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
Rising to the Challenges ~ Always one step ahead ~
Boeing787 2016 Introducing MRJ
Launching LCC service 2012 JAPAN Launching JV with LH
Boeing787 introducing 2011 Launching joint venture with UA/CO
2010 Inauguration of Haneda international service
Star Alliance 2009 Okinawa Cargo Hub introduced
1999 Joined Star Alliance L1011
1986 International service inauguration
1952 Nippon Helicopter (NH) established
2 Current Performance Consolidated operating revenues and operating expenses (¥ bil) (FY2001 - 2011) 1,500 1,411 1,400 Op. Revenues 1,314 1,300 Op. Expenses Medium-term 1,200 performance targets
1,100 Operating margin of 1,000 10% or above 900 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11
Air transportation business Domestic Passenger Share International Passenger Share revenues (FY 2011) （FY2011） （FY2011）
Other 162(12.9%) 14.9% Cargo & Mail Domestic 128(10.1%) Passenger 36.6% 50.2% 17.4% 651 International （51.6%） 67.7% Passenger 320 13.2% (25.4%) （Source: MLIT) (¥ bil) ･Company calculated revenue passengers on ANA flights ***To/From Japan （Source: MIDT) Total 1,262 and code-share flights operated by our partner airlines. 3 Growth Strategy
Our goal : Being the Leading Airline in Asia
《Continuing growth as a network airline》
Key Strategy Stable and sustainable growth Introducing Boeing787s Increase corporate value FY2012 (Plan) Expanding Joint Venture Op. Margin Op. Revenues 10% or more ¥1,500 billion Launching LCC Op. Income ¥110 billion JAPAN
《Become a leader in the LCC market》 4 Introducing Boeing Dreamliner
Increasing Fleet Competitiveness through Fuel-efficient Boeing787-9
The number of fuel-efficient aircraft (No. of Seats) Seats and flight range 260 B777-300ER B787-8 B787-9 B777 B737NG others Composition ratio* 250 (*247 seats) 240
230 B787-9 Fuel-efficient Aircraft B777-200ER (No. of Aircraft) 220 200 100% (*223 seats) (250 seats) 226 226 223 223 226 210 200 200150 80% 190 B767-300ER B787-8 180 (*202 seats) (*158 seats) 170 100 100 60% 160 57.0% 58.8% 150 47.8% 52.9% 140 5050 40% 130 39.8% 9,000 10,000 11,000 12,000 13,000 14,000 15,000 16,000 17,000 (Source: Boeing Commercial Airplanes Fact Sheet） (km) 0 20% (*) ANA Configuration Mar.12 Mar.13(E) Mar.14(E) Mar.15(E) Mar.16(E) Fuel-consumption per ASK
120% Domestic Flight International Flight
Mar.12 Mar.13 Mar.14 Mar.15 Mar.16 Total 100% (E) (E) (E) (E) Orders 80%
B787-8 6 20 27 32 35 36 60% 83% 79% B787-9 4 8 30 40%
Total 6 20 27 36 43 66 20% 0% ･The numbers of B787-8/-9 are revised projections after PR release on Jun 19, 2012 787-8 767-300 787-8 767-300ER ・ANA’s aircraft for both domestic and international routes are included. (Survey Methodology: Performance Software provided by Boeing) ･Aircraft used by AirAsia Japan and Peach are not included. ・Calculation based on actual fuel consumption from 26 Oct. 2011 ･This slide contains forward-looking statements and actual results may differ materially. to 30 Apr. 2012. Please see “Disclaimer” on slide 2. Expanding Joint Venture
Expanding Network through Joint Venture
X FY2012
X
Joint Action Potential Initiatives Harmonized Network Optimize Schedule Harmonized Pricing New Route Expansion Joint Sales Aircraft Upsizing Joint Marketing Revenue Pooling
Anti Trust ……etc. Immunity 6 Launching LCC Service
Background of ANA’s decision to establish own LCCs
《Market Share》 First Flight: March, 2012 LCC LCC LCC 14.2% Stock Share: ANA 34% First Eastern 33% 35.7% 30.5% Routes: DOM&INT routes from/to Kansai Service Brand: “Peach” 【Europe】 【N. America】 【Asia】
NE. Asia LCC Expanding 6.9% Routes to/from Japan
Jet Star / SQ-LCC Spring / Cebu / Macau First Flight: August, 2012 Jeju / Air Asia X… Stock Share: ANA 67% Air Asia 33% Routes: DOM&INT routes from/to Narita
JAPAN 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） 【North America】 40.0% 2001-2011 1,000 CAGR Europe 35.0% 35.9% 800 LCC 600 +9.8% 30.0% N. America 29.7% 400 FSC 200 +0.2% 25.0% 0 20.0% Asia/Pacific 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 19.1%
（Passengers/million） 【Europe】 15.0% 2001-2011 1,400 CAGR 1,200 10.0% 1,000 LCC NE. Asia 800 +16.0% 5.0% 6.9% 600 400 FSC +0.9% 0.0% 200 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 (Source: CAPA) (*) Seat capacity share in each region 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
(Source: Euromonitor International 2011) 8 Launching LCC Service
Location of Tokyo and Osaka Airports
Direct Distance： Approx 400km
International Tokyo Tokyo Osaka Station JAPAN Domestic/International
Narita Domestic/International Direct Distance：Approx 40km Haneda Itami Domestic Kobe Direct Distance： Approx 60km
Kansai Osaka Domestic/International 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
Network / Joint Venture / Alliance Cabin Product & Service Strength Weakness Airport Facilities (Lounge / Counter…) Connection Evolution FFP (including Partner’s Service) Diversification Value of Web Site & Fun Page (SNS) Popularity in Non-Japanese Market
Promptness Landslide Low Fare Strength Weakness
LCC Cost Competitiveness 10 Launching LCC Service
Entering New Growth Area while Expanding International Network
Long Haul Boeing 787 New Demand
777 787 International Network Joint Venture Long and Medium-haul
ASEAN Short Haul Leisure / Low Yield 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 80% 800,000 80% Kansai Kansai Kansai Kansai Itami 700,000 Itami 1,000,000 Kobe 70% 70% 600,000
800,000 60% 500,000
600,000 60% 400,000 50%
300,000 400,000 40%
50% 200,000
200,000 30% 100,000
0 40% 0 20% 2010 2011 2012 2010 2011 2012 ANA L/F （Right Axis） ANA L/F （Right Axis） 12 Promoting Multi-brand Strategy
Implementing Group Reorganization and Cost Restructuring
Holding Company Transition (April 1, 2013) ¥100 billion cost reduction (FY2012 ~ FY2014) ANA Holding Company
Consolidated Subsidiaries 100% ANA Operating Company ¥ 48.0 billion Personnel 100% ANA WINGS
100% Air Japan Investments ¥ 16.5 billion Maintenance *67% AirAsia Japan
Other Operating Companies Service billion ¥ 10.5 Commissions Equity-Method Subsidiaries and Affiliates
38.7% Peach Aviation billion Facilities Other Operating Companies ¥ 7.0
Strategic Investments (Future) ¥ 18.0 billion Procurement
* 67% based on voting rights (51% based on economic interest) 13 Current Issues for Full-service Carriers
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
14 Thank you!