Opportunities for Progress Annual Report 2010 For the Year Ended March 31, 2010 Web Edition Opportunities for Progress In the more than 50 years since its founding in 1952, All Nippon Airways Co., Ltd. (ANA), has provided air transportation services, with the highest priority on safe operations. ANA is proud of the high level of trust that customers have placed in the Company. As a result of that trust, ANA has grown into a world-class airline, with more than 44 million passengers a year. The ANA Group’s operating environment is changing signifi cantly, with the expansion of airports in the Tokyo area and intensifying global competition. We intend to continue making progress in offering ANA’s value to customers worldwide as we work to achieve our corporate vision of becoming Asia’s Number One Airline Group. Contents 2 ANA Snapshot Editorial Policy 4 Consolidated Financial Highlights The ANA Group aims to earn trust and provide peace of 6 To Our Shareholders mind through communication with its stakeholders, thus increasing corporate value. To date, our annual reports have 15 Special Feature: Reliably Capturing Demand presented the state of our operations, including management Our Sophisticated Network Strategy strategies and an overview of our businesses. From Annual 21 Business Overview Report 2010, we have also incorporated our CSR Report, in 22 ANA at a Glance order to provide a wide-ranging overview of our corporate 24 Review of Operations social responsibility activities. 33 Management We also publish information on CSR activities that we have 34 Management Members and Group Organization selected as being of particular importance to the ANA Group 36 Corporate Governance and society in general. Please see our website for updates and 40 Internal Control Report more details. 41 Safety Management ANA’s CSR/Environment Website: 42 Safety Management System http://www.ana.co.jp/eng/aboutana/corporate/csr/ 44 ANA Group Medium-Term Safety Promotion Plan 45 CSR (Corporate Social Responsibility) 46 CSR Feature: Pleasing More Passengers ANA Disability Desk (ADD) 48 The ANA Group’s CSR 50 Customer Satisfaction (CS) Initiatives 58 Employee Satisfaction (ES) Initiatives 65 Contributing to Communities, Society and Future Generations 66 Relationships with Business Partners 67 Environmental Initiatives 68 Environment Feature: Regenerating Japan’s Forests The ANA Group’s Carbon Offset Program 70 Toward Becoming a Leading Eco-Friendly Airline Forward-Looking Statements This annual report contains statements based on ANA’s current plans, estimates, 86 Environmental and Social Contribution Activities strategies, and beliefs; all statements that are not statements of historical fact are forward-looking statements. These statements represent the judgments and hypoth- ANA Group Environmental Data eses of the Company’s management based on currently available information. Air 88 transportation, the Company’s core business, involves government-mandated costs that are beyond the Company’s control, such as airport utilization fees and fuel taxes. 91 Financial Section In addition, conditions in the markets served by the Company are subject to signifi - cant fl uctuations. Factors that could affect actual results include, but are not limited to 131 The ANA Group economic trends, sharp changes in exchange rates, fl uctuations in the price of crude oil and disasters. 132 ANA Route System Due to these risks and uncertainties, the Company’s future performance may differ signifi cantly from the contents of this annual report. Accordingly, there is no assurance 133 Investor Information that the forward-looking statements in this annual report will prove to be accurate. ANA Fact Book 2010 (separate) A data reference resource Annual Report 2010 1 ANA Snapshot As of March 31, 2010 Targeted Form of the ANA Group In the fi scal year ended March 2010, the ANA Group revised its management vision, maintaining its target of becoming Asia’s Number One Airline Group while clearly orienting its businesses toward global growth and delivering the value of ANA to customers around the world. ANA Group Corporate Philosophy ANA Group Our Commitments Corporate Vision On a foundation of security and reliability, the ANA Group will • Create attractive surroundings With air transportation as its core for customers fi eld of business, the ANA Group • Continue to be a familiar presence aims to be one of the leading • Offer dreams and experiences to corporate groups in Asia, providing people around the world passenger and cargo transportation around the world. ANA Group Safety Principles Being the leader in Asia means that we will become Safety is our promise to the public and the foundation of our business. ◆ Number one in quality Safety is assured by an integrated man- ◆ Number one in customer agement system and mutual respect. satisfaction Safety is enhanced through individual ◆ Number one in value creation performance and dedication. Position of the ANA Group The ANA Group has the largest route network in Japan, and is one of Japan’s largest airlines in terms of domestic passengers. Its international route network provides balanced coverage of Asia, Europe and North America, making it a major airline group on a global scale as well. Share of Domestic Revenue Passengers Domestic Revenue Passengers Flights per Day 7th 47.6% 1,054 For the fi scal year ended March 2010, the ANA Group The ANA Group has the largest domestic route network The ANA Group is working to expand its network while ranked seventh among the world’s airlines and fi rst in among Japanese airlines, and has continued to steadily adjusting capacity to demand, and offers 945 fl ights Japan in terms of domestic revenue passengers, and increase its share of domestic revenue passengers in a per day on domestic routes and 109 fl ights per day on twelfth among the world’s airlines in terms of total challenging operating environment to 47.6 percent for overseas routes (totals of passenger and cargo fl ights revenue passengers. the fi scal year ended March 2010. as of July 1, 2010). Source: International Air Transport Association (IATA) Source: Ministry of Land, Infrastructure, Transport and Tourism 2 All Nippon Airways Co., Ltd. The History of the ANA Group ANA was established in 1952 with the goal of restoring regular air transportation services in Japan that were disrupted by World War Ⅱ. In the 50 years since, it has grown steadily while placing the highest priority on safe operations. Dec. 1952 Japan Helicopter & Aeroplane Transports Co., Ltd. is established. Feb. 1953 The Company starts a helicopter service. 1964: Boeing 727 Dec. 1953 The Company expands its network of routes after starting cargo service begins with services on the trunk line Tokyo-Osaka route. a fl ight from Tokyo to Sapporo. Dec. 1957 The company name is changed to All Nippon Airways Co., Ltd. Mar. 1958 ANA merges with Far Eastern Airlines Co., Ltd. Oct. 1961 ANA is listed on the Second Section of the Tokyo Stock Exchange and the Second Section of the Osaka Securities Exchange. (The listings are changed to the First Section of both exchanges in 1972.) Nov. 1963 ANA merges with Fujita Koku K.K. 1986: Scheduled international Feb. 1971 Non-scheduled international services begin with the opening of a service begins with Tokyo-Hong Kong route. a fl ight from Tokyo Mar. 1986 ANA begins scheduled international service with the opening of a to Guam. Tokyo-Guam route. Oct. 1999 ANA joins the Star Alliance network. Mar. 2003 The cumulative number of passengers carried by the ANA Group on domestic and international routes reaches 1 billion. Jun. 2007 The ANA Group sells its hotel operations and concentrates its 1999: Special management resources on the air transport business. livery celebrates ANA’s membership in the Star Alliance. Inclusion in Socially Responsible Investment (SRI) Indexes ANA continues to be selected for inclusion in the FTSE4Good Index, an internationally recognized SRI index. For inclusion, companies must meet evaluation criteria in the following areas: environmental conservation activi- ties, support of human rights, positive relationships with stakeholders, and prevention of corrupt practices such as bribery. In addition, ANA is included in other major indexes such as Storebrand’s “Best in Class” status, Morningstar’s SRI Index “MS-SRI” and the Dow Jones Sustainability Asia Pacifi c Index. Annual Report 2010 3 Consolidated Financial Highlights All Nippon Airways Co., Ltd. and its consolidated subsidiaries (Note 1) Years ended March 31, 2010, 2009 and 2008 s/PERATINGREVENUESDECREASEDYEARONYEARTOc BILLIONBECAUSEOFADELAYINRECOVERYOFPASSENGER demand due to the recession and the H1N1 infl uenza pandemic. s/PERATINGEXPENSESDECREASEDYEARONYEARTOc BILLIONBECAUSETHE!.!'ROUPBETTERMATCHED capacity and demand and met its targets for reducing fuel expenses and other costs. s/PERATINGLOSSWAScBILLIONCOMPAREDWITHOPERATINGINCOMEOFcBILLIONFORTHEPREVIOUSlSCALYEAR because the large decrease in operating revenues overwhelmed expense reductions. Operating Revenues Operating Income (Loss) / Net Income (Loss) / Depreciation and Amortization*/ (¥ Billions) Operating Income Margin Net Income Margin Capital Expenditure (¥ Billions, %) (¥ Billions, %) (¥ Billions) 1,489.6 1,487.8 357.7 1,392.5 92.1 1,368.7 88.8 84.3 6.2 1,228.3 5.7 6.5 64.1 251.9 235.5 32.6 4.3 209.9 26.7 7.5 2.2 2.0 145.7 0.5 (54.2) (4.2) (57.3) 116.7 112.8 113.8 88.6 76.2 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 Operating Income (Loss) (¥ Billions)