an increase of 10.9% compared to a year earlier and load factors increased by 4.6 percentage points to 58.2 per cent.

・        In addition to establishing new Narita-Niigata and Itami-Fukushima routes, ANA resumed the Fukuoka-Miyazaki/Sendai routes, and increased the number of flights on Haneda-Hakodate/Komatsu and Itami-Fukuoka routes, while cutting the number of flights on the Haneda-Okinawa and Narita-Chubu routes to match supply and demand.

・        ANA has introduced the Boeing 787 on domestic routes, refreshed its domestic service with the introduction of new Premium Class seats (two aircraft as of June 30, 2012), and renewed the ANA lounges in Kumamoto Airport and Kansai International Airport.

International Passenger Services

・        The number of international passengers exceeded that in the same period last year by 25 per cent while revenues increased by 20.2 per cent to 83.2 billion due to the steady increase in demand in areas such as inbound demand, which was severely affected by the earthquake last year.

・        ANA worked to improve its Chinese route network by providing daily flights on the Narita-Hangzhou and Kansai-Hangzhou/Qingdao routes, in addition to introducing larger aircraft on the Kansai-Beijing route, as well as by introducing the Boeing 787 on all Haneda-Frankfurt services from April 13.

・        A joint venture with Lufthansa went into full-scale operation in April, providing greater convenience by establishing joint fares utilizing the two companies’ network. In June, a new upgraded Premium Economy service was launched on international flights.

Cargo Services

・        Despite the solid performance of fresh cargo to and from Okinawa along with home delivery parcel services, cargo volumes and revenue on domestic routes fell compared with the high levels recorded in the same period last year immediately after the earthquake.

・        In addition, international cargo transport demand was affected by the economic slowdown inEurope. Although cargo volume exceeded that of the same period last year due to actively engaging in third country cargo such as that destined for U.S. and Europe from Asia and China, revenue fell below that of the same period last year.

This resulted in a .2 billion decrease in domestic cargo revenues, down 3.5% year-on-year, and a decrease in international cargo revenues of 2.1 billion, a 9% decrease over the same period the previous year.

Outlook for FY2012 (April, 2012 - March, 2013)

・        The outlook for the Japanese economy is for a gradual continued recovery backed by reconstruction demand from the Great East Japan Earthquake, despite rising oil prices, exchange rate fluctuation and restrictions on the supply of electric power. But the global economy is expected to slow as the government debt crisis in Europe worsens.

・        In the face of this uncertainty, ANA will strive to implement the three goals outlined in its FY2012-2013 Group Corporate Strategy - namely the establishment of a multi-brand strategy, the enhancement of cost-competitiveness through structural reforms, and the move to a holding company structure.

・        ANA intends to leverage its strengths as a network carrier and to accelerate expansion and improve profitability by putting its international operations at the center of its growth, including the launch of new routes from Narita to Seattle, San Jose, Yangon and Delhi. Domestic operations will remain as ANA’s main base of profit, and the Group will continue to optimize capacity on each route to balance supply and demand and maximize profitability. In the low-cost carrier market, AirAsia Japan, an ANA Group Airline, has now launched services. New routes will be phased in, creating new demand and contributing to the overall profits of ANA Group.

There will be no change to the consolidated forecast as announced on April 27.

Consolidated Operating Results (Forecast)                             unit: billion yen (rounded down)        

Notes for Editors:

- Aｌｌ financial information are prepared on the basis of accounting principles generally accepted in Japan.

- Aｌｌ financial information are not audited and provided for reference only.

- All percentages are rounded off; all other figures including monetary figures are rounded down                               

- All comparisons are year-on-year

- All figures are given on a consolidated Group basis                

 (58 consolidated subsidiaries and 18 equity method affiliates)

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