ANA HOLDINGS Financial Results for the First Quarter of FY2014

TOKYO, July 30, 2014 -ANA HOLDINGS (hereinafter “ANA HD”) today reports its financial results for the first quarter of fiscal year 2014 (April 2014 – March 2015).

Highlights
・Revenue up 10% versus Q1 2013, to ¥386.8 billion, with sales growth in each business segment
・Operating expenses up 8.2% due principally to increased fuel costs
・Sales growth supported by good demand for domestic and international air travel and diversification into other airline related businesses, including cargo
・Operating income of ¥0.3 billion, against loss in same period of FY2013 and recurring loss reduced total loss ¥2.5 billion
・Net income of ¥3.4 billion versus net loss of ¥6.6 billion in Q1 2013 after extraordinary profit of ¥10 billion following defined benefits pension plan.
・ANA HD maintains its forecasts for the consolidated business outlook for FY2014, as announced on April 30, 2014

Overview
・The Japanese economy softened slightly during the period, in anticipation of the consumption tax rise, but has since shown signs of gradual recovery, led by increased capital investment and a partial recovery in individual consumption.
・Japan’s economy is expected to recover slowly as the beneficial effects of the government’s economic policies take hold.
・ANAHD continues to deliver on its strategy to expand its airline network, diversify revenue streams into other airline related services and capitalize on the growing Asian market.
・ANAHD continues to maximize profits by managing the cost base tightly and by capitalizing on its holding company structure.
・ANA continues to make customer service enhancements, in-line with its objective of becoming the world’s leading airline group. The Airline is proud to be selected as the best airline in the world in the following two segments; 1) Best Airport Services, and 2) Best Transpacific Airline at the latest SKYTRAX awards, in addition to retaining its prestigious “5 Star” rating.

Air Transportation

Domestic Passenger Services
・Revenues from domestic passenger services rose by ¥0.9 billion (up 0.7% year-on-year) with year on year growth in passenger number, driven by solid demand in business travel and a sharp increase in leisure travel.
・Unit price came under pressure as a result of increased domestic competition.
・ANA continues to expand its domestic flight network in order to make leisure travel more convenient for passengers.
・ANA introduced additional flights on the Haneda-Iwami/Tottori route.
・ANA is maintaining tight control of its demand/supply balance, using different sized aircrafts on domestic flights in response to the level of demand.
・ANA continues to implement and review the use of “Tabiwari” discount-fares in order to attract customers.
・To improve customer convenience, ANA launched a free transit bus service during the period to allow passengers connecting between international and domestic flights at Haneda Airport for easier transit.
・Furthermore, ANA continues to build on its popular “Tastes of Japan” project, which introduces specially selected Japanese food and drinks to its services, providing passengers with greater choice and highlighting different aspects of Japanese culture and cuisine.

International Passenger Services
・As a result of introducing new routes and increased flights, ANA was able to capture the increasing demand for international business and leisure travel during the period. Consequently, revenues from international passenger services rose by ¥19.7 billion (up 22.1% year-on-year) and passenger numbers also increased.
・ANA continues to strengthen its network, taking advantage of the expansion of international slots at Haneda Airport from this March. New services were launched to seven destinations from Haneda to London, Paris, Munich, Hanoi, Jakarta, Manila and Vancouver. ANA also increased frequency between Haneda and Frankfurt, Singapore and Bangkok. A new service from Narita to Dusseldorf was started at the same time.
・Discount fares “Bizi-wari” and “Eco-wari” were used during the long-holiday season in order to attract tourist.
・In terms of customer service enhancements, ANA has expanded capacity and facilities at the “ANA SUITE LOUNGE” and “ANA LOUNGE” at Haneda Airport.

Cargo Services
・Revenue from domestic cargo services rose by ¥0.5 billion (up 7.4% year-on-year) and from international cargo services rose by ¥4.8 billion (up 19.6% year-on-year).
・Both businesses also experienced year on year growth in volumes.
・In domestic cargo services, growth was supported by the steady demand for the transportation of fresh foods, mainly from Kyushu and Okinawa, and ANA actively responded to the demand for door-to-door delivery.
・In international cargo services, ANA launched the Okinawa-Singapore-Narita and Narita-Jakarta routes, using an additional cargo plane, to expand its network. In addition to cargo departing from Japan, ANA also transports cargo from Asia/China to North America, where demand is steady. This tripartite transportation of cargo within Asia, leveraging the Okinawa cargo hub, led to both volume and revenue growth compared to the same period last year.

Others
・Other revenue in the air transportation business was ¥38.2 billion (up 9.7% year-on-year), including revenue from FFP program, maintenance contracts and Vanilla Air Inc.
・During the 1Q of FY2014, 198,000 passengers were carried on Vanilla Air, with a load factor of 59.7%.
・Targeted advertising, marketing and special offers have been introduced for Vanilla Air in order to build brand recognition and boost demand on the new Amami- Oshima route launched in July.

Airline Related , Travel Services, Trade and Retail and Other
・The airline-related businesses achieved sales of ¥53.6 billion during the 1Q (up 17.3% year-on-year) and operating profit of ¥2.7 billion (up 24.4% year-on-year). This was driven by an increase in contracts for ground support operations at Haneda Airport.
・In the travel businesses, sales for the 1Q were ¥36.7 billion (up 1.0 year-on-year) with operating profit of ¥0.7 billion (up 27.0% year-on-year). International travel services saw popular demand for packaged tours from Haneda Airport and benefited from overseas travelers visiting Japan.
・In trade and retail, sales of ¥30.0 billion were achieved (up 13.4% year-on-year) with operating profit of ¥0.5 billion (down 29.7% year-on-year). Revenue grew as a result of steady sales in the retail segment and air electric segment.
・In other businesses, the steady real estate business resulted in sales of ¥7.5 billion (up 7.3% year-on-year) and operating profit of ¥0.1 billion (up 45.8% year-on-year) during the 1Q.

Outlook for FY 2014 (April 2014 – March 2015)
・Japan’s economy is expected to recover slowly as the beneficial effects of the government’s economic policies take hold. However, ANA HD remains exposed to any potential downward swing in overseas economies and other factors.
・ANA HD will continue to execute its Mid-term Corporate Strategy for FY2014-2016, in order to achieve its mid-term profit target, despite the continued high price of fuel and persistent weakness in the Japanese yen.