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ANA Group Corporate Strategy for FY2013-15
TOKYO April 30, 2013 - ANA Group, Japan’s largest airline group, today sets out its corporate strategy for FY2013-15. Despite the challenging global economic backdrop, ANA Group has a clear strategic plan to position the Company for growth. The strategic plan focuses on the following elements:
• Build upon the company’s new corporate structure and enhanced management team • Pursue a multi-brand approach; expanding the portfolio to include ancillary airline services • Target expansion in high growth markets, including Asia • Continue to differentiate ANA Group as the Leading Global Airline Group
Market conditions Due to Airline liberalization and deregulation, which has opened up markets in the airline industry, we are seeing intense competition, not only from existing Japanese airlines, but also from major airlines from Asia, Europe, US and Middle East, and from the full-scale entry of low-cost carriers to the market. We anticipate that this trend will continue as liberalization and deregulation continue at a rapid pace. In addition to this, slot expansion in Tokyo and increasing competition from other modes of transportation, such as the extension of the Shinkansen bullet trains, have intensified competition further. ANA Group Strategy 2012-2013 In response to these challenges, and as the company entered its 60th anniversary year, ANA Group has already undertaken a number of reforms, as set out in the ANA Group Corporate Strategy for FY2012-13. These include management reforms, the establishment of a multi-brand strategy to expand the portfolio to include ancillary airline services, and changes to the Group’s corporate structure to strengthen cost competitiveness and the Group’s financial position.
2013-2015
Building on these changes, ANA Group’s FY2013-15 Corporate Strategy is designed to position the Group as a best in class airline operator, leading the Japanese market. The strategy includes capitalizing on the new corporate structure and continuing to strengthen the management team. In addition, ANA is pursuing growth by capitalizing on the expansion of airport slots in the Tokyo area and seeking profit diversification through expansion into new business areas which demand our specialist expertise and strategic investment in Asia.
ANA HOLDINGS NEWS
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Outline of the FY2013-2015 Mid-term Corporate Strategy
Expansion of Growth Areas
Alongside ANA Group’s core portfolio, the Company will pursue revenue growth through a multi-brand strategy; expanding into ancillary airline services, and by strengthening its operations in both international and domestic markets. In particular, the Group is looking to capture growth in the Asian market and increase its exposure to non-airline operations, including cargo.
Diagram of Business Expansion through Expansion of Growth Areas
Narita + 20,000(270,000)
Narita + 30,000(300,000 )
Haneda + 30,000(60,000 during daytime)
Expansion of Japanese LCCs, and entry of foreign LCCsExpansion of Japanese LCCs, and entry of foreign LCCs
Intensified competition with Bullet trains, etc.
Intensified competition with Bullet trains, etc.Intensified competition with
Japanese airlinesIntensified competition with
Japanese airlines
Relationships with neighboring countries
Relationships with neighboring countries
Market fluctuations of oil prices and exchange rates
Market fluctuations of oil prices and exchange rates
FY2012FY2012
Advancement of trade liberalizationAdvancement of trade liberalization
Formation of Corporate Strategy
Creation of basis Creation of basis for growth strategyfor growth strategy
Strengthening of Strengthening of financial statusfinancial status
《FY2013-15 Corporate Strategy》
Continued implementation along axis included in FY2012-13 Corporate Strategy
PublicPublic Capital Capital increase increase through a through a public offering public offering in July 2012in July 2012
Toward furtherToward furthergrowth areasgrowth areas
Entry into new business areas utilizing business characteristics and know-howProvision and expansion of existing services outside thegroupExecution of strategic investment in Asia
Transition to holding company (April 2013)Transition to holding companyTransition to holding company (April 2013)
Multi-brand strategy (March 2012: Peach / August 2012: AirAsia Japan)MultiMulti--brand strategy brand strategy (March 2012: Peach / August 2012: AirAsia Japan)
Restructuring of costs / Reduction of costs by ¥100 billion (FY2011-14)Restructuring of costsRestructuring of costs / Reduction of costs by / Reduction of costs by ¥¥100 billion 100 billion (FY2011-14)
FY2013FY2013 FY2014FY2014 FY2015FY2015
Business environment
*Number of international slots
Narita + 20,000(270,000)
Narita + 30,000(300,000 )
Haneda + 30,000(60,000 during daytime)
Expansion of Japanese LCCs, and entry of foreign LCCsExpansion of Japanese LCCs, and entry of foreign LCCs
Intensified competition with Bullet trains, etc.
Intensified competition with Bullet trains, etc.Intensified competition with
Japanese airlinesIntensified competition with
Japanese airlines
Relationships with neighboring countries
Relationships with neighboring countries
Market fluctuations of oil prices and exchange rates
Market fluctuations of oil prices and exchange rates
FY2012FY2012
Advancement of trade liberalizationAdvancement of trade liberalization
Formation of Corporate Strategy
Creation of basis Creation of basis for growth strategyfor growth strategy
Strengthening of Strengthening of financial statusfinancial status
《FY2013-15 Corporate Strategy》
Continued implementation along axis included in FY2012-13 Corporate Strategy
PublicPublic Capital Capital increase increase through a through a public offering public offering in July 2012in July 2012
Toward furtherToward furthergrowth areasgrowth areas
Entry into new business areas utilizing business characteristics and know-howProvision and expansion of existing services outside thegroupExecution of strategic investment in Asia
Transition to holding company (April 2013)Transition to holding companyTransition to holding company (April 2013)
Multi-brand strategy (March 2012: Peach / August 2012: AirAsia Japan)MultiMulti--brand strategy brand strategy (March 2012: Peach / August 2012: AirAsia Japan)
Restructuring of costs / Reduction of costs by ¥100 billion (FY2011-14)Restructuring of costsRestructuring of costs / Reduction of costs by / Reduction of costs by ¥¥100 billion 100 billion (FY2011-14)
FY2013FY2013 FY2014FY2014 FY2015FY2015
Business environment
Narita + 20,000(270,000)
Narita + 30,000(300,000 )
Haneda + 30,000(60,000 during daytime)
Expansion of Japanese LCCs, and entry of foreign LCCsExpansion of Japanese LCCs, and entry of foreign LCCs
Intensified competition with Bullet trains, etc.
Intensified competition with Bullet trains, etc.Intensified competition with
Japanese airlinesIntensified competition with
Japanese airlines
Relationships with neighboring countries
Relationships with neighboring countries
Market fluctuations of oil prices and exchange rates
Market fluctuations of oil prices and exchange rates
FY2012FY2012
Advancement of trade liberalizationAdvancement of trade liberalization
Formation of Corporate Strategy
Creation of basis Creation of basis for growth strategyfor growth strategy
Strengthening of Strengthening of financial statusfinancial status
《FY2013-15 Corporate Strategy》
Continued implementation along axis included in FY2012-13 Corporate Strategy
PublicPublic Capital Capital increase increase through a through a public offering public offering in July 2012in July 2012
Toward furtherToward furthergrowth areasgrowth areas
Entry into new business areas utilizing business characteristics and know-howProvision and expansion of existing services outside thegroupExecution of strategic investment in Asia
Transition to holding company (April 2013)Transition to holding companyTransition to holding company (April 2013)
Multi-brand strategy (March 2012: Peach / August 2012: AirAsia Japan)MultiMulti--brand strategy brand strategy (March 2012: Peach / August 2012: AirAsia Japan)
Restructuring of costs / Reduction of costs by ¥100 billion (FY2011-14)Restructuring of costsRestructuring of costs / Reduction of costs by / Reduction of costs by ¥¥100 billion 100 billion (FY2011-14)
FY2013FY2013 FY2014FY2014 FY2015FY2015
Business environment
*Number of international slots
DomesticPassengerServices
InternationalPassengerServices
CargoLCC
Others
Multi-brand strategy
Multi-brand strategy
DomesticPassengerServices
InternationalPassengerServices Diversification
LCC Cargo
[FY2012-2013 Corporate Strategy]
[FY2013-2015 Corporate Strategy]
● Capturing Asian market● Acquisition of growth areas● Investment in diversified
businesses
Expansion of earnings of entire group
Growth of seat-km for international flights
(vs. FY2011 performance)
100.0%
110.6%
125.9%
FY2011 FY2012 FY2013
*dotted circle is a mid-term image
*includes AirAsia Japan
DomesticPassengerServices
InternationalPassengerServices
CargoLCC
Others
Multi-brand strategy
Multi-brand strategy
DomesticPassengerServices
InternationalPassengerServices Diversification
LCC Cargo
[FY2012-2013 Corporate Strategy]
[FY2013-2015 Corporate Strategy]
● Capturing Asian market● Acquisition of growth areas● Investment in diversified
businesses
Expansion of earnings of entire group
Growth of seat-km for international flights
(vs. FY2011 performance)
100.0%
110.6%
125.9%
FY2011 FY2012 FY2013
*dotted circle is a mid-term image
DomesticPassengerServices
InternationalPassengerServices
CargoLCC
Others
Multi-brand strategy
Multi-brand strategy
DomesticPassengerServices
InternationalPassengerServices Diversification
LCC Cargo
[FY2012-2013 Corporate Strategy]
[FY2013-2015 Corporate Strategy]
● Capturing Asian market● Acquisition of growth areas● Investment in diversified
businesses
Expansion of earnings of entire group
Growth of seat-km for international flights
(vs. FY2011 performance)
100.0%
110.6%
125.9%
FY2011 FY2012 FY2013
*dotted circle is a mid-term image
*includes AirAsia Japan
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(1) International passenger business With slot expansion in Tokyo, ANA will expand its network for international routes departing/arriving from the Tokyo area. It will also incorporate non-Japanese demand traveling both into and through Japan in addition to existing Japan-based business demand.
(2) Domestic passenger business ANA will continue to differentiate its products & services on its domestic flights in order to
ensure the strength of its core business. (3) Low-cost sector
ANA Group will continue to develop a profitable, low-cost business model for its LCC business, by improving the level of brand recognition, capturing Asian market demand, and pursuing a low-cost operating model.
(4) Cargo ANA aims to drive profitability in its cargo business through a series of measures. It will improve
aircraft utilization rates to reduce costs, expand its cargo network by increasing the number of freighters, and carry more freight on ANA’s passenger aircraft and flights made by other carriers. ANA will also introduce a business management system to develop business solution for the
cargo business. (5) Diversifying into Ancillary Airline Service
ANA plans to diversify into other aviation related businesses, in particular in the growth areas of Asia, as well as looking for opportunities for the ANA brand in the airline sector.
Strategic Investment ・ Use funds obtained through 2012 public stock offering to invest overseas, to make strategic
investments abroad, in particular in Asia, where high economic growth is anticipated. Consider plans to establish an investment management company in Singapore, in June, to
accelerate implementation of investment. ・ Invest in Asia to capture growth in that region, with additional synergy benefits to ANA
Group‘s airline business. ・ Diversify into other aviation related businesses, such as aircraft maintenance, utilizing the
company’s experience, knowledge, resource and brand value, to expand new profit areas.
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Strengthening the Management Base
Building on progress from the FY2012-2013 corporate strategy, ANA Group will continue to:
(1) Reform Group Corporate Structure ANA Group will move to a Holding Company structure from this fiscal year in order to achieve the separation of management and execution, fair and equitable group management, and delegation of authority and responsibility to individual group companies. Consolidation of shared back office functions will take place in order to improve efficiency, and some activities may be outsourced.
(2) Reform Cost Structure
The company is in line to reduce costs by 100 billion yen by fiscal year 2014 (ca. unit cost 1.0 yen). ANA Group also plans to review its pension program and the mid-to-long-term cost impact.
Public stock offering(Implemented in July 2012)
Public stock offering(Implemented in July 2012)
Stable cash flow(Highest operating income on record for 2 consecutive years
Stable cash flow(Highest operating income on record for 2 consecutive years
Diversification of earnings areas through strategic investment
Expansion of growth areas aimed at further expansion of profits
Investment in the airline business centered on Asia
Establishment of an investment companyDate of establishment: June 2013 (scheduled)Location of establishment: SingaporePurpose of establishment: acceleration of investment, stabilization of management
Establishment of an investment companyEstablishment of an investment companyDate of establishment: June 2013 (scheduled)Location of establishment: SingaporePurpose of establishment: acceleration of investment, stabilization of management
Mutualsynergies
Maximization of earnings of the ANA Group through business portfolio management
Enabling balancing of strengthening of financial position and strategic investment
Enabling balancing of strengthening of financial position and strategic investment
Participation in airline-related businesses in Japan and Asia
FY2013: Formulation of specific implementation plansFY2014: Expansion of business in phases
Aiming to utilize ANA Group knowledge and personnel
FY2013: Formulation of specific implementation plansFY2014: Expansion of business in phases
Aiming to utilize ANA Group knowledge and personnel
Strategic Investment in Asia Entering Execution Phase
Public stock offering(Implemented in July 2012)
Public stock offering(Implemented in July 2012)
Stable cash flow(Highest operating income on record for 2 consecutive years
Stable cash flow(Highest operating income on record for 2 consecutive years
Diversification of earnings areas through strategic investment
Expansion of growth areas aimed at further expansion of profits
Investment in the airline business centered on Asia
Establishment of an investment companyDate of establishment: June 2013 (scheduled)Location of establishment: SingaporePurpose of establishment: acceleration of investment, stabilization of management
Establishment of an investment companyEstablishment of an investment companyDate of establishment: June 2013 (scheduled)Location of establishment: SingaporePurpose of establishment: acceleration of investment, stabilization of management
Mutualsynergies
Maximization of earnings of the ANA Group through business portfolio management
Enabling balancing of strengthening of financial position and strategic investment
Enabling balancing of strengthening of financial position and strategic investment
Participation in airline-related businesses in Japan and Asia
FY2013: Formulation of specific implementation plansFY2014: Expansion of business in phases
Aiming to utilize ANA Group knowledge and personnel
FY2013: Formulation of specific implementation plansFY2014: Expansion of business in phases
Aiming to utilize ANA Group knowledge and personnel
Strategic Investment in Asia Entering Execution Phase
Country Country AA
Company ACompany A
Country BCountry B
Company BCompany B
Country CCountry C
Company CCompany C
Company DCompany D
SingaporeSingapore
ANA HoldingsANA Holdings
Format of Investment Company (Image)
SPC1SPC1 SPC2SPC2
Investment Investment CompanyCompany
SPC: Special Purpose Company
SPC3SPC3
Merging Merging CompanyCompany
(SPC3)(SPC3)Country Country AA
Company ACompany A
Country BCountry B
Company BCompany B
Country CCountry C
Company CCompany C
Company DCompany D
SingaporeSingapore
ANA HoldingsANA Holdings
Format of Investment Company (Image)
SPC1SPC1 SPC2SPC2
Investment Investment CompanyCompany
SPC: Special Purpose Company
SPC3SPC3
Merging Merging CompanyCompany
(SPC3)(SPC3)
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Progress on Cost Structure Reform
ANA Group Goals Following the creation of the holding company and its 60th anniversary last year, ANA Group will
benefit from the strategic oversight provided by the strengthened management team. ANA Group has formulated a new group mission statement, management vision, policy on corporate social responsibility, and group action guideline - The ANA’s Way. Overview of the Mission Statement and Management Vision
(1) New Group Mission Statement The ANA Group Mission Statement represents the corporate group’s long-term goals, mission, and purpose. Security and trust are the basic defining responsibilities across the Group. Through these values ANA Group will differentiate itself as the Leading Global Airline Group.
■ Production volume(domestic seat km + international
seat km)(Initial FY2011 plan: 100)10.83
Unit Cost(Initial FY2011
plan: 100
10.56
FY2011(Initial plan)
FY2011(Actual)
FY2012(Actual)
FY2013(Plan)
FY2014
Unit cost▲1-yen reduction plan
(Cost down by ¥ 100 billion)
Unit costUnit cost▲▲11--yen reduction planyen reduction plan
(Cost down by (Cost down by ¥¥ 100 billion)100 billion)
FY2015
FY2013-2015Corporate strategy
▲ ¥¥ 11.0B ▲ ¥¥ 221.0B ▲ ¥¥ 25.0B ▲ ¥¥ 43.0B
Referencepoint
Referencepoint
100.1%
106.7%
▲1.00
115.4%
10.xx
■ Production volume(domestic seat km + international
seat km)(Initial FY2011 plan: 100)10.83
Unit Cost(Initial FY2011
plan: 100
10.56
FY2011(Initial plan)
FY2011(Actual)
FY2012(Actual)
FY2013(Plan)
FY2014
Unit cost▲1-yen reduction plan
(Cost down by ¥ 100 billion)
Unit costUnit cost▲▲11--yen reduction planyen reduction plan
(Cost down by (Cost down by ¥¥ 100 billion)100 billion)
FY2015
FY2013-2015Corporate strategy
▲ ¥¥ 11.0B ▲ ¥¥ 221.0B ▲ ¥¥ 25.0B ▲ ¥¥ 43.0B
Referencepoint
Referencepoint
100.1%
106.7%
▲1.00
115.4%
10.xx
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(2) New Group Corporate Vision The ANA Group Corporate Vision represents our long terms goals and our ambition to become an important corporate player in the air transport business, leading the market in terms of customer satisfaction and value creation.
(3) Group CSR Policy and Group Code of Conduct (ANA's Way)
The Group CSR policy sets forth ANA’s social responsibility to achieve a mission and vision which represent our promise to society as a corporate group. We have already been working on CSR centered on safety but we will shift to a more global level looking at wider range of stakes holder globally. The Group Action Guideline (ANA's Way) forms the cornerstone of actions that ANA Group employees should take to achieve the vision and principles.
Management and Financial Goals for FY2013
* % Growth is the percent changed from the previous year
Contact: ANA Holdings Public Relations TEL +81-3-6735-1111
About ANA Holdings Inc. ANA Holdings Inc. is an aviation group with global operations and a total of 57 consolidated subsidiaries and 19 affiliates spanning passenger and cargo operations as well as airline-related business such as catering and IT services. ANA Holdings Inc. was formed in April 2013 and is the parent company of the full-service carrier ANA and AirAsia Japan. It also owns a 38.6% stake in Peach, the low-cost carrier based in Kansai Airport. ANA Holdings Inc. promotes a multi-brand
FY2013 Forecast (billion yen)
Operating Revenues 1,610.0 Operating Income 110.0
Profit Margin 6.8% Recurring Profit 80.0
Net Income 45.0 % Growth in international seat km +13.8% % Growth in domestic seat km +4.5%
% Growth in international cargo ton km +14.6% % Growth in domestic cargo ton km +4.7%
Target consolidated operating income for Fiscal 2013 of ¥110.0 billion, with a consolidated operating margin of 6.8%. The medium-term goal for consolidated operating income is ¥150 billion and a consolidated operating margin of 10% or above.
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strategy to leverage the strength of ANA brand and stimulate demand in markets complementary to its full-service airline offering enabling it to expand market share for the Group as a whole and enhance value. ANA Holdings Inc. has 235 aircraft flying to 32 international destinations and 50 domestic cities, carrying more than 43 million passengers each year. It is number one in Asia and eighth in the world, based on revenue. The goal of ANA Holdings Inc. is to be the world’s leading airline group for customer satisfaction and value creation.