Annual Report 2020
Fiscal 2019 (Year ended March 2020)
2
10
18
24
The ANA Group DNA:
A Legacy from Our Founders
2
Strengths Cultivated from the Spirit of Our Founders:
Innovation and Comprehensive Capabilities
4
Strengths Accumulated over a 68-Year History:
Scale and Quality
6
Expansion of ANA Group Businesses
8 Corporate Philosophy / ANA’s Way
Management Message
The ANA Group Value Creation
Process
18
Cycle of Expanding Strengths—
Driven by the Spirit of Our Founders
20 Value Creation Process
22
Timeline for Simultaneous Creation of Economic
Value and Social Value
Business Progress
26
Current Economic Conditions and
ANA Group Responses
32 Overview by Business
38 ANA Group Response to COVID-19
39 Special Feature: Establishing avatarin Inc.
42
Sustainability Initiatives
44 ANA Group ESG Management
46 Further Promotion of ESG Management
50 Dialogue with Experts on ESG
54 Material Issues
66
Business Foundations Supporting
Corporate Value
68 Safety
72 Human Resources
76 Unique ANA Group Initiatives
78 Corporate Governance
92 Risk Management
94 Compliance
96 Responsible Dialogue with Stakeholders
98
Financial / Data Section
Contents of This Report
The ANA Group (ANA HOLDINGS INC. and consolidated subsidiaries) strives to create social value
and economic value, leveraging the strengths we have cultivated based on the spirit of our founders.
In so doing, we expect to generate sustainable corporate value growth. This report presents the ANA
Group philosophies that have been handed down through our history. We also address value
creation, our actions in response to changes in the recent business environment, and the foundation
that supports our corporate activities.
Editorial Policy
The ANA Group emphasizes proactive communication with stakeholders in all of our business
activities. In Annual Report 2020, we aim to encourage a deeper comprehensive understanding of the
social value and economic value created by the ANA Group through our management strategies, our
business, and our economical, social, and governance (ESG) activities. We have published informa-
tion on the activities we selected as being of particular importance to the ANA Group and society in
general. For more details, please visit the ANA Group corporate website in conjunction with this report.
Scope of This Report
• This report covers business activities undertaken from April 1, 2019 to March 31, 2020
(including some activities in and after April 2020).
• In this report, “the ANA Group” and “the Group” refer to ANA HOLDINGS INC., and its
consolidated subsidiaries.
• “The Company” in the text refers to ANA HOLDINGS INC.
• Any use of “ANA” alone in the text refers to ALL NIPPON AIRWAYS CO., LTD.
The Spirit of Our Founders
A Business with Integrity
A Resolute and Independent Business
A Self-Reliant Business
We must always remember that we are a company offering
highly public services. We must contribute to society without
bias to profit or authority.
The Words of Our Founders
“Trust and love are the threads
that weave a beautiful world”
Let us create a world of beauty by
spreading mutual trust and greater
harmony, woven by trust and love.
“Wakyo” (Close Cooperation)
We act with strength, in harmony,
but not necessarily in agreement,
through patient, careful discussions
to reach positive outcomes, striving
as one to achieve goals once the
decision is made.
“Hardship Now, Yet Hope for the Future”
No matter the difficulty we face, if we continue to
persevere to a brighter tomorrow, the time will come
when we thrive and prosper.
1
Strengths Cultivated from the Spirit of Our Founders:
Innovation and
Comprehensive Capabilities
Our business began in 1952 with only two helicopters. Our founders’ desire was for our company
to serve as a highly public company that not only pursues profits but also contributes to nations
and communities. We continue to make sincere and dedicated efforts, even in the most challeng-
ing of environments. The ANA Group DNA is firmly rooted in the spirit of transcending accepted
wisdom, customs, and organizations. Rising to challenges and pulling together to overcome
issues by taking advantage of diversity are also rooted in our DNA.
1952Two Helicopters
and Big Dreams
At the end of World War II, the Allied Powers fully banned any private
companies in Japan from operating aircraft. That ban was lifted in
1950. Two years later, in 1952, Japan Helicopter and Aerospace
Transport Co., Ltd. (ANA’s predecessor) became the first privately
run air transport company in Japan with only two helicopters in
its “fleet.” Starting from zero was a challenge, as the world at the
time was dominated by government-directed airlines manage-
ment. Under the spirit of our founders that stressed integrity and
independence, the company’s employees embraced a great
dream. Ten years later, in 1962, we became the launch customer
for the YS-11, the first domestically produced aircraft in the post-
war era. This development expanded our business to lead the
Japanese airline industry. In 1964, we used this aircraft to fulfill the
important mission of transporting the Olympic torch for the Games
of the XVIII Olympiad in Tokyo. In this manner, ANA continued to
grow alongside postwar Japan.
An industry policy in 1972, called the 45-47 System, regulated
domestic airline companies. Under this policy, ANA was
allowed only to operate domestic flights, restricted from inter-
national operations. However, in 1971, we began operating an
international charter flight to Hong Kong.
In the following year, the efforts of our second president
and CEO, Kaheita Okazaki, led to international charter services
to Shanghai, in the aftermath of the normalization of national
relations with China. The ANA dream of scheduled interna-
tional flight operations remained alive. The 1980s saw increas-
ing calls for a review of the 45-47 System, as it did not
accommodate expanding and diversifying demand for air
travel. The system was finally abolished in 1985. In 1986, ANA
began operating scheduled international flights between Narita
and Guam, fulfilling a ten-year dream.
Achieving a 10-Year Dream to
Operate International
Flights
1986
1978
Opening of Narita
International Airport
Revenue Passenger-Kilometers (RPK)
Peach Aviation
ANA International Services
ANA Domestic Services
Foundation
2011
The First to Implement
the State-of-the-Art
Boeing 787
Dreamliner Aircraft
The Boeing 787 is a next-generation aircraft that introduced
many new technologies and materials to achieve longer-dis-
tance flights and significantly reduced operating costs. In
2004, the ANA Group was the first in the world to order the
Boeing 787. As the launch customer, we supported the devel-
opment of this aircraft.
Our order of this globally anticipated, state-of-the-art air-
craft made headlines, boosting the ANA Group’s global pres-
ence. We placed the Boeing 787 into service in 2011, and by
January 2016 we became the first company in the world to fly
over 100,000 flights with this aircraft. This was equivalent to
one-quarter of all Boeing 787 flights worldwide. The exception-
ally increased fuel efficiency of this model enables long-distance
flights by medium-body aircraft.
2014
Expansion of
international slots
at Haneda Airport
2013
Shift to a holding
company structure
2008
Global
financial
crisis
2011
Great East
Japan
Earthquake
1999
ANA Joined the
Star Alliance
to Expand Our Overseas Network
ANA became the ninth member of the Star Alliance, the
world’s first and largest global airline alliance, in 1999. Utilizing
code share flights, we continued to expand our network and
accelerate the growth of our International Business. At the
same time, we faced a variety of risks arising from global
political and economic circumstances, as well as social
phenomena.
Due to unforeseen events such as the September 11
terrorist attacks in the United States in 2001, the Iraq War in
2003, and the spread of the SARS virus, passenger demand
decreased dramatically. However, by implementing emergency
cost reductions, we achieved profitability in our International
Business for the first time in fiscal 2004 (the fiscal year ended
March 2005). Despite facing numerous adversities, we have
strengthened our comprehensive capabilities as a group,
moving forward in our growth strategies and expanding our
network.
2003
Outbreak
of SARS
2001
September 11
terrorist attacks in
the United States
1994
Opening of
Kansai
International
Airport
1952
1960
1970
1980
1990
2000
2010
2019 (FY)
2
3
Strengths Accumulated over a 68-Year History:
Scale and Quality
In 2020, we celebrated the 68th anniversary of our founding. Today, we have grown into a top-tier
global airline group in terms of both scale and quality. To continue to be a company loved by our
customers and society, as well as one that connects the world, we are committed to overcoming
the challenges of COVID-19 and reach the highest levels of value.
Scale
Quality
FY2019 results
Total ANA Group Passengers (FY2019)
59.62 million
Share of Domestic Passengers*2 (FY2019)
No. 1 (46%)
Number of Aircraft (as of the end of FY2019)
307 aircraft total
Wide-Body:
Medium-Body:
Narrow-Body:
Regional:
59
107
117*
24
* Includes aircraft operated
by Peach Aviation
ANA Domestic
Passengers*1 (2019)
Total ANA Domestic
and International
Passengers*1 (2019)
Global
No. 17
Global
No. 22
Airports Served by ANA (as of the end of FY2019)
101 airports 48 international airports
53 domestic airports
Airports and Routes Served by Peach Aviation
(as of the end of FY2019)
22 airports 39 routes
ANA Mileage Club Members
(as of the end of FY2019)
36.65 million
Cargo Volume (FY2019)
1,239 thousand tons
Sources:
*1 International Air Transport Association (IATA), 2020
*2 Number of passengers (industry-wide): Ministry of Land, Infrastructure, Transport and Tourism (FY2019)
In-Service Rate
97.4%
On-Time
Departure Rate
88.7%
On-Time
Arrival Rate
87.5%
Number of Customer Feedback Reports
16.9%
20.1%
35.8%
FY2015
73,688
26.1%
FY2019
16.6%
117,628
42.3%
Complaint
Compliment
Comment / Request
Other
21.2%21.2%
21.1%21.1%
External Recognition
Quality
SKYTRAX (ANA, 2020)
5-STAR AIRLINE
for an 8th
consecutive year
By Category:
• World’s Best Airport Services (2019)
• Best Business Class Onboard Catering (2019)
JCSI (Japan Customer Satisfaction Index) Survey
(ANA, FY2019)
• International Aviation Division, Customer Satisfaction
No. 2
On-Time Performance
Cirium (ANA, 2019)
Asia-Pacific Major Airlines
Network Category: No. 1
Mainline Category: No. 1
Worldwide Major Airlines
Network Category: No. 2
Mainline Category: No. 2
4
5
Expansion of ANA Group
Businesses
The ANA Group consists of our core Air Transportation Business and a variety of related businesses.
Each company is managed autonomously, and we establish strong relationships and synergies to
further refine our unique strengths and continuously increase corporate value throughout the Group.
Air Transportation
Composition of Operating Revenues
73.3%
Full Service Carriers (FSCs)
ALL NIPPON AIRWAYS CO., LTD.
ANA WINGS CO., LTD.
Air Japan Co., Ltd.
Low Cost Carriers (LCCs)
Peach Aviation Limited
Airline Related
Composition of Operating Revenues
12.6%
ANA AIRPORT SERVICES Co., Ltd.
ANA Base Maintenance Technics Co., Ltd.
ANA MOTOR SERVICE CO., LTD.
ANA Cargo Inc.
ANA Systems Co., Ltd.
ANA Catering Service Co., Ltd.
ANA TELEMART CO., LTD.
ANA X Inc., and more
Consolidated Group Data
Operating Revenues
¥1,974.2 billion
Number of Employees
45,849
Composition of
Operating Revenues
by Segment
(Fiscal 2019)
* Calculated before
eliminations
(¥ Billions)
Operating
Revenues
Operating
Income (Loss)
Air Transportation
1,737.7
Airline Related
Travel Services
Trade and Retail
Others
Adjustments
Total (Consolidated)
299.4
143.9
144.7
44.2
(395.9)
1,974.2
49.5
18.1
1.3
2.9
3.5
(14.7)
60.8
Travel Services
Trade and Retail
Composition of Operating Revenues
Composition of Operating Revenues
6.1%
ANA Sales Co., Ltd.
ANA Business Jet Inc., and more
6.1%
ALL NIPPON AIRWAYS TRADING Co., Ltd., and more
The core of the ANA Group is our ownership and operation of
the full service carrier (FSC) ANA brand and the low cost car-
rier (LCC) brand Peach Aviation. We leverage the strengths of
each entity to drive growth in our airline business domains.
We will continue to contribute to greater corporate value for
the entire Group by building an optimal business portfolio
within the Air Transportation Business and pursuing a more
resilient business structure.
In the Airline Related Business, ANA Group companies mainly
support the Air Transportation Business with services that
include airport ground support, aircraft maintenance, vehicle
maintenance, cargo and logistics, catering (in-flight meals),
and contact center services.
This business seeks to grow and deepen Group businesses
through contract services for overseas airlines, new value creation
through the effective use of customer data, and other means.
As the sales and marketing division of the ANA Group, ANA
Sales Co., Ltd. provides airline sales services, including sales
of air tickets and travel services. The company also engages in
the planning and sales of travel products.
To meet the needs of our customers who value their time, we
are expanding the scope of our travel services, which includes
the launch of ANA Business Jet Inc. in 2018. ANA Business Jet
arranges charter flights for business jets.
ALL NIPPON AIRWAYS TRADING Co., Ltd., and Group compa-
nies perform aircraft parts procurement, conduct aircraft trad-
ing (import, export, leasing, sales), operate airport shops (ANA
DUTY FREE SHOP and ANA FESTA) across Japan, and
manage other businesses related to air transportation. The
Group also trades in non-airline products (paper, pulp, food
import and sales; semiconductor and electronic component
import / export), provides advertising agency services, and
operates the ANA online shopping site.
Air transportation
Aircraft
maintenance
Vehicle
maintenance
Cargo / logistics
Human resources /
business support
Flight catering
Human
resource
development
Sales and
marketing
Research institute /
think tank
Airport ground
support
IT
IT
Contact center
General trading
companies
Real estate /
building maintenance
Charter arrangements
6
6
7
The beliefs of our founders have transcended the ages,
passed on with great care as the
DNA of the ANA Group.
Ambition in
Our DNA
Our Mission
in Society
Group
Synergies
Mission Statement
Built on a foundation of security
and trust, “the wings within ourselves”
help to fulfill the hopes and
dreams of an interconnected world.
ANA Group Safety Principles
Safety is our promise to the public and is the foundation of our business.
Safety is assured by an integrated management system and mutual respect.
Safety is enhanced through individual performance and dedication.
Management Vision
It is our goal to be the world’s leading airline group in customer satisfaction and value creation.
ANA’s Way
To live up to our motto of “Anshin, Attaka, Akaruku-genki!”
(Trustworthy, Heartwarming, Energetic!), we work with:
1. Safety
We always hold safety as our utmost priority, because it is
the foundation of our business.
2. Customer Orientation
We create the highest possible value for our customers
by viewing our actions from their perspective.
3. Social Responsibility
We are committed to contributing to a better,
more sustainable society with honesty and integrity.
4. Team Spirit
We respect the diversity of our colleagues and come together
as one team by engaging in direct, sincere and honest dialogue.
5. Endeavor
We endeavor to take on any challenge in the global market
through bold initiative and innovative spirit.
8
9
Returning to the spirit of our found-
ers, coming together as a group to
overcome the COVID-19 pandemic
and create a strong, resilient
Group business structure.
Shinya Katanozaka
President & Chief Executive Officer
10
11
Management Message The Impact of COVID-19 on
Our Businesses
However, the spread of infection around the world led to stron-
ger immigration restrictions in every country beginning in March.
Naturally, we were forced to cancel or reduce flights on interna-
tional routes. In Japan, the national government declared a
state of emergency on April 7 and local governments requested
voluntary restraints on unnecessary travel outside the home.
These developments led to a sharp decrease of passengers
First, I want to express my sincere gratitude for your continued
flying on domestic routes. As a result, the ANA Group posted
support.
an operating loss of ¥58.8 billion for the stand-alone fourth
I also want to express my deepest sympathies to the people
quarter, which was the largest loss we have ever recorded on a
around the world who have been affected by COVID-19.
quarterly basis. Although we secured net operating income of
The ANA Group has been pursuing growth strategies, mainly
¥60.8 billion for the full year, we truly regret that we canceled
through the International Business, in line with our FY2018–2022
dividends for fiscal 2019 in light of the business environment
ANA Group Corporate Strategy, which we formulated in February
and our inability to predict when the COVID-19 pandemic
2018. During fiscal 2019, All Nippon Airways Co., Ltd. (ANA)
will end.
introduced new routes from Narita to Perth, Chennai, and
Strict immigration regulations continue in force around the
Vladivostok. The Company also put ultra-wide body aircraft into
world, and international flights have been restricted heavily.
service as part of a Hawaii Strategy. The Cargo Business
In Japan, we saw a second rise in the number of COVID-19
adopted wide-body freighters for Shanghai and Chicago routes
infections beginning in July. Some prefectures are pushing for
to strengthen our ability to capture demand for not only special
another call for citizens to refrain from travel. Given this envi-
items including oversize cargo but also trilateral cargo. The
ronment, we have seen a rise in new work styles and lifestyles,
merger of Peach Aviation Limited and Vanilla Air Inc. in our LCC
including online conferences, telework, and demand for non-
Business has resulted in a more efficient business structure
contact services. We expect consumers to shy away from air
to confront tough global competition in the future. To further
travel for the time being. It is extremely difficult for us to imagine
enhance basic quality for greater competitiveness, we have been
the type of continued demand we incorporated when we formu-
persistent in addressing the engine component issues related to
lated our corporate strategy.
the Boeing 787, while at the same time, we made up-front invest-
Looking at our past, we know that the Group’s businesses
ments in safety, quality and services as well as human resources,
have not always been smooth sailing. Since the start of the 21st
including the active recruitment of employees who will lead us
century, we have encountered numerous challenges, including
into the future. As a result of these activities, we continued to
the September 11 terrorist attacks, SARS, the Lehman Shock,
generate record-high operating revenues on a consolidated
the Great East Japan Earthquake, and U.S.–China trade fric-
basis through the third quarter of fiscal 2019.
tions. With every challenge, our officers and employees have
However, once we entered the fourth quarter, we began
put their minds together to overcome the circumstances, even
seeing the impact of the spread of COVID-19 during the second
when such policies have included difficult consequences. It may
half of January. Passenger numbers began to decrease gradu-
not be an overstatement to say that we now face the greatest
ally on routes to China and Asia. As a company that plays a role
challenge since our founding, which will be 70 years in just
in social and transportation infrastructure, we have continued to
two years from now. Even so, we are willing to overcome these
operate at the highest level possible, monitoring route trends in
challenges and put our businesses back on a growth vector.
detail, including the needs for Japanese citizens overseas to
To this end, I wish to explain my thoughts on how we plan to
return home. In so doing, we remained focused on the safety
deal with the challenges at hand.
of our customers, our employees, and other stakeholders.
Our Initiatives since the
Outbreak of COVID-19
do away with internal concerns and foster a sense of security.
We are a business that ensures the safety of the skies.
Therefore, we absolutely had to avoid situations in which
employees were forced to engage in their work while worrying
about infection, unemployment, or other concerns. I shared my
thoughts candidly about our commitment to ongoing training
and education looking ahead to a recovery in operating scale.
When COVID-19 first emerged, we set about on our financial
I discussed how we would move forward in work-style diversity
response immediately. We began discussions with financial
while complying with laws and regulations. I also addressed
institutions to secure cash on hand. Supported by the financial
how we planned to engage in labor–management negotiations
foundation we accumulated through the past several years of
to revise compensation in a way to protect both our employees
results, we were able to establish a plan during April to secure
and the Company.
the funds needed for ongoing business operations for the time
We experienced the lowest point of passenger demand for
being. By the end of June, we executed loans and expanded
our Domestic Business in May. At the same time, we needed
our commitment line, securing access to the level of ¥1 trillion.
to introduce new procedures to prevent COVID-19 infections.
In parallel with securing cash on hand, we implemented
As a group, we pursued exhaustive measures to create an
effective business measures that included reducing the number
environment in which customers and employees could feel
of flights in line with the decrease in passenger demand,
safe and secure. President Hirako of ANA was proactive in his
adjusting personnel operations, and optimizing services. At the
response to provide peace of mind to our customers as quickly
same time, I instructed the presidents of all Group companies
as possible, and he unveiled the ANA Care Promise on June 1
to engage in emergency cost-reduction measures. We have
as the ANA policy to prevent infections. The new standard of air
asked the Scheduled Airlines Association of JAPAN to provide
travel proposed by ANA is the same comfort and enjoyment as
support in approaching the government and related agencies
ever, now with even greater peace of mind. Peach also pursued
to obtain deferments and exemptions related to taxes and
necessary measures, including the publishing of a special
public fees for the airlines industry. In this and other ways, we
page on the company’s website to communicate aircraft proce-
are working together with other airlines to respond to the crisis.
dures in response to the new normal of the with-COVID-19 era.
However, the COVID-19 pandemic has showed no signs of
As a group, we will continue to provide clean and hygienic
waning, and the outlook for our business had become even
environments, striving to relieve passenger anxiety and inspire
more uncertain. As this difficult situation continued, in March,
confidence in boarding our aircraft as we leverage these poli-
I issued a message to the 45,000 ANA Group employees,
cies into new brand power.
declaring my intention to protect their jobs. I believed that the
Group would come together to respond to the crisis if we could
P.38 ANA Group Response to COVID-19
12
13
Management Message
Business Structure Reform
in Anticipation of the
Post-COVID-19 Era
see a gradual recovery on Domestic Business that will reflect a
As a short-term initiative, we plan to change our Air
change in quantity with respect to passenger numbers. Over the
Transportation Business structure toward balanced profitability.
medium term, we believe the emergence of vaccines and other
We will pursue a two-pronged portfolio strategy through ANA
factors will lead to a moderate pace of recovery in demand on
and Peach, bringing to bear the brand strengths of each in a
International Business, while continued globalization will spur a
post-COVID-19 world. At the same time, the ANA Group will
return to air travel. On the other hand, even as the impact of
reduce fixed costs in terms of fleet and human resources. Over
COVID-19 continues, we expect leisure demand to recover first,
the medium term, deepen our portfolio strategy toward building
growing steadily over the medium term, reflecting a change in
a strong Group business structure that creates consistent,
mixture based on passenger class. We also expect to see a
steady value. While doing so, we will also establish our Non-Air
What Will Never Change:
Our Pursuit of ESG
Management
Our corporate strategy to date has called for growth through
recovery in inbound travelers visiting Japan. We must also
Business as a second pillar of revenue to stand alongside our
Travel restrictions were tightened around the world in conjunc-
network expansion in the ANA and Peach brands to generate
consider how changes in work styles affect business travel
Air Transportation Business. The ANA Group aims to be a cor-
tion with the spread of COVID-19. The Japanese government
operating revenues and profits on par with the global top-tier
demand, as more companies report weaker earnings, conduct
porate group capable of withstanding the return of a pandemic,
declared a state of emergency in April 2020. During that time,
airlines. We are faced now, however, with the urgent need to
business through online meetings, and make other changes.
returning to stable and continuous dividends through improved
I experienced for myself just how keen people were to go out-
modify our business policies flexibly in response to changes
Our plans for reform are measures responding to changes
corporate value.
side. I think that latent needs for air travel will never change in
in behavior of people caused by the COVID-19 pandemic.
in passenger numbers and class. Our first approach to pushing
Our aim is to not only reduce the scope of our business
the future. People will still want to return to their hometowns,
The following topics are urgent issues for the ANA Group
past COVID-19 is to reduce the scope of our operations in
through restructuring but also achieve growth in the post-
travel overseas, and use aircraft for other travel needs. The
under the current situation:
conjunction with the change in passenger numbers. At the stage
COVID-19 era, becoming an airline group essential to the
spread of remote work and other factors could increase the
1) Reduce costs and control investment
2) Pursue business structure reform
we see a recovery in demand over the medium term, we will
people of the world. Now that the external business environ-
potential for weak business travel demand temporarily. On the
re-expand the scope of our business toward a growth trajectory.
ment has changed so significantly, we must be proactive in
other hand, new location-independent work styles could give
To respond to changes in passenger class, we plan to change
adapting to the new normal. The ANA Group will pursue reform
rise to new demand for workations and other travel.
how we capture demand throughout the Group by offering
products and services tailored to the needs of new markets.
with a sense of urgency, securing a path to sustainable growth
Others have pointed out that travel restrictions could have
that we will be able to hand over to the next generation.
an impact on the nature of the airline business. Now is the time
With respect to 1) reducing costs and controlling investment,
The following matters represent specific actions for us to
we reduced capacity significantly in line with demand trends,
achieve these plans.
P.24– Business Progress
trimmed personnel expenses based on negotiations with the
union, and engaged in other cost-reduction measures in terms
of both variable and fixed costs. We reduced costs by a total
¥162.5 billion during the first quarter of fiscal 2020. And we will
continue to expand into other areas for reduction and delve
deeper into reduction impacts. With respect to investment,
we continue to negotiate with aircraft manufacturers and other
parties, reflecting our intent to significantly curb capital expen-
ditures by postponing the timing of aircraft delivery.
We also plan to 2) pursue business structure reform in bold
measures for the future. The current demand structure in the
airline industry is about to change in major ways. We expect to
Basic Policies on Business Structure Reform:
Business Model Changes*
1) Short Term: Change business structure toward
surplus in profit in Air Transportation Business
a. Optimize Air Transportation Business portfolio strategy
b. Engage in resource-related tactics to reduce fixed costs
2) Medium Term: Establish a resilient Group business
structure that creates consistent, steady value
a. Strengthen Air Transportation Business portfolio strategy
b. Establish a second pillar of earnings with our Non-Air
Business
that we must communicate the meaning and significance of the
ANA Group to society. The road to recovery will by no means
be smooth. When travel by air begins to increase with the
development and distribution of a vaccine, the ANA Group will
play an important role in social infrastructure. We will help revi-
talize economies, trade, and other social activities, as we aid
the movement of people, goods, and cultural interactions.
This aligns with our Group Mission Statement: The wings within
ourselves help to fulfill the hopes and dreams of an intercon-
nected world. The ANA Group will continue to value personal
relationships and empathy, connecting the world to bring about
a brighter, more abundant future.
To grow sustainably with society, companies must pursue
* Disclosures as of July 29, 2020
For the most up-to-date information,
please visit our corporate website:
Financial Results Presentation Materials:
https://www.ana.co.jp/group/en/investors/irdata/supplement/
not only economic value, such as operating revenues and
profits, but also social value, which includes a response to
social issues facing modern society on a global scale. As a
member of society, the ANA Group desires to share value for
the sustainable development of our stakeholders, including our
customers, shareholders and investors, employees, business
partners, and local communities. We have pursued environ-
mental, social, and governance (ESG) management, which
has become even more important in the face of the COVID-19
pandemic. We are determined to approach medium- and long-
term issues seriously and from a global perspective.
P.44–45 ANA Group ESG Management
14
15
Management Message
Environmental issues are issues that truly impact our stake-
holders, and the environment has become an even greater
topic of concern across the world. Climate change is a
common global challenge. Addressing climate change has
become a responsibility for companies entrusted with the
future, and the airline industry has become subject to stricter
regulations to reduce CO2 emissions from aircraft operations.
Entrusting Our Future to
New Generations
Recently, airline industry CO2 emissions are down due to can-
Beginning in January, Wuhan, China, experienced a dramatic
cellations and flight reductions stemming from COVID-19.
increase in COVID-19 infections. At that time, ANA organized a
However, as our Air Transportation Business recovers in the
total of five charter flights to ensure Japanese citizens in the
near future, we must take appropriate measures to ensure
area could travel back to Japan. While the threat of COVID-19
CO2 emissions do not return to the same level as in the past.
was still not recognized fully in Japan, many of our employees
Therefore, we have created new long-term targets for the year
worked side-by-side with the risk of infection. Despite the chal-
2050. We intend to strengthen our efforts to address climate
lenges, we helped a total of 828 Japanese citizens return
change, reducing CO2 emissions from aircraft operations by
home, as each employee fulfilled their role with dedicated
50% compared to 2005.
P.46–49 Further Promotion of ESG Management
action. Later, some employees remarked that they became
even more aware than usual of our mission as a public trans-
portation provider. Others stated how completely focused they
The new goals we created will not be easy to achieve. We must
became in helping return passengers safely to their homes in
respond in tangible ways through our aircraft, jet fuel technol-
Japan. We fulfilled our responsibilities as an airline with the
ogy innovations, and more. We must also respond in intangible
support of the Japanese government and many others. On
ways through steady efforts that involve human intervention.
June 23, we received a letter of appreciation from the Japanese
Social issues other than those related to the environment that
Minister of Foreign Affairs.
require ongoing efforts include business activities and supply
As part of our social contribution activities, we asked for
chain management that respect human rights. Stakeholder
employee volunteers in April to support medical gown sewing.
engagement is an essential part of gaining an appropriate
The response of Group employees was far beyond our expec-
understanding of and responding to these trends. In addition
tations. After hearing from employees of their desire to serve
to using dialogue to understand potential opportunities and
society and do whatever they could to help, I was again
risks surrounding the Group, we also plan to engage in man-
impressed that human resources are the true treasure of our
agement that incorporates the environment, society, and
Group. While we cannot see when the COVID-19 pandemic will
governance. Here, we will do even more to gain an accurate
end, I want to express how truly proud I am of our employees
understanding of social awareness and behavioral changes,
who even now work in airports, on-board aircraft, and in a
reflecting this understanding in our corporate strategy. In the
variety of other locations to fulfill our responsibilities as social
future, the ANA Group will make the process for achieving our
and transportation infrastructure.
goals more visible and provide appropriate disclosures of our
results through annual reports, websites, and other communi-
cation channels.
P.76–77 Unique ANA Group Initiatives
Our true capabilities come to the fore when times are tough,
requiring calm thinking, passionate action, and self-awareness
in achieving responsibilities together with colleagues. One of
the spirit of our founders is to be a Business with Integrity. This
reflects an emphasis on the public interest rather than on prof-
its. Our employees united in their sense of mission to fulfill their
roles properly and without fanfare when they supported the
Wuhan charter flights and the medical gown sewing project.
Every employee demonstrated their sense of responsibility to
take a personal role in this mission. The ANA Group possesses
wings within ourselves that help us overcome difficulties
together. Our DNA is rooted in values handed down to us from
those who came before, and this DNA will never change at any
time in the future. I am convinced that the corporate culture we
have cultivated over our 68 years of history will be the driving
I intend to steer firmly ahead to ensure we become an inspiring
force behind overcoming the current crisis.
airline group.
Hardship now, yet hope for the future were the famous
I ask for your continued support of the ANA Group.
words of Masuichi Midoro, our founder. Using these words,
successive generations of management have continued work-
ing together single-mindedly with employees to serve society
through a foundation of safety. ANA’s predecessor, Japan
Helicopter and Aeroplane Transports Co., Ltd. began with only
two helicopters, 28 employees, and big dreams. Since that
time, we have continued to grow with effort and a spirit of
taking on new challenges. We have faced many difficulties due
to changes in our business environment. But we have always
come through such crises reborn and stronger than ever. We
will overcome COVID-19 through the comprehensive capabili-
ties of the Group. My dream is for us to build even stronger
wings that spread out to connect the people of world and take
us forward. Dreams come true, if one makes the effort. With
this in mind, and as the top manager of ANA HOLDINGS INC.,
September 2020
Shinya Katanozaka
President & Chief Executive Officer
16
17
Management Message
Cycle of Expanding Strengths
Driven by the Spirit of Our Founders
We have remained committed to our founding spirit, improving on our unique strengths over the course
of our history. Each element of our philosophy amplifies others, leading to a cycle of expanded strengths.
This, in turn, serves as the driving force behind the values unique to the ANA Group.
Ongoing
Commitment
to Our
Philosophies
Ambition in Our DNA
Group Synergies
Our Mission in Society
Aspirations toward
Innovation
• Early adoption of state-of-the-art
aircraft
• Leading-edge products and
services
Strengths
Cultivated
from the Spirit of Our Founders
Always expanding through
a focus on innovation
multiplied by Group diversity
Comprehensive
Capabilities
to Meet Our Goals
• Multifaceted business portfolio and
decision-making independence for
Group companies
• Network of nearly 45,000 Group
employees
Each ANA Group company
relies on its own expertise to
contribute to our overall strategy.
These companies develop
innovative businesses, products,
and services, raising our organi-
zation to higher levels of quality
and creating more revenue
opportunities.
Create Both
Economic Value and
Social Value
We seek new challenges by
embodying the essence of team
spirit, embracing the support of
our stakeholders around the
world, who have responded to
our obsessive focus on quality
and our extensive network.
Improve
Quality
• History and culture of safety
• Commitment to on-time
operations
• Respond to diverse needs based
on degree of customer
satisfaction
Strengths
Created
through Our Businesses
Create both quality and
volume in pursuit of
social infrastructure value
Expand
Business Scope
• Expand international route
network
• Solid domestic network
• Customer segment coverage by
full service carrier and LCC
18
19
The ANA Group Value Creation Process Value Creation Process
We will invest appropriate management resources based on the environment surrounding the ANA Group.
In so doing, we will accelerate the cycle of our four strengths, which serve as the engine driving value cre-
ation. By executing our strategy, we will create social value and economic value simultaneously. As we
do so, we aim for improved corporate value while we contribute to the Sustainable Development Goals
(SDGs) adopted by the United Nations.
Our Environment (Medium and Long Term)
ANA Group Management Resources
Economic Growth in Asia-Pacific
Changing Social Structures
in Japan and Overseas
Advancing Technology
Climate Change and Resource Shortages
Power of people who are willing to endeavor
and challenge
Fleet and network connecting the world
Trust of our customers and society
Limited natural resources shared with humankind
Financial foundation allowing us
to spread our wings
e
t
a
e
r
t h e v a l u e w e c
E x p a n d
Ongoing
Commitment
to Our
Philosophies
Ambition in
Our DNA
Group Synergies
Our Mission
in Society
Aspirations
toward
Innovation
Cultivate
Strengths
Comprehensive
Capabilities
to Meet
Our Goals
Improve
Quality
Create
Strengths
Expand
Business Scope
Execute our
strategy
Leverage our strengths to
move forward and achieve sustainable
expansion in our businesses
Sustainable Corporate Value Enhancement
Achieving Our Management Vision
Economic
Value
Simultaneous
Creation of Economic Value
and Social Value
Social
Value
Expanding top-line
Improving cost
competitiveness
Creating more business
opportunities
Developing demand in new
customer segments
Improving employee
productivity
Improving quality and service
Pursuing both improved
convenience and efficiency
Generating new business
Strengthen our
competitive ability
Providing smart,
comfortable travel
Revitalize our regional
tourism business
Promoting Japan
as a tourism nation,
encouraging inbound tourism
Foster and utilize a diverse
employee base
Promoting diversity
Helping create a society that
respects human rights
Generate efficiencies and
innovation through DX
Providing personalized
services
Raising employee
job satisfaction
Controlling cost increases
(primarily fuel expenses)
Pursue energy efficiencies
Reducing environmental
impact
Management
Foundation
20
Mission Statement
Safety
Hygiene
Corporate
Governance
Human Resources /
ANA’s Way
21
The ANA Group Value Creation Process Timeline for Simultaneous Creation
of Economic Value and Social Value
To continue creating social value and economic value through our corporate activities, it is important that
we set appropriate targets and timelines, having an accurate awareness of the prevailing business envi-
ronment. We must respond with flexibility to the dizzying changes in our business environment, including
increased competition and the emergence of geopolitical risks. We must also set our sights on medium-
and long-term initiatives in response to environmental regulations and human rights issues. As we incor-
porate both values into our corporate strategy, we will generate even greater improvements in the value
we create moving forward.
2020
Understanding of the
short-term environment
• New normal
• Change in airline market
demand structure
Economic value
Simultaneous
Creation of
Economic Value
and
Social Value
Social value
C
u
r
r
e
n
t
A
N
A
G
r
o
u
p
C
o
r
p
o
r
a
t
e
S
t
r
a
t
e
g
y
Materiality (P.44)
Environment
Human Rights
Diversity and
Inclusion
Regional
Revitalization
Short-Term
Initiatives
P.24 Business Progress
Airline Industry
Overview
Business Measures
Financial Measures
Cost Reductions
E
x
e
c
u
t
i
n
g
t
h
e
N
e
x
t
A
N
A
G
r
o
u
p
C
o
r
p
o
r
a
t
e
S
t
r
a
t
e
g
y
Understanding the
medium- and long-term
environment
• Economic growth in Asia-Pacific
• Changing social structures
in Japan and overseas
• Advancing technology
• Climate change and resource
shortages
The ANA Group
ESG Commitments
P.42 Sustainability Initiatives
E
• Reduce CO2 emissions
• Reduce resource waste
• Reduce food waste
• Biodiversity conservation
• Responsibility to respect human rights
• Promote responsible procurement and
supply-chain management
• Human resource development to support
sustainable growth
• Responding to the diversity of our
customers
• Promote regional revitalization
• Utilizing innovation to solve social issues
• Employ stronger governance structure
S
G
2050
i
i
A
c
h
e
v
n
g
M
e
d
u
m
i
-
a
n
d
L
o
n
g
-
T
e
r
m
G
o
a
s
l
22
23
The ANA Group Value Creation Process
Business
Progress
The impact of COVID-19 has resulted in major changes to the
environment surrounding the ANA Group.
We must take swift action both in our businesses and finances
to overcome one of the greatest challenges in our history. At the
same time, we must also transform our business structure to
accommodate new-normal lifestyles, pursuing sustainable growth.
What Does the
ANA Group DNA Mean to You?
Uncompromising commitment to quality through everyday effort, striving for
change, and an unwavering commitment to safety on the front lines.
Teruyuki Kominami
ANA Line Maintenance Technics Co., Ltd.
Maintenance Crew
24
2424
25
25
ANA Group Corporate Strategy Progress
Progress in Response Measures
In January 2019, we published the ANA Group Corporate Strategy Update for fiscal 2019 and 2020. As we subsequently finalized our
plans to expand our international network, mainly from Haneda Airport, in January 2020 we planned to announce a rolling update to
From the initial stages of the impact of COVID-19, the ANA Group has taken a proactive response in both
business and financial aspects.
the ANA Group Corporate Strategy by March.
However, the impact of COVID-19 on our business became apparent in February. With the spread of the virus both in Japan and
overseas, we assumed that the drastic decline in passenger demand would extend over a longer period of time. Accordingly, we made
our response to this urgent issue a top priority.
Business Measures
We implemented measures for the following four major areas of our businesses.
2018
2019
2020
2021
2022
(FY)
Results for the 1Q of FY2020
Please visit our corporate website for the latest information.
Financial results briefing materials:
https://www.ana.co.jp/group/en/investors/irdata/supplement/
Business
Environment
Surrounding
the ANA Group
Corporate and
Business Strategy
1. ANA Group
Corporate Strategy
(published February 2018)
2. ANA Group Corporate
Strategy Update
(published January 2019)
Staged Growth in
Inbound Travel
• Slot expansion at Tokyo metropolitan area airports
• Tokyo 2020 Olympic and Paralympic Games
FY2018 to FY2022
FY2019 to FY2020
3. Flight Schedule Plan for FY2020
(announced in January 2020)
FY2020
4. Formulation of Further Strategy
Action Plans for
Major Areas
1) ESG Management
2) Productivity Improvement
3) Customer Data Utilization
4) Pursuit of Innovation
February 2020–
Rising Negative
Impact on
Demand by
COVID-19
Priority to
Measures
Addressing
Urgent Issues
1 Match Capacity to
Demand Trends
Reduced operation and sales-linked
expenses significantly
2 Optimize Employee
Utilization and Services
3 Emergency Response
Measures
1) Adopted a temporary leave program
Expanded targeting to 36 Group companies
and 43,500 employees
2) Revised airport operation structure, etc.
Temporary closures of some facilities
along with capacity
Reduced fixed costs across various categories
1) Reduced officer remuneration, personnel expenses
2) Shrank aircraft-related expenses
3) Cut down outsourcing business
4) Made significant reductions in controllable costs, etc.
4 Establish Social
Credibility
Launched ANA Care Promise (June 1)
Match Capacity to Demand Trends
In response to the decline in passenger demand, we matched
Emergency Response Measures
We implemented a number of measures quickly to reduce
capacity to demand by suspending and reducing flights. We
personnel expenses and other costs. These measures included
also downsized the aircraft in operations, reducing variable
reducing officer remuneration, management salaries, and
costs such as fuel expenses and landing and navigation fees.
summer bonuses, which improved our profit balance.
Optimize Employee Utilization and Services
Along with controlling capacity, we adopted a temporary leave
Establish Social Credibility
We are pursuing efforts to establish our social trust so custom-
program and other measures to optimize employee utilization.
ers use our aircraft with peace of mind.
We also optimized our service systems and operation structure,
In June 2020, ANA launched the ANA Care Promise. Peach
including the temporary closure of certain airport facilities.
also implemented a variety of measures, providing a clean and
hygienic environment, striving to eliminate customer anxiety.
2626
26
27
27
Business Progress Business Progress
Progress in Response Measures
Cost Reduction Initiatives
By taking appropriate measures in our businesses, we achieved total cost reductions of ¥162.5 billion
during the first quarter of fiscal 2020, reflecting a combination of cuts in variable costs, such as fuel
expenses, and fixed costs, such as personnel expenses.
Cost Reduction Impact (Consolidated)
Results [Apr.–Jun.]
Total ¥ –162.5 Bn
Key Programs
throughout
the 1Q of FY2020
Cost Reduction
Forecast for the
Current Fiscal Year
Variable
Costs
Operation &
Sales-Linked
Expenses
¥ –130.0 Bn
1) Control capacity flexibly
Capacity by Business
Apr.–Jun. (YoY)
• International Passenger –86%
• Domestic Passenger –73%
• International Cargo –62%
• Peach Aviation –81%
Continue to control
capacity in response
to demand trends
Group Personnel
Expenses
¥ –24.5 Bn
Fixed
Costs
2) Reduce officer remuneration
and manager salaries
3) Reduce summer bonuses
4) Adopt a temporary leave
program
Approx.
¥ –75Bn*
Others
¥ –8.0 Bn
5) Limit capital expenditures
6) Reduce controllable costs, etc.
We will continue to strive to minimize variable costs by matching capacity to demand trends carefully.
We plan to reduce fixed costs by ¥75.0 billion* over the full year. As we expect the recovery in passenger demand to take time, we
will pursue further cost reductions by expanding areas to target and digging for deeper cuts.
* Forecast as of July 29, 2020
Please visit our corporate website for the latest information.
Financial results briefing materials:
https://www.ana.co.jp/group/en/investors/irdata/supplement/
Financial Measures
The ANA Group implemented financial measures in the following two major areas. At the same time,
we issued a request to the government for support of the airline industry.
Ensure Liquidity on Hand
Results for the 1Q of FY2020
Secured cash amount for the time being,
total ¥1 trillion or more
1) Secured bank loans Approx. ¥535 Bn
2) Established additional
commitment line
Expand to ¥500 Bn
Limit Capital Expenditures
Reduced capital expenditures
significantly
1) Postponed planned aircraft delivery schedule
2) Deferred in-flight product changes, etc.
1
2
We secured liquidity on hand as early as possible in anticipation of the prolonged impact of COVID-19. Working with financial institu-
tions, we secured access to approximately ¥1 trillion in total funding, consisting of bank loans of ¥535.0 billion in the first quarter and
an expanded commitment line to a maximum of ¥500.0 billion.
We also postponed planned aircraft deliveries for this year and deferred in-flight product changes, limiting capital expenditures.
We reviewed Group investment plans, deferring some projects and significantly reducing investment amounts.
Others
Request for Government
Assistance to the Airline
Industry
* Response as a Scheduled Airlines Association of JAPAN
Results for the 1Q of FY2020
Obtained deferments of landing and
navigation fees, etc.
In the meantime, we submitted a request to the government for industry support through the Scheduled Airlines Association of JAPAN.
As a result, many airports in Japan have deferred landing and navigation fees. Leasing costs and facilities usage fees have also been
reduced. Going forward, our industry will continue to ask for further support, including extended deferments and exemptions of taxes
and public fees.
2828
28
29
29
Business Progress Business Progress
Future Management Policies
Business Environment and the
ANA Group Response
The impact of COVID-19 has forced changes in social structures and value systems around the world. As
work-styles and lifestyles change, the acceptance of a new normal is about to cause changes in demand
structures, even in the airline industry. The ANA Group will respond to this situation as described below.
Environment
A new normal in work styles and lifestyles
Airline Industry
Significant changes in the demand structure of the airline market
Passenger
Numbers
(Change in
Volume)
ANA Group
Passenger
Class
(Change in
Mixture)
Short Term (under COVID-19)
Medium Term (post-COVID-19)
1) Rise in non-air travel
2) Gradual recovery in domestic routes
3) Recovery at a moderate pace on
international routes
4) Active resumption of air travel
Reduce business scale to
get over COVID-19
Re-expand business scope
toward a growth trajectory
1) Variation in recovery speed on each
2) Different class mix compared to
passenger segment
pre-COVID-19
• Leisure
• Business : Decrease
: Decrease to gradual recovery
• Leisure
: Increase including inbound
travelers
• Business : Ongoing weakness
ANA Group
Provide products and services that meet the new market needs
Responding to Passenger Numbers
(Change in Volume)
We are currently seeing strong movement toward non-air travel.
Responding to Passenger Class
(Change in Mixture)
Even as the impact of COVID-19 continues, we expect leisure
Even so, we expect to see a gradual recovery in passenger
demand to recover first, growing steadily over the medium
demand on domestic operations. Over the medium term, we
term. We also expect to see a recovery in inbound travelers.
believe the emergence of vaccines and other factors will lead
However, we forecast demand for business travel to continue
to a moderate pace of recovery in international operations,
to experience weakness as corporate earnings deteriorate and
while continued globalization will spur a return to air travel.
online conferencing becomes more widespread. Therefore,
The Group will reduce the scale of our businesses tempo-
we expect to see significant changes in passenger class
rarily to weather the declining phase of demand. When we see
mixture.
a recovery in demand over the medium term, we will re-expand
The Group will provide products and services that meet
the scale of our businesses toward a growth trajectory.
new market needs, changing our approach to capturing
demand across the entire Group.
Please visit our corporate website for the latest information.
Financial results briefing materials:
https://www.ana.co.jp/group/en/investors/irdata/supplement/
Basic Policy for Reform of
Business Structure
The ANA Group will carry out business structure reform to respond
steadily to changes in the market environment.
Sustainable Growth
Medium Term: Establish a resilient Group business structure that creates
consistent, steady value
1) Strengthen Air Transportation Business portfolio strategy
2) Establish a second pillar of earnings on Non-Air Business
Enhance corporate value
(Stable & Continuous
Dividends)
Short Term: Change business structure toward surplus in Air Transportation Business
1) Optimize Air Transportation Business portfolio strategy
ANA
:
Reduce the scale of our business for the time being;
Concentrate management resources on high-profit routes;
Reevaluate products and services to meet a new normal
Peach :
Capture wider demand in outlying regions of the major cities near Narita and Kansai airports
2) Implement resource-related tactics to reduce fixed costs
Fleet :
Reduce the number of aircraft; Leverage smaller aircraft and pursue higher capacity rates
Human Resources: Revise staffing assignments by enhancing productivity through new work styles, etc.
Management
Foundation
Mission Statement / Safety / Hygiene / ESG Management /
Human Resources / DX / ANA’s Way
As a short-term initiative, we will change our business structure toward balanced profitability in our Air Transportation Business.
1) Optimize Air Transportation Business portfolio strategy
ANA will reduce the scope of its business for the time being, concentrating management resources on high-profit routes. At the
same time, ANA will reevaluate current products and services in anticipation of market needs in the post-COVID-19 era.
However, Peach, which has established an efficient business structure through merger, will strive to capture wider demand
in outlying regions of the major cities near Narita and Kansai airports.
2) Implement resource-related tactics to reduce fixed costs
We intend to reduce the total number of owned aircraft in our fleet, as well as leverage smaller and more efficient aircraft.
We also plan to review our staffing assignments, enhancing productivity through new work styles based on
digital transformation (DX), etc.
Over the medium term, we will pursue a deeper portfolio strategy for the purpose of strengthening our Air Transportation Business,
covering a wide range of diversifying demand.
Also, we will seek to establish a resilient Group business structure that creates consistent, steady value by establishing our
Non-Air Business as a second earnings pillar.
This will improve corporate value, returning the ANA Group to stable and continuous dividends as we pursue sustainable growth.
3030
30
31
31
Business Progress Business Progress
Air Transportation Business
We will survive the trials
of COVID-19, continuing
to grow on into the future.
Yuji Hirako
Member of the Board of Directors,
ANA HOLDINGS INC.
President & Chief Executive Officer,
ALL NIPPON AIRWAYS CO., LTD.
The year 2020 was expected to be a year of great progress,
among the best airlines in the world. At the same time, COVID-19
with the expansion of international flight slots at Haneda Airport
has had a major impact on our lifestyles and behavior. On June
and Japan hosting the Tokyo 2020 Olympic and Paralympic
1, ANA launched the ANA Care Promise as a new standard for
Games. Unfortunately, the airline industry now faces major
air travel. Under this promise, we have strengthened our
challenges stemming from the COVID-19 pandemic. Since I
hygiene initiatives even further. We will pursue the complete
was named president in 2017, I have worked to build a resilient
confidence of our passengers through appropriate measures
organization that can deliver results in any environment.
in the with-COVID-19 era and based on the service quality we
Currently, we have been forced to cut flights on both interna-
have built over our history.
tional and domestic routes on an unprecedented scale. It is at
To overcome this unprecedented crisis, we must reform our
times like these that we must demonstrate resilience to survive.
Air Transportation Business cost structure, particularly in fixed
During fiscal 2019, we conducted a comprehensive review of safety, quality and services that form the solid
foundation of our business. At the same time, we executed up-front investments in human resources and
our fleet to take advantage of the international slot expansion at Haneda Airport. While results were firm
through the third quarter, the impact of COVID-19 in the fourth quarter resulted in Air Transportation
Business operating revenues amounting to ¥1,737.7 billion, a decrease of 4.2% year on year. Operating
income amounted to ¥49.5 billion, a decrease of 69.1%.
In fiscal 2020, we will maintain flexibility in controlling capacity during periods of weak demand. We will also
work to maximize revenues during periods of recovery.
International Passenger Business
Phased recovery of ASK while assessing the status of global travel and immigration restrictions
Fiscal 2019 in Review
In May, we began introducing the Airbus A380 FLYING HONU
on our Narita–Honolulu route as part of our Hawaii Strategy. We
also introduced Narita–Perth service in September, Narita–
Chennai service in October, and Narita–Vladivostok service in
March 2020.
For the first time in 10 years, ANA unveiled new seats for
First Class and Business Class on Boeing 777-300ER aircraft.
We introduced the upgraded aircraft on the Haneda–London
route in August, the Haneda–New York and Narita–New York
routes in November, and the Haneda–Frankfurt route in
February 2020. We introduced our first private wide-seat with a
closable door, called THE Room, in Business Class. These new
seats offer the world’s first personal 4K-compatible monitor and
other amenities, achieving the highest levels of passenger
comfort.
Meanwhile, the decline in demand due to COVID-19 on
Chinese routes became apparent at the end of January.
Slowing demand spread subsequently to routes in Asia, North
America, Europe, and Hawaii. In response, we began adjusting
supply and demand in February, and by the end of March, we
canceled or reduced a total of 2,814 flights across 71 routes.
As a result, international route passengers amounted to
9.41 million, a decrease of 6.7% year on year. Operating rev-
enues were 5.8% lower at ¥613.9 billion.
Fiscal 2020 Business Policies
As long as travel and immigration restrictions continue in place
around the world, we will continue to reduce the scale of our
operations to the greatest extent possible. In the meantime, we
will restore capacity in phases if Japan and other countries we
Performance of the International Passenger Business
Revenues
ASK
RPK
(Index) Fiscal 2015 = 100
130
120
110
100
0
126
119
124
2015
2016
2017
2018
2019
(FY)
New Business Class Seat, THE Room
Our air transportation services have enjoyed an outstanding
costs. In addition, we are reviewing employee work styles and
service begin to ease restrictions.
reputation in the world. In 2019, ANA was ranked first in the
plan to increase employee productivity significantly. By engaging
Asia-Pacific region for on-time arrivals by Cirium of the U.S. In
diligently and quickly in these areas, we will introduce bold
addition, we received the prestigious 5-Star designation from
reforms that place ANA back on a growth trajectory in the
SKYTRAX of the U.K. for an eighth consecutive year, rating
post-COVID-19 era.
3232
32
33
33
Business Progress Business Progress
Air Transportation Business
Domestic Passenger Business
Cargo and Mail Business
Increasing capacity as economic activity and movement of people resume, helping to revitalize the local
economy while restoring profitability
Maximize transport capacity to grow earnings in a tight cargo market
Performance of the International Cargo Business
Revenues
ATK
RTK
(Index) Fiscal 2015 = 100
150
100
50
0
122
120
91
2015
2016
2017
2018
2019
(FY)
Fiscal 2019 in Review
Our International Cargo Business experienced weak demand
for cargo originating both in Japan and overseas due to the
global economic slowdown stemming from U.S.–China trade
friction and other factors. In addition, we were forced to cancel
a large number of flights beginning in February due to the
impact of COVID-19. As a result, both transport volume and
revenues underperformed year on year.
In our route network, we introduced the Boeing 777F wide-
body cargo freighter for the Narita–Shanghai (Pudong) route
(July) and Narita–Chicago route (October). In addition to new
products such as oversize cargo and special cargo (e.g., semi-
conductor manufacturing equipment), we also captured trans-
portation demand for emergency supplies and hygiene-related
supplies, which surged in demand due to the spread of
COVID-19.
As a result, international cargo volume for fiscal 2019
amounted to 866 thousand tons (down 5.2% year on year) and
operating revenue amounted to ¥102.6 billion (down 17.9%).
Fiscal 2020 Business Policies
Global passenger flight cancellations and reductions have
resulted in a shortage of capacity for international cargo trans-
portation. To respond flexibly to the tight supply and demand in
Boeing 777F Aircraft
the market, we plan to operate extra flights and charters, mainly
using freighters. In April, we became the first Japanese airline
to begin transporting cargo in the passenger cabin on passen-
ger aircraft. We will continue to pursue revenue growth, while
maximizing our transport capacity.
Performance of the Domestic Passenger Business
Revenues
ASK
RPK
(Index) Fiscal 2015 = 100
110
100
0
103
99
99
2015
2016
2017
2018
2019
(FY)
Fiscal 2019 in Review
Passenger numbers through the third quarter were solid, mainly
due to strong business demand and travel within Japan. We
also captured the strong demand over the 10-day Golden
Week holidays. We introduced discounted tickets available for
purchase up to 355 days prior to boarding as one means to
capture demand as early as possible. These and other mea-
sures, as well as our new fare structure adopted in the previous
year, succeeded in generating sales.
In our route network, we increased the number of flights for
Narita–Nagoya (Chubu) in May and Nagoya (Chubu)–
Kumamoto in October. We also adjusted aircraft type flexibly
and optimized the number of flight, optimized supply to demand
through aircraft type and scheduling.
In November, we introduced new seats on Boeing 777-200
aircraft, offering improved comfort and functionality with power
reclining in Premium Class. We also introduced seats equipped
with touch panel personal monitors in Economy Class. At the
Naha Airport, we altered the layout of the departure counter
and implemented the ANA Baggage Drop automated baggage
drop machine, making Naha the fourth airport in Japan to be
so equipped. We also renovated the ANA LOUNGE. These and
other efforts were made to further improve service quality.
However, the spread of COVID-19 in Japan prompted the
central and local governments to ask citizens to refrain from
New Premium Class Seats for the Boeing 777-200
unessential go-out or attendance at events. These policies
resulted in a significant decline in passenger demand begin-
ning at the end of February. While we endeavored to maintain
our network as a public transportation provider, we began
adjusting the number of flights in March. In total, 2,674 flights
across 42 routes were suspended or reduced.
As a result, domestic passengers amounted to 42.91 mil-
lion, a decrease of 3.2% year on year. Operating revenues were
2.4% lower, at ¥679.9 billion.
Fiscal 2020 Business Policies
We will continue to reduce operation-linked expenses by con-
trolling the number of flights in operation as long as demand
remains weak due to COVID-19. At the same time, we will
resume capacity flexibly when we confirm increased demand
as a result of increased economic activity and the resumption
of travel. We plan to strengthen our ability to capture leisure
travel demand by taking advantage of the Japanese govern-
ment’s Go To campaign and other measures to encourage
tourism. We will leverage these measures to restore profitability
and contribute to the revitalization of local economies.
Refurbished Naha Airport Departure Counter
ANA Signed a Strategic Partnership Agreement with Singapore Airlines
Transporting Cargo in the Passenger Cabin
On January 31, 2020, ANA signed a joint venture framework agreement with Singapore
Airlines to strengthen our network and increase our presence in the Asia / Oceania region.
While expanding existing code share flights, ANA is preparing to apply for Antitrust Immunity
(ATI) under the Civil Aeronautics Act. Our goal is to start joint operations beginning with our
2021 winter schedule. After approval, this agreement will mark the third such arrangement
after United Airlines (Asia–North, Central, and South America) and Lufthansa (Japan–
Europe). These stronger alliances help us offer greater passenger convenience and
strengthen our competitiveness in the Asia / Oceania region.
3434
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35
Business Progress Business Progress
Air Transportation Business
Non-Air Business
Strengthening efforts to establish a new revenue pillar to stand next to our Air Transportation Business
LCC Business
Airline Related
LCC merger strengthens our business foundation and allows us to allocate management resources on
domestic routes for the time being
Fiscal 2019 in Review
We moved forward with the transfer of aircraft and human
resources in stages as we prepared for the Peach Aviation
Limited and Vanilla Air Inc. merger. By the end of October, we
completed the integration of operations. While we curtailed the
use of resources temporarily due to aircraft conversions and
flight crew transition training, we transferred 10 routes previ-
ously operated by Vanilla Air to Peach.
At the same time, geopolitical risks in Hong Kong and
South Korea had a negative impact on performance, as did the
spread of COVID-19 beginning in February. In response, we
canceled or reduced 2,088 flights across 23 international and
domestic routes.
As a result, passengers numbers amounted to 7.28 million,
a decrease of 10.6% year on year. Operating revenues were
12.5% lower, at ¥81.9 billion.
Fiscal 2020 Business Policies
We introduced Narita–Kagoshima and Narita–Nagasaki service
on our domestic routes at the end of March. In mid-June we
resumed service for all routes, and in late July, we resumed
service for all flights, strengthening our efforts to capture leisure
travel demand. On August 1, we launched the Narita–Miyazaki
and Narita–Kushiro routes, building on the strengths estab-
lished by the Peach brand over the years and expanding routes
offered from our LCC base in Narita, taking over from Vanilla Air.
LCC Business: Operating Revenues
(¥ Billions)
87.5
93.6
81.9
69.8
75.6
2015
2016
2017
2018
2019
(FY)
* The above graph represents the combined total of Peach and Vanilla Air results
(fiscal 2015–2016 includes Peach results before consolidation).
Takeaki Mori
Representative Director &
CEO
Peach Aviation Limited
After serving many passengers in Japan and overseas,
Vanilla Air ceased operations at the end of October 2019
and completed a merger with Peach Aviation. Many who
transferred from Vanilla Air, including pilots, cabin atten-
dants, maintenance crew, and other employees, are now
serving as the mainstay of Peach operations.
This merger has combined the strengths of each
company, including Peach’s innovative initiatives out of
the Kansai International Airport and Vanilla Air’s creation of
new Tokyo metropolitan area demand at the Narita Airport.
The shared management resources provide economies of
scale that have strengthened our business foundation.
In addition to the routes taken over from Vanilla Air,
Peach introduced service between Narita and
Kagoshima, Nagasaki, Miyazaki, and Kushiro, establish-
ing a firm presence in the Tokyo metropolitan area.
At present, travel remains restricted significantly due
to the impact of COVID-19. At the same time, accelera-
tion of telework and other work-style reforms have led to
more leisure time and even the potential for working from
resorts or family homes in rural areas. Seeing these
trends, we believe the importance of travel to meet
others and enjoying the novelty of visiting new places
will only continue to increase. The concept of travel has
changed and will continue to expand in the future.
By communicating the good qualities and new charms
of Japan to the rest of the world, we believe we can
develop even more demand in inbound tourist travel.
And Peach was one of the first to increase domestic
route flights, with the theme of Bridging Your Sky. We will
expand our domestic network to function fully in our role
as a bridge, contributing to the revitalization of econo-
mies in Japan’s outlying regions and of Japan as a
whole. In addition, we expect the tabinoco website (user-
generated travel content platform) to generate new
demand, serving as a bridge connecting passengers
with other passengers and Japan’s rural areas.
Governments will begin lifting travel restrictions in
phases in the near future. Over the medium to long term,
we plan to once again expand our international business,
taking advantage of our substantial domestic network to
encourage inbound travelers to see even more of what
Japan has to offer.
Peach will secure a position as the leading LCC in
Asia, both in customer satisfaction and in market share.
Fiscal 2019 operating revenues amounted to ¥299.4 billion
Airline Related Business: Operating Revenues
(2.9% increase year on year) and operating income amounted
to ¥18.1 billion (37.7% increase). This result was mainly due to
increased ground handling services at Kansai and Chubu
airports and the new consolidation of subsidiary MRO Japan
(¥ Billions)
Co., Ltd., an aircraft maintenance company launching full
231.9
264.4
284.3
291.0
299.4
operations in Okinawa.
Fiscal 2020 contracts for ground handling services are
likely to decrease due to fewer flights by overseas airlines
owing to the impact of COVID-19. When global operations
resume in the future, we will pursue initiatives to restore and
strengthen profitability.
Travel Services
2015
2016
2017
2018
2019
(FY)
During fiscal 2019, sales of online products attracted strong
Travel Services: Operating Revenues
demand for both domestic and international travel. In addition,
we took an aggressive stance to capture demand for travel
during the 10-day Golden Week holiday in Japan. The spread
of COVID-19 beginning in late January impacted operating
revenues and operating income, which amounted to ¥143.9
billion (4.5% decrease year on year) and ¥1.3 billion (129.9%
increase), respectively.
In fiscal 2020, we plan to capture domestic travel demand,
which is expected to recover early. We will also pursue efforts to
strengthen our competitive posture, taking advantage of the Go
To campaign, while expanding direct sales and leveraging our
dynamic Tabisaku packaged product.
Trade and Retail
(¥ Billions)
167.3
160.6
159.2
150.7
143.9
2015
2016
2017
2018
2019
(FY)
In fiscal 2019, while transaction volume for aircraft parts
Trade and Retail: Operating Revenues
increased in our aerospace and electronics business, volume
decreased for nuts and other food business products. Further,
volume in our Retail business declined at our airport ANA DUTY
FREE SHOP retail locations and ANA FESTA airport shops due
to the impact of COVID-19. As a result, operating revenues
amounted to ¥144.7 billion (3.9% decrease year on year) and
operating income amounted to ¥2.9 billion (21.5% decrease).
During fiscal 2020, we will exercise selection and concen-
tration to strengthen existing businesses, while also creating
new businesses that contribute to greater revenue growth.
(¥ Billions)
140.2
136.7
143.0
150.6
144.7
2015
2016
2017
2018
2019
(FY)
3636
36
37
37
Business Progress Business Progress
Business Progress
ANA Group Response to COVID-19
Creating a New Standard for Air Travel
The global spread of COVID-19 has led to the start of a new lifestyle standard in many aspects of our daily
lives. In June 2020, ANA launched the ANA Care Promise as a shared commitment to our customers to pro-
tect the health of our passengers and staff, creating a carefully detailed environment emphasizing measures
to prevent disease infection. Peach Aviation has also committed to creating a new standard in the skies
through similar measures and the concerted efforts of all employees.
We will continue to place the highest priority on safety, providing clean, hygienic environments and ser-
vices to offer even greater peace of mind to our customers in every travel situation.
Overview of Disease-Prevention Measures
1
Create a hygienic and clean environment
at all times
• Disinfect and sterilize equipment, etc.
• Package food and drinks in the lounge, etc.
2
Implement preventive measures for staff
who interact with customers
• Wear masks, face shields, etc. (airport and lounge staff)
• Wear masks, gloves, and goggles, etc. (cabin attendants)
3
Disinfect all aircraft on a regular basis
• International route aircraft (every flight)
• Domestic route aircraft (every night)
4
Thorough ventilation inside the aircraft
• Ventilate all air in the cabin in three minutes by drawing in
clean outside air
• Equip all aircraft with high-performance filters* to filter and
circulate air inside the cabin
Ceiling air conditioning ducts
Lower cargo
compartment
Vent air out of the aircraft
* Type used in hospital operating room air conditioners
Draw in air
from the engine
We are asking passengers to cooperate with initiatives to prevent the spread of disease; thereby reducing anxiety among all passen-
gers. These measures include mandatory wearing of masks or facial coverings in the airport and inside the aircraft, modified proce-
dures within the airport, at security checkpoints, at the boarding gate, social distancing, and other measures.
* Passengers who do not wear masks or who are not feeling well (fever, etc.) may be denied boarding.
For more detailed information:
About the ANA Care Promise
About Peach Disease-Prevention Measures
https://www.ana.co.jp/en/jp/topics/coronavirus-travel-information/
https://www.flypeach.com/information/en/infection_control/
Special Feature
Establishing
avatar-in is a futuristic platform that allows anyone to connect
beyond geographical distances or physical restrictions.
By launching a new venture for this platform, we will accelerate
business speed and contribute to the society of the future in
next-generation social infrastructure.
In April 2020, ANA Holdings established avatarin Inc. as our first-ever start-up.
An avatar is a remote-controlled alter ego robot that enables interactive telepresence. ANA Holdings
launched the ANA AVATAR project in 2018, developing robots and researching mobility that does not
require physical movement. We see great potential yet to be unlocked in use cases for these avatars.
For instance, avatars can contribute to resolving a myriad of social issues in areas like education and
healthcare, as well as generate new travel demand.
To achieve the wings within ourselves to fulfill the hopes and dreams of an interconnected world as
defined in our Mission Statement, avatarin Inc. will address business domains beyond the airline
framework, creating new value unique to the ANA Group.
3838
38
39
39
MISSION
To expand humanity’s
potential by offering
new abilities through
avatars.
Major Businesses
• Develop and offer services using
avatar remote-controlled alter ego
robots and the avatar-in platform
• Offer proposals to resolve social
issues through avatars
newme
newme, ,
a wider general-use
a wider general-use
avatar model
avatar model
avatar platform
avatar-in, avatar platform
avatar-in,
Creating a future society in which
anyone can participate, freely
connecting via the internet to
avatars placed in many different
locations
Conferences
Remote work
Office / Meetings
Education /
Seminars
Museums /
Entertainment
Information centers /
Multilingual support
Avatar Use Cases
Participate in office meetings from home
Shop while receiving store staff advice
View popular new releases at the
bookstore
Participate in online graduation
Students living on a remote island visit
Well-known basketball coach provides
ceremonies
the Tokyo National Museum remotely
direct instruction remotely
Healthcare / Nursing care
(Remote visits / Remote care)
Remote medical care
Shopping / Sightseeing
Playing with children living far away
Remote hospital visits
Akira Fukabori
Founder & CEO,
avatarin Inc.
create an environment in which anyone can freely and instantly
serendipity (chance events and experiences), more difficulty in
gain acceptance for the avatar platform as social infrastructure,
project their presence to any location. Our aim is to make a
team building, and greater challenges in developing new ideas.
we will proceed in the joint development of robots and services
world in which all people can easily participate in society. newme
With avatars, users can move around the office, conference
via collaboration and equity partnerships with a wide range of
is a wider general-use avatar designed for maximum market
halls, and other locations freely from their own home. This
companies.
penetration, installed in locations that include medical facilities,
system creates a realistic environment in which users can visit
Air travel passengers make up only 6% of the world’s popu-
tourism sites, and schools. By transferring consciousness and
and talk to someone without constraints, take a casual stroll,
lation. We are transitioning from the era of physical travel to an
presence to newme, users can travel beyond geographical and
have chance encounters, glean hints of potential ideas from
era of teleported consciousness. The ANA Group, which began
Our mission is to expand humanity’s potential by offering new
physical limitations. For example, hospital patients can enjoy
accidental meetings or discoveries, and so on.
with only two helicopters, will supplement the movement of
abilities through avatars. We believe that it is our mission to
shopping and sightseeing, teachers can conduct classes at
By advancing the greater fusion of real and virtual, avatars
aircraft and offer instant mobility in the form of avatars. As we
harness technology that eliminates distance, time, and physical
schools on remote islands, etc.
offer new abilities for all people. We are firm in our belief
leverage ideas unique to us as an airline group, we will continue
constraints on movement, providing a new method of travel
Today, the impact of COVID-19 has caused rapid growth
that we can contribute to resolving various social issues by
to evolve avatarin Inc. and contribute to the creation of the
that transcends aircraft or other existing methods.
in social needs for contactless and remote technologies. The
connecting people without concern to distance, time, and
society of the future.
Currently, avatarin Inc. uses the remote-controlled alter ego
spread of online work and teleconferencing has resulted in
robot avatar and the world’s first avatar platform avatar-in to
issues including fewer opportunities for small talk and
physical restrictions, as well as by proposing new, mutually
supportive lifestyles. To promote the spread of avatars and
4040
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41
Business Progress Business Progress
Sustainability
Initiatives
The ANA Group strives to resolve social issues through our
business activities to keep growing together with society.
We establish a long-term vision for ourselves, executing our
strategies steadily to improve corporate value sustainably.
What Does the
ANA Group DNA Mean to You?
42
Always remembering to be thankful to our customers and colleagues, and
engaging in strong teamwork to deliver safety and security.
Yoko Kobayashi
ANA
Cabin Attendant
43
ANA GROUP ESG MANAGEMENT
The Social Environment Surrounding
the ANA Group
Various social issues exist around the world, including
global warming and climate change, energy resource short-
ages, increasing ocean plastic waste and microplastics,
poverty, and child labor. More voices are calling for a
response from not only national and local governments
but also from private-sector companies. Examples include
the CO2 emissions reduction goals set under the Paris
Agreement and the SDGs, which are global common
goals to be achieved by 2030.
Especially over the past several years, the issue of
climate change has attracted global attention, and CO2 is
considered to be one of the causes of global warming.
The central business of the ANA Group is air transportation.
Therefore, we must address the impact of our business
activities on the environment and society, including reduc-
tion of CO2 emissions from flight operations. In addition,
the Air Transportation Business is susceptible to external
factors, such as natural disasters, terrorism, and the spread
of infectious disease. Creating stability in our global environ-
ment and social circumstances is critical for our business
operations.
The ESG Management Promotion Cycle
for Sustainable Growth
Having gained an understanding of the surrounding envi-
ronment, the ANA Group pursues ESG management to
become an indispensable part of society in the future,
to grow continually as a company, and to create value.
We identify social demands through dialogue with
stakeholders, and then align our corporate strategy with
these requirements, evaluating the impact on business and
society. Finally, we incorporate these requirements into
corporate initiatives. We disclose the status of our initiatives
on our corporate website and through other channels as
necessary. At the same time, we engage in regular dialogue
with stakeholders based on information we disclose. We
also report our progress and confirm the appropriateness
of our initiatives in those dialogues.
We pursue ESG management through a cycle of
dialogue, initiatives, and information disclosure. Here, our
aim is to develop a sustainable society and to increase
corporate value.
44
ANA Group ESG Management Promotion Cycle
Dialogue
Dialogue
External
Dialogue
Stakeholder Dialogue
Stakeholder Dialogue
Internal
Dialogue
Alignment With
Alignment with Corporate
Strategy
Corporate Strategy
Mission Statement
Mission Statement
Built on a foundation of
Built on a foundation
security and trust, “the
of security and trust,
wings within ourselves”
help to fulfill the hopes
“the wings within
and dreams of an inter-
ourselves” help to
connected world.
fulfill the hopes and
dreams of an inter-
Dialogue Based on
Dialogue Based on
Dialogue Based on
Dialogue Based on
Information Disclosed
Information Disclosed
Information Disclosed
Information Disclosed
connected world.
Information
Disclosure
• Integrated Report
• Integrated Report
• Human Rights Report
• Human Rights Report
• Websites
• Websites
… and other channels
… and other channels.
ANA Group Material Issues
in ESG Management
We aligned the social demands identified through dia-
logue with stakeholders with our corporate strategy. After
evaluating the impact on business and society, we identi-
fied four material issues, and we have been engaged in
addressing these issues through our business activities.
In fiscal 2015, we identified three material issues: the
environment, diversity and inclusion (D&I), and regional
revitalization. In fiscal 2016, we added human rights as
a fourth material issue. In fiscal 2019, we established the
ANA Group ESG Commitments. At that time, we held
dialogues with experts and conducted management-level
discussions to confirm that these four material issues
would continue to be material issues for the ANA Group.
Evaluate the
mpacts on
Evaluate the IImpacts on
Evaluate the impacts on busi-
Evaluate the impacts on busi-
Business and Society
Business and Society
ness and society
ness and society
Initiatives
Environment
• Reduce CO2 emissions
• Reduce resource waste
• Reduce food waste
• Biodiversity conservation
M
a
t
e
r
i
a
l
I
s
s
u
e
s
Human
Rights
• Responsibility to respect human rights
• Promote responsible procurement and
supply-chain management
Diversity and
Inclusion
• Human resource development to support
sustainable growth
• Responding to the diversity of our customers
Regional
Revitalization
• Promote regional revitalization through
tourism and social contribution activities
• Utilizing innovation to solve social issues
• Maintain commitment of top management
Governance
• Pursue board of director diversity
• Ensure transparency
E
S
G
Create Both Social
Value and Economic
Value, aiming to
develop a sustainable
society and increase
corporate value
Disclose Status of Initiatives
Disclose Status of Initiatives
Disclose Status of Initiatives
Disclose Status of Initiatives
Materiality Matrix
Extremely important
Human Rights
• Human rights violations
across the supply chain
Diversity and Inclusion
• Diversity of customers and employees
Society
Axis
Consideration for
stakeholders /
Impact on society
and the
environment
Environment
• Climate change
• Environmental
pollution
Rationale for Identification as Material Issues
Environment
P54
For the ANA Group
For Society
• Controlling fuel costs
• Controlling the costs of future
emission trading schemes
• Maintaining / improving evaluations
by avoiding environmental risk
• Reducing
environmental
footprint
Human Rights P58
• Maintaining / improving evaluations
through avoiding human rights risk
Regional Revitalization
• Decline of Japanese regions
• Income / education disparity in
emerging countries
Diversity and
Inclusion
• Improving profitability
by generating new demand
P60
• Providing an issue resolution
system to strengthen capacity to
respond to customers
• Improving profitability by generat-
ing new inbound tourism demand
Management Axis
Extremely
important
Regional
Revitalization
P64
• Maintaining / improving profitability
of domestic airline business
Impact on the operations of the ANA Group
(Mission Statement, Management Vision, direction of corporate strategy,
business opportunities and risks)
• Improving profits of international
airline business
• Realizing a
world that
respects
human rights
• Realizing an
inclusive
society
• Revitalize
regional
economies
• Promoting
international
exchange
45
Sustainability Initiatives
FURTHER PROMOTION OF ESG MANAGEMENT
Please visit our corporate website for more details
on ANA Group ESG Commitments
https://www.ana.co.jp/group/en/csr/commitment/
Developing ANA Group ESG Commitments
To become an indispensable part of society in the future and to grow continually, the ANA Group must address environmental and
social issues through our business activities from a long-term perspective.
We strive to solve material issues related to the environment, human rights, D&I, and regional revitalization. To further promote ESG
management from a long-term perspective, we developed ANA Group ESG Commitments based on the following three viewpoints. We
will continue to address these issues in achieving our commitments.
1
Commitments to Be
Achieved by 2050
2
Commitments to
Pursue on an Ongoing
Basis through 2030,
the Final Target Year
for the SDGs
Matters for Which We
3
Provide Disclosure
and Report Results
on a Continued Basis
1
Commitments to Be Achieved by 2050
Reduce CO2 emissions from aircraft flight operations by 50% (compared to 2005)
Environment
(Million ton)
12
Domestic
International
10
8
6
4
2
0
Address the environment from the following four viewpoints.
(1) Adopt new technologies
Move forward in introducing fuel-efficient aircraft and
improved engines, including the Boeing 787 and Airbus
A320neo / A321neo models, developed through new
technology.
(2) Improve flight operations
Reduce fuel consumption by improvements in aircraft flight
operation, regularly cleaning the inside of the engine, and
reducing the weight of equipment installed.
(3) Introduction of sustainable aviation fuel (SAF)
Continue to introduce SAF produced from sustainable
sources, such as vegetable oil, animal fat, and waste
biomass.
(4) Utilize emission trading schemes
(purchase CO2 emissions credit)
Reduce CO2 emissions globally by purchasing CO2 emission
credit generated by lower CO2 emissions in businesses other
than aviation. To prevent a further increase of CO2 emissions
50%
reduction
compared to
2005
Eliminate CO2 emissions from all non-aircraft flight operations by 2050
Environment
Reduced
through
energy
conservation
Eliminate CO2
Emissions
Shift to
renewable
energy
2019
2050
Delve deeper into energy conservation mea-
sures and pursue a shift to renewable energy
sources. At the same time, plan to introduce
hybrid vehicles (HVs), electric vehicles (EVs),
and fuel cell vehicles (FCVs) for use in air-
ports, while upgrading existing equipment in
our facilities and buildings to more energy-
efficient models over time.
Reduce our resource waste ratio to zero and reduce food waste, including in-flight meals, by 50%
Environment
Promote the 3Rs (reduce, reuse, and recycle resources, such as plastic and paper). Reduce food waste throughout the product
life cycle (food material procurement, preparation, delivery, and disposal).
2
Commitments to Pursue on an Ongoing Basis through 2030, the Final Target Year for the SDGs
Responsibility to
respect human rights
Human
Rights
Promote responsible
procurement and supply-
chain management
Environment /
Human Rights
Utilizing innovation to
solve social issues
Regional
Revitalization
Based on the United Nations Guiding
Manage and promote environment-con-
Provide new value through avatars,
Principles on Business and Human
scious procurement with respect to human
drones, MaaS*, etc., and cooperate
Rights, make every effort to promote
rights and build a fair and transparent
with different industries.
the respect of human rights.
supply chain.
* Mobility as a Service (MaaS): Integration of various
forms of transport services into a single mobility
service on demand.
3
Matters for Which We Provide Disclosure and Report Results on a Continued Basis
Human resources development to
support sustainable growth
Diversity and
Inclusion
Responding to the diversity of
our customers
Diversity and
Inclusion
Develop human resources and a sustainable work environ-
Respect the needs and diversity of each customer, and pro-
ment in which employees raise their productivity and contrib-
mote universal services in both products and services.
ute to sustainable corporate growth.
2005
2019
2050
in and after 2021, plan to use market mechanisms in addition
to initiatives described in (1) to (3) above.
Biodiversity conservation
Environment
Regional revitalization
Regional
Revitalization
Contribute to biodiversity conservation by promoting and
Contribute to regional revitalization through social contribution
enhancing measures to prevent illegal wildlife trade.
activities and by solving social issues.
46
47
Sustainability Initiatives FURTHER PROMOTION OF ESG MANAGEMENT
Process to Establish ANA Group ESG Commitments
We developed the ANA Group ESG Commitments in three steps: (1) Identify social demands; (2) Categorize and prioritize social
demands to develop commitments; and (3) Verify appropriateness and finalize commitments.
The first step is to identify social demands through regular dialogue with stakeholders (Step 1). The second step is to identify ESG
issues related to our businesses and develop ANA Group ESG Commitments (Step 2). The third step is to verify the appropriateness of
the commitments through dialogue with ESG investors and to finalize commitments in the Group Management Committee (Step 3).
Identify Social Demands
Categorize and
Prioritize Social
Demands to Develop
Commitments
Step
3
Verify
Appropriateness
and Finalize
Commitments
Identify Social Demands through Dialogue with Stakeholders
Management Level Discussions
Verifying Targets with Our Stakeholders
When developing the ANA Group ESG
Commitments, we engage in dialogue with ESG
experts to understand the social expectations and
requirements of the ANA Group.
More details are available on our corporate website.
https://www.ana.co.jp/group/en/csr/communications/discussion/
https://www.ana.co.jp/group/en/csr/communications/dialogue/
Dialogue Regarding the SDGs
Dialogue with ESG Investors
Participating Organizations
• Hermes Equity Ownership Services (Hermes EOS)
• Corporate Human Rights Benchmark (CHRB)
Shinya Katanozaka
Norichika Kanie
ANA HOLDINGS INC.
Keio University Graduate School of
President & Chief Executive Officer
Media and Governance Professor
© Caux Round Table Japan
Dialogue Regarding the Environment
Dialogue Regarding Business and Human Rights
Participating Organizations
• WWF Japan
• Conservation International Japan
• IATA JAPAN
For more, see P.59
Participating Organizations
• The Danish Center for Human Rights
• Institute for Human Rights and Business
• World Benchmarking Alliance (WBA)
We discussed and developed the ANA Group ESG
To objectively verify the appropriateness of the ANA Group
Commitments in our Group Management Committee. This
ESG Commitments developed within the Group Management
committee operates under the chairmanship of the president
Committee, we held more dialogues with the ESG investors
and consists of full-time directors and full-time Audit &
who helped us first identify social demands. We received
Supervisory Board members.
opinions on the appropriateness of commitments and future
The Group Management Committee discussed the social
information disclosure.
demands identified through dialogue and the ESG issues
related to our businesses as identified by our corporate sus-
ESG Investors Participating in Dialogues
tainability and other relevant operation departments in accor-
• Hermes EOS (Hermes Equity Ownership Services)
dance with our Mission Statement and in consideration of the
• CHRB (Corporate Human Rights Benchmark)
impact on our business and society.
ANA Group Management Committee Deliberations
July
• Identifying the latest social trends
and investor trends
August
• Understanding social demands and
requirements of the ANA Group
• Suggesting ESG issues related to
our businesses
2019
Finalizing the ANA Group
ESG Commitments
The Group Management Committee again discussed and
then finalized the ANA Group ESG Commitments after con-
firming the appropriateness of commitments with ESG inves-
tors. The final ANA Group ESG Commitments were reported
to the board of directors.
Opinions at the Board of Directors’ Meeting
• The board recommended that per-unit reduction should
also be addressed in tandem with social trends for total
November
• Suggesting ANA Group ESG
CO2 reduction.
Commitments for the ANA Group
based on social demands
2020
February
• Revisiting commitments and
suggesting implementation structure
• The board noted that ESG management is being driven by
Europe. The Group should not simply adopt European-style
ESG, but rather strike a balance on a case-by-case basis
and in reflection of Japanese values.
© Caux Round Table Japan
© Caux Round Table Japan
48
49
StepStep12Sustainability Initiatives
DIALOGUE WITH EXPERTS ON ESG
The COVID-19 pandemic has changed social values and behavior. We conducted an interview with ESG experts to better understand
social trends and respond appropriately.
These interviews consisted of questionnaire responses, rather than face-to-face meetings, considering safety. We will continue to
engage in dialogue with stakeholders to understand and identify social demands.
Topics
Expectations and concerns required of the ANA Group due to changes in consciousness after the spread
of COVID-19
Implementation
Period
June to July 2020
Summary
Hiroshi Ishida
Executive Director, Caux Round Table Japan
In order to achieve the medium and long-term goals set by the ANA Group, ANA Group will
continue to focus on medium to long-term trends and follow the ESG-related efforts which
include the respect for human rights, environmental considerations, etc. In addition, we
expect that it will be possible to build a resilience business model by absorbing the change
in social value due to the impact of COVID-19 in the long-term trend.
Under the COVID-19, it is important for the ANA Group to pursue transparency in the
process of identifying new ESG issues and to develop a “Quality Relationship” with the aim
of improving reliability with ESG-related investors.
In the context of the COVID-19 crisis, companies are expected to put adequate measures in
place to make sure that they manage human rights risks connected to the pandemic. This
should include at a minimum a commitment from the company to respect human rights in
this crisis and a clear allocation of responsibility inside the company to ensure that this is
achieved in practice. It is crucial for companies to take necessary steps to identify, assess
and manage the human rights risks connected to the COVID-19 crisis through a robust
human rights due diligence process. For a company with a large supply chain like ANA
Group, adopting responsible purchasing practices to protect suppliers should be a priority.
Companies are also expected to provide effective remedy, including the availability of griev-
ance mechanisms through which complaints related to COVID-19 concerns can be made
without the fear of retaliation.
More than ever, the COVID-19 crisis shows the need for sustainable, inclusive develop-
ment and provides the opportunity to ‘build back better’: making society and the economy
more resilient by protecting fundamental human rights, aligning short-term economic inter-
ests with long-term needs, and ensuring continued momentum on the SDGs.
Camille Le Pors
Lead, Corporate Human Rights Benchmark,
World Benchmarking Alliance
It is appreciated that ANA Group is committed to the UN Guiding Principles (UNGPs) through
its Human Rights policy, training and Human Rights Due Diligence (HRDD). With social dis-
tancing here to stay for coming month HRDD process will be tested, due to tough business
environment and limited in-person engagement (with employees, suppliers and rights hold-
ers) in the value chain. Particularly, impacts on travellers will be due to with travel restrictions,
increased sanitisation, social distancing at airports as well as inside the aircrafts. Some
rights holders* will be more impacted than the others, thus it will be important to keep re-
evaluating needs and Human Rights risks in ANA’s value chain.
* Rights-holders: People impacted directly by corporate activities, etc.
The world today is a different place: are we still a global society?
I believe our ‘new normal’ will be different because—perhaps for the first time in our
lives—we will try not to lose what we have found. How ANA Group copes with the shift to a
smaller global travel and hospitality sector will be a case study for how to keep sight of what
matters. Those parts of the business that were in the shadows will now fall into the light. The
decisions on what to cut and what to keep will require close examination of what was waste-
ful and what was valuable.
© Caux Round Table Japan
Rishi Sher Singh
Specialist in Global Value Chains
Puvan Selvanathan
Chair,
Bluenumber Foundation and Former
Member of the UN Working Group on
Business and Human Rights
The COVID-19 pandemic provided an unexpected temporary reduction in CO2 emissions
and other environmental impacts. Companies that return to their old ways of doing business
and cannot transform may be disqualified by society in the post-COVID-19 world. As such,
37 companies and 28 industry groups in Europe have joined the Green Recovery Alliance*.
The ANA Group post-COVID-19 recovery shall pursue the concept of Do No Harm to avoid
returning to the pre-COVID-19 CO2 emission level, and to further efforts towards Net Zero of
all negative environmental and social impacts, not just carbon emissions. ANA Group shall
take advantage of this window of opportunity to become a leader in green recovery and
sustainability, and to commit as early as possible to the stakeholders, especially the future
generations.
Yasushi Hibi
Vice President, Conservation International
* Green Recovery Alliance: An informal alliance of political leaders, civil society groups and NGOs, CEO and business associations,
and the European trade union confederation. This alliance promotes the EU post-pandemic recovery plan, accelerating the
transition toward climate neutrality and healthy ecosystems.
50
51
Sustainability Initiatives
DIALOGUE WITH EXPERTS ON ESG
More and more governments around the world are adopting the Green Recovery policies,
looking ahead to the post-COVID-19 world. More than ever, businesses are being asked to
improve sustainability.
WWF has raised Green and Just Recovery, Wildlife Exploitation, and Land Use and Food
Systems as important social issues, suggesting the need to review approaches in these
areas. The ANA Group is expected to show a long-term post-COVID-19 airline business plan
that is consistent with the requirements by the Science Based Targets Initiative* so as to
reframe its efforts to reduce greenhouse gases and realize a zero-carbon society. Also, the
ANA group is expected to expand measures against illegal trade as a means to prevent
infections from animals. Further, it should use resources wisely by reducing and reusing
TOBAI Sadayosi
Chief Executive Officer
WWF Japan
©WWF Japan
plastics, as well as by sourcing palm oil, timber, paper, and other resources through sustain-
able means.
* Science Based Targets Initiative: Science Based Targets is a collaborative initiative among the WWF, CDP, World Resources
Institute (WRI) and the UN Global Compact. The initiative encourages companies to adopt emissions reduction targets in line
with what the latest climate science says is necessary to limit global warming to well below 2˚C above pre-industrial levels.
One of the issues investors are currently focusing on is how companies support, diversify
and maintain a sustainable supply chain. It highlights the importance of employment, health,
safety, work styles, and satisfaction of employees of the group and supply chain companies
are also crucial issues. Besides, investors are paying attention not only to data security
but also to data governance, because AI-based analysis and utilization of customer and
employee data requires a partnership with the external parties.
As the global aviation industry is expected to remain in a tough situation for a while,
I hope the ANA Group will re-question what it can do and find new growth opportunities
as a resilient company in the Post-COVID-19 era.
Masaru Arai
Chair, Japan Sustainable Investment Forum
(JSIF)
Being a Company Indispensable to Society in the Post-COVID-19 World
The ANA Group is being affected by the COVID-19 pandemic in significant ways.
However, the direction in which we promote ESG management from a long-term per-
spective will remain unchanged after we overcome this crisis. We aim to become a
resilient company by listening to and accurately understanding the social demands of
the post-COVID-19 world.
We will reflect the input of experts in our strategic initiatives. We also continue to
aim to create a sustainable society (contribute to the SDGs) and increase corporate
value by identifying social demands through ongoing dialogue with stakeholders and
by implementing measures appropriately.
Chikako Miyata
Senior Vice President,
Director of Corporate
Sustainability
ANA HOLDINGS INC.
52
Using External Evaluations Related to ESG
Results of the four following external evaluations have provided us with an objective and multifaceted understanding of ANA Group ESG
management. We intend to reflect these results in officer remuneration.
DJSI
FTSE
MSCI
CDP
FY2019 Evaluation
FY2022 Targets
Remarks
World Index
Asia Pacific Index
Selected as a
component member
Maintained status as
noted (left)
Stock index developed jointly by U.S.-based S&P
and Switzerland-based RobecoSAM. Evaluates
corporate sustainability from the perspectives
of economy, environment, and society.
Selected as a
component member
of FTSE4Good Index
Maintained status as
noted (left)
Stock index managed by U.K.-based FTSE. Evaluates
the initiatives and results of ESG management based
on benchmarks.
*
Selected as a
component member of
the Japan Empowering
Women Index (WIN)
Selected as a compo-
nent member of the
Japan ESG Select
Leaders Index
Stock index managed by U.S.-based MSCI.
An index based on the performance of stocks around
the world from various perspectives. Examines and
evaluates corporate commitment to ESG.
B
A–
External evaluation for institutional investors managed
by a U.K.-based NPO. Analyzes the corporate impact
of CO2 on the environment and climate change,
evaluating the company’s responses.
* THE INCLUSION OF ANA HOLDINGS INC. IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE
A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF ANA HOLDINGS INC. BY MSCI OR ANY OF ITS AFFILIATES.
THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.
ESG Implementation Structure
We established the Group ESG Management Promotion Committee
ESG Implementation Structure
(which was renamed from the Group CSR / Risk Management /
Compliance Committee in April. 2020) in accordance with Group ESG
Board of Directors, Other Management Committees, etc.
Management Promotion Committee Regulations. This committee, which
Group ESG Management Promotion Committee
operates under the guidance of the president and under the chairmanship
of the director in charge of corporate sustainability, consists of ANA
HOLDINGS and Group company directors, executive officers, and the
full-time Audit & Supervisory Board members of ANA HOLDINGS. The
committee establishes core policies, formulates proposals, and deliber-
ates matters related to ESG management. After deliberations, important
issues are elevated to the board of directors, the Audit & Supervisory
Board, and the Group Management Committee.
Each Group company has an appointed ESG promotion officer (EPO)
to oversee ESG and ESG promotion leader (EPL) to lead the ESG activi-
ties of their respective organization.
ANA HOLDINGS President & Chief Executive Officer
Chief ESG Promotion Officer (CEPO)
* Director in charge of ANA HOLDINGS Corporate Sustainability
G
r
o
u
p
c
o
m
p
a
n
e
s
i
ESG Promotion Officer (EPO)
* Selected by Group company directors
Management Committee Related to ESG Promotion
ESG Promotion Leader (EPL)
53
Sustainability Initiatives
MATERIAL ISSUES
Environment
ANA Group ESG Commitments
Reduce CO2 emissions from aircraft flight operations by 50% (compared to 2005)
Eliminate CO2 emissions from all non-aircraft flight operations by 2050
Reduce our resource waste ratio to zero and reduce food waste, including in-flight
meals, by 50%
Continue initiatives toward conservation of biodiversity
Basic Approach
The ANA Group has introduced the ANA Group Environmental Principles and the ANA Group Environmental Policies. These principles
and policies build on the ANA FLY ECO 2020 medium- to long-term environmental plan from fiscal 2012 to fiscal 2020 and include
initiatives for reducing environmental impact. We recognize that global environmental issues, including climate change and biodiversity
conservation, are quintessential management tasks, and we will continue striving to reduce our environmental impact.
In fiscal 2020, the final year of ANA FLY ECO 2020, we have formulated long-term targets looking ahead to the year 2050. We are
proceeding with the formulation of a medium-term environmental plan leading to the year 2030 to help us achieve these long-term targets.
Global Trends
The aviation industry is heavily dependent on fossil fuels, with
2016 ICAO Assembly of the Carbon Offsetting and Reduction
approximately 2% of all CO2 emitted around the world said to
Scheme, which is a scheme for achieving the CNG2020 goal.
be generated from the aviation field.
In recent years, there has been a growing sense of crisis
CO2 Emissions Forecast and Reduction Targets
about climate change issues, and the aviation industry is accel-
erating its efforts to reduce CO2.
The Paris Agreement was adopted at the 2015 United
Nations Climate Change Conference (COP21).
Prior to this, Carbon Neutral Growth 2020 (CNG2020) had
been adopted in the aviation sector following a resolution of the
2010 ICAO (International Civil Aviation Organization) Assembly.
The target of CNG2020 is to keep the global net carbon emis-
sions from international aviation from 2021 at the same level.
Additionally, the International Air Transport Association
(IATA) has set the ambitious goal of reducing CO2 net carbon
emissions by 50% by the year 2050 compared to 2005.
Other initiatives have advanced across the industry to curb
CO2 emissions. These initiatives include the adoption in the
CO2
Emissions
Emissions based on current,
unchanged trajectory
Carbon Neutral Growth 2020
Change in total emissions
100
50
Utilize emission
trading schemes
(purchase CO2
emissions credits)
Improve flight
operations
Adopt new
technologies
Introduction
of SAF
CNG2020
(Left axis) Index: 2005 results = 100
2005
2010
2020
2030
2040
2050
Drafted based on the IATA Vision
Information Disclosure on Response to Climate Change
CDP
TCFD
Disclosure of information on corporate
strategies for CO2 emissions and climate
change.
Disclosure of information analyzing the risks
and opportunities posed by climate change
to our business.
54
Science Based Targets (SBT)
Greenhouse gas reduction targets based
on scientific evidence consistent with the
Paris Agreement. The ANA Group declared
our commitment to the SBTs in May 2020.
We are participating in a technical subcom-
mittee creating reduction targets and rules
for the aviation sector.
Please visit our corporate website for more:
https://www.ana.co.jp/group/en/csr/environment/
Progress Report: ANA FLY ECO 2020 Medium- to Long-Term Environmental Plan for FY2012–2020
Reduction of 20%
(vs. Fiscal 2005 levels) in CO2 emissions
per revenue ton-kilometers on international
and domestic routes
Limit total domestic
route CO2 emissions to
under 4.4 million tons /
year on average
Fiscal 2005
Fiscal 2019
Fiscal 2019
1.25 kgCO2/RTK
1.01kgCO2/RTK
Limited to 4.0 million tons
Reduce ground operations
energy consumption by
1% annually
on an intensity basis
(compliance with the Act on the Rational Use of Energy)
Fiscal 2019
9.1% reduction
vs. previous fiscal year
Complete implementation of noise control
measures for international and domestic
flight aircraft
Complete implementation of air pollution
control measures for international and
domestic flight aircraft
Fiscal 2019
100%
Compliance with ICAO Chapter 4 Noise Standard
for all aircraft (including leased aircraft)
Fiscal 2019
100%
Compliance with ICAO Emission Standards for all
aircraft (including leased aircraft)
Initiatives to Curb CO2 Emissions
Adopt New Technologies
Introduction of Fuel-Efficient Aircraft
The ANA Group is actively introducing state-of-the-art aircraft to
Introduction of Lightweight Cabin Seats
We adopted aircraft seats devel-
reduce CO2 emissions from aircraft. These aircraft include the
oped jointly with Toyota Boshoku
Boeing 787 and Airbus A320neo / A321neo, which feature
Corporation on domestic routes.
excellent fuel efficiency. As of the end of March 2020, fuel-
These seats allow us to reduce
efficient aircraft accounted for 70.3% of the Group fleet. The
weight in-cabin by 195kg across
ANA Group is also a launch customer for the Boeing 787.
all aircraft versus traditional
Consisting of 73 aircraft, our Boeing 787 fleet is the largest
specifications. In turn, this
among the world’s airlines.
weight reduction has led to a
reduction of approximately 15kl
in annual fuel consumption per aircraft.
1
Save fuel through flight crew initiatives
reversers
Use single-engine taxiing and reduce usage of thrust
• Reduce climbing resistance by raising flaps
earlier after takeoff
• Maintain engine RPMs at only the necessary
levels during thrust reverser use after landing
• Shut down one engine during post-landing taxi
• Adopt / implement continuous descent approach
and expand the number of eligible airports
Save fuel by optimizing flight routes
Save fuel in airport, equipment operations
2
3
While still ensuring safety, we can reduce the use of thrust
reversers during landing, limiting engine output, and taxiing on
the ground with a single engine after landing. These measures
will lead to reduced CO2 emissions.
Engine cleaning
We can restore engine performance
through regular cleaning of inside
components using water. This main-
tenance has been proved to lower
the combustion temperature of the
engine, improve fuel efficiency, and
reduce CO2 emissions by approximately 1%.
55
50% reduction
by 2050
Improve Flight Operations
Sustainability Initiatives
ENVIRONMENT
Introduction of Sustainable Aviation Fuel (SAF)
To prevent increasing CO2 emissions for 2021 and beyond, the
ICAO Assembly adopted the use of renewable aviation fuels other
than the conventional fossil fuels. This development requires the
use of SAF, jet fuel made from sustainable sources such as veg-
etable oil, animal fat, and waste biomass. Considering the SAF life
cycle, it is preferable that SAF be locally produced for local con-
sumption. Therefore, we are pursuing efforts toward the adoption
of SAF together with relevant institutions and businesses inside
and outside Japan for stable production both domestically and
overseas.
In October 2019, ANA received delivery at Haneda Airport of
a new Boeing 777-300ER from the manufacturer’s Everett plant
(Washington State, U.S.A.). This aircraft uses exhaust gas-derived
SAF manufactured by U.S.-based LanzaTech. For this flight, ANA
not only purchased and used SAF but also took the lead in trans-
porting SAF from the factory, mixing the fuel, inspecting quality, and
refueling. In this way, we acted as the main player throughout the
supply chain.
IATA-Hosted SAF Symposium Lecture
(New Orleans, U.S.A.)
The IATA hosted the SAF Symposium in New Orleans in November 2019.
As a panelist, ANA stated that we would work with governments, related institu-
tions, and businesses to ensure the stable production of SAF in Japan as well.
Initiatives to Reduce Environmental Impact
Carbon Offset Program
In response to customer feedback, the ANA Group now offers
Reduce Food Waste
We have expanded in-flight meal reservations in First Class and
the ANA Carbon Offset Program by class on domestic and
Business Class sections of our international flights. This service
international routes. This program is a mechanism to offset the
helps us meet passenger requests for in-flight meals and elimi-
amount of CO2 emitted by aircraft. We have chosen projects to
nate the need to load extra meals. This service improves cus-
support via this program that meet certain certification stan-
tomer satisfaction, while reducing food waste.
dards (J-VER, VCS, Gold Standard CER).
ALL NIPPON AIRWAYS TRADING Co., Ltd. contributes
to the reduction of food waste by donating surplus food and
Initiatives as an Eco-First Certified Company
beverage inventories resulting from the replacement of in-flight
In 2008, ANA became the first in the
transportation industry and the first
airline to become a certified Eco-First
Company. We received this honor in
recognition of our environmental initia-
tives and corporate stance that emphasizes social
responsibility.
One specific initiative recognized was our work to reduce
environmental impact by recycling resources. Our efforts here
include waste separation (glass bottles, PET bottles, and cans)
generated on all international flights arriving in Japan.
products for sale on domestic routes. Donations are made to
Second Harvest Japan*, a certified NPO.
* Japan’s first food bank, collecting foods that would otherwise become food loss and
delivering it to people in need
Exchanging Disposable Plastics for Eco-Friendly
Materials
By the end of fiscal 2020, approximately 70% of the total weight
of all disposable plastic products used in-flight and in airport
lounges will be eco-friendly materials, such as paper and bio-
plastics. In addition, ANA supports the Plastics Smart campaign
sponsored by the Ministry of the Environment, and we are
engaged in further initiatives in this area.
Utilize Emission Trading Schemes (Purchase CO2 Emissions Credits)
Taking Action for Biodiversity
We are exploring the potential for using ICAO-approved programs to trade emission credits (purchase CO2 credits), since it will become
mandatory to offset increased CO2 emissions on and after 2021. We recognize that these credits are also an effective method for offset
reduction.
Initiatives in Non-Aircraft Operations
Based on energy management standards established uniquely for and by the ANA Group, we reduced CO2 generated outside of aircraft
operations by 4.4% compared with the previous fiscal year. We achieved this result by upgrading Group-owned and leased facilities
with energy-saving equipment and by using renewable energy, including solar power generated in-house. In fiscal 2020, we began
purchasing and expanding our use of electricity from renewable sources.
ANA, ANA Catering Service Co., Ltd., and ANA Foods Co., Ltd. received the Excellence in Energy Efficiency Award (S Class) certifi-
cation under the Act on the Rational Use of Energy of the Ministry of Trade, Economy and Industry for a fifth consecutive year.
Initiatives for Environmental and Ecosystem
Conservation
The ANA Group continues to be engaged in environmental
year, in collaboration with TRAFFIC*1, ANA created an educa-
tional program in partnership with ROUTES*2, and we offer
education programs both inside and outside the Company. In
conservation activities. Group employees participate in activi-
December 2019, we held a workshop for airport staff in collabo-
ties that include the ANA Forest of the Heart project in Minami
ration with NARITA INTERNATIONAL AIRPORT CORPORATION.
Sanriku, Miyagi Prefecture, as well as invasive plant control
activities at Yambaru National Park in Okinawa Prefecture, the
Team Chura Sango coral reef conservation project in Onnason
Village, and more.
Support for the Keidanren Declaration of Biodiversity
In June 2020, we announced our support for the Revision to
Declaration of Biodiversity by Keidanren and Action Guidelines
In 2018, ANA signed the Buckingham Palace Declaration, a
toward the realization of a sustainable society through the
statement aimed at eradicating illegal wildlife trade. That same
construction of a world that coexists with nature (a society in
harmony with nature).
*1 TRAFFIC: An NGO that surveys and monitors wildlife trade. A joint venture between
the World Wildlife Fund (WWF) and the International Union for Conservation of Nature
(IUCN). TRAFFIC sponsors activities through a global network, mainly through bases
in ten countries. https://www.traffic.org/
*2 ROUTES: Abbreviation of Reducing Opportunities for Unlawful Transport of
Endangered Species. ROUTES is an international collaborative platform for dealing
with criminal activities involving the illegal trade of wild animals. The organization
implements a variety of programs, mainly in countries / regions where illegal transac-
tions occur frequently.
56
Education program
booklet
Workshop on eradication of illegal wildlife trade
57
Sustainability Initiatives
Sustainability Initiatives
MATERIAL ISSUES
Human Rights
ANA Group ESG Commitments
Responsibility to respect human rights: Based on the United Nations Guiding
Principles on Business and Human Rights, make every effort to promote the
respect of human rights.
Promote responsible procurement and supply-chain management: Manage and
promote environment-conscious procurement with respect to human rights and
build a fair and transparent supply chain.
Basic Approach
The ANA Group has been working to ensure human rights in accordance with the global standards provided in the United Nations
Guiding Principles on Business and Human Rights. In April 2016, we established the ANA Group Policy on Human Rights. We based
this policy on the International Bill of Human Rights (the Universal Declaration of Human Rights and the two International Covenants),
the International Labour Organization Declaration on Fundamental Principles and Rights at Work, the Ten Principles of the United
Nations Global Compact, and the United Nations Guiding Principles on Business and Human Rights. We also encourage our contrac-
tors and suppliers to adopt similar policies.
Please visit our corporate website for more:
https://www.ana.co.jp/group/en/csr/human_rights/
Prevent the Use of Airplanes in Human Trafficking
After conducting training for all ANA cabin attendants, we
Eradicate Corruption
We emphasize preventive measures in regions considered
began a program in April 2019 to report potential cases of
relatively high-risk among the countries served by the ANA
human trafficking found in-flight to ground facilities.
Group.
In 2020, we conducted another human trafficking prevention
Following Southeast Asia in 2018, we held seminars on
program to raise awareness among all ANA cabin attendants.
competition and anti-bribery laws in China in 2019 for ANA
The program covered international protocols, notification pro-
Group employees and employees on overseas assignments.
cedures from within the aircraft, and other response measures.
Stakeholder Engagement
Communication with Our Employees
To deepen an understanding of respect for human rights, we
Local Dialogue Overseas (Thailand)
We recognize that the fisheries industry in Thailand presents
conduct education and awareness activities through in-house
potential human rights risks in the ANA Group supply chain.
training for new employees and newly appointed managers.
In June 2019, we visited Thailand for the purpose of under-
In addition, we have been conducting annual e-learning
standing the state of migrant workers and learning about the
courses for all Group employees as of fiscal 2015. The topic of
response to issues in the fishing industry. We performed local
the fiscal 2019 e-learning course was to leave no one behind.
on-site visits and exchanged views with international institu-
The course was available to approximately 44,000 employees,
tions, local NGOs, and others.
We will continue human rights initiatives, recognizing that respect for human rights lies at the very foundations of the philosophy of
of which 92% participated.
the SDGs.
Issuing the Human Rights Report
The ANA Group issued our first Human Rights Report in Japan in 2018, aiming to promote communication with
stakeholders through active dissemination of our initiatives to respect human rights. The Group has continued
人権報告書 2019
to issue these reports annually since then.
Involving Business Partners
We inform all contractors and suppliers of the ANA Group
Purchasing Guidelines. We work together to ensure their work-
place environments uphold respect for human rights.
Note that we are preparing to revise the ANA Group
Purchasing Guidelines with the cooperation of third-party insti-
tutions to ensure even more responsible procurement.
In October, we visited a company involved in the production
of in-flight meals for ANA flights departing from Thailand. There,
we conducted interviews about initiatives related to traceability
and exchanged views with local NGOs and others.
Major Initiatives
In 2016, we conducted a review to identify potential risks to human rights related to business activities across the ANA Group and at all
locations where we serve. Our evaluation identified the following four key issues for risk prevention. Note that though we conducted a
re-assessment to identify risks in 2019 based on advice from outside experts, we confirmed that there are no changes at present to the
four existing key issues, as follows.
Survey on Employment Conditions of Foreign
Workers in Japan
In 2019, we summarized precautions to take when hiring non-
Strengthen Supply Chain Management of
In-Flight Meals
We used our participation in the Bluenumber Initiative*2 (in
Japanese nationals and shared these with the entire Group.
2017, ANA HOLDINGS was the first Japanese company to join)
Further, we secured the cooperation of an independent third-
to register more than 200 partners and producers connected to
party institution (Caux Round Table Japan*1) to conduct inter-
the ingredients in our in-flight meals. We also conducted a test
views with contractor-employed foreign workers involved in
registration of more than 2,000 articles.
ground handling services at airports.
We seek to build a highly transparent food supply chain that
In 2020, we will begin to identify employment conditions for
includes respect for human rights and environmental conserva-
foreign workers in the supply chain, leveraging technology
tion in the production process.
systems in the process.
58
Exchange of views with local NGOs in October
@Caux Round Table Japan
Regular Reviews from Human Rights Experts
The ANA Group holds advisory meetings with human rights experts on a regular
basis. In October 2019, we invited four human rights experts from the Danish Center
for Human Rights*3, the Institute for Human Rights and Business*4, and the World
Benchmarking Alliance*5 to evaluate the progress of the ANA Group’s initiatives given
the advice received the previous year.
The experts provided advice for stronger information disclosure, new human rights
issues requiring caution, places to improve our management systems, and more.
*1 Caux Round Table Japan: The Caux Round Table is a global network of business leaders working to realize a fair, free, and transparent society through business.
*2 Bluenumber Initiative: The Bluenumber Initiative is a global program to establish food supply chain platforms by Bluenumber Foundation.
*3 Danish Center for Human Rights: The Danish Center for Human Rights was established by the Danish Parliament to gather information and develop tools related to human rights and
business.
*4 Institute for Human Rights and Business: Founded in 2009, the Institute for Human Rights and Business is an international think tank active in the field of business and human rights.
This Institute is a leading driver of initiatives in this field.
*5 World Benchmarking Alliance (WBA): A benchmarking organization established primarily by the United Nations Foundation, Index Initiative, and British insurance company Aviva.
This organization develops benchmark indicators to evaluate company contribution levels to a sustainable society.
@Caux Round Table Japan
59
MATERIAL ISSUES
Diversity and Inclusion
ANA Group ESG Commitments
Human resources development to support sustainable growth: Develop human
resources and a sustainable work environment in which employees raise their
productivity.
Responding to the Diversity of Our Customers: Respect the needs and diversity
of each customer, and promote universal services in both products and services
Basic Approach
Creating an Environment for Customer Comfort (Facility Legacy of Diversity)
We will continue to create services, facilities, and equipment offering even greater comfort and convenience in any scenes, from
pre-departure through arrival.
Websites
Airports (Information)
Population demographics are changing in Japan and our customers continue to diversify globally. In this environment, continuing to be
chosen and trusted by customers will be crucial for the future of ANA Group growth.
We will accelerate initiatives aimed at providing world-class inclusive and universal services in an effort to fulfill our responsibility as
a public transportation entity and build an inclusive society in which everyone can live together.
Create accessible website environments for all to use,
regardless of disabilities
Remote sign-language services at counters /
Morph resin wheelchairs
Airports (Facilities)
Aircraft
Implementation Structure
One pillar of our corporate strategy is the FY2018–2022 Universal Service Strategy, which calls for us to respect the diversity of each
customer and provide ANA Group services that every customer can enjoy comfortably and with peace of mind.
We carry out initiatives to improve our facilities and services, while at the same time, we identify issues in any scenes, from
pre-departure through arrival, and implement action plans to improve convenience in every scenario.
Facility strategy
Comply with laws and regulations, as well as
implement accessible websites, airports, and
aircraft on-board facilities and equipment
Service strategy
Encourage the barrier-free mindsets through
stronger education, training, and systems and
benefits for all employees
Pre-departure
Airport
In-flight
Arrival
Major Initiatives
For Customers to Experience Air Travel Comfortably and with Peace of Mind
In July 2019, we launched the “Assistance Information
Registration Service” to receive and store information for cus-
tomers in our ANA Mileage Club member database who need
special assistance. The system saves customers the time and
effort of providing the details of the assistance required every
time they make a reservation. In turn, this facilitates smooth
reservation procedures.
Information Stored
• Walking ability
• Information on wheelchair to be checked in (manual, electric, foldable or
non-foldable, size, spare battery)
• Whether or not you have a visual / hearing impairment
• Medical equipment to be used on board the aircraft
• Assistive equipment to be loaned requiring special arrangement
• Assistance required at the airport or on board, etc.
Installation of low counters at 50 airports in Japan /
Wider boarding gates
ANA-original in-flight wheelchairs (available in all aircraft) /
Wheelchair-accessible restrooms on selected narrow-body aircraft
Creating a Society with Accessibility for All
Beyond air transportation, ANA plans to leverage MaaS* as a
necessary assistance information with and among relevant
mechanism to improve accessibility and convenience for all
organizations.
customers. Universal MaaS is a service that enables customers
In June 2019, ANA started an industry–academic–
who are hesitant to travel, due to disability, age, or other reason
government joint project with Keikyu Corporation, Yokosuka
to enjoy travel without stress. The service facilitates seamless
City, and Yokohama National University. Here, we began proof-
transportation by providing information on public transportation
of-concept tests for customers traveling in wheelchairs. We will
fares, barrier-free connection routes, and so on. The system
continue to work together with our stakeholders, aiming to
also shares and links customer location information and
launch social implementation by the end of fiscal 2020.
Joint Press Conference
Proof-of-Concept Test
* Mobility as a Service (MaaS): Integration of various forms of transport services into a single mobility service on demand.
60
61
Sustainability Initiatives
DIVERSITY AND INCLUSION
Human Resource Development to Drive Barrier-Free Mindset Practices
(Service Legacy of Diversity)
We have implemented a range of initiatives to ensure that every employee embraces a barrier-free mindset in society and that allows us
to offer world-class inclusive and universal services.
We are creating skies that value and welcome all people through programs that eliminate fear of air travel for special needs school
students, as well as through ongoing education for employees.
Hands-On Open Seminar for Universal Services
Participants interact with the elderly and persons with disabili-
Universal Service Refresher Training
We provide e-learning education four times every year to raise
ties to learn about issues from the perspectives of those
the level of the universal services pursed by the Group.
concerned.
ANA’s Sora-Pass Classes
We provide a Sora-Pass* class for children who are not used to traveling on aircraft. Here, children learn the boarding process from the
airport to the cabin of the aircraft. In 2019, we launched an ANA Sora-Pass class (boarding support class) for students using wheel-
chairs and students with developmental disabilities. ANA Group employees visit schools and teach classes to students who use ANA
flights for school travel to alleviate the anxieties about air travel.
* Sora-Pass: Air Travel Passport
11
Point
22
Point
ANA instructors teach classes
appropriate to the characteristics
of the children’s disabilities
Experience-based curriculum
allowing students to easily
understand boarding an aircraft
33
Point
Instructors are current
ANA employees
One class is a 60- or 70-minute session.
ANA instructors visit schools and teach
classes in which students learn the pro-
cess from boarding to disembarking in the
classroom, after which they experience the
process for themselves.
Students experience sitting in on-board
wheelchairs, security checkpoint proce-
dures, and more.
ANA Group employees who have experi-
ence as cabin attendants or ground staff
serve as instructors (instructor job experi-
ence depends on program content).
ANA Wing Fellows Vie Oji: Diverse Human Resources Shine and Excel
ANA Wing Fellows Vie Oji was established in June 1993 and was accredited as a special subsidiary under the Act on
Employment Promotion, etc. of Persons with Disabilities in December 1993. Since then, the company has operated busi-
nesses in diverse locations, business types, and with diverse human resources. At the same time, we have pursued diverse
work styles in the ANA Group, serving as a leader of diversity and inclusion. Guided by the vision that all employees are
valuable, this company contributes to increasing the corporate value of the ANA Group.
Manufacturing and External Sales Business
Airline-Related Business
The company provides hospitality and
The ANA Aoshima Factory produces
This business supports the Group
high-quality customer service through
and sells hand made paper and
through various services, including
a bakery division, convenience store
woodwork products under its own
management of ANA uniforms,
operations center, and the ANA
brand name, using raw materials
mileage-related services, and digital
Wonderful Day Café.
from the Miyazaki area to introduce
management of aircraft maintenance
Aoshima to the world.
records.
Universal Standard Consulting: Leveraging Strengths for New Value
We established the Universal Standard Consulting business unit in August 2016. The unit provides consulting services to
spread the adoption of universal environments inside and outside the ANA Group. The unit suggests high-quality universal
standards based on the perspectives and sensibilities of people with disabilities and our own ANA’s heartfelt service.
Specifically, the unit verifies equipment at airports and on aircraft, as well as organizes workplace environment seminars for
ANA Group employees. The unit also inspects hotels and accommodation facilities, in addition to promoting the employ-
ment of visually impaired persons.
62
63
Promoting Universal Services through Group BusinessesSustainability Initiatives
MATERIAL ISSUES
Regional Revitalization
ANA Group ESG Commitments
Utilizing innovation to solve social issues: Provide new value through avatars,
drones, MaaS, etc., and cooperate with different industries
Regional revitalization: Contribute to regional revitalization
Basic Approach
Japan is famous for its traditional culture and tourism attractions. On the other hand, Japan faces concerns about falling populations
in rural areas and the gradual decline of traditional industries. The ANA Group works together with corporations, NGOs, NPOs, local
governments, and others in order to develop long-term demand for the Air Transportation Business, as well as to expand the ANA
economic sphere (including Non-Air Business).
In addition, we will contribute to regional revitalization through tourism promotion in this era of the new normal by providing informa-
tion about tourist area safety and security.
Implementation Structure
The ANA Group Regional Revitalization Meeting, under the Tourism Development section of ANA Marketing and Sales, organically
integrates initiatives across Group companies to maximize impact. This meeting is responsible for advancing strategies that promote
tourism for regional revitalization.
L
o
c
a
l
G
o
v
e
r
n
m
e
n
t
,
D
M
O
s
,
e
t
c
.
ANA Sales
Domestic
Offices
Government Agencies
ANA Tourism
Development
Tourism
Promotion
Tourism
Strategies
ANA HOLDINGS INC.
ANA Strategic Research Institute
Secondments, consulting, surveys, etc.
Actions
ALL NIPPON AIRWAYS TRADING
ANA Group advertising media, hometown tax, merchandising, etc.
ANA Group
Regional
Revitalization
Meeting
ANA Sales
Travel package planning, promotion, and sales
ANA Business Solutions
Provide ANA Group expertise
ANA Cargo
Expansion of export regional / local products
ANA department overseas HQs, Offices
Marketing and promotions for inbound tourism
Group companies
Cross-organizational initiatives
Major Initiatives
Regional Revitalization through Tourism Promotion
Social Contribution
• Offer consulting services leveraging ANA Group human resources
• Participation in reconstruction activities
• Discover and market tourism resources throughout Japan
(Supporting regional recovery after large-scale disasters)
• Develop, distribute, and sell local products
• Support environmental and biodiversity conservation programs
• Establish systems to host foreign visitors to Japan
(Project to conserve coral reefs in Okinawa, etc.)
• Stage promotional campaigns involving air transportation services
• Develop next-generation education programs
• Promote domestic / international tourism via ANA flights
(Aviation Class, career training, etc.)
• Develop training programs incorporating ANA Group expertise
• Social contribution programs in overseas areas we serve
• Expand directly related populations through cross-industry collaboration
(Educational support, tourism resource conservation, etc.)
• Leverage innovation to resolve social issues
Please visit our corporate website for more:
https://www.ana.co.jp/group/en/csr/regional_creation/
Expand Directly Related Populations through Cross-Industry Collaboration
Proof-of-Concept Test for Air Ticket Subscription
Service Utilizing Vacant Seats
We are implementing initiatives to expand reach to directly
an air ticket subscription service utilizing vacant seats in and
between regional routes. Our concept here is to support the
expanding work styles and lifestyles for people who have
related populations, including promoting lifestyles rooted in
established multiple bases while traveling between the Tokyo
multiple bases, promoting workcations, and creating second
metropolitan area and rural areas, or from one rural area to
hometowns. Our intent here is to solve population declines in
another. We are working with ADDress Co., Ltd., a company
outlying regions, population density in the Tokyo metropolitan
that offers unlimited flat-rate residence services across Japan
area, and other social issues. We hope to support lifestyles that
using vacant homes in rural areas.
take advantage of ever-expanding work styles and lifestyles
due to the shift to remote work caused by COVID-19.
In January 2020, we launched a proof-of-concept test for
Creating New Travel Value through Journey+
We have established and
operate the Journey+ plat-
form to connect users and
local communities. Journey+
builds communities based
on the keywords of business
succession issues, resolution
Group Photo: Journey+ in Southern Kyushu
of regional social issues, regional revitalization, and taking on
new challenges. Under this platform, we visit innovators and
leaders active in a given region to consider the real social
Materials about the ANA collaboration with ADDress Co., Ltd.
issues facing that area.
Promoting Domestic and International Tourism via ANA Group-Operated Flights
In April 2018, we launched Japan Travel Planner, a travel infor-
To encourage inbound tourist (mainly longer-term travelers
mation website for visitors to Japan. This website is a part of
from Europe and the U.S.) to visit other areas within Japan, we
our efforts to attract travelers to visit Japan and revitalize local
are collaborating with online travel agents* to offer activities
economies. As of fiscal 2019, Japan Travel Planner has grown
and sharing economy services passengers can enjoy during
into an important communication platform for passengers
their stay.
arriving from overseas, offering information on more than 800
We are also pursuing cooperation with various areas over-
tourist spots in 11 languages. The website hosts more than
seas, and we will continue to contribute to the revitalization of
600,000 site visitors on average monthly. We encourage tour-
local economies by stimulating inbound tourist demand.
ists to visit many different parts of Japan through a seamless
connection with the ANA flight booking website.
* Travel agencies doing business solely online
Utilizing Innovation to Solve Social Issues
Using Avatars to Build New Regional
Communication Infrastructure
avatarin Inc., the first-ever start-up launched by ANA
HOLDINGS, is engaged in the avatar business. This
business contributes to regional revitalization by offering
communications that bridges physical distances and new
infrastructure. During the 2020 Golden Week holidays and
in cooperation with Oita Prefecture, avatarin Inc. installed
a newme remote-controlled robot at three locations in the
Oita Funai Gobangai Shopping Street. This robot offers
the opportunity to experience remote shopping. Even in
situations where cross-prefecture travel is made difficult due
to COVID-19, these avatars enable shopping from anywhere
in the country, contributing to greater local sales.
Shopping with the newme avatar
64
65
Sustainability Initiatives
Business
Foundations
Supporting
Corporate Value
To share our values with all stakeholders, the ANA Group has
established a foundation for appropriate management resource
allocation and rapid management decision-making.
What Does the
ANA Group DNA Mean to You?
66
The DNA of experience to overcome difficulties and take on challenges, moving
forward into the future and growing as a strong Group through relentless effort.
Yuichi Nishiyama
B777 Pilot
67
Safety
Strengthening Safety as a Business Foundation,
Passing Down Safety as a Culture
Safety is the unequivocal mission of every business in the ANA Group.
Solid Approach to Safety
Safety is the absolute value underlying every ANA Group cor-
The corporate culture based on mutual understanding and
porate activity. Safety is the foundation of everything we do. Our
trust form relationships among employees across various job
dedication to safety extends to every part of our group busi-
descriptions to support all aspects of the ANA Group business.
nesses, including food services, cargo, and information. Our
In every workplace, we post the ANA Group Safety Principles
everyday efforts to improve safety and conscientious response
and Course of ANA Group Safety Action, which are pledges
to customer expectations build confidence and trust with soci-
shared by all ANA Group employees.
ety. Faced with the new threat of COVID-19, we are implement-
ing all possible measures, providing a sanitary environment
and ensuring safety against the risk of infection.
ANA Group Safety Principles
Safety is our promise to the public
and is the foundation of our business.
Course of ANA Group Safety Action
Strictly observe rules & regulations, and all actions will be grounded on safety.
As a professional, place safety as the #1 priority while keeping your health
in mind.
Safety is assured by an integrated management
Address any questions and sincerely accept the opinions of others.
system and mutual respect.
Safety is enhanced through individual
performance and dedication.
Information will be accurately reported and shared in a timely manner.
Continuous self-improvement for prevention and avoiding reoccurrence.
Lessons learned from experiences and increased skills for risk awareness.
ANA Group Medium-Term Safety Promotion Plan
Based on the FY2018–2022 ANA Group Medium-Term Safety Promotion Plan, we have improved the safety risk management process,
focusing on prevention as a key component. In fiscal 2020, we began the following measures in pursuit of our vision to become a lead-
ing airline with a world-class “Safety system and Culture” and create a sense of safety for customers.
1. Offering a Sense of Safety for Our Customers
Customer questionnaires and interview results help us identify the
points at which customers feel a sense of safety when using ANA
Group services. We offer peace of mind for customers through
individual Group employee performance and dedication to safety.
C
o
m
m
u
n
c
a
t
i
i
o
n
Sense of
Safety
2. Strengthening Safety Structures
We improve our safety risk management process (see the following
section) through safety structures that conform to global standards
Customer
Customer
and other measures.
We strengthen our safety systems by visualizing risks and mea-
sures, analyzing flight data, and using indicators to identify the
signs of unsafe events. At the same time, we work together with
other airline companies to improve safety across the airline industry.
3. Putting Safety Actions into Practice
We analyze the safety actions and reflect the results in our training
and practice to strengthen our safety structures.
Safety
Implementation of
Implementation of
Safety Measures
Safety Measures
Safety
Structures
Education /
Education /
Awareness
Awareness
Safety
Culture
ANA Group
ANA Group
68
Four Axes of Safety Risk Management
The ANA Group has adopted a PDCA cycle for safety management for (1) aircraft operations, (2) passengers, (3) employees (front
line), and (4) security.
We have set numerical targets for unsafe events with respect to these four axes. At monthly Group Safety Promotion Committee
meetings, which holds the final decision-making authority within our safety implementation structure, attendees report on high-risk
events and issues, discuss countermeasures and risk reduction, and review safety targets and achievement rates.
Four Axes of Safety Risk Management
Operations
Passengers
Employees
(front line)
Preventing accidents /
major incidents
Preventing harm to the
bodies and lives of passengers
from departure to arrival
Preventing dangers to
ANA Group employees
and others
Security
Advance risk identification
and prevention for illegal acts,
such as terrorism and hijacking
incidents
The Changing Environment and the Unchanging Mindset toward Safety Awareness
The ANA Group also faces significant changes in the business environment due to COVID-19. In an environment where the number of
flights are significantly reduced or suspended, employees face three different task categories that can result in human error.
Three Task Categories (First Time, Procedure Changes, and Task after Extended Time Gap)
First Time Task
Uncommon tasks
Procedure Changes
New or different
procedures and
environments
Task after Extended
Time Gap
Performing a task an
extended time away / away
from the process
Every ANA Group employee uses foresight to anticipate risks, sharing information and using the assertion* method with coworkers to
respond appropriately to these three task categories, leveraging organization management to prevent unsafe situations.
* Assertion: Employees respect each other and express their opinions in a constructive and cooperative manner, which is important behavior for a team to ensure safety.
Every employee strives to create an atmosphere in which everyone feels free to express themselves and voice their concerns to prevent unsafe events.
Passing on Lessons Learned from Air Accidents—Forest Dew Park
On July 30, 1971, an ANA aircraft and a Japan Self-Defense Force aircraft on a
training flight collided and crashed over the city of Shizukuishi, Iwate Prefecture,
resulting in 162 causalities. The Irei no Mori monument has been well kept and
maintained by the local community in Fuji City, Shizuoka Prefecture. Every year,
more than 500 ANA Group employees visit to clean the forest and for safety
enlightenment.
In 2020, which coincides with the 50th anniversary of the accident, the monu-
ment was rebuilt and the location renamed to Forest Dew Park. The name was
changed to meet the wishes of those concerned to make the monument more
familiar and more casually accessible to those who are unfamiliar with the acci-
dent. We will continue to maintain the new Forest Dew Park together with the
foundation for the Irei no Mori and stakeholders in the local community, etc., as
Monument for Aviation Safety
we strive to preserve the memories of ANA’s last casualty involved aircraft accident and maintain the location as a place reflect-
ing an oath for safe aviation operations.
69
Business Foundations Supporting Corporate Value
Safety
ANA Group Safety Education Center (ASEC)
We established ASEC in 2007 in Shimomaruko, Ota-ku, Tokyo. This activity was our response to a proposal from an employee who said
that ANA should create a location to preserve the memories of past accidents. In October 2019, we relocated the ASEC to the newly
Toward Ensuring Safety
built ANA Group Training Center (ANA Blue Base).
Configuration of ASEC
The facility is located on the second and third floors of the ANA Blue Base (ABB) and consists of three spaces.
1 The Way Theater
2 The Sky of the Pledges
3 Active Lounge
The theater is a space where visitors come
face-to-face with the accidents through the
use of videos and the exhibition of parts of
the crashed aircraft.
This is a space where ANA Group employ-
ees engage with the memories of their
senior employees who experienced an
accident and converse with them in spirit.
The lounge is a space to learn how to
notice human errors through experience
and discussion with colleagues.
Overview of the Education Programs
Firsthand Experience of
the Tragedy of Accidents
This program allows participants to
come face-to-face with the acci-
dents through the use of videos and
records from the past.
Firsthand Experience of
Real Situations that Cause
Human Errors
This program allows participants to
learn the mechanism where human
errors occur through discussions.
Putting Safety Actions
into Practice
The purpose of this program is to
allow participants to conduct safety
activities in their workplaces follow-
ing their declaration of safety
activities.
The new ASEC offers programs that allow participants
We raise awareness of safety through three concepts that
to engage actively and create safety together with other
reflect the ideas under which we created the center: Look
participants through education, as well as to experience the
truthfully at accidents, look truthfully inside, and look truthfully
creation of peace of mind for customers. The ASEC also uses
at our colleagues. Under these concepts, the ASEC strives
expertise from inside and outside the Group, introducing the
to raise safety awareness through safety education and
latest information equipment to transform the center into a
strengthen the culture of pursuing safety without compromise,
learning facility that allows employees to conduct safety
which forms the foundation for our management.
activities in their workplaces.
Strengthening the Safety Management System to Address Alcohol Issues
On May 1, 2020, ANA received a business improvement order
height of efforts by the entire airline industry to prevent the
from the Minister of Land, Infrastructure, Transport, and Tourism
recurrence of alcohol issues. We apologize once again for
to ensure the safety of air transportation in relation to a drinking
the concern and trouble we caused our customers and
incident by our flight crew that occurred at Fukuoka Airport in
stakeholders.
November of the previous year. The incident recurred at the
Future Measures
The ANA Group will solve alcohol issues through the following key measures.
1. Ensure Alcohol Testing
(Set Up a Strict Testing Procedures)
2. A Personal Transformation in Each Employee
(Develop Responsible Drinking Behavior)
• In addition to the legally mandated alcohol testing, conduct a
pre-test and report from home or hotel before work
• We implemented an initiative to develop responsible drinking
habits among our employees, called the TEKKIN INITIATIVE.
• Strengthen management systems by creating an alcohol test
management system in conjunction with a facial recognition
system, etc.
• We are improving the educational system and developing work-
place leaders to ensure that all employees are aware of the alco-
hol issue and they must exercise self-control.
Pre-test
Legal test
OK
OK
Plan
approval
Alcohol Test Management System
ZERO!
ONE!
TWO!
Do not drink before
work and if you are in
poor health. Do not
encourage drinking for
non-drinkers.
The right amount of
drinking for those who
are intolerant to alcohol
is one drink.
The right amount of
drinking per day is two
drinks. Do not drink on
at least two days a
week.
* One drink = 0.5 units (10 grams of alcohol)
3. Organizational Support
• Strengthen mutual support by developing and placing workplace
support leaders and collaborating with, for example, medical
institutions
• Collaborate with relevant institutions and consider building a
support program compliant with the airline industry standard
Mutual Support
Workplace peer consultant / supporter
Referral and consultation from internal and external
expert organizations as necessary
4. Strengthening the Safety Management
System for Alcohol Consumption
(Constant Optimization by Management,
on a Workplace Level, and by Experts)
• Internal auditing, consultation, and monitoring implemented to
identify and improve underlying issues
• Strengthen corporate-level management by introducing commit-
tees formed by outside experts; form a cooperative council
together with the labor union
Outside
Experts
(Committee)
Corporate
Management
Actual Situation
Cooperative
Council with the
Labor Union
Constant optimization using the PDCA cycle
70
71
Business Foundations Supporting Corporate Value
Human Resources
Sustainable Growth Focused on and Inspired by Our People
Employee diversity is what enables us to bring the Group’s power to bear.
Promoting Diversity and Inclusion
Under our Diversity and Inclusion Declaration (“D&I Declaration”), the ANA Group seeks to become a corporate group that allows every
employee to exercise their strengths fully and to expand those strengths to their maximum potential.
Basic Approach to Human Resources
Human resources are the greatest asset of the ANA Group. Our people are the source of our ability to respond flexibly, to overcome
Diversity & Inclusion Declaration
Diversity
Inclusion
challenges, and to grow sustainably, even in an environment that changes significantly. We are building stronger mechanisms to create
We will:
new value, leveraging our people as the source of our capabilities to achieve our vision of becoming the world’s leading airline group in
customer satisfaction and corporate value improvement.
Establishing a Mechanism for Sustainable Growth Focused on and Inspired by Our People
Human Resources
Diversity and
Inclusion (D&I)
Ease of Work
Fulfillment of Work
ANA’s Way
Digital
Improved Engagement
Promoting ANA’s Way
Enhanced
Basic Quality
Enhanced
Productivity
Generating
Innovation
Improved
Customer
Satisfaction
Improved
Corporate
Value
Sustainable
Growth
We strive to instill an understanding of our Mission Statement
In 2019, we reorganized the ANA’s Day Training for all group
and Management Vision, developing and evolving ANA’s Way
employees, returning to our founding philosophy of hardship
as an ingrained part of our corporate culture. We also encour-
now, yet hope for the future and wakyo (close cooperation).
age organizational and human development on an ongoing
We also hold discussions for the sustainable growth of the
basis to manifest the ANA Group identity.
ANA Group.
Major Measures
ANA’s Day Training:
Passing Down the ANA Group Identity
This training program for all Group
employees aims to make employees
familiar with our founding philosophy
and the words of our founders. Here,
we pass on our shared, important
values, and help put ANA’s Way into
practice.
ANA TIMES:
A Group Newsletter Fostering Unity
This monthly newsletter is published online for
all employees.
The newsletter promotes action through
important management topics, the current
state of the ANA Group, and employee-
focused articles.
あ ん し ん 、 あ っ た か 、 あ か る く 元 気 ！
A N A G R O U P M A G A Z I N E
特 集
中期経営戦略を知る！
A N A グル ープ の 未 来
に 向 けて
2019
4
VOL.8
持ち帰りOK!
表紙の
ひとたちは誰！？
詳しくは裏表紙へ！
MONTHLY TOPICS
NEWS PICK UP!
My ANA Bookをつくろう！
HELLO 2020 PROJECT通信
アスリート対決
表紙のひとたち
Good Job Program:
Fostering a Culture of Gratitude and Respect
We promote the Good Job Program in which we share good practices
from each workplace companywide.
The program also communicates
mutual gratitude over the Group
intranet and via Good Job Cards, an
initiative that goes beyond company
and department borders.
A total of 600,000 cards were
issued in fiscal 2019.
ANA’s Way Survey:
A Regular Diagnosis of Employee Satisfaction
This survey is conducted yearly to increase employee satisfaction
and, in turn, customer satisfaction and corporate value. A total of
39,286 people across the 46 ANA Group companies responded to the
fiscal 2019 survey, representing a
response rate of 96.1%.
• Consider Diversity & Inclusion as the source of innovation and
value the diversity of our employees.
• Endeavor to create a workplace where each person can fully
demonstrate his or her strengths.
• Create an ANA Group where each person can work with spirit and
purpose, to generate unwavering trust and constant innovation.
Innovation
Establishing a Group D&I Promotion Department
In conjunction with our D&I Declaration in April 2015, we estab-
lished a dedicated organization within the Human Resources
Department to promote the active participation of diverse
human resources. This organization promotes environmental
improvement, fosters culture, and encourages changes in
paradigms. In April 2020, we established the new Group D&I
Promotion Department, aiming to strengthen our D&I promo-
tion function.
In addition to the diversity of attributes such as age, nation-
ality, gender, and disability, we respect diversity of viewpoints
and beliefs arising from values and experiences not physically
observable. We continue to strengthen our mechanism for
promoting D&I throughout the Group and in our culture to
leverage diversity as a strength that drives greater reform.
We will accelerate new value creation by helping employees
Group D&I Promotion Department Members
work with greater enthusiasm and fulfillment, generating inno-
vation and improving productivity.
Major Measures
Building a Foundation for
D&I Promotion:
The 5th D&I Forum
This annual one-day event brings together
around 200 key players in D&I promotion
across all group companies to further
promote understanding and encourage
action.
Ikuboss Initiative:
Internal Communication
from Top Management
Top management provides examples
through messages to Ikubosses and by
issuing their own internal Ikuboss
Declarations.
Work–Life Balance:
Supporting a Balance Between Work
and Childcare / Nursing Care
We hold seminars, provide e-learning
courses, distribute handbooks, and take
other actions to support balance between
work and childcare / nursing care.
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Business Foundations Supporting Corporate Value
Human Resources
Health Management
Encouraging Work-Style Reforms and Kaizen
The ANA Group announced the ANA Group Health Management
We encourage Quality of Life (QOL) and improved corporate
To promote D&I and health management, as well as to build an environment in which people can work with enthusiasm, it is essential
Declaration in April 2016. We believe that our employees are
value through employees who engage in their work in physical
that we transform the awareness and work styles of all employees.
the engine that drives sustainable growth together with society,
health, mental health, and passion.
The ANA Group strives to improve productivity, driven by the commitment of management. We use the time saved to transform
and that our employees are who embody the motto, Trustworthy,
In fiscal 2020, ANA HOLDINGS INC. was selected as a
operations with new ideas and promote the work–life balance of every employee.
Heartwarming, Energetic!.
Certified Health & Productivity Management Organization
The ANA Group has appointed a Chief Wellness Officer who
Recognition Program (White 500) Company for the fourth con-
is a director responsible for Group health management. We
secutive year. ANA AIRPORT SERVICES Co., Ltd. was selected
Encouraging Telework
We are creating a culture in which every employee can play an
also appoint Wellness Leaders at each Group company.
for the second consecutive year, and ANA Osaka Airport Co., Ltd.
active role, and in which organizations and individuals maxi-
Through this leadership, the ANA Group ensures that Group
was selected for the first time. Seven other Group companies
mize results. We are working to evolve toward flexible, diverse
employees, companies, and health insurance associations
were selected as Certified Health & Productivity Management
ways of working that are not limited to specific times or places.
work in unison for health management.
Organization Recognition Program companies, reflecting how
We implemented a telework system for office work in 2010,
the Group presses forward together in pursuit of initiatives.
Four Perspectives on ANA Group Health Management:
Developing an Environment Encouraging a Long Career in the ANA Group
The ANA Group is focused on the following four priority measures. We maintain and improve the physical and mental health of our
employees through regular situational monitoring and by analyzing / responding to positive impact and challenges.
Health Management Initiatives
1
• Create an environment for health management throughout
Disease Prevention Initiatives
2
• Enhance measures for each target employee
the group
Standardize health checkup
list and determination criteria
Establish health management
offices at each branch and
construct a health
management system
Strengthen cancer prevention
measures for all Group
employees
Adopt policies regarding
women-specific diseases
introducing virtual desktop environments. In January 2017,
we expanded the scope of places, eligible employees, and
number of work days related to telework. We continue to intro-
duce a variety of measures encouraging telework, including a
special hometown telework program we adopted in fiscal 2019.
As a result, we were able to transition smoothly to telework,
even during the COVID-19 pandemic. The situation has led to a
review of work styles and details from new perspectives.
Encouraging Kaizen
We are working to establish kaizen as a style of work within
the ANA Group. This process of continuous improvement is
designed to find and resolve problems in daily work, creating
room to breathe mentally and increase time for customers and
• Create a post-checkup follow-up cycle conducted by industrial
• Establish and monitor health management indicators across all
employees.
physicians
Group companies
Mental Health Initiatives
3
• Deploy mental health-related measures to all Group companies
Safety and Health Initiatives
4
• Develop safe, secure workplace environments
Educate
employees at
the workplace
and management
level
Deploy measures to prevent
occupational accidents
Establish a strong safety
and health management
system
• Conduct follow-ups by occupational health staff and activate
• Deploy cross-organizational educational activities driven by the
workplace communication to encourage prevention
activities of health and safety committees
Mental Health Initiatives
As the social environment changes and
causes rapid changes in the working
environment, healthy minds become an
even more important factor in the quality
of life and work. The ANA Group has
introduced measures in line with the four
types of mental health care described
in the Ministry of Health, Labour and
Welfare’s Guidelines for Maintaining and
Improving Workers’ Mental Health.
Care through External
Consultation Desks
Care through Occupational
Health Staff
Care by Line
Supervisors
Self-Care
Consultations through external specialists
Health consultations though industrial
physicians / nurses
Managers address mental health problems,
including workplace environment and active
communication improvements
Self-awareness through stress checks,
voluntary consultations
Remote conferencing using the latest newme communication avatar
Implementation
Structure
Promoter (Office /
Promoter (Office /
Department Manager)
Department Manager)
Bottom-Up
Kaizen Chief
Dedicated
Support
Workplace Members
We have implemented kaizen in ANA operations depart-
ments, our head office, and the Marketing & Sales Department.
We have also expanded these activities to overseas branches.
Nearly 3,000 initiatives were conducted to eliminate waste,
inconsistency, and overburden (muri, mura, muda) in our oper-
ations. Our employees are taking bold, voluntary steps to
We established an implementation structure for each group
create a comfortable office environment and an efficient work
company and department to eliminate waste, inconsistency,
structure.
and overburden (muri, mura, muda) hidden in work and work-
We will continue to integrate kaizen and innovation strategi-
places, as well as to promote kaizen activities. In addition to
cally to create new customer value and evolve toward smart
continuing an action-based approach of trying new methods
ways of working.
and improving old methods, we will continue to pursue human
resources education.
The Kaizen Award: A Forum for Lateral Deployment
of Good Practices
The Kaizen Award aims to provide a summary of kaizen activities for the year,
commend good practices, and deploy these practices laterally to the entire Group.
In fiscal 2019, overseas branch activities received commendations for superior
practices, which have been expanded as global activities. Superior practices were
shared from not only the front lines but also from administrative departments.
These ideas have also resulted in work-style reform.
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Implement stress checksProvide care through occupational health staffProvide care through external consultation desksBusiness Foundations Supporting Corporate Value
Unique ANA Group Initiatives
Built on a foundation of security and trust, “the wings within ourselves”
help to fulfill the hopes and dreams of an interconnected world.
The phrase, the wings within ourselves, from our Mission Statement represents the strong desire of each
employee to become wings, connecting people, goods, and emotions.
Even during the COVID-19 pandemic, we carry on, uplifted by the wings within ourselves and fulfilling our
mission as a public transportation provider. We move forward, creating unique and new actions based on
our Group code of conduct, ANA’s Way.
Wuhan to Haneda Charter Flight
On January 29, 2020, ANA operated a charter flight between Wuhan and Haneda for persons wishing to return to Japan from
Wuhan, China, which had been on lockdown due to the outbreak of COVID-19. In a short period of time, we prepared for the
flight and operated a total of five charter flights to help people without a means to return to Japan. Every Japanese person resid-
ing in China’s Hubei Province and wishing to return to Japan were able to return. In total, 828 Japanese citizens and their family
members were brought home safely on ANA flights.
On June 23, 2020, we became the first airline to receive a letter of appreciation from Foreign Minister Motegi for this initiative
to safeguard the lives and health of many people, including Japanese persons living abroad.
Support for Sewing
Medical Gowns
The spread of COVID-19 has led to an increasing need for
medical gowns and resulting inventory shortages in Japan. In
April 2020, in response to a request from the government and
the ANA Group’s desire to play a role in the safety of healthcare
workers, we recruited employee volunteers to help sew portions
of medical gowns, cut sleeve fabrics, and inspect end products.
Under the direction of Valley LLC, volunteers worked in a
hygiene-conscious environment at ANA Blue Base, the ANA
Group’s general training center. A total of 380 employees from
the Group contributed to producing gowns over 32 days.
In April 2020, we launched our gown project with participation by craftspersons
across Japan. From the moment we held our first online meeting, I could feel the
passion of each participant, and I was convinced this would be a successful
project. The cohesion among our members grew day by day, and on July 16, we
delivered our initial target of 100,000 gowns on time.
I always thought that working behind the scenes, no one on the front lines of
medical care would think about our efforts. However, I remember feeling an inde-
scribable happiness from the support we received from so many people. I was
also greatly pleased when we received a note of appreciation for our gown pro-
duction efforts from a medical professional onboard an ANA flight.
Though there are many tough days still ahead, I will remember the lessons
I learned from the ANA Group about what it means to be a professional.
Please visit the page linked to the right for more
information about this initiative.
https://www.anahd.co.jp/ana_news/en/2020/05/28/20200528-1.html
Hideki Tani
Valley LLC
President
76
A Boeing 767-300ER that transported returnees from Wuhan
Letter of appreciation presentation ceremony at the Ministry of Foreign Affairs
#ANAGroupWingsWithinOurselves
Project
Beginning in May 2020, the ANA Group reduced or suspended
numerous flights. At the same time, we implemented telework
and adopted a temporary leave program. Amid these circum-
stances, we launched the #ANAGroupWingsWithinOurselves
project in response to a question posed by an employee. The
At-Home Aviation Class video
question was what we could do for children and customers
content, the At-Home Aviation Class, featured ANA pilots
unable to travel by air and how could we help make time at
who presented interesting facts about our aircraft. This well-
home more meaningful?
received class offered fun, educational content in a quiz
The ANA Group uploaded videos and other content to our
format, other information about the work done by ANA pilots,
website and social media to offer greater familiarity with our
and answers to questions asked to our pilots.
aircraft and the ANA Group employees. Our first published
In addition, we have uploaded musical telework perfor-
mance videos performed by energetic volunteer employees,
videos expressing appreciation and encouragement for
healthcare workers, and more.
Even in the post-COVID-19 world, we will continue to offer
a variety of content to foster trust and emotional connections
with our airlines and the ANA Group in the daily lives of our
customers.
#ANAGroupWingsWithinOurselves
Special Website (In Japanese Only)
https://www.ana.co.jp/group/kokoro-no-tsubasa/
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Production of a video supporting medical professionals and other heroes
Business Foundations Supporting Corporate Value
Corporate Governance System
Mission Statement
Built on a foundation of
security and trust, “the wings
within ourselves” help to fulfill
the hopes and dreams of
an interconnected world.
The ANA Group aims to practice management that contributes to value
creation for our various stakeholders in accordance with our Mission
Statement and to promote sustainable growth and enhance corporate
value over the long term. To accomplish this goal, ANA HOLDINGS
INC. plays the lead role in Group management for overall policies and
goal-setting, pursuing transparent, fair, prompt, and effective decision-
making. For this purpose, we have built a corporate governance
system and work continuously to enhance governance within the
ANA Group.
Corporate Governance System
Appointment /
Dismissal
Appointment /
Dismissal
General Meeting of Shareholders
Accounting
Auditors
Account
auditing
Reporting
Personnel
Advisory
Committee
Remuneration
Advisory
Committee
Appointment / Dismissal
Board of Directors
Advice
Appointment /
Dismissal
Supervision
Proposal / Report
Proposal / Report
President & Chief
Executive Officer
Group Management
Committee
Reporting
Overall management
ANA HOLDINGS Corporate Governance System
Holding Company Structure
The ANA Group has adopted a holding
company structure to remain competitive
in any challenging business environment.
Each Group company is guided by
experienced and specialized personnel
who are delegated authority to operate
their respective businesses.
Company with Audit &
Supervisory Board Members
The board of directors and members of
the Audit & Supervisory Board oversee
and audit the execution of duties by
directors. The Group strengthens the
supervisory function of the board of
directors by appointing outside directors.
We also strengthen the audit function
of members of the Audit & Supervisory
Board by appointing full-time outside
members.
Corporate Executive
Officer System
The Group has adopted a corporate
executive officer system under which
management and executive functions are
separated to promote efficient decision-
making and to clarify responsibilities and
authority in the execution of duties. Under
this system, directors supervise manage-
ment decision-making and the execution
of duties, while corporate executive
officers conduct day-to-day business.
Board of Directors
Group Management Committee
Term of Office
Number of Meetings*
Number of Meetings*
1 Year
(also applies to outside
directors)
13
54
Number of Board
Members
Directors 10
(including 3 independent
outside directors and 1
female director)
Audit & Supervisory
Board members
5
The board of directors of ANA HOLDINGS INC. sets groupwide man-
agement policies and goals, while also overseeing the management
and business execution of each Group company. The board of directors
is chaired by the chairman of the board. All directors, including outside
directors, and all members of the Audit & Supervisory Board, including
outside members, participate in board meetings.
Chaired by the president and CEO, the Group Management Committee
consists of full-time directors, full-time Audit & Supervisory Board mem-
bers, and others, and functions as an organization that complements
the board of directors. The role of the committee is to provide more
timely and detailed discussions of management matters.
Audit & Supervisory
Board
Auditing
Reporting
Audit &
Supervisory
Board Members
Office
Group ESG Management Promotion Committee
Advisory Committees
Internal Audit Division
Instruction / Supervision
Personnel Advisory Committee
Remuneration Advisory Committee
Chief ESG Promotion Officer
Director in charge of Corporate Sustainability
Internal auditing
Instruction / Supervision
Secretariat
Corporate Sustainability
General Administration
Legal & Insurance
Group Companies
and Divisions
ESG Promotion Officers / Leaders
Responsible for ESG promotion in each company / department
Chairman
Number of Members
Number of Meetings*
Chairman
Number of Members
Number of Meetings*
Ado Yamamoto
4
5
Ado Yamamoto
6
3
The Personnel Advisory Committee discusses the selection of director
candidates and the dismissal of directors, and reports to the board of
directors. The Personnel Advisory Committee, chaired by an outside
director, consists of three outside directors and one inside director to
ensure transparency and fairness in the selection process of directors.
The Remuneration Advisory Committee consists of a majority of outside
directors, outside Audit & Supervisory Board members, and outside
experts to ensure fair and transparent process of decision-making
related to director remuneration. The committee develops the director
remuneration system and director remuneration standards based on
surveys of director remuneration at other companies provided by out-
side experts and reports to the board of directors.
Audit & Supervisory Board
Number of Members
Term of Office
Number of Meetings*
Audit & Supervisory
Board members
5
(including 3 independent
outside Audit & Supervisory
Board members)
4 Years
(also applies to outside
Audit & Supervisory board
members)
13
* The number of meetings held in fiscal 2019.
To ensure healthy development and to earn greater levels of trust from
society through audits, we appoint five individuals to serve as Audit &
Supervisory Board members who possess extensive experience and
the advanced expertise required to conduct audits.
The Audit & Supervisory Board strengthens the collaboration with
the accounting auditors and the Internal Audit Division. The board also
exchanges opinions with outside directors on a regular basis.
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79
Business Foundations Supporting Corporate Value
Management Members: Directors
As of July 31, 2020
1 Shinichiro Ito
Chairman of the Board
Chairman of the Board of Directors
Major concurrent position
Outside Director, Mitsui Fudosan Co., Ltd.
2004: Executive Vice President
2006: Senior Executive
Vice President
2007: Senior Executive
Vice President,
Representative Director
2009: President & Chief
Executive Officer,
Representative Director
2015: Chairman of the
Board of Directors,
Representative Director
2017: Chairman of the Board
(present)
2 Shinya Katanozaka
President & Chief Executive Officer,
Representative Director
Chairman of the ANA Group Management Committee
Head of Group ESG Management
Promotion Committee
In charge of the Internal Audit Division
Chairman of ALL NIPPON AIRWAYS CO., LTD.
Major concurrent positions
Vice Chair, Keidanren (Japan Business Federation)
Director (Outside Director) of Tokio Marine Holdings, inc.
2011: Executive Vice President
2012: Senior Executive Vice
President
2013: Senior Executive
Vice President,
Representative Director
2015: President & Chief
Executive Officer,
Representative Director
(present)
3 Yutaka Ito
Senior Executive Vice President,
Representative Director
Chairman of Group ESG Management Promotion
Committee
In charge of Legal & Insurance,
General Administration, Group Procurement and
Corporate Sustainability
2019: Member of the
Board of Directors
2020: Senior Executive Vice
President, Representative
Director (present)
7
6
5
8
9
10
3
1
2
4
80
4 Yuji Hirako
Member of the Board of Directors
President & Chief Executive Officer,
ALL NIPPON AIRWAYS CO., LTD.
Major concurrent position
Chairman of All Japan Air Transport and Service
Association Co., Ltd.
5 Naoto Takada
8 Ado Yamamoto*
2015: Member of the Board of
Directors (present)
Outside Director
2013: Outside Director (present)
Major concurrent positions
Chairman and Representative Director,
Nagoya Railroad Co., Ltd.
Outside Director, Yahagi Construction Co., Ltd.
Chairman, Nagoya Chamber of Commerce & Industry
Executive Vice President
In charge of Corporate Communications and Branding,
Executive Secretariat, Human Resources Strategy
2017: Member of the Board of
Directors (present)
9 Izumi Kobayashi*
Outside Director
2013: Outside Director (present)
6 Ichiro Fukuzawa
Executive Vice President,
Chief Financial Officer
2019: Member of the Board of
Directors (present)
Major concurrent positions
Outside Director, Mitsui & Co., Ltd.
Outside Director, Mizuho Financial Group, Inc.
Outside Director, OMRON Corporation
7 Koji Shibata
Executive Vice President
In charge of Corporate Strategy,
Group IT Management, Facilities Planning,
Digital Design Lab, Group D&I Promotion,
Okinawa Region
10 Eijiro Katsu*
Outside Director
2020: Outside Director (present)
2020: Member of the Board of
Directors (present)
Major concurrent position
President and Representative Director and COO of
Internet Initiative Japan Inc.
* Independent directors
81
Business Foundations Supporting Corporate Value
Appointment of Directors
Approach to Selection of Director Candidates
Internal
Directors
Outside
Directors
The Company selects directors from among candidates who have impeccable character, extensive experience,
broad insight, and advanced expertise. Ideal candidates have the potential to contribute to improved policy-making,
decision-making, and oversight befitting a global airline group with widespread businesses centered on the Air
Transportation Business. Our selection is made without regard to gender, nationality, or other such factors, and
falls within the scope of the Civil Aeronautics Act and other relevant laws.
The Group selects a multiple number of outside directors who possess practical viewpoints based on extensive
experience in corporate management, or who possess unique global or regional viewpoints. These individuals
must be independent from the Company, and able to offer objective and expert opinions based on a sophisticated
knowledge of social and economic trends.
Reasons for Appointment of Directors
• • The following director candidates were selected based on the judgment that their abundant experience, performance, and insight
would be crucial to overcoming the management crisis caused by the current COVID-19 pandemic and for achieving sustainable
increases in Group corporate value.
• • These director candidates assumed their positions after being appointed at the 75th Ordinary General Meeting of Shareholders.
Reasons for Appointment
Shinichiro Ito
Chairman of the Board,
Chairman of the Board
of Directors
Shinichiro Ito has extensive experience in sales, human resources, and other disciplines. Mr. Ito was appointed
director of ALL NIPPON AIRWAYS CO., LTD. in June 2003 and was instrumental in overcoming the management
crisis caused by the SARS outbreak and the Iraq war. After being appointed president & CEO in April 2009, he
guided the ANA Group through the challenging business environment left in the wake of the Lehman Shock,
introducing management reforms and expanding the Group’s revenue base to support a successful perfor-
mance recovery. Since April 2015, he has served as chairman of the board of directors, working to strengthen the
functions of the board by promoting proceedings that encourage free, open-minded, and constructive discus-
sions and exchange of opinions.
Shinya Katanozaka
President & Chief
Executive Officer,
Representative Director
Shinya Katanozaka has extensive experience in sales, human resources, corporate planning, and other
disciplines. He was appointed representative director and president & CEO of ANA HOLDINGS INC. in April
2015. Under his uncompromising stance on safety, he has established a stronger foundation for Group busi-
ness management. At the same time, the Group has implemented a growth strategy, achieving a profit growth
for four consecutive years. At board meetings, he strives to bolster decision-making and supervisory functions.
He was also instrumental in overcoming a series of large-scale management crises caused by the SARS outbreak,
the Lehman Shock, and other factors. Mr. Katanozaka is spearheading efforts to implement emergency
measures against the COVID-19 pandemic.
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Yutaka Ito
Senior Executive
Vice President,
Representative Director
Yutaka Ito has extensive experience in legal, finance, and other disciplines. Mr. Ito studied and has been
stationed in Europe and the United States for many years throughout his career. Since April 2013, he has
served as representative of the European operations of ALL NIPPON AIRWAYS CO., LTD. In April 2016, he was
appointed director and has endeavored to improve ANA competitiveness by raising customer satisfaction. After
being appointed director of ANA HOLDINGS INC. in June 2019, he has been engaged in CSR activities and
risk management, striving to promote a greater understanding of our businesses and promote ESG management
by actively communicating with investors. After being appointed senior executive vice president in April 2020,
he has contributed to bolstering decision-making and supervisory functions of the board.
Professional Overseas Experience: Europe and the United States
Yuji Hirako
Member of the
Board of Directors
(President & Chief
Executive Officer of
ALL NIPPON AIRWAYS
CO., LTD.)
Yuji Hirako has extensive experience in sales, finance, and other disciplines. In April 2012, he was appointed
representative for businesses across the United States. In June 2015, he was appointed director, overseeing
financial strategies to enhance corporate value. In April 2017, he was appointed president & CEO of ALL
NIPPON AIRWAYS CO., LTD., a core subsidiary of the ANA Group. Since that time, he has guided the company
with an uncompromising stance on safety and a focus on global business by leveraging his extensive knowledge
of the International Business, leading the company toward becoming the world’s leading airline.
Professional Overseas Experience: the United States
Naoto Takada
Executive Vice
President,
Member of the Board
Naoto Takada has extensive experience in labor relations, industrial policy, public relations, and other disciplines.
Since being appointed director in June 2017, he has focused on Group public relations, CSR activities, risk
management, and active communications with individual investors. Through these duties, he has endeavored
to create a wider brand awareness of the ANA Group. Since April 2019, he has been in charge of ANA Group
human resources development.
Ichiro Fukuzawa
Executive Vice
President,
Member of the Board
Ichiro Fukuzawa has extensive experience in finance and investor relations. Since April 2017, he has served
as an executive officer, and since June 2019, as director and chief financial officer for ANA HOLDINGS INC.
He has implemented financial strategies, including efficient capital restructuring and securing a stable financial
base for the Group. In addition to active engagement with institutional investors in Japan and overseas,
he assists the president appropriately and is actively engaged in ESG. This includes playing a central role
in the Group being the first airline in the world to issue Green and Social Bonds.
Koji Shibata
Executive Vice
President,
Member of the Board
Koji Shibata has extensive experience in sales, international alliances, and other disciplines. Since April 2012,
he has served as an executive officer and representative for ANA European operations. Since April 2013, he
has been engaged in forming equity alliances with foreign carriers in Asia. Since April 2017, he has been in
charge of planning and implementation of Group management strategies to promote Group management.
Professional Overseas Experience: Europe
Ado Yamamoto
Independent Outside
Director
Ado Yamamoto has a wealth of experience and expertise in transportation industry management. At meetings
of the board of directors, he offers the benefit of his background to provide opinions and advice about Group
management strategy, risk management, organizational management, investment management, and the
promotion of safety measures.
He was appointed member of the Remuneration Advisory Committee and the Personnel Advisory Committee
in June 2016. He was subsequently named chairman of the Remuneration Advisory Committee and the Personnel
Advisory Committee in July 2020.
Izumi Kobayashi
Independent Outside
Director
Izumi Kobayashi has a wealth of experience and expertise as a representative for private financial institutions
and international development and finance institutions, as well as an outside director for other operating com-
panies. At meetings of the board of directors, she offers the benefit of her background to provide opinions and
advice from a global perspective on Group management strategy, risk management, investment management,
corporate governance, and organizational management.
She was appointed member of the Remuneration Advisory Committee in July 2013 and member of the
Personnel Advisory Committee in June 2016.
Eijiro Katsu
Independent Outside
Director
Eijiro Katsu served as administrative vice minister and in other major positions in the Ministry of Finance. He
has a wealth of experience and expertise as an administrative officer. In June 2013, he was appointed president
and representative director of Internet Initiative Japan Inc. He has a wealth of experience in corporate management
and extensive knowledge of innovation, including digital transformation.
Since April 2014, he has served as a member of our Management Advisory Council and has a wealth of
knowledge regarding business conditions in the airline industry and the ANA Group businesses.
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Business Foundations Supporting Corporate Value
Management Members:
Audit & Supervisory Board Members
As of July 31, 2020
Fiscal 2019 Initiatives
Major Agenda Items for the Board of Directors (Fiscal 2019)
1. Items Related to General Meetings of Shareholders
8. Items Related to Disposal and Receipt of Important
• Proposals to be submitted to General Meetings of
Assets
Shareholders for approval
• Aircraft procurement, sales, and leases
2. Items Related to Directors, Corporate Executive Officers,
9. Investment-Related Matters
the Board of Directors, etc.
10. Items Related to Major Debts
• Selection of director candidates and corporate
executive officers
• Financing plans
• Bond issuances
• Results of the evaluation of the effectiveness of the
11. Items Related to Corporate Governance
Board of Directors
• Policies for officer remuneration
3. Items Related to Financial Results
• Internal audit plans and results reports
• Overview of the proceedings of the Group CSR /
Risk management / Compliance Committee*
• Financial results and earnings forecasts
• Valuation of cross-shareholdings
• Reports from operating companies
• Evaluations in the capital markets
12. Other Items
• Avatar business
4. Items Related to General Meetings of Shareholders
• Customer satisfaction survey results
• Capital stock, etc.
• ANA’s Way Survey (Employee awareness survey)
5. Items Related to Organizational Restructuring
results
6. Items Related to Personnel and Organizations
• Personnel Advisory Committee report
7. Items Related to the Company and Important
• Remuneration Advisory Committee report
Subsidiaries
• Impact of the COVID-19 pandemic
• ANA Group Corporate Strategy update
• ANA Group ESG Commitments
• ANA brand business plan
• ANA digital transformation initiatives
* The Group CSR / Risk Management / Compliance Committee was renamed the
Group ESG Management Promotion Committee in fiscal 2020.
Changes in Board Meeting Length
(Annual Transition)
Since we began encouraging more substantial discussions in
Discussion by Agenda Topic (Fiscal 2019)
We encourage active discussions of corporate strategy at
board meetings, selecting major related topics about which to
Toyoyuki Nagamine
Audit & Supervisory Board Member
Kiyoshi Tonomoto
Audit & Supervisory Board Member
Nozomu Kano*
Outside Audit & Supervisory
Board Member
Shingo Matsuo*
Outside Audit & Supervisory
Board Member
Eiji Ogawa*
Outside Audit & Supervisory
Board Member
* Independent Audit & Supervisory Board members
Approach to Selection of Candidates for Audit & Supervisory Board Member
Audit &
Supervisory
Board
Members
To ensure healthy development and to earn greater levels of trust from society through audits, the Company
appoints individuals to Audit & Supervisory Board members from both inside and outside the Company who pos-
sess extensive experience and the advanced expertise required to conduct audits. Our selections do not consider
gender, nationality, or other factors. The Company appoints at least one individual who possesses appropriate levels
of knowledge related to finance and accounting.
Outside Audit & Supervisory Board members are selected from among candidates who have advanced levels of
knowledge in a variety of areas and who are independent of the ANA Group. These individuals include candidates
who are well-versed in corporate management, candidates who have sophisticated knowledge of social and eco-
nomic trends, and candidates who have advanced knowledge in finance, accounting, or legal matters.
board meetings, the annual total time devoted to board meet-
exchange opinions from medium- to long-term perspectives.
ings has increased over the last several years.
Reasons for Appointment of Audit & Supervisory Board Members
Mr. Toyoyuki Nagamine and Mr. Shingo Matuo ware elected at the 75th General Meeting of Shareholders.
Reasons for Appointment
Toyoyuki Nagamine
Audit & Supervisory
Board Member
Shingo Matsuo
Outside
Audit & Supervisory
Board Member
A
u
d
i
t
i
&
S
u
p
e
r
v
s
o
r
y
B
o
a
r
d
M
e
m
b
e
r
s
Toyoyuki Nagamine has extensive experience in flight operations, labor relations, corporate planning, and other
disciplines. He has a wealth of knowledge and experience of Group management, including growth in the
Group’s revenue domains and in implementing Group management strategies. Aiming for sustainable growth
in the group corporate value, we have nominated Mr. Nagamine as an Audit & Supervisory Board member. This
nomination is based on his wealth of experience and expertise in the airline industry, as well as our confidence
in his ability to strengthen the audit function within the Group.
Shingo Matsuo has abundant experience and deep insight developed as a corporate manager in highly public
businesses, which is why he has been appointed outside Audit & Supervisory Board member. At meetings of
the Audit & Supervisory Board and the board of directors, he provides the benefit of his background to offer
advice and opinions concerning Group operation focused on safety as a top priority. He also provides insight
into management strategies to encourage discussion of management issues. Aiming for sustainable growth in
Group corporate value, we have again nominated Mr. Matsuo as outside Audit & Supervisory Board member to
reinforce the supervisory function of the board of directors.
Mr. Kiyoshi Tonomoto was elected at the 72nd General Meeting of Shareholders.
Mr. Eiji Ogawa was elected at the 73rd General Meeting of Shareholders.
Mr. Nozomu Kano was elected at the 74th General Meeting of Shareholders.
84
27.7 Hours
26.4
Matters Related to General Meetings of
Shareholders, Board of Directors, etc.
6.2%
Other
2.3%
21.4
22.8
2016
2017
2018
2019
(FY)
Matters Related to
Financial Results
Matters Related to
Fleet Plan,
Investments,
Asset Sales, etc.
15.5%
22.3%
53.8%
Important
Matters,
Including
Corporate
Strategy and
Business Plans
85
Business Foundations Supporting Corporate Value
Effectiveness of the Board of Directors
The ANA Group continues initiatives to improve the functions of the board of directors. We conduct a questionnaire survey for all direc-
tors and Audit & Supervisory Board members, and we individually interview the chairman of the board, president & CEO, senior execu-
tive vice presidents, outside directors, and outside Audit & Supervisory Board members. We provide a detailed analysis of the survey
and interview results and present a report to the board of directors.
We strive to enhance further effectiveness of the board of directors by improving the PDCA cycle through operational changes
toward new solutions.
Fiscal 2018
Fiscal 2019
Act / Plan
Define Issues
Do
Improvement Initiatives
Check
Evaluate
Act / Plan
Identify Issues
Fiscal 2020
Do
Improvement Initiatives
i
T
m
e
Make operational changes to provide
sufficient time for discussion
Extended board meeting time from two hours
to three
Board meeting length is appropriate in
general. Written reports, etc., resulted
in more effective use of time
Continue three-hour board meetings as a rule
S
h
a
r
i
n
g
I
f
n
o
r
m
a
t
i
o
n
Insufficient understanding at times due
to lack of information sharing related
to deliberations of internal meetings
Included a summary of internal meeting
discussions (pro and con opinions) in board
meeting documents
Meetings continue to improve with
greater numbers of reports regarding
internal meeting discussions
More information has been provided regarding internal discussions;
still room for improvement
Provide more detailed notes summarizing internal discussions in
board meeting materials; strengthen coordination with internal
committees
More time is required to discuss
important management issues,
including the ANA Group Corporate
Strategy, separately from board
meetings
Held separate meetings to discuss
ANA Group Corporate Strategy
Improvement Example (1)
Held meetings for outside directors to explain
other management issues
Improvement Example (2)
Although deeper explanations of
the ANA Group Corporate Strategy
were provided, more time to discuss
medium- to long-term issues, industry
trends, and overseas airlines would
be better
More opportunities to discuss
correlations with the Air Transportation
Business separate from board meetings
would help to gain a deeper
understanding
Deeper discussions are required for explanations of medium- and
long-term management issues and Group companies
Provide more time to discuss the medium- to long-term
management issues at board meetings, and hold a special meeting
for reports and Q&A separately from board meetings
Provide an additional meeting where the respective officers in charge
explain the management issues of ANA and a regular meeting
where major Group companies present the management issues
of their companies
Hold meetings solely for outside director discussions
Establish a new format of meeting where the financial statement
auditor and outside directors hold discussions
Investment project reviews should be
stronger to ensure more appropriate
management resource allocation for
greater effectiveness
Conducted reviews of investment projects
since the ANA Group transitioned to a holding
company structure
Reviews of investment projects should
continue to allow more visibility of
investment cost effectiveness
Continue conducting reviews
More efforts are required in town meet-
ing* operation for greater effectiveness
Made changes to management of town
meetings with Flight Operation Center (FOC)
members to enhance the effectiveness
P88–89 Town Meetings with Frontline
Employees
Town meetings with FOC members
were very informative. Continue town
meetings with frontline employees in
various businesses
Visits to frontline office and town meetings with employees have
been well-received; continue to improve meeting quality
Continue to conduct hearings with outside directors about their
interests and aspirations and conduct visits to frontline offices
i
D
s
c
u
s
s
o
n
D
e
t
a
i
i
l
s
A
c
t
i
v
i
t
i
e
s
A
d
d
i
t
i
o
n
a
l
* Dialogue between officers and employees
Improvement Example (1)
Held meetings for outside directors to
discuss the ANA Group Corporate Strategy
Outside directors are not provided with sufficient time to
discuss the ANA Group Corporate Strategy at board
meetings alone. We held meetings separately from
board meetings in which the ANA HOLDINGS represen-
tative director, the ANA president & CEO, officers in
charge of corporate planning, and outside directors
discussed the ANA Group Corporate Strategy.
Opinions Discussed
• Time spent on business in Europe provides a real sense that climate change is
a very hot topic there. We must also take environmental issues more seriously.
• What is the ideal business model for ANA, which operates in a small country such
as Japan, compared to airlines in the United States and China operating over a
vast land area? What measures should ANA take toward this ideal?
• The cargo business is greatly impacted by economic trends. Can we grow it into
a core business of our portfolio with our current understanding that cargo is an
accessory to the passenger service?
• Global risks are likely to increase in the future. We must prepare for the continued
rise of populism and nationalism, leading to gradual restrictions on the movement
of people and goods.
Improvement Example (2)
Held meetings for outside directors to discuss the
avatar business
We established avatarin Inc. in April 2020 to create new businesses
and resolve social issues. We held a meeting separately from board
meetings for outside directors to provide deeper explanations of our
avatar business and solicit opinions from various perspectives. At the
meeting, outside directors learned the details of the avatar business
and received a demonstration of the remote-controlled robot newme.
Outside directors discussed the avatar business after the presentation
and demonstration.
Major Topics Covered by the Board
Effectiveness Survey
(1) The performance of board functions
(decision-making, supervision of business execution)
(2) Response to issues identified in the prior year’s survey
(3) Management of board meetings
i.
Discuss board deliberations, including dissenting opinions,
at other internal meetings
ii. Provide balance among agenda item explanations,
questions and answers, and time for discussions
iii. Content (time, quality) for explanations to outside directors
prior to meetings
iv. Materials (quantity, quality) handed out during board
meetings
86
87
Business Foundations Supporting Corporate Value
Effectiveness of the Board of Directors
Town Meetings with Frontline Employees
Background
Following the principles of Japan’s Corporate Governance Code, we conduct a twice-yearly survey (ANA’s Way Survey) to determine
whether ANA Group employees understand and comply with ANA’s Way, our Group code of conduct. The survey results revealed the
need to encourage further communications between management and employees. Also, outside directors have requested to meet and
talk with frontline employees to deepen an understanding of the Group’s business and corporate culture as a whole. Based on these
requests, we have held town meetings between outside directors and frontline employees since fiscal 2018.
Town meetings were held with section managers at the ANA Engineering & Maintenance Center and maintenance departments within
Group companies during fiscal 2018. In 2019, we conducted similar interactions with members of the Flight Operation Center (FOC).
2019
Town meetings with members of the Flight Operation Center (FOC)
Process
Outside directors selected
from several topics to discuss
with the FOC
Documents related to the
selected topics were pro-
vided to the outside direc-
tors beforehand
Six outside directors and six FOC
employees were divided into two
groups for active discussions.
1. Consistent Training Programs for Flight Crew Members
QWhat are the issues in providing consistent training for skilled flight crew members?
A strong mentality to express their own
opinions is a must.
Young people tend to try to judge other people’s feelings and
worry about what other people think. Worrying too much about
what other people think becomes a hindrance in making
decisions when decisiveness is required.
A captain must always exercise appropriate
judgment.
Advanced technological innovation of aircraft allows the cap-
tain to concentrate more on management and communication
in the cockpit, rather than solely on aircraft operations. The
issue is how to improve judgment through everyday operations.
How do we conduct our business to develop
pilots over the long term?
Approximately 100 pilots were hired when our generation
joined the Company (class of 1992–1993). However, every
time the economy stalled, we reduced recruitment and post-
poned captain promotion training. Fluctuations in recruitment
may be unavoidable over the short term. However, this vari-
ance certainly impacts the consistency of flight crew training
over the medium and long term.
Flight crew members over 65 years should be
allowed to continue to work if they are willing
and able.
The ANA retirement age is 60 years (which can be extended to
65 years). However, flight crew members are allowed to con-
tinue to work until 68 years based on Japanese government
regulations. The qualification of flight crew members can be
confirmed by a health check and skills assessment. We have
seen flight crew members over 65 years who have left to work
at other airlines.
2. Measures to Address Alcohol Use by Flight Crew
ANA has experienced a series of problems involving
alcohol use by flight crew. Why couldn’t the Company prevent these issues?
What do you think about measures to eliminate alcohol-related issues?
Q
We must improve communications between
captains and first officers.
We must strive to improve human relations and
a sense of belonging to ANA.
The captain concentrates on safety during a flight. The
captain does not have much time to provide detailed
instructions or discuss their experiences with the first offi-
cer. The response to alcohol issues is becoming stricter.
Senior members have passed on their experience and
skills to junior members in their spare time after flight ser-
vice. However, such a culture is on the decline recently.
The younger generation does not seem to like close human relations.
However, we are proud that we have grown together, exchanging frank
opinions with each other, regardless of the relationship between senior
and junior ranks. A lack of dialogue with others will result in less rejec-
tion and possibly greater personal comfort. However, it is also true that
receiving honest feedback can lead to personal growth. We expect
management to take the lead in systematically reducing the sense of
isolation and communication gaps.
Do you think irregular work patterns and different crew composition for every flight might hamper
organizational functionality? Could it be that an organizational structure that leaves each person their
own decisions has something to do with alcohol issues?
Q
The FOC maintains an atmo-
sphere in which everyone can
express their opinions freely.
Given the nature of the work, not everyone
receives instructions from their superiors
every day. Each person is responsible for
their own duties on each flight. An organi-
zation that supports this culture should not
be afraid to encourage frank discussions
with superiors or senior officers.
We must strengthen personal
communications.
We send information regarding alcohol
issues via email quite frequently. We also
conducted at least one interview with every
pilot, performed by a superior. However,
this approach has not been completely
sufficient, and we believe we must engage
in deeper communications.
Given the nature of our work,
providing certain discretion to
each individual serves to benefit
organizational operations.
We admit that we had issues in managing
such an extremely limited number of
individuals effectively. We must consider
an organizational approach that
addresses the issue fully.
Outside Director Comments
We were glad to hear the opinions of captains and other flight crew
members with whom we do not have direct contact. Hopefully, these
kinds of opportunities will be provided again in the future.
Organization
A captain is independent and has the ultimate authority on
a flight. He or she is not so much a member of an organization
per se.
Communications
A captain works in a lonely environment. From an organizational
operations perspective, it is important that captains create
opportunities to talk with junior officers and establish an
environment to provide sufficient guidance.
Skills
We must create a system to enhance communication.
This includes an environment that encourages the improvement
of skills among flight crew members.
Retirement Age
Flight crew members are allowed to work until 68 years of
age, as long as they have the and ability. ANA should take a
close look at extending retirement age.
Board Meeting Comments
Captains serving as managers have opportunities
to communicate with ANA management. However,
other captains do not have sufficient opportunities.
We recognize that we have various issues to over-
come in the consistent training of flight crew members.
Future Direction
We have received opinions from our outside directors
based on their broad perspectives. Meanwhile,
town meetings have provided outside directors with
a detailed understanding of Group businesses,
which has further reenergized our board meetings.
We will continue to provide opportunities for town
meetings with frontline employees across a broader
range of our businesses.
88
Town Meeting (November 2019)
89
Business Foundations Supporting Corporate Value
Director and Audit & Supervisory Board Member
Remuneration
1. Basic Policies for Director Remuneration
The basic policies for director remuneration are as follows.
remuneration ranges from 0.0 to 1.0 times according to the
degree of achievement for annual performance targets.
• Ensure the transparency, fairness, and objectivity of remu-
a. Bonuses
neration and establish a remuneration level worthy of his / her
We use net income, safety, and customer satisfaction as
roles and responsibilities
indicators that reflect the performance and substance for a
• Create a system that can reflect the contributions of individual
single fiscal year. The Remuneration Advisory Committee and
directors by introducing performance-linked remuneration
combining a diverse range of indicators to clarify roles and
responsibilities for company results.
the board of directors have previously determined the target
values for each indicator and a table for corresponding pay-
ment levels. This table determines payment amounts based
• Establish a remuneration system that achieves our social
on the performance on each indicator.
responsibilities as a company, while allowing the Company to
b. Stock options
share profits with shareholders through raising medium- to
We use return on equity (ROE), return on assets (ROA), and
long-term corporate value.
2. Procedures for Determining Remuneration
The board of directors decides director remuneration, taking into
operating income margin, etc., as indicators for improved
corporate value over the medium to long term and sustainable
growth. The amount of payment is determined through a
combination of payment levels, determined by the Remuneration
account reports by the Remuneration Advisory Committee. The
Advisory Committee and the board of directors, and the
total amount of director remuneration shall be within the scope
of the amount approved at the Ordinary General Meeting of
respective indicators.
(2) Outside directors
Shareholders.
Remuneration for outside directors consists of fixed compensation
(monthly compensation) without a performance-linked portion.
3. Remuneration Advisory Committee
See P.79
This compensation encourages outside directors to exercise
4. Remuneration System
(1) Internal directors
their supervisory functions from an independent standpoint.
(3) Audit & Supervisory Board members
Remuneration for both inside and outside Audit & Supervisory
In addition to a fixed basic remuneration, remuneration for directors
Board members consists of fixed compensation (monthly com-
includes an annual variable performance-linked bonus and long-
pensation) without a performance-linked portion. This compen-
term incentive stock option plan as a means of providing healthy
sation encourages those members to exercise their supervisory
incentives for pursuing sustainable growth for the Company.
functions from an independent standpoint.
The ratio of fixed basic remuneration and bonus / stock options
Remuneration levels for members of the Audit & Supervisory
for total remuneration is 1:0.67 fixed to variable if annual perfor-
Board are determined in line with remuneration at other compa-
mance targets have been accomplished. The ratio of variable
nies and in consultation with outside experts.
Conceptual Diagram for the Officer Remuneration System
Ratio
Fixed
1
Variable
0.67*1
Remuneration
(1) Basic remuneration
(2) Bonus
(short-term performance-linked)
(3) Stock options
(long-term incentive)
P
a
y
m
e
n
t
c
r
i
t
e
r
i
a
Internal directors
Payment according to title, etc.
Measure for fiscal year
results according to
various criteria
Net Income
Safety
Evaluate contributions to
corporate value over the
medium to long term
Return on Equity (ROE)
Return on Assets (ROA)
Customer Satisfaction
Operating Income Margin
Outside directors Uniform payment for all members
Audit &
Supervisory
Board members
Payment according to status as
full-time or part-time
—
—
—
—
Remuneration limits
Annual total for
(1) and (2) is
limited to a maximum
¥960 million*2
Per resolution at the 66th Ordinary
General Meeting of Shareholders,
held June 20, 2011
Annual maximum
of ¥180 million
Per resolution at the 74th Ordinary
General Meeting of Shareholders,
held June 21, 2019
Payment method
Monthly (cash)
Annually (cash)
Annually
*1 Range from 0.0 to 1.0 times according to the degree of achievement for annual performance targets.
*2 Stock options referenced in (3) is paid according to the stock option plan adopted per resolution of the 70th Ordinary General Meeting of Shareholders, held June 29, 2015. This amount is
separate from the remuneration limit amount.
Major Indicator Targets and Results in FY2019 (Reference)
Original Fiscal Year
Targets (Consolidated)
Results
Net Income
¥108.0 billion
¥27.6 billion
Return on Equity (ROE)
Return on Assets (ROA)
Operating Income Margin
9.5%
6.2%
7.7%
2.6%
2.4%
3.1%
We set internal targets for Safety and
Customer Satisfaction , in addition
to those indicated at the left. The results
based on these targets are reflected in
the evaluation.
FY2019 Director and Audit & Supervisory Board Member Remuneration
Segment
Directors
(Outside directors)
Audit & Supervisory
Board members
(Outside Audit & Supervisory
Board members)
Total
Number of
persons eligible
Total amount of
remuneration, etc.
(¥ millions)
Total amount by type (remuneration, etc.) (¥ millions)
Basic remuneration
Bonuses
Stock options
10
(3)
6
(4)
16
323
(44)
137
(65)
460
313
(44)
137
(65)
450
—
(—)
—
—
—
10
(—)
—
(—)
10
Notes:
1. The table above includes one outside director who resigned as of the end of the 74th Ordinary General Meeting of Shareholders, held June 21, 2019.
2. The amounts listed above are rounded down to the nearest million yen.
Cross-Shareholdings
We believe that it is essential to maintain and strengthen
between the effectiveness of an investment in a stock versus
collaborative relationships with our business partners for
the capital costs of the Group. If, as a result of these evalua-
further growth and development of Group businesses. The
tions, we determine that the price of a stock will continue to
ANA Group, consisting mainly of our Air Transportation
be low for a certain period of time and further will not contribute
Business, engages in cross-shareholdings when we deem
to sustainable growth over the medium to long term, we will
such holdings to contribute to improved corporate value over
reduce our holdings in said stock.
the medium to long term from the viewpoint of continuing
As a result of a comprehensive review of the cross-share-
smooth business, maintaining business alliances, and grow-
holdings owned by the Group, we have determined that we
ing profits through strengthening business relationships.
do not own cross-shareholdings that should be subject to
Every year, the board of directors conducts a comprehen-
reduction.
sive review of individual cross-shareholdings. The board
In addition, the exercise of voting rights associated with
evaluates the significance of holdings and the benefits and
cross-shareholdings will be judged based on the results of
risks associated. To verify the economic rationality of cross-
dialogue with the company in question after examining the
shareholdings, we conduct a quantitative and multifaceted
medium- to long-term improvement of the corporate value
evaluation, which includes checking the TSR (total share-
and the impact on the Group’s business.
holder return) for each stock or conducting a comparison
90
91
Business Foundations Supporting Corporate Value
Risk Management
Preserve Corporate Value through Safe and
Reliable Business Operations
The ANA Group takes steps to identify, analyze, and appropriately address risks with the potential to
severely impact management. In addition, we have developed groupwide frameworks to minimize the
impact of risks and prevent reoccurrence in case risks materialize.
Risk Management Promotion System
The ANA Group Total Risk Management Regulations provides the basic terms of the Group’s risk management system. Under these
regulations, the Group ESG Management Promotion Committee develops and implements basic policies. These policies are executed
in line with the basic policies determined by the board of directors. Each Group company / department has established a risk manage-
ment system. Here, the ESG Promotion Officer and the ESG Promotion Leader are responsible for promoting and leading risk manage-
ment operations, respectively. The ESG Promotion Leader assumes a role to conduct risk management operations according to plans
and take swift action while working with the secretariat in the event of a crisis.
Risk Management Principles
Risk Prevention
Each Group company implements independent risk manage-
Crisis Management in Response to a Risk
We collect accurate information and implement measures to
ment activities (identifying risks, analyzing and evaluating
minimize damage and prevent reoccurrence by investigating
these risks, planning and implementing countermeasures,
and identifying the causes of crises.
and monitoring the results).
The Crisis Management Manual provides responses to crises
The Group companies monitor and evaluate progress,
in general, and the Emergency Response Manual provides
effectiveness, and level of achievement of the measures taken
responses to incidents with a direct impact on the operation
with respect to significant risks identified in each organization.
of ANA Group aircraft, including accidents or hijack.
The Company implements measures to address issues faced
by the Group, and the Group ESG Management Promotion
Committee monitors progress.
Major Initiatives
Business Continuity Plan (BCP)
Our BCP details policies and procedures for responding to
Union in 2018, and the China Cybersecurity Law (CCSL) and the
California Consumer Privacy Act (CCPA), established in 2020.
large-scale disasters to ensure the safety of customers and all
We require every employee to receive e-learning training on
ANA Group directors and employees, minimize the impact on
the importance of information assets and proper handling, etc.
management and on society as a whole, and resume normal
In so doing we ensure compliance with these laws, regulations,
business operations as quickly as possible.
Information Security
The ANA Group updates the Group’s information security
regulations and implements the information security manage-
ment system. Through this system, we strive every day to
and rules for using our information systems. In this way and
others, we strive to raise employee awareness of the signifi-
cance of information security in the workplace.
Security Export Control*
The ANA Group exports the parts, chemicals, apparatuses, and
improve information systems functions and implement security
other articles necessary for aircraft maintenance to overseas
measures in line with the policies.
airports and aircraft maintenance centers. Certain articles have
Personal information is essential for us to provide services
the potential to be adapted to create weapons. Accordingly, we
in ANA Group businesses. We view personal information as
practice rigorous security export control of exported articles.
important assets we receive from our customers. In recent
A stringent security export control structure is maintained
years, various laws and regulations related to personal informa-
through once-annual audits and trainings. These activities target
tion and privacy have been established in Japan and overseas.
divisions that are considered exporters for being directly involved
We have therefore revised our privacy policy and relevant inter-
in exporting as well as divisions that are involved due to handling
nal regulations to ensure compliance with the General Data
Protection Regulation (GDPR), established in the European
customs clearance and other transportation-related processes.
* Security export control is a term that refers to all regulations placed on exports from
Japan by the Foreign Exchange and Foreign Trade Act.
92
Cybersecurity Measures
The ANA Group is designated as a critical infrastructure provider in Japan by the National Center of Incident Readiness and
Strategy for Cybersecurity (NISC). We implement security measures at entrance and exit control, and we have adopted antivirus
measures in accordance with the guidelines formulated by the Ministry of Economy, Trade and Industry (METI). We monitor our
security system 24 hours a day, 365 days a year. The ANA Group trains security personnel, and we have established the Computer
Security Incident Response Team (CSIRT) to ensure swift action in response to any incidents.
Cybersecurity intelligence is most effective when providing early alerts to counter cyberattacks. Therefore, we participate in
information sharing organizations, such as the Aviation Information Sharing and Analysis Center (A-ISAC), which consists of airline,
aircraft manufacturer, and other members. We also participate in the Surface Transportation Information Sharing and Analysis
Center (ST-ISAC). In these ways, we acquire information from internal and external industry sources as early as possible for use in
taking preventive measures.
The Keidanren (Japan Business Federation) published the Cyber Risk Handbook for Directors in autumn 2019. We develop
measures assuming that incidents are inevitable. Since the utilization of digital technology is an important means for corporate
growth, we understand that we must take a balanced approach. The ANA Group sees cybersecurity as a risk management issue
to be addressed by the entire group, including our board of directors.
Responses to Typhoons and Their Aftermath
Natural disasters such as large typhoons and torrential rains have occurred frequently over the past few years. As a public transporta-
tion provider, we see a growing importance to make preparations and conduct drills related to these disasters on a regular basis.
Typhoon No. 21(Jebi) touched down in September 2018 and caused flights to be suspended for an extended period of time
at the Kansai International Airport. We conducted a review in fiscal 2019 of our disaster responses at the time, including a second
look at practice drills. As a result, we enhanced the disaster response capacity of the front lines of our business. We also reviewed
our facilities at airports across Japan, developing facility enhancement plans to prepare for flooding and power outages.
ANA actively participates in the development of guidelines for Advanced Airport-Business
Continuity Plan (A2-BCP) led by the Ministry of Land, Infrastructure, Transport and Tourism (MLIT).
These guidelines address building airports resistant to natural disasters and participation is part
of our efforts to strengthen cooperation with airport administrators and other stakeholders.
The ANA Group strives to update our BCP measures in the event of a crisis, and we continue
to improve our capacity to respond on the front lines of our business and to train our people.
Drill at the Kansai International Airport
Responses to COVID-19 (Employee Infection Prevention Measures)
The ANA Group created a response system based on the Crisis Management Manual and Emergency Response Manual in late
January 2020, when the COVID-19 infection spread in Wuhan, China, and the authorities suspended public transportation services.
We have endeavored to prevent the spread of infection. For example, when a physician identifies an employee who is suspected of
infection, we notify the relevant employee and employees who are likely to have been in contact, directing them to stay home and
wait for instructions from the public health center.
In addition, we implemented the following measures to prevent infection among our employees.
• Implement consistent infection prevention measures, such as hand washing
• Instruct employees to wear masks and gloves according to the degree of infection spread
• Check employee health on a consistent basis
• Communicate information and distribute materials based on the latest knowledge
• Ensure employees are aware of government declaration of emergency policies (we imposed some policies that are stricter than those
of the government)
Based on the experience acquired through measures to prevent the spread of the infection since January, we will implement the
following measures.
• Strive to acquire the latest information and share with employees
• Implement new business and work styles based on the new normal published by the Ministry of Health, Labour and Welfare and the
guidelines of the Keidanren and the Scheduled Airlines Association of JAPAN, understanding that infections spread in waves
93
Business Foundations Supporting Corporate Value
Compliance
Preserve Corporate Value by Enhancing Internal Systems and
Further Entrench Mission Statement
The ANA Group is taking steps to minimize exposure to legal risks and prevent incidents that could diminish
corporate value.
Compliance Implementation System
The ANA Group has developed a compliance system based on the ANA Group Compliance Regulations to promote compliance with
laws, regulations, and other standards related to business activities. Under the direction of the Group ESG Management Promotion
Committee, which is an advisory body to the board of directors, each company and department appoints an ESG Promotion Officer
that is responsible for promotion and an ESG Promotion Leader as a key driver of ESG initiatives. These officers and leaders strive to
raise awareness of compliance across the ANA Group.
Internal Reporting System
Based on the ANA Group Rules for Handling Internal Reporting,
we have set up a point of contact (ANA Alert) both inside and
outside the Company (via a law firm) to collect and resolve any
issues. These reporting systems are available to all Group
executives, employees, and temporary personnel involved in
operations. ANA Group retirees and officers and employees of
our business partners may also use these reporting systems.
We protect the privacy of the whistleblower and other relevant
parties, and assures that no punitive measures will be taken
against those that seek consultation or cooperate in confirming
facts. This helps us obtain internal risk-related information
promptly and aids in self-resolution. We are also engaged in
initiatives overseas to improve awareness of our internal reporting
system and focus on minimizing legal risks on a global level.
Major Initiatives
Legal Compliance Education
We conduct a variety of educational programs for every Group
executive and employee to acquire correct knowledge of and
exercise appropriate judgment related to various laws and
regulations. We hold regular seminars on contract practices,
labor practices, and laws and regulations related to air trans-
portation, improving our familiarity with business-essential
knowledge. The Company also seeks to foster a mindset
focused on legal compliance among Group executives and
employees working overseas. To this end, we hold seminars
on competition and anti-bribery laws at overseas branches.
We also sponsor seminars tailored to topics and content that
reflect the needs of each Group company and / or department.
Information Dissemination
To spread awareness of compliance throughout the ANA Group,
we distribute e-mail and other newsletters on topics related to
revisions to laws and regulations, as well as points of caution
regarding labor and contract practices. We have also posted
manuals and guidelines for various laws, regulations, and rules
on the compliance website on our intranet. In this way and
others, we create an environment in which Group executives
and employees have access to this information at any time.
Initiatives to Prevent Harassment
We are working now, more than ever, to strengthen initiatives
for workplaces free from harassment. Specifically, we estab-
lished the new Rules on Harassment Prevention and conduct
e-learning harassment education for all Group executives and
employees. In this way, we are striving to create workplace
environments across the entire ANA Group in which people can
work without hindrance and that never tolerate harassment.
Seminar conducted during fiscal 2019
Newsletter
Harassment Education Materials
Information Poster for the Internal Reporting System
Group Companies Compliance Survey
Surveys on compliance at Group companies are conducted
once each year. These surveys consist of self-checks on the
Strengthening Cooperation with Group
Companies and Overseas Branches
To strengthen the compliance system across the entire Group,
degree to which compliance was practiced with regard to rel-
we have clarified the points of contact between our Legal &
evant laws and regulations as well as examinations of issues
Insurance Department, Group companies, and ANA overseas
pertaining to each Group company and to the entire Group. We
branches, building and operating a system facilitating two-way
conduct follow-ups with each company based on survey
communication.
results as necessary in the interest of resolving issues.
ANA Group Tax Policy
In February 2020, we formulated the ANA Group Tax Policy to strengthen
corporate tax governance and respond to growing global interest in taxes.
The core principles of this policy state that the ANA Group considers the
proper reporting and fulfillment of tax obligations related to our business
activities is a social responsibility. Reporting and paying tax obligations
enables the Group to preserve our corporate value and contribute to the
development of communities in each relevant country. By implementing tax
governance that is groupwide and cross-functional, we comply with the
relevant laws, regulations, and other rules, clearly indicating the ideal state
whereby we report and fulfill tax obligations in an appropriate manner.
We present courses of action for employees related to (1) compliance
with laws and regulations, (2) fair business practices, (3) talent develop-
ment, (4) tax management, (5) utilization of external knowledge, and (6)
relationship with relevant tax authorities. We strive to raise awareness
among Group employees on an ongoing basis through internal training
and other methods.
By sharing this policy with each of our stakeholders and ensuring that
Group employees are in compliance, we aim to reduce tax risk and report
and fulfill tax obligations in an appropriate manner.
Six Courses of Action for
Our Tax Policy
1
2
3
4
5
6
Compliance with Laws and
Regulations
Fair Business Practices
Talent Development
Tax Management
Utilization of External Knowledge
Relationship with Relevant Tax
Authorities
Details are available on our corporate
website.
https://www.ana.co.jp/group/en/csr/basic_
approach/tax-policy/
94
95
Business Foundations Supporting Corporate Value
Responsible Dialogue with Stakeholders
The ANA Group conducts business activities through our relationships with stakeholders. We engage
in ongoing dialogue with stakeholders to build trust and offer peace of mind. As we do so, we increase
the effectiveness of our strategies by incorporating the opinions and requests of stakeholders into
our businesses.
Dialogue with
Shareholders
and Investors
The 75th Ordinary General Meeting of Shareholders
IR large meetings / small meetings
(for institutional investors / analysts)
Number of attendees
585 people
Voting rights exercise ratio
62.8%
6 times
Dialogue with institutional investors /
analysts
Presentations for private investors*
Aircraft maintenance center tours for
private shareholders*
225 times
(in Japan : 127 times;
overseas : 98 times)
10 times /
Total: 575 people
(including IR fairs)
10 times /
Total: 614 people
* Suspended January–March 2020 due to COVID-19.
Communication
with Our
Employees
ANA Officer Town Meetings
Number of meetings 949 times
Participants
Total: 12,612 people
Topic examples • Commitment to safety
• SDGs
• Work-style reform, etc.
Dialogue with
International
Society
Participation in an international
conference on the environment
Dialogue with overseas
ESG investors
Dialogue with human
rights organizations
overseas
Participation in
international conferences
on human rights
7 times
(United States, Canada,
Switzerland, Malaysia)
6 times
(UK)
2 times
(Thailand)
5 times
(United States, Switzerland,
Thailand, Japan)
Dialogue with
Business
Partners
Exchange of opinions with companies involved in the
manufacture of in-flight meals
1 time
(Thailand)
External Recognition
Inclusion in ESG Indexes
• Dow Jones Sustainability World Index
• Dow Jones Sustainability Asia Pacific Index
• Sustainability Award Gold Class 2019
• FTSE4Good Index
• FTSE Blossom Japan Index
• MSCI Japan Empowering Women Index (WIN)*
Quality
On-Time Performance
• SKYTRAX (ANA)
- Awarded 5-STAR status for
an eighth consecutive year
• Cirium (ANA)
Asia-Pacific Major Airlines
- Network Category : No. 1
- Mainline Category : No. 1
Worldwide Major Airlines
- Network Category : No. 2
- Mainline Category : No. 2
Management Strategy
• Japan Health Conference, Ministry of Economy,
• Cabinet Office
Trade and Industry
Certified Health and Productivity Management Organization
Recognition Program –White 500–
(ANA HOLDINGS INC., ANA AIRPORT SERVICES Co., Ltd.,
ANA OSAKA AIRPORT CO., LTD.)
• Ministry of Health, Labour and Welfare
IKUMEN AWARD 2019
Balance Support Category Special Encouragement Award (ANA)
• Ministry of Health, Labour and Welfare Next-generation support
certification Company Platinum Kurumin Certified
(ANA, ANA AIRPORT SERVICES CO., LTD.)
• DBJ Health Management Ranking Highest Rank
(ANA HOLDINGS INC., ANA)
• J-Win Diversity Award 2020
Advanced Achievement Award (ANA)
Cool Japan Matching Award 2019
Kabuki-themed in-flight safety video
Grand Prix Award (ANA)
• Good Design Award 2019
(New domestic route economy-class seats developed between
ANA and Toyota Boshoku Corporation; P.55)
• IAUD International Design Award 2019
Gold Award, UX Design Category (ANA)
• 2019 ORICON Customer Satisfaction Survey
No. 1 in category of Instructor, Corporate Training,
Extension Seminar for Young, Mid-Level Employees
(ANA Business Solutions)
Participation in reconstruction activities,
volunteer activities
(sponsored by ANA Holdings Corporate Sustainability)
Participation in conferences for the revitalization of
communities surrounding Narita Airport
Number of meetings 17 times
Group employee participants
Total: 423 people
Number of meetings 62 times
Dialogue with
Communities
96
* THE INCLUSION OF ANA HOLDINGS INC. IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A
SPONSORSHIP, ENDORSEMENT OR PROMOTION OF ANA HOLDINGS INC. BY MSCI OR ANY OF ITS AFFILIATES.
THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.
97
Business Foundations Supporting Corporate Value
Consolidated 11-Year Summary
ANA HOLDINGS INC. and its consolidated subsidiaries (Note 1)
(FY) (Note 2)
2019
2018
2017
2016
Yen (Millions)
2015
2014
2013
2012
2011
2010
2009
For the Year
Operating revenues (Note 4)
Operating expenses
Operating income (loss)
Income (loss) before income taxes
Net income (loss) attributable to owners of the parent
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Free cash flow
Substantial free cash flow (Note 5)
Depreciation and amortization
EBITDA (Note 6)
Capital expenditures
At Year-End
Total assets
Interest-bearing debt
Shareholders’ equity (Note 7)
Per Share Data (Yen, U.S. dollars) (Note 8)
Earnings per share
Book value per share
Cash dividends
Average number of shares during the year (Thousand shares)
Management Indexes
Operating income margin (%)
Net income margin (%)
ROA (%) (Note 9)
ROE (%) (Note 10)
Shareholders’ equity ratio (%)
Debt/equity ratio (Times) (Note 11)
Asset turnover (Times) (Note 12)
Payout ratio (%)
Number of employees
Operating Data
International Passenger Operations
Passenger revenues
Available seat-km (Millions)
Revenue passenger-km (Millions)
Number of passengers (Thousands)
Load factor (%)
Unit revenues (¥)
Yield (¥)
Domestic Passenger Operations
Passenger revenues
Available seat-km (Millions)
Revenue passenger-km (Millions)
Number of passengers (Thousands)
Load factor (%)
Unit revenues (¥)
Yield (¥)
LCC Passenger Operations (Note 13)
Revenues
Available seat-km (Millions)
Revenue passenger-km (Millions)
Number of passengers (Thousands)
Load factor (%)
Unit revenues (¥)
Yield (¥)
International Cargo Operations
Cargo revenues
Cargo volume (Tons)
Domestic Cargo Operations
Cargo revenues
Cargo volume (Tons)
1,974,216
1,913,410
60,806
51,501
27,655
130,169
(230,218)
23,869
(100,049)
(79,149)
175,739
236,545
351,361
2,560,153
842,862
1,061,028
82.66
3,171.80
—
334,559
3.1
1.4
2.4
2.6
41.4
0.8
0.8
—
45,849
613,908
68,885
50,219
9,416
72.9
8.9
12.2
679,962
58,552
39,502
42,916
67.5
11.6
17.2
81,953
11,076
9,202
7,288
83.1
7.4
8.9
102,697
866,821
25,533
373,176
2,058,312
1,893,293
165,019
154,023
110,777
296,148
(308,671)
(46,480)
(12,523)
(18,028)
159,541
324,560
375,864
2,687,122
788,649
1,099,413
331.04
3,285.46
75.00
334,632
8.0
5.4
6.4
10.6
40.9
0.7
0.8
22.7
43,466
651,587
65,976
50,776
10,093
77.0
9.9
12.8
696,617
58,475
40,704
44,325
69.6
11.9
17.1
93,611
12,052
10,394
8,153
86.2
7.8
9.0
125,015
913,915
27,454
393,773
1,971,799
1,807,283
164,516
196,641
143,887
316,014
(324,494)
(29,989)
(8,480)
61,410
150,408
314,924
304,707
2,562,462
798,393
988,661
417.82
2,954.47
60.00
344,372
8.3
7.3
6.8
15.1
38.6
0.8
0.8
14.4
41,930
597,446
64,376
49,132
9,740
76.3
9.3
12.2
689,760
58,426
40,271
44,150
68.9
11.8
17.1
87,555
11,832
10,212
7,797
86.3
7.4
8.6
118,002
994,593
30,710
436,790
1,765,259
1,619,720
145,539
139,462
98,827
237,084
(194,651)
3,349
42,433
39,655
140,354
285,893
254,425
2,314,410
729,877
919,157
28.23
262.44
6.00
3,500,205
8.2
5.6
6.5
11.6
39.7
0.8
0.8
21.3
39,243
516,789
60,148
45,602
9,119
75.8
8.6
11.3
678,326
59,080
38,990
42,967
66.0
11.5
17.4
—
—
—
—
—
—
—
93,301
954,027
30,860
451,266
1,791,187
1,654,724
136,463
131,064
78,169
263,878
(74,443)
(133,257)
189,435
88,035
138,830
275,293
281,416
2,228,808
703,886
789,896
22.36
225.87
5.00
3,496,561
7.6
4.4
6.1
9.8
35.4
0.9
0.8
22.4
36,273
515,696
54,710
40,635
8,167
74.3
9.4
12.7
685,638
59,421
38,470
42,664
64.7
11.5
17.8
—
—
—
—
—
—
—
113,309
810,628
31,740
466,979
1,713,457
1,621,916
91,541
77,983
39,239
206,879
(210,749)
(30,424)
(3,870)
(22,350)
131,329
222,870
274,702
2,302,437
819,831
798,280
11.24
228.45
4.00
3,492,380
5.3
2.3
4.2
5.1
34.7
1.0
0.8
35.6
34,919
468,321
49,487
35,639
7,208
72.0
9.5
13.1
683,369
60,213
38,582
43,203
64.1
11.3
17.7
—
—
—
—
—
—
—
124,772
841,765
32,584
475,462
1,601,013
1,535,027
65,986
36,391
18,886
200,124
(64,915)
(85,569)
135,209
38,929
136,180
202,166
183,739
2,173,607
834,768
746,070
5.41
213.82
3.00
3,493,860
4.1
1.2
3.2
2.5
34.3
1.1
0.7
55.5
33,719
395,340
41,451
30,613
6,336
73.9
9.5
12.9
675,153
61,046
37,861
42,668
62.0
11.1
17.8
—
—
—
—
—
—
—
104,736
710,610
32,116
477,081
1,483,581
1,379,754
103,827
70,876
43,140
173,196
(333,744)
84,549
(160,548)
54,256
123,916
227,743
162,752
2,137,242
897,134
766,737
13.51
218.41
4.00
3,192,482
7.0
2.9
5.1
6.6
35.9
1.2
0.7
29.6
32,634
348,319
37,947
28,545
6,276
75.2
9.2
12.2
665,968
58,508
36,333
41,089
62.1
11.4
18.3
—
—
—
—
—
—
—
86,589
621,487
32,231
463,473
1,411,504
1,314,482
97,022
63,431
28,178
214,406
(166,323)
16,171
48,083
52,043
119,268
216,290
196,881
2,002,570
963,657
549,014
11.22
218.24
4.00
2,511,841
6.9
2.0
5.1
5.3
27.4
1.8
0.7
35.7
32,884
320,066
34,406
25,351
5,883
73.7
9.3
12.6
651,556
56,756
34,589
39,020
60.9
11.5
18.8
—
—
—
—
—
—
—
87,978
570,684
33,248
467,348
1,357,653
1,289,845
67,808
35,058
23,305
203,889
(139,619)
(10,596)
64,270
27,870
118,440
186,248
211,698
1,928,021
938,819
520,254
9.29
207.35
2.00
2,507,572
5.0
1.7
3.7
4.7
27.0
1.8
0.7
21.5
32,731
280,637
29,768
22,430
5,168
75.3
9.4
12.5
652,611
56,796
35,983
40,574
63.4
11.5
18.1
—
—
—
—
—
—
—
86,057
557,445
32,413
453,606
1,228,353
1,282,600
(54,247)
(95,593)
(57,387)
82,991
(251,893)
173,791
(168,902)
(123,902)
113,806
59,559
209,937
1,859,085
941,691
473,552
(24.67)
188.93
—
2,326,547
(4.4)
(4.7)
(2.8)
(14.4)
25.5
2.0
0.7
—
32,578
214,124
26,723
20,220
4,666
75.7
8.0
10.6
630,976
57,104
35,397
39,894
62.0
11.0
17.8
—
—
—
—
—
—
—
55,750
422,449
31,829
458,732
U.S. dollars
(Thousands)
(Note 3)
2019
18,140,365
17,581,641
558,724
473,224
254,111
1,196,076
(2,115,390)
219,323
(919,314)
(727,271)
1,614,802
2,173,527
3,228,530
23,524,331
7,744,757
9,749,407
0.75
29.14
—
5,640,981
6,247,927
753,036
943,646
234,613
Notes: 1. As of March 31, 2020, there were 62 consolidated subsidiaries and 16 equity-method subsidiaries and affiliates.
8. The Group conducted a 1-for-10 reverse stock split effective October 1, 2017. Calculations have been made assuming a reverse stock split at the beginning of the fiscal year ended
2. From April 1 to March 31 of the next year
3. U.S. dollar amounts in this report are translated, for convenience only, at the rate of ¥108.83 = US$1, the approximate exchange rate as of March 31, 2020.
4. Effective from the fiscal year ended March 2015, revenue of jet fuel which is resold to airlines outside the Group is offset by its purchasing cost and the net amount is recorded in
operating revenues.
5. Substantial free cash flow is excluding purchase and redemption of marketable securities (time deposits and negotiable deposits of more than three months).
6. EBITDA = Operating income + Depreciation and amortization
7. Total shareholders’ equity = Shareholders’ equity + Accumulated other comprehensive income
March 2018.
9. ROA = (Operating income + Interest and dividend income) / Simple average of total assets
10. ROE = Net income attributable to owners of the parent / Simple average of shareholders’ equity
11. Debt/equity ratio = Interest-bearing debt / Shareholders’ equity
12. Asset turnover = Operating revenues / Simple average of total assets
13. Revenues of LCC Operations include ancillary income.
* Yen amounts are rounded down to the nearest million yen and percentages are rounded to the nearest one decimal place. U.S. dollar amounts are truncated.
98
99
Financial / Data Section
Performance for Fiscal 2019
Overview of the ANA Group
As of March 31, 2020, the ANA Group (“the Group”), led by holding
company ANA HOLDINGS INC., consisted of 128 subsidiaries
(including ALL NIPPON AIRWAYS CO., LTD.) and 45 affiliates. A total
of 62 companies are treated as consolidated subsidiaries, with
another 16 treated as equity-method subsidiaries and affiliates. The
Group had 45,849 employees, up 2,383 employees year on year.
During fiscal 2019, we executed various measures set forth in the
FY2018–22 ANA Group Corporate Strategy (published February 1,
2018). We made progress in human resources and capital expendi-
tures in advance of the 2020 slot expansions at the Tokyo metropoli-
tan area airports, while also pursuing safety, quality and services.
However, in the fourth quarter, impact from the spread of COVID-19
led to a sharp decline in demand for air transport.
Consolidated Operating Revenues, Operating Expenses,
and Operating Income
Fiscal 2019 consolidated operating revenues amounted to ¥1,974.2
billion, a ¥84.0 billion (4.1%) decrease year on year. This decrease
was mainly due to reduced revenues in our mainstay Air
Transportation Business.
Although we reduced costs by controlling the volume of opera-
tions in response to the sharp decline in passenger demand, operat-
ing income amounted to ¥60.8 billion, a ¥104.2 billion (63.2%)
decrease year on year due to a significant decrease in operating
revenues.
Review by Segment
The Group operates four reportable segments: Air Transportation,
Airline Related, Travel Services, and Trade and Retail.
Segment Information
(Fiscal Year)
2019
2018
Change
2019
2018
Change
2019
2018
Change
Operating Revenues
Operating Income
EBITDA
(¥ Millions)
Trade and Retail
144,750
150,679
(5,929)
2,909
3,706
(797)
4,214
5,060
(846)
Others
44,223
40,958
3,265
3,526
2,275
1,251
3,788
2,511
1,277
Adjustments
(395,923)
(389,539)
(6,384)
(14,716)
(15,302)
586
(14,716)
(15,302)
586
Total (Consolidated) ¥1,974,216
¥2,058,312 ¥(84,096)
¥ 60,806
¥165,019 ¥(104,213)
¥236,545
¥324,560 ¥(88,015)
Notes: 1. “Others” represents all operating segments that are not included in reportable segments, including facility management, business support, and other operations.
2. Adjustments of segment profit represent the elimination of intersegment transactions, Group management expenses of ANA HOLDINGS INC., and other certain items.
3. Segment operating income is reconciled with operating income in the consolidated financial statements.
4. EBITDA = Operating income + Depreciation and amortization
19/4
5
6
7
8
9
10
11
12
20/1
2
3
(Year/
Month)
Air Transportation
¥1,737,737
¥1,814,417 ¥(76,680)
¥ 49,550
¥160,556 ¥(111,006)
¥217,846
¥313,504 ¥(95,658)
Source: Bloomberg
Airline Related
299,433
291,051
8,382
18,144
13,178
4,966
23,467
17,674
5,793
Global Air Transportation Passenger Volume by Region
Travel Services
143,996
150,746
(6,750)
1,393
606
787
1,946
1,113
833
Management’s Discussion and Analysis
Monthly Prices for Dubai Crude Oil and Singapore Kerosene
(U.S. dollars per barrel)
100
80
60
40
20
19/4
5
6
7
8
9
10
11
12
20/1
2
3
(Year/
Month)
Dubai Crude Oil
Singapore Kerosene
Source: Bloomberg
Monthly Yen-Dollar Exchange Rate
(Yen/U.S. dollars)
3,011
3,000
8,679
2,320
2,000
1,932
1,000
786
442
185
0
(CY)
2013
2014
2015
2016
2017
2018
2019
(Left)
Total
(Right) Asia-Pacific
Africa
Europe
North America
Middle East
Latin America
Source: International Air Transport Association (IATA), 2020
Economic Conditions
General Economic Overview
The Japanese economy recovered moderately during fiscal 2019
(April 1, 2019 to March 31, 2020) as corporate earnings remained at
a high level and consumer spending rallied. Toward the end of the
fiscal year, however, the economy deteriorated rapidly due to the
effects of COVID-19, leading to an extremely severe situation.
Looking ahead, we must pay close attention to risks that could
degrade the global economy further as a result of the spread of the
virus. Potential effects include worsening employment and personal
income environments due to falling corporate profits, slowing con-
sumer spending, and more.
Fuel Price Trends
The average price for Dubai crude oil was $60.5 per barrel during
fiscal 2019. During the first half of the year, Dubai crude ranged
around $60 per barrel as OPEC, Russia, and other major non-OPEC
oil-producing countries deferred production increases. However,
toward the end of the fiscal year, fears of global recession due to
impact of the spread of COVID-19 led to a sudden decline in market
conditions. As a result, the price of Dubai crude oil ended at $33.7
per barrel on March 31, 2020.
The market price of Singapore kerosene tracked the price of
crude oil. The average price for the fiscal year was $72.4 per barrel,
ending at $31.1 per barrel on March 31, 2020.
Foreign Exchange Market
The Japanese yen averaged ¥108.7 to the U.S. dollar for fiscal 2019,
ending the year at ¥108.8 per U.S. dollar. The value of the yen rose
during the first half of the year due to concerns about the impact of
intensifying trade frictions on the world economy. Toward the end of
the fiscal year, risk aversion grew with the spread of the virus, and the
value of the yen continued to appreciate.
Air Transport Traffic Trends
International Air Transport Association (IATA) member airlines
reported 1,890 million passengers on scheduled international flights
in 2019 (4.4% increase year on year). Passengers on scheduled
domestic flights numbered 2,650 million (3.4% increase). At the same
time, scheduled global air cargo volume decreased 2.4%. (Source:
IATA World Air Transport Statistics, 2020)
In Japan, passengers on trunk routes* decreased 2.2% to 42.49
million for fiscal 2019. The number of passengers on local routes*
decreased 1.8% to 59.38 million. In total, Japanese air transport
passengers numbered 101.87 million, a decrease of 2.0%. Domestic
cargo volume decreased 5.6% to 0.77 million tons. The number of
passengers carried by Japanese airlines on international services
decreased 8.4% to 21.43 million, while the volume of international
cargo handled by Japanese airlines increased 0.9% to 1.45 million
tons. (Source: Ministry of Land, Infrastructure, Transport and Tourism
Statistical Report on Air Transport)
* Trunk routes refer to routes connecting Sapporo (New Chitose), Tokyo (Haneda), Tokyo
(Narita), Osaka (Itami), Kansai, Fukuoka, and Okinawa (Naha) airports with one another.
Local routes refer to all other routes.
120
110
100
RPK (Billions)
9,000
6,000
3,000
0
100
101
Financial / Data Section
Management’s Discussion and Analysis
Air Transportation Business
Changes in Operating Income (FY2019 vs FY2018)
(¥ Billions)
ANA
International
Passenger
Decrease in Revenues –76.6
Decrease in Profit –111.0
–37.6
ANA
Domestic
Passenger
Revenues from contracted
maintenance and handling,
Mileage and Card, etc.
Depreciation and
amortization
except aircraft,
maintenance, etc.
–16.6
ANA
Cargo & Mail
–24.6
ANA
Other
Revenues
+13.9
LCC
–11.6
Other
Expenses
+26.7
160.5
Commissions,
advertising,
In-flight services,
Ground services, etc.
Landing and
navigation fees, Aircraft
depreciation, Personnel,
Outsourcing contracts, etc.
Sales-Linked
–0.2
Operation-
Linked
+27.0
Increase in Expenses +34.3
FY2018
Operating Income
(Fiscal Year)
Operating revenues
Operating expenses
Operating income
2019
2018
Change
YoY (%)
1,737.7
1,814.4
1,688.1
1,653.8
–76.6
+34.3
49.5
160.5
–111.0
–4.2
+2.1
–69.1
–19.2
Fuel &
Fuel Tax
49.5
FY2019
Operating Income
Air Transportation Business operating revenues amounted to
¥1,737.7 billion, a year-on-year decrease of ¥76.6 billion (4.2%).
Operating revenues through the third quarter trended firmly up owing
to factors such as strong domestic passenger demand and expan-
sion of international route networks, despite sluggish demand for
international cargo business due to a cooling of the world economy
caused by U.S.–China trade frictions. In the fourth quarter, demand
for domestic and overseas travel declined sharply due to immigration
restrictions in various countries around the world due to the spread of
COVID-19, as well as voluntary limits on non-essential travel domesti-
cally. Operating income amounted to ¥49.5 billion, a year-on-year
ANA International Passenger Business
A total of 9.41 million passengers used the ANA network in fiscal
2019 (6.7% decrease), while unit price rose 1.0% to ¥65,196.
Operating revenues fell 5.8% year on year to ¥613.9 billion. We
recorded a 4.4% increase in available seat-kilometers (ASK) and
saw a 1.1% decrease in revenue passenger-kilometers (RPK).
Load factor decreased 4.1 points to 72.9%.
Although we captured demand by opening new routes and
deploying ultra-wide body aircraft on Hawaii routes, the decline in
demand due to COVID-19 that became apparent on China routes
from the end of January spread to routes servicing Asia, North
America, Europe, and Hawaii. As a result, both revenues and passen-
ger numbers decreased to levels underperforming previous fiscal
year. ANA actively promoted services to new cities in our route
network, launching the Narita–Perth route (western Australia) in
September, the Narita–Chennai route (southern India) in October, and
the Narita–Vladivostok route (eastern Russia) in March 2020. In May,
ANA introduced the Airbus A380 FLYING HONU, the world’s largest
passenger aircraft, on the Narita–Honolulu route. However, we
decrease of ¥111.0 billion (69.1%). This result was due to an increase
in aircraft expenses, maintenance expenses, and other costs due to
further improvements in safety, quality, and services and measures
preparing for slot expansions at the Tokyo metropolitan area airports.
On the other hand, performance was impacted negatively by flight
cancellations and reductions on both international and domestic
routes, despite controlled fuel expenses, landing and navigation fees,
and other costs in response to decreasing demand for air travel.
Results by business were as follows.
suspended and reduced flights along 71 routes, affecting 2,814
flights by the end of March 2020 in response to the decrease in
demand caused by the impact of COVID-19.
For the first time in 10 years, ANA unveiled new seats for First
Class and Business Class on Boeing 777-300ER aircraft. We intro-
duced the upgraded aircraft on the Haneda–London route in August,
the Haneda–New York and Narita–New York routes in November, and
the Haneda–Frankfurt route in February 2020. We introduced our first
private wide-seat with a closable door, called THE Room, in Business
Class. These new seats offer the world’s first personal 4K-compatible
monitor and other amenities, achieving the highest levels of passen-
ger comfort.
At the end of January, we signed a joint venture framework
agreement with Singapore Airlines with the aim of strengthening our
network and increasing our presence in the rapidly growing Asia /
Oceania region. Going forward, we will deepen our partnership
relations and work to improve competitiveness and customer conve-
nience in the Asia / Oceania region.
ANA International Passenger Business Results
(¥ Billions)
(Fiscal Year)
ASK (Millions)
RPK (Millions)
Number of passengers (Thousands)
Load factor (%)
Passenger revenues (¥ Billions)
Unit revenues (¥)
Yield (¥)
Unit price (¥)
* Difference
2019
2018
YoY (%)
68,885
50,219
9,416
72.9
613.9
8.9
12.2
65,976
50,776
10,093
77.0
651.5
9.9
12.8
+4.4
–1.1
–6.7
–4.1*
–5.8
–9.8
–4.7
18/4
65,196
64,556
+1.0
ANA Domestic Passenger Business
In addition to robust business demand and domestic travel of
passengers visiting Japan, we captured strong demand over the
ten-day Golden Week holidays. We also offered various discount
fares according to demand. These measures led to a positive trend
through the third quarter; however, demand declined sharply due to
impact of COVID-19 beginning at the end of February. As a result,
revenues and passenger numbers decreased year on year. ASK grew
0.1% year on year, while RPK fell 3.0%. Load factor was 67.5%, a
decrease of 2.1 points. Passenger numbers declined 3.2% to 42.91
million and unit price rose 0.8% to ¥15,844. Operating revenues were
down 2.4% to ¥679.9 billion.
ANA increased flights in our route network, introducing the Narita–
Chubu route in May and the Chubu–Kumamoto route in October. ANA
sought to improve efficiency further by optimizing the number of route
flights and adjusting aircraft types flexibly based on demand predic-
tions. During the phase of declining demand caused by COVID-19,
we began adjusting the number of flights in March, while striving to
800
600
400
200
0
200
150
100
50
0
2015
2016
2017
2018
2019
(FY)
(Left)
Passenger Revenues
(Right)
ASK
RPK
Yield
* Figures for ASK, RPK, and Yield are indexed using the figures for fiscal 2015 as 100.
maintain our network as a public transportation provider. In total,
2,674 flights across 42 routes were suspended or reduced.
We have offered discount fares that can be purchased as early
as 355 days before boarding, aiming to capture demand at an early
stage for periods such as the Golden Week holidays and summer
vacations. In November, we introduced new seats on Boeing 777-200
aircraft, offering improved comfort and functionality with power
reclining in Premium Class. We also introduced seats equipped with
touch panel personal monitors in Economy Class. In addition, we
renovated the ANA LOUNGE at Naha Airport in September under
the supervision of Kengo Kuma, one of Japan’s leading architects.
In November at Naha, we also altered the layout of the departure
counter, and implemented the ANA Baggage Drop automated
baggage drop machine, making it the fourth airport in Japan to be
so equipped. These and other efforts were made to further improve
service quality.
ANA Domestic Passenger Business Results
(¥ Billions)
(Fiscal Year)
ASK (Millions)
RPK (Millions)
Number of passengers (Thousands)
Load factor (%)
Passenger revenues (¥ Billions)
Unit revenues (¥)
Yield (¥)
Unit price (¥)
* Difference
2019
2018
YoY (%)
58,552
39,502
42,916
67.5
679.9
11.6
17.2
58,475
40,704
44,325
69.6
696.6
11.9
17.1
15,844
15,716
+0.1
–3.0
–3.2
–2.1*
–2.4
–2.5
+0.6
+0.8
800
600
400
200
0
120
110
100
90
0
2015
2016
2017
2018
2019
(FY)
(Left)
Passenger Revenues
(Right)
ASK
RPK
Yield
* Figures for ASK, RPK, and Yield are indexed using the figures for fiscal 2015 as 100.
102
103
Financial / Data Section
Management’s Discussion and Analysis
ANA Cargo and Mail Business
The ANA Cargo and Mail Business recorded fiscal 2019 operating
revenues of ¥136.1 billion, a year-on-year decrease of 15.3%.
The International Cargo Business recorded operating revenues of
¥102.6 billion, down 17.9% compared to the previous fiscal year.
Cargo volume decreased 5.2% to 860,000 tons. This was the result of
consistently low cargo demand for to and from Japan stemming from
the global economic slowdown caused by U.S.–China trade frictions.
The significant reduction of flights due to the spread of COVID-19 in
February and thereafter also had a negative effect on performance.
Available ton-kilometers (ATK) rose 3.2% while revenue ton-kilometers
(RTK) decreased 2.2%. We introduced the Boeing 777F wide-body
cargo freighter to our route network on the Narita–Shanghai (Pudong)
route in July and on the Narita–Chicago route in October. We also
captured demand for oversize special cargo, such as semiconductor
manufacturing equipment, which enjoys steady demand. Our efforts
in the fourth quarter to respond to emergency supply transportation
due to the outbreak of COVID-19 also made a positive contribution.
Domestic Cargo Business operating revenues decreased 7.0% to
¥25.5 billion, reflecting a 5.2% decline in cargo volume to 370,000
tons. While we endeavored to grow revenues through non-scheduled
extra cargo flights on the Okinawa–Haneda route during peak
demand for flowers, air cargo demand overall was weak throughout
the year. At the same time, the spread of COVID-19 caused flight
suspensions and reductions.
International Mail Business operating revenues decreased 6.6% to
¥4.7 billion, while Domestic Mail Business operating revenues were
2.9% lower at ¥3.1 billion.
ANA Cargo and Mail Business Results
International Cargo Business Results
(Fiscal Year)
2019
2018
YoY (%)
Cargo and mail services revenues (¥ Billions)
International ATK (Millions)
cargo
RTK (Millions)
Cargo volume (Thousand tons)
136.1
7,354
4,222
866
160.7
7,122
4,318
913
Cargo revenues (¥ Billions)
102.6
125.0
Unit price (¥/kg)
Mail revenues (¥ Billions)
Domestic ATK (Millions)
cargo
RTK (Millions)
Cargo volume (Thousand tons)
Cargo revenues (¥ Billions)
Unit price (¥/kg)
Mail revenues (¥ Billions)
118
4.7
137
5.1
1,705
1,720
387
373
25.5
68
3.1
408
393
27.4
70
3.2
–15.3
+3.2
–2.2
–5.2
–17.9
–13.4
–6.6
–0.9
–5.2
–5.2
–7.0
–1.9
–2.9
LCC Business Results
The LCC Business recorded ¥81.9 billion in operating revenues, a
12.5% decrease year on year. This result was mainly due to a 10.6%
decrease in passenger numbers to 7.28 million and a 2.1% decrease
in unit price to ¥11,244. ASK and RPK declined 8.1% and 11.5%,
respectively. Load factor was 83.1%, which was a decrease of 3.2
points compared to the previous fiscal year.
Performance was inhibited by the impact of geopolitical risks in
Hong Kong and South Korea, as well as a significant decline in
demand due to the spread of COVID-19 toward the end of the fiscal
year. Operations of Vanilla Air were terminated in October of this fiscal
year, and we successfully completed the merger with Peach Aviation.
In the route network, in addition to transferring 10 routes to Peach
Aviation, we launched the Narita-Kagoshima and Narita-Nagasaki
routes in March 2020. However, due to impact from the spread of
COVID-19, we suspended and reduced flights on 23 routes begin-
ning in February, which affected a total of 2,088 international and
domestic flights.
(¥ Billions)
150
1,600
1,200
100
800
50
400
0
0
18/4
2015
2013
2016
2014
2017
2015
2018
2016
2019
2017
(Left)
International Cargo Revenues
(Right)
ATK
RTK
Unit Price
* Figures for ATK, RTK, and Yield are indexed using the figures for fiscal 2015 as 100.
150
200
150
100
100
50
50
0
0
(FY)
To promote sales, we conducted Flying Train Peach Sale on all 40
routes to celebrate the merger of the two LCCs.
LCC Business Performance
(Peach Aviation Limited, Vanilla Air Inc.)
(Fiscal Year)
ASK (Millions)
RPK (Millions)
Number of passengers (Thousands)
Load factor (%)
Passenger revenues (¥ Billions)*2
Unit revenues (¥)
Yield (¥)
Unit price (¥)
2019
2018
YoY (%)
11,076
12,052
9,202
7,288
83.1
81.9
7.4
8.9
10,394
8,153
86.2
93.6
7.8
9.0
11,244
11,482
–8.1
–11.5
–10.6
–3.2*1
–12.5
–4.7
–1.1
–2.1
*1 Difference
*2 Operating revenues include incidental revenues.
Others
Other operating revenues in the Air Transportation Business
amounted to ¥225.7 billion, a 6.6% increase year on year. Results
include incidental revenues from mileage memberships, in-flight
sales, contracted maintenance, etc.
Operating Expenses
Air Transportation Business operating expenses increased ¥34.3
billion (2.1%) year on year to ¥1,688.1 billion. Specific expense
amounts and reasons for year-on-year changes are described below.
Breakdown of Operating Revenues and Expenses
(Fiscal Year)
2019
2018
Change
Segment operating revenues
¥1,737,737 ¥1,814,417
¥ (76,680)
(¥ Millions)
International Passenger
Cargo
Mail
613,908
102,697
4,764
651,587
125,015
5,100
Domestic
Passenger
679,962
696,617
Cargo
Mail
LCC revenues
Other revenues
25,533
3,136
81,953
27,454
3,230
93,611
225,784
211,803
Segment operating expenses
1,688,187
1,653,861
Fuel and fuel tax
Landing and navigation fees
Aircraft leasing fees
Depreciation and amortization
Aircraft maintenance
Personnel
314,486
120,173
130,614
168,296
177,330
201,651
Sales commissions and promotion
105,192
Contracts
Others
256,618
213,827
333,709
121,606
123,419
152,948
157,058
207,801
107,810
239,630
209,880
(37,679)
(22,318)
(336)
(16,655)
(1,921)
(94)
(11,658)
13,981
34,326
(19,223)
(1,433)
7,195
15,348
20,272
(6,150)
(2,618)
16,988
3,947
Segment operating income
¥ 49,550 ¥ 160,556
¥(111,006)
Fuel and aircraft fuel tax expenses amounted to ¥314.4 billion, a
¥19.2 billion (5.8%) decrease year on year. This expense accounted
for 18.6% of Air Transportation Business operating expenses, com-
pared with 20.2% in the previous fiscal year. This ¥19.2 billion
decrease was mainly due to decreases in ANA price factors (includ-
ing hedging effectiveness) of approximately ¥19.0 billion, an increase
in ANA consumption volume factors of approximately ¥3 billion, and
a decrease in LCC Business of approximately ¥3 billion.
Fuel consumption volume increased due to the expansion of
capacity in international services. The ANA Group is working to
control fuel consumption volume by introducing fuel-efficient aircraft
and other measures, including the adoption of efficient flight opera-
tions. During fiscal 2019, we engaged in the same measures of fuel
tax reduction as we followed in the previous fiscal year.
Landing and navigation fees amounted to ¥120.1 billion, down ¥1.4
billion (1.2%) year on year. Passenger aircraft flights (excluding Peach
Aviation and Vanilla Air flights) on ANA domestic operations
increased 0.7%, while ANA international flights decreased 1.7% and
freighter flights decreased 13.3%. These results were partly due to
impact from suspended and reduced flights as a result of the spread
of COVID-19.
Aircraft leasing fees increased ¥7.1 billion (5.8%) year on year to
¥130.6 billion due to factors such as greater use of airline charters
in the International Cargo Business.
Depreciation and amortization expenses increased ¥15.3 billion
(10.0%) to ¥168.2 billion. This increase was mainly due to introducing
Boeing 777F and Airbus A380 aircraft in service during this fiscal year
as we continue to update the ANA-owned fleet.
Aircraft maintenance expenses increased ¥20.2 billion (12.9%) year
on year to ¥177.3 billion. This increase was due to several factors,
including increased maintenance frequency caused by Rolls-Royce
engine inspection and maintenance.
Personnel expenses decreased ¥6.1 billion (3.0%) year on year to
¥201.6 billion. This decrease reflected the impact of decreases in
performance-linked lump-sum payments.
Sales commissions and promotion expenses decreased ¥2.6 billion
(2.4%) year on year to ¥105.1 billion. This decrease was mainly due
to the decrease in passenger demand as a result of the spread of
COVID-19.
Contract expenses increased ¥16.9 billion (7.1%) year on year to
¥256.6 billion. This increase was mainly due to increases in out-
sourced operations associated with advance preparations for slot
expansions at Tokyo metropolitan area airports in 2020.
Other expenses increased ¥3.9 billion (1.9%) year on year to ¥213.8
billion. This result was mainly due to increased expenses related to
in-flight services.
104
105
Financial / Data Section
Management’s Discussion and Analysis
Airline Related Business
Fiscal 2019 segment operating revenues increased ¥8.3 billion
(2.9%) year on year to ¥299.4 billion. Operating income increased
¥4.9 billion (37.7%) to ¥18.1 billion. These increases were mainly due
to increased contracts for airport ground support work (check-in
procedures, baggage handling, etc.) at Kansai International Airport
and Chubu International Airport. We also added MRO Japan Co., Ltd.
as a newly consolidated subsidiary this year. MRO Japan has
launched full-scale business development in Okinawa.
Trade and Retail
Fiscal 2019 operating revenues in our Trade and Retail business
decreased ¥5.9 billion (3.9%) year on year to ¥144.7 billion.
Operating income decreased ¥0.7 billion (21.5%) to ¥2.9 billion.
Transaction volume for aircraft parts and other items rose, while
sales decreased for nuts and other items in our food business. Retail
business transaction volume decreased year on year at our airport
ANA DUTY FREE SHOP retail locations and ANA FESTA airport shops,
which also contributed to lower performance.
Performance in the Airline Related Segment
Performance in the Trade and Retail Segment
(¥ Millions)
(¥ Millions)
(Fiscal Year)
2019
2018
Change
(Fiscal Year)
2019
2018
Change
Segment operating revenues
¥299,433
¥291,051
Segment operating expenses
281,289
277,873
Segment operating income
¥ 18,144
¥ 13,178
¥8,382
3,416
¥4,966
Segment operating revenues
¥144,750
¥150,679
¥(5,929)
Segment operating expenses
141,841
146,973
(5,132)
Segment operating income
¥ 2,909
¥ 3,706
¥ (797)
Travel Services
Fiscal 2019 segment operating revenues amounted to ¥143.9 billion,
a ¥6.7 billion (4.5%) decrease year on year. Operating income
increased ¥0.7 billion (129.9%) to ¥1.3 billion. Performance trended
upward through the third quarter due to success in attracting custom-
ers for products sold on the internet (both for domestic and overseas
travel). We were also successful in capturing demand for travel
during the ten-day Golden Week holidays. However, the impact of
COVID-19 beginning at the end of January resulted in operating
revenues that underperformed the previous fiscal year.
Meanwhile, operating income rose year on year, mainly due to a
decrease in system expenses.
Performance in the Travel Services Segment
Others
Fiscal 2019 operating revenues in the Others segment increased
¥3.2 billion (8.0%) year on year to ¥44.2 billion. Meanwhile, operating
income increased ¥1.2 billion (55.0%) to ¥3.5 billion. Subleasing
transaction volume grew and we sold properties in our real estate-
related business, while construction and facility management-related
business revenues stemming from facility renovations at Haneda
Airport terminals and construction-related revenues grew.
Performance in the Others Segment
(Fiscal Year)
2019
2018
Change
(¥ Millions)
Segment operating revenues
Segment operating expenses
¥44,223
40,697
¥ 3,526
¥40,958
38,683
¥ 2,275
¥3,265
2,014
¥1,251
(¥ Millions)
Segment operating income
(Fiscal Year)
2019
2018
Change
Segment operating revenues
¥143,996
¥150,746
Domestic package products
112,711
119,362
International package products
Other revenues
20,925
10,360
20,979
10,405
Segment operating expenses
142,603
150,140
Segment operating income
¥ 1,393
¥ 606
¥(6,750)
(6,651)
(54)
(45)
(7,537)
¥ 787
Non-Operating Income / Expenses
Net non-operating expenses amounted to ¥9.3 billion for fiscal 2019.
This result was due to impairment loss on goodwill related to Peach
Aviation Limited, which was offset in part by posting compensation
related to delays of aircraft delivery and engine malfunctions.
Non-Operating Income / Expenses
(Fiscal Year)
2019
2018
Change
(¥ Millions)
Interest and dividend income
¥ 3,031
¥ 2,926
¥
Interest expenses
Foreign exchange gain
Foreign exchange loss
Gain on sales of assets
(6,291)
(6,995)
473
—
6,746
—
(1,761)
2,554
Loss on sales / disposal of assets
(7,435)
(11,758)
105
704
473
1,761
4,192
4,323
Impairment loss
(25,159)
(1,997)
(23,162)
Equity in earnings of unconsolidated
subsidiaries and affiliates
1,210
1,559
(349)
Gain on sales of investment securities
1,122
Valuation loss on investments in
securities
(853)
—
—
1,122
(853)
Compensation payments received
17,897
6,810
11,087
Litigation settlement fees related to
anti-trust law claims
Loss on sales of shares of subsidiaries
and affiliates
Gain on donation of non-current assets
Other, net
Total
—
(6,423)
6,423
(7)
(343)
336
3,553
(3,592)
2,512
1,920
1,041
(5,512)
¥ (9,305)
¥(10,996)
¥ 1,691
Net Income Attributable to Owners of the Parent
The preceding factors combined to decrease income before income
taxes by ¥102.5 billion (66.6%) year on year to ¥51.5 billion. After
income taxes, municipal taxes, business taxes, and other adjust-
ments, net income attributable to owners of the parent decreased
¥83.1 billion (75.0%) to ¥27.6 billion. Earnings per share were ¥82.66
compared with ¥331.04 for the previous fiscal year.
Comprehensive income decreased ¥156.3 billion to a loss of
¥14.7 billion, mainly due to the decrease in net income attributable to
owners of the parent.
Cash Flows
Fundamental Approach
The ANA Group’s fundamental approach to cash management is to
conduct continuous investments strategically to strengthen competi-
tiveness over the medium and long term, while maintaining financial
soundness.
Capital expenditures are ordinarily kept within the scope of cash
flows from operating activities, including repayment of lease obliga-
tions, to generate free cash flow, which enables us to maintain a
balance between total interest-bearing debt and shareholders’ equity.
The Group’s primary means of raising funds are borrowings from
banks and bond issuances. The Group has also concluded commit-
ment lines totaling ¥153.6 billion (as of March 31, 2020) with major
domestic financial institutions to ensure reliable access to working
capital in case of emergency. Commitment lines were unused as of
the end of fiscal 2019.
The Group has access to the Japan Bank for International
Cooperation (JBIC)’s guarantee system for investments in aircraft,
our primary assets.
Overview of Fiscal 2019
Free cash flow resulted in expenditures of ¥100.0 billion (sum of cash
flows from operating activities and investing activities). Net cash
provided by financing activities totaled ¥23.8 billion. As a result, cash
and cash equivalents decreased ¥75.9 billion from the beginning of
the fiscal year, amounting to ¥135.9 billion at the end of the fiscal year.
Cash Flows from Operating Activities
After adjusting the ¥51.5 billion in income before income taxes for
depreciation and amortization and other non-cash items, net cash
provided by operating activities amounted to ¥130.1 billion, ¥165.9
billion lower year on year.
Interest Coverage Ratio*
(Fiscal Year)
Interest coverage ratio
(Times)
2019
2018
20.4
41.3
* Interest coverage ratio = Cash flows from operating activities / Interest expenses
106
107
Financial / Data Section
Management’s Discussion and Analysis
Cash Flows from Investing Activities
Net cash used in investing activities totaled ¥230.2 billion, ¥78.4
billion lower year on year. This result was mainly due to payments for
purchases of property and equipment related to payments upon
delivery of aircraft, purchases of spare parts, and advance payments
for aircraft to be put into service in the future. Payments were also
made for intangible assets, including investments in software. Net
cash used in investing activities amounted to ¥209.3 billion when
excluding cash movements that resulted in net outlays of ¥20.9 billion
related to the acquisition and sale of time deposits and negotiable
deposits of more than three months.
Free Cash Flow
As mentioned above, net cash provided by operating activities
totaled ¥130.1 billion. Since net cash used in investing activities
was ¥230.2 billion, free cash flow for fiscal 2019 amounted to a net
expenditure of ¥100.0 billion, an increase of ¥87.5 billion compared
to the previous fiscal year. Substantial free cash flow decreased
¥61.1 billion year on year to an outlay of ¥79.1 billion when excluding
cash movements associated with the acquisition and sale of time
deposits and negotiable deposits of more than three months.
Cash Flows from Financing Activities
Net cash provided by investing activities totaled ¥23.8 billion, up
¥70.3 billion year on year. This result was mainly due to dividend
payments and loan repayments, offset in part by proceeds from
issuance of bonds, etc.
Capital Expenditures and
Aircraft Procurement
Capital Expenditures
ANA Group capital expenditures are based on an approach of
selection and concentration. We invest to strengthen safety, increase
our competitiveness, and improve profitability. These expenditures
primarily reflect aircraft-related investments, including the acquisition
of aircraft, spare parts, and prepayment for aircraft, as well as
information systems expenditures. As a result, capital expenditures
for fiscal 2019 amounted to ¥351.3 billion, a decrease of 6.5%
compared to the previous fiscal year.
By segment, Air Transportation Business capital expenditures
decreased 7.4% year on year to ¥343.4 billion. Airline Related expen-
ditures increased 237.3% to ¥6.2 billion, while Travel Services expen-
ditures increased 7.1% to ¥0.2 billion. Trade and Retail capital
expenditures increased 94.6% to ¥2.2 billion, and Others decreased
47.6% to ¥0.1 billion.
Capital Expenditures* / Depreciation and Amortization
(¥ Billions)
400
300
281.4
254.4
304.7
375.8
351.3
138.8
140.3
150.4
159.5
175.7
200
100
0
18/4
2015
2016
2017
2018
2019
(FY)
Capital Expenditures
Depreciation and Amortization
* Capital expenditures contains only fixed assets.
Fundamental Approach to Aircraft Procurement
Aircraft are major investments used over the long term (10-plus
years). Decisions regarding the selection of aircraft types suited to
routes and networks and the pursuit of the best fleet composition
are among the most important issues for airline management.
The ANA Group fleet strategy is based on three basic policies:
(1) Strengthening cost competitiveness by introducing fuel-efficient
aircraft; (2) Optimizing supply to demand by increasing the ratios of
narrow- and medium-body aircraft; and (3) Enhancing productivity by
integrating aircraft types.
Fundamentally, the Group purchases and owns strategic aircraft
we intend to use over the medium to long term. We employ operating
leases to procure aircraft for use over the short term or for capacity
adjustment. The Group may also utilize sale-leaseback transactions
as a means to diversify corporate financing methods. In these and
other ways, the Group selects the most economical aircraft procure-
ment method.
Aircraft Procured in Fiscal 2019
Based on our fleet strategy mentioned above, aircraft totaled 307 as
of the end of fiscal 2019, an increase of 3 compared to the end of the
previous fiscal year.
During the fiscal year, the ANA Group added 21 new aircraft.
These additional aircraft consisted of one Airbus A380, six Boeing
777-300s, two Boeing 777Fs, one Boeing 787-10, five Boeing 787-9s,
two Airbus A320neos, and four Airbus A320-200s. Meanwhile, the
Group sold or returned leased aircraft, consisting of five Boeing
767-300s, two Boeing 767-300Fs, seven Airbus A320-200s, and four
Boeing 737-500s (18 aircraft total).
The table below shows changes in the number of aircraft.
Changes in the Number of Aircraft in Fiscal 2019
Aircraft
Number of Aircraft as of
March 31, 2020
Owned
Leased
( ) changes
Airbus A380
Boeing 777-300
Boeing 777-200
Boeing 777F (Freighter)
Boeing 787-10
Boeing 787-9
Boeing 787-8
Boeing 767-300
Boeing 767-300F (Freighter)
Airbus A321-200neo
Airbus A321-200
Airbus A320-200neo
Airbus A320-200
Boeing 737-800
Boeing 737-700
Boeing 737-500
Bombardier DHC-8-400
Total
2
(+1)
35
(+6)
20
2
2
(+2)
(+1)
2
(+1)
26
16
2
2
(+2)
(+1)
35
(+5)
29
(+3)
(–5)
(–2)
36
24
10
11
4
11
(+2)
(–3)
(–1)
(+1)
(–4)
41
39
8
3
24
31
23
(+3)
7
(–2)
0
0
11
(+2)
0
(–5)
24
(–1)
8
3
(+1)
(–4)
24
(+6)
(+2)
(–8)
0
9
4
0
0
6
5
1
3
11
4
0
41
(+2)
15
0
0
0
307
(+3)
208
(+1)
99
(+2)
Figures for Airbus A320-200s included 38 aircraft (all leased) operated by Peach Aviation Limited.
Separate from the figures above, as of March 31, 2020, 19 aircraft were leased outside the Group (19 as of March 31, 2019).
Aircraft Procurement Plan for Fiscal 2020
The ANA Group plans to add a total of 13 aircraft during fiscal 2020.
Our plans call for purchasing one Airbus A380, five Boeing 787-9s,
and seven Airbus A321neos. Meanwhile, the Group plans to retire
nine aircraft, consisting of one Boeing 777-200, one Boeing 767-300,
one Boeing 767-300F, three Boeing 737-700s, and three Boeing
737-500s.
108
109
Financial / Data Section
Management’s Discussion and Analysis
Financial Position
Assets
Total assets as of March 31, 2020 amounted to ¥2,560.1 billion, a
decrease of ¥126.9 billion compared to March 31, 2019.
Total current assets amounted to ¥571.1 billion as of March 31,
2020, a decrease of ¥129.0 billion from one year earlier. Cash and
deposits amounted to ¥109.4 billion, an increase of ¥41.1 billion
compared to the end of the previous fiscal year. Marketable securities
decreased ¥96.1 billion to ¥129.2 billion. As a result, liquidity on hand
amounted to ¥238.6 billion, down ¥55.0 billion year on year.
Total non-current assets at the end of the fiscal year stood at
¥1,988.1 billion, up ¥1.7 billion from one year earlier. This increase
was mainly due to an increase in aircraft and buildings and struc-
tures, despite a decrease in intangible assets as a result of recording
an impairment loss related to goodwill.
Liabilities
Total liabilities as of March 31, 2020 amounted to ¥1,491.2 billion,
a decrease of ¥86.5 billion compared to the end of the previous
fiscal year.
Current liabilities totaled ¥530.5 billion at the end of the fiscal year,
a decrease of ¥155.3 billion. This result was primarily due to a
decrease in advance ticket sales.
Long-term liabilities amounted to ¥960.7 billion as of March 31,
2020, an increase of ¥68.8 billion compared to the end of the previ-
ous fiscal year.
Interest-bearing debt, including finance lease obligations,
increased ¥54.2 billion year on year to ¥842.8 billion. This change
was the result of the issuance of ¥70.0 billion in bonds and borrow-
ings that exceeded amounts in the previous fiscal year. These
increases were offset in part by loan repayments. Debt/equity ratio
amounted to 0.8 times, an increase of 0.1 point compared with the
end of the previous fiscal year.
Interest-Bearing Debt
(End of Fiscal Year)
Short-term debt:
Short-term loans
Current portion of long-term loans
Current portion of bonds
Finance lease obligations
Long-term debt*:
Bonds
Convertible bonds with stock
acquisition rights
Long-term loans
Finance lease obligations
2019
2018
Change
¥108,307
¥112,987
¥ (4,680)
429
84,057
20,000
3,821
336
77,883
30,000
4,768
93
6,174
(10,000)
(947)
¥734,555
¥675,662
¥ 58,893
165,000
115,000
50,000
140,000
140,000
—
416,900
406,830
12,655
13,832
10,070
(1,177)
Total interest-bearing debt
¥842,862
¥788,649
¥ 54,213
* Excluding current portion of long-term loans and current portion of bonds
Net Assets
Net assets as of March 31, 2020 amounted to ¥1,068.8 billion,
a decrease of ¥40.4 billion compared to the end of the previous
fiscal year.
As a result of recording net income attributable to owners of the
parents, shareholders’ equity amounted to ¥1,068.6 billion, ¥2.0
billion higher year on year.
Total accumulated other comprehensive loss amounted to ¥7.6
billion, a decrease of ¥40.4 billion compared with the end of the
previous fiscal year. This result was mainly due to decreases in
unrealized gains on securities and deferred loss on derivatives under
hedge accounting.
As a result, total shareholders’ equity decreased ¥38.3 billion
compared with the previous fiscal year-end, standing at ¥1,061.0
billion. Shareholders’ equity ratio increased 0.5 point to 41.4%.
Book value per share (BPS) at the end of the fiscal year was
¥3,171.80, compared to ¥3,285.46 as of the end of the previous
fiscal year.
Interest-Bearing Debt / Debt/Equity Ratio*
(¥ Billions)
1,000
750
703.8
729.8
798.3
788.6
0.9
0.8
0.8
0.7
500
250
0
18/4
842.8
0.8
2015
2016
2017
2018
2019
(Left)
Interest-Bearing Debt
(Right)
Debt/Equity Ratio
* Excluding off-balanced lease obligations
(Times)
1.2
1.0
0.8
0.6
0
(FYE)
Bond Ratings
The Company has obtained credit ratings on its various long-term
bonds from the Japan Credit Rating Agency, Ltd. (JCR) and Rating
and Investment Information, Inc. (R&I).
Bond ratings as of March 31, 2020 were as follows:
Bond Ratings
Issuer rating
Outlook
JCR
A
Stable
R&I
A–
Stable
(¥ Millions)
Retirement Benefit Obligations
Allocation of Profits
Basic Policy on Allocation of Profits
Shareholder returns are an important management priority for
the Group.
The Group strives to bolster shareholder returns while maintaining
financial soundness. This goal will be accomplished as we secure
the funds needed to conduct growth investments (aircraft, etc.) to
support future business development. We examine the possibility of
further shareholder returns through dividend increases and share
buybacks on an ongoing basis, while considering the appropriate
level for free cash flow.
Dividends for Fiscal 2019
The impact of COVID-19 on Group performance has been significant.
At present, we cannot forecast when the pandemic will slow. Given
such unprecedented and severe economic conditions, securing
liquidity on hand has become an urgent issue. Therefore, we deeply
regret to announce that we will not be providing dividends for this
fiscal year.
The ANA Group’s defined benefit plans consist of defined benefit
corporate pension plans and lump-sum retirement benefit plans. In
addition, the Group has adopted a defined contribution pension plan.
Certain employees are entitled to additional benefits upon retirement.
Certain consolidated subsidiaries adopting defined-benefit
corporate pension plans and lump-sum retirement benefit plans use
a simplified method for calculating retirement benefit expenses and
liabilities.
Retirement Benefit Obligation and Related Expenses
(Fiscal Year / End of Fiscal Year)
Retirement benefit obligation
Plan assets at fair value
Unfunded retirement benefit obligation
Liability for retirement benefits
Asset for retirement benefits
Net liability arising from defined benefit obligation in
the consolidated balance sheet
Net periodic benefit costs
Main basis for actuarial calculations
(¥ Millions)
2019
2018
¥(225,286)
¥(223,723)
62,717
65,990
(162,569)
(157,733)
(163,384)
(158,209)
815
476
(162,569)
(157,733)
15,537
15,474
Discount rates
0.1–1.2%
0.1–1.2%
Expected rates of return on plan assets
1.0–2.5%
1.0–2.5%
Contribution to defined contribution pension plans
¥ 4,381
¥ 4,423
Fuel and Exchange Rate Hedging
The ANA Group pursues and conducts optimal hedge transactions
that reduce the impact of volatility in fuel prices and foreign exchange
rates to control the risk of fluctuations in earnings. The objective of
this hedging is to both stabilize profitability and equalize expenses
in response to rising fuel surcharges and foreign currency revenues
associated with growth in ANA international business.
The Group conducts fuel hedging (for ANA brands) three years in
advance of the applicable period after considering fuel surcharge
revenues.
The Group hedges (for ANA HOLDINGS and ANA brands) U.S.
dollar payments for fuel expenses three years in advance and U.S.
dollar payments associated with capital expenditures for aircraft and
other items five years in advance of the payment periods. Based on
a balance of foreign currency revenues, revenues linked to foreign
exchange market fluctuations, and foreign currency expenses with
respect to U.S. dollar payments, the Group uses forward exchange
agreements to hedge any portion of foreign currency expenses in
excess of foreign currency revenues.
110
111
Financial / Data Section
Operating Risks
The following describes major risks related to business and accounting conditions, etc., recognized by management as having a potentially
material impact on the consolidated Group financial condition, earnings, and cash flows.
Further, the forward-looking statements that follow are based on Group judgments as of March 31, 2020.
Category
Risk Factors
Description
Response Measures
International Situation
• Decline in demand for international routes to North
America, Europe, China, and Asia due to political
instability, international conflicts, large-scale terrorist
attacks, deterioration in diplomatic relations, etc.
Economic Recession
• Decline in demand for air transportation due to
economic stagnation in Japan and overseas
• Scale back operations in a flexible manner in response to
sharp decline in demand
• Build a business portfolio that does not depend
excessively on international business
• Conduct ongoing cost structure reform to reduce costs
and add liquidity to fixed costs
• Ensure liquidity on hand
Government
Air Transportation
Policies
External
Environment
Fluctuations in
Crude Oil Prices and
Exchange Rates
• Slots at congested airports in the Tokyo metropolitan
area (Haneda, Narita) allocated to the advantage of
other carriers
• Contraction or elimination of reduction measures related
to jet fuel taxes, landing fees, and air navigation service
charges
• Quick, sharp rises in crude oil prices outpacing hedges,
other self-directed efforts to compensate, and ability to
pass on costs in airfares
• Sharp declines in the yen in foreign exchange markets
driving aircraft and fuel procurement costs outpacing
self-directed efforts to compensate
• Consult with the Ministry of Land, Infrastructure, Transport
and Tourism (MLIT) and make requests on an equal footing
with overseas airlines
• Systematic and continuous hedging transactions of crude
oil commodity derivatives
• Use foreign currency generated for foreign currency
expenditures to the extent possible
• Use forward exchange agreements and currency options
for a portion of foreign currencies
• Scale back operations in a flexible manner in response to
• Outbreak of serious infectious disease resulting in
sharp decline in demand
Infectious Diseases
and Disasters
sharply lower air transportation demand due to decreased
demand in areas affected and voluntary restraints on
domestic and international travel
• Significant reduction in air transportation demand
stemming from disasters or events that restrict airport
operations or flight paths for an extended time; disaster-
related damage to ANA Group facilities affecting flights
• Obsolescence of current business models due to
Corporate Strategy
(Business Structure)
intensified competition or changes in consumer behavior
• Dependence on revenues and profits from specific
businesses
Aviation Safety
(Aircraft Accidents, etc.)
• Aircraft accidents causing loss of customer confidence
and public reputation having a significant impact on
Group management
• Conduct ongoing cost structure reform to reduce costs
and add liquidity to fixed costs
• Ensure liquidity on hand
• Implement measures for facilities and equipment to prevent
loss of airport administrative functions
• Coordinate with airport operating companies to strengthen
overall airport disaster-response measures based on the
fiscal 2019 Guidelines (A2-BCP) of the MLIT
• Review business models and cost structures focused on
the Air Transportation Business in anticipation of future
demand trends and changes in consumer behavior
• Differentiation strategy to build a business portfolio and
secure competitive advantage in each business
• Build and implement organizational measures, including
safety risk management systems, safety audits by
specialty organizations, and collecting and disseminating
the latest information related to safety internally
• Conduct ongoing training and education, including training
for Group employees engaged directly in flight operations,
hands-on training for all Group employees, etc.
• Leverage air transportation insurance to cover damage
reparations, and restoration / replacements of operating
equipment
International
Environment
IT Systems and
Information Leakage
Profit Structure
Finances
• Significant impact of systems failures or cyber terrorism
on operations maintenance and services due to high
degree of dependence on systems
• 24/7/365 monitoring of defense in depth (access restric-
tions, antivirus measures) and other defense measures
• Implementation of systems and operational measures to
• Leakage of personal information that leads to payment
of significant sanctions based on violations of the law,
as well as decline in customer base due to loss of trust
prevent information leakage
• Implementation of security literacy education for
employees
• Major impact of significant demand decreases on profits
due to inflexible fixed and operating costs
• Optimize supply to demand by placing appropriate aircraft
into service depending on demand and reservation trends
• Particularly large impact on revenues if summer demand
• Conduct ongoing cost structure reform to reduce costs
declines significantly
and add liquidity to fixed costs
• Deterioration in the profitability of each segment or a
decision to sell assets forcing the Group to recognize
asset impairment losses or loss on sales of property and
equipment
• Plan and execute ANA Group Corporate Strategy and
profit plans
• Write-downs of deferred income taxes due to declining
• Monitor the progress of profit plans
business profits that result in lower future taxable income
than estimates used in current tax planning
The following describes matters in addition to the risks noted
above that could have a material impact on investor decisions.
(1) Important Factors
The ANA Group has experienced a significant impact due to the
spread of COVID-19. We expect that future business conditions will
continue to be extremely challenging.
Given these unprecedented circumstances, we have limited the
scale of Air Transportation Business operations and reduced fuel
expenses and other operations-related costs. We have reduced
personnel expenses by cutting officer remuneration and manage-
ment salaries, as well as by adopting a temporary leave program.
In addition, the Group is reviewing and controlling capital expendi-
ture in aircraft and other areas, while also revising the timing of
investments. Over the three months between April and June of this
year, we borrowed total of ¥535 billion from private financial institu-
tions and the Development Bank of Japan. Further, we expanded
our existing commitment line of ¥150 billion by another ¥350 billion.
In the future, we will raise more funds as necessary to secure
liquidity on hand for every Group company. Accordingly, it is our
judgment that there are no material uncertainties regarding the
going concern assumption for the ANA Group.
(2) Risks Related to the International Situation
The Group currently operates international routes, primarily to North
America, Europe, China, and other parts of Asia. Going forward,
incidents including political instability, international conflicts, large-
scale terrorist attacks, or deterioration in diplomatic relations with
countries where the Group operates and has offices and other
bases could affect the Group’s performance due to the accompa-
nying decrease in demand for travel on these international routes.
(3) Risks Related to Statutory Regulations
As an airline operator, the Group undertakes operations based on
the stipulations of statutory regulations relating to airline operations.
The Group is required to conduct passenger and cargo operations
on international routes in accordance with the stipulations of
international agreements, including treaties, bilateral agreements,
and the decisions of the International Air Transport Association
(IATA) and the International Civil Aviation Organization (ICAO). The
Group’s fares, airspace, operating schedule, and safety manage-
ment are subject to a variety of constraints due to these regulations.
Further, the Group’s operations are constrained by the Japanese
Antitrust Law and similar laws and regulations in other countries
with regard to the pricing of fares and charges.
(4) Risks Related to Environmental Regulations
In recent years, numerous Japanese and overseas statutory
environmental protection regulations have been introduced or
strengthened with regard to such issues as noise, aircraft emissions
of CO2 and other greenhouse gases, use of environmentally pollut-
ing substances and their disposal, and energy use at major offices.
The ANA Group incurs significant costs to comply with these laws
and regulations. In addition to the emissions trading and reduction
schemes to be adopted in 2021 related to controlling greenhouse
gases generated by international aviation, if a globally shared
environmental tax is adopted, business activities could be restricted
or significant additional costs may be incurred.
(5) Risks Related to the Business Environment of the
Airline Industry
There could be material changes in the current competitive and
business environment within Japan, such as changes in aviation
policy or regional policy, as well as changes in the standing of
competitors due to mergers or capital tie-ups stemming from
bankruptcies and other factors. These changes could affect the
Group’s performance.
1. Risks Related to Airport Slots
Differences in the number of slots allocated at congested Tokyo
metropolitan area airports (Haneda, Narita) or the timing of alloca-
tions from ANA Group projections could affect the achievement of
the targets of the Group corporate strategy.
2. Risks Related to Public-Sector Fees
Public-sector fees include jet fuel taxes, landing fees, and air
navigation service charges. The Japanese government is currently
implementing temporary measures to reduce jet fuel taxes and
landing fees but could scale back or terminate these measures
in the future, which could affect the Group’s performance.
(6) Risk of Economic Recession
The airline industry is susceptible to the effects of economic trends,
and if the domestic or global economy is sluggish, this may cause
a decline of demand for air travel due to deterioration in personal
consumption and corporate earnings. International operations
(passenger and cargo) depend on overseas markets, especially
China, other parts of Asia, and North America, and economic
conditions in these regions could lead to a decline in the passenger
and cargo volume or a fall in the unit price.
112
113
Financial / Data Section
Operating Risks
(7) Risks Related to Crude Oil Price Fluctuations
Jet fuel is a crude oil derivative and its price tracks the price of
crude oil. Variance that exceeds the Group estimates for factors
that affect the price of crude oil, including political instability in the
oil-producing nations of the Middle East, the shale oil production
structure in the U.S., increased demand for crude oil due to rapid
economic growth in emerging countries, reductions in oil stockpiles
or reserves, speculative investment in crude oil, and natural disasters
can affect the Group’s performance as follows.
1. Risk of Increase in Crude Oil Prices
Generally, an increase in the price of crude oil causes an increase
in the price of jet fuel, which imposes substantial additional costs
on the Group. Accordingly, to mitigate the risk of fluctuations in
the price of jet fuel and to stabilize operating income, the Group
hedges risks using crude oil and jet fuel commodity derivatives in
planned, continuous hedging transactions for specific periods of
time. In the event that crude oil prices rise over a short period, there
are limitations to the Group’s ability to offset increases in crude oil
prices through ongoing cost reductions as well as raising fares and
charges. For these reasons, the Group may be unable to avoid the
influence of a sharp increase in crude oil prices completely,
depending on factors such as hedging positions.
2. Risk of Sudden Decrease in Crude Oil Prices
The Group conducts hedge transactions against changes in the
price of crude oil to mitigate risk. Therefore, a sudden decrease
in oil prices may not directly contribute to earnings because, in
addition to decreases in or expiration of fuel surcharges, hedge
positions and other market conditions may preclude the immediate
reflection of a sudden drop in fuel expenses in results.
(8) Risks Related to Foreign Exchange Rate
Fluctuations
The Group’s expenditures in foreign currencies are greater than its
revenues in foreign currencies. Therefore, depreciation of the yen
affects the Group’s profits. Accordingly, to the greatest extent
possible, foreign currency taken in as revenue is used to pay
expenses denominated in the same foreign currency to minimize
the impact on operating income from the risk of fluctuations in
foreign exchange rates. In addition, the Group uses forward
exchange agreements and currency options for a portion of the
foreign currency needed for purchases of aircraft and jet fuel to
stabilize and limit payment amounts on a yen conversion basis.
However, there are limits to the extent to which the Group can
reduce and offset costs by adjusting fares and charges should
costs increase due to the rapid depreciation of the yen in the
foreign exchange market over a short period of time. Accordingly,
such an occurrence could, depending on hedge positions and
other factors, affect the Group’s profit and expenditures.
Conversely, if the yen should appreciate rapidly in the foreign
exchange market over a short period of time, depending upon
hedge positions and other factors, this may preclude immediate
reflection in lower fuel expenses and impact the Group’s ability to
enjoy the benefits of the appreciation of the yen.
(9) Risks Related to Competition
The possibility of future increases in costs related to the Group’s
operations due to such factors as jet fuel expenses, financing cost,
and responses to environmental regulations cannot be ruled out.
If such costs increase, in order to secure income, it will be neces-
sary for the Group to cut costs through such means as reducing
indirect fixed costs, and to pass on costs through higher fares and
charges. However, because the Group is in competition with other
airlines and LCCs in Japan and overseas as well as with alternative
modes of transportation, such as the Shinkansen, on certain routes,
passing on costs could diminish competitiveness. Further, price
competition with competitors greatly restricts the passing on of
costs that could affect the Group’s performance.
(10) Risks Related to the Outbreak and Spread of
New Infectious Diseases
All Group businesses, including but not limited to international
routes, are exposed to the risk of a decline in demand due to the
outbreak and spread of new infectious diseases. The spread of
disease and the harm it may cause, including reduced desire to
travel by air among customers due to rumors, as well as restrictions
on entry and exit from countries and voluntary restraints on
movement within Japan, such as during the global spread of
COVID-19, could affect Group’s performance by causing the
number of passengers on the Group’s domestic and international
routes to drop sharply.
Further, more employees and contractors than expected could
fall ill due to the spread of new and highly contagious
infectious diseases, or due to increased virulence caused by
changes in disease profile, which could affect the continuity of
Group’s business.
(11) Risks Related to Disasters
The extended closure or operational restriction of airports or flight
path restrictions due to disasters including an earthquake, a
tsunami, a flood, a typhoon, heavy snow, a volcanic eruption, an
infectious disease, a strike, or a riot could impact flight operations
using affected airports and routes or result in significantly reduced
demand for air transportation, which could affect the Group’s
performance.
In particular, the Group’s data center is located in the Tokyo
metropolitan area, while the operational control for all of the Group’s
domestic and international flights is conducted at Haneda Airport
and most of the Group’s passengers use Tokyo metropolitan area
airports. As a result, a major disaster, such as an earthquake or a
typhoon; a disaster at the abovementioned facilities, such as a fire;
or a strike that closes the airports or limits their access could lead
to a long-term shutdown of the Group’s information systems,
operational control functions, or its operations themselves that
could significantly affect the Group’s performance.
3. Risks Related to Investments
The Group may enter new businesses and invest in or acquire other
companies to further expand its business in growth areas. These
investments and other initiatives may not produce the intended
effects. Moreover, if the interests of equity investors do not align, the
joint venture may not operate in the manner the Group considers
appropriate. If joint venture operations deteriorate, the Group may
be exposed to an economic burden. In addition, equity investors
other than the Group may experience poor financial results or
withdraw from the business. The Group may also expand into foreign
countries, and enter into businesses with remote relation to the
airline business. These initiatives may incur unforeseen detriments.
(13) Risks Related to Ineffective Strategic Alliances
The Group belongs to the Star Alliance. Based on Antitrust Immunity
(ATI) approval, joint venture operations are introduced in collabora-
tion with United Airlines in the network between Asia and the United
States, and with Lufthansa and Lufthansa group companies, Swiss
International Air Lines, Austrian Airlines, and Lufthansa Cargo AG.
in the network between Japan and Europe. The Group has also
entered into individual agreements, mainly in Asia, that go beyond
the frameworks of these alliances. However, the benefits of Star
Alliance membership might diminish if the alliance is broken up by
antitrust laws in various countries; an alliance partner withdraws
from the Star Alliance or changes its business policies; another
alliance group becomes more competitive; bilateral alliances
between member companies end; an alliance partner performs
poorly, restructures, or becomes less creditworthy; or restrictions
on alliance activities are tightened due to external factors. Such
eventualities could affect Group management.
(12) Risks Related to the Group’s Management
Strategy
1. Risks Related to the Group’s Fleet Strategy
In the Air Transportation Business, the Group is pursuing a fleet
strategy centered on introducing highly economical aircraft, inte-
grating aircraft types, and better optimizing supply to demand.
This strategy involves ordering aircraft from The Boeing Company,
Airbus S.A.S., Bombardier Inc., and Mitsubishi Aircraft Corporation.
Delays in delivery from any of those four companies for financial or
other reasons could create obstacles to Group operations.
In addition, elements of the fleet strategy could prove ineffective
or their expected benefits could diminish significantly due to the
factors given below.
1) Dependence on The Boeing Company
In accordance with the above fleet strategy, the Group has
ordered a large number of aircraft from The Boeing Company
(Boeing). Therefore, should financial or other issues render
Boeing unable to fulfill its agreements with the Group or compa-
nies such as those that maintain Boeing products, the Group
would be unable to acquire or maintain aircraft in accordance
with its fleet strategy. Such eventualities could affect the Group’s
operations.
2) Delay of Aircraft Development Plans by Mitsubishi Aircraft
Corporation
The Group has decided to introduce the Mitsubishi Space Jet
(formerly MRJ) that Mitsubishi Aircraft Corporation is developing,
with delivery scheduled after fiscal 2021. Further delivery delays
could create obstacles to Group’s operations.
2. Risks to Business Structure
Our Air Transportation Business and Airline Related Business
account for the majority of consolidated operating revenues. In
addition, the Air Transportation Business is closely interconnected
with our Travel Services and Trade and Retail businesses. In this
way, the ANA Group business structure is heavily dependent on the
Air Transportation Business. It may not be possible for other operat-
ing segments to compensate for an event that affects the overall Air
Transportation Business revenues, which could have a significant
impact on Group performance.
114
115
Financial / Data Section
Operating Risks
(14) Risks Related to Air Safety
1. Aircraft Accidents
An aircraft accident involving a flight operated by the Group or a
code-share partner could cause a drop in customer confidence and
impair the Group’s public reputation, creating a medium- to long-
term downturn in demand that could significantly affect the Group’s
performance.
Major accidents suffered by other airlines could similarly lead to
a reduction in aviation demand that could affect the Group’s
performance. An aircraft accident would give rise to significant
expenses including compensation for damages and the repair or
replacement of aircraft, but aviation insurance would not cover all
such direct expenses.
2. Violations of the Civil Aeronautics Act, etc.
ANA Group businesses are required to comply with the Civil
Aeronautics Act and notifications from government agencies.
Serious violations of the Civil Aeronautics Act could result in disad-
vantageous treatment (administrative penalties, administrative
guidance). In the past, the ANA Group has received a Business
Improvement Order due to violations of warnings related to insuffi-
cient maintenance and excessive consumption of alcohol among
flight crew. In addition to the negative impact on confidence in ANA
Group operational safety, this kind of disadvantageous treatment
could lead to a suspension of operations or revocation of business
licenses, depending on recurrence or the severity of the violation.
Such disadvantageous treatment could have a serious impact on
Group performance.
3. Technical Circular Directives
If an issue arises that significantly compromises the safety of an
aircraft, MLIT by law issues a technical circular directive. In some
cases, all aircraft of the same model might be grounded until the
measures to improve the airworthiness of the aircraft and equip-
ment have been implemented as directed.
Even when the law does not require a directive to be issued,
in some cases when safety cannot be confirmed from a technical
perspective, operation of the same model might be voluntarily
suspended and inspections and other maintenance activities may
be performed. The occurrence of such a situation could affect the
Group’s safety credibility or performance. In particular, the Group is
moving forward with fleet consolidation to new aircraft models, such
as the Boeing 787. An unanticipated design defect or technical
issue with these new models, which serve as mainstay aircraft,
could have a serious impact on Group performance.
(15) Risks Related to Unauthorized Disclosure of
Customer Information and Other Data
The Group holds a large amount of information relating to custom-
ers, such as that pertaining to the approximately 36.65 million
members (as of the end of March 2020) of the ANA Mileage Club.
The Personal Information Protection Law of Japan and similar laws
in countries overseas require proper management of such personal
information. The Group has established a privacy policy, apprised
customers of the Group’s stance regarding the handling of personal
information, and established measures to counter any foreseeable
contingency to ensure information security, including in its IT
systems. In addition, work procedures and information systems
are continuously monitored and revised to eliminate any potential
security gaps. Despite these precautions, the occurrence of a major
leak of personal information caused by unauthorized access, an
error in conducting business, or some other factor could carry
significant costs, in terms of both compensation and loss of
public confidence, which could affect the Group’s performance.
(16) Risks Related to IT Systems
The Group is highly dependent on information systems for such
critical functions as customer service and operational management.
A major disruption of one of those systems or of telecommunica-
tions networks caused by natural disasters, accidents, computer
viruses or unauthorized access, power supply constraints, large-
scale power outages, or system failures or malfunctions would
make it difficult to maintain customer service and operations and
would result in a loss of public confidence, which could affect the
Group’s performance. Further, the Group’s information systems are
also used by its partner airlines so there is a possibility that the
impact of systems failure would not be limited to the Group.
(17) Risks Related to Personnel and Labor
Many Group employees belong to labor unions. Events including a
collective strike by Group employees could have an effect on the
Group’s aircraft operation.
(18) Risk of Inability to Secure Required Personnel
The growth of our LCC Business and other factors have increased
demand for flight crews and other personnel. A certain period of
time is required to cultivate and train flight crews and other personnel.
Inability to secure the required number of competent flight crews
and other personnel in a timely manner could affect the Group’s
performance. In addition, a change of the supply–demand balance,
in labor markets could lead to personnel shortages in airport handling
and other operations, as well as a sharp increase in wage levels.
(19) Risks Related to Profit Structure
Expenses that are largely unaffected by passenger load factors,
including fixed costs such as aircraft expenses, along with fuel
expenses and landing and navigation fees which are largely deter-
mined by the type of aircraft, account for a significant proportion of
the Group’s costs, which limits the Group’s ability to immediately
change the scale of its operations in response to changes in
economic conditions. Therefore, decreases in the number of
passengers or volume of cargo could have a large impact on the
Group’s revenue and expenses.
Moreover, a significant decrease in demand during the summer
could affect the Group’s performance for that fiscal year, as passenger
service sales typically increase during summer.
(20) Financial Risks
1. Increase in the Cost of Financing
The Group raises funds to acquire aircraft primarily through bank
loans and bond issuances. However, the cost of financing could
increase due to deteriorating conditions in the airline industry,
turmoil in capital and financial markets, changes in the tax system
or government interest policy, changes to the guarantee systems
at governmental financial institutions, or a downgrade of the
Company’s credit rating that makes it difficult or impossible to
finance on terms advantageous to the Group. Such eventualities
could affect the Group’s performance.
2. Risks Related to Asset Impairment or Other Issues
The Group owns extensive property and equipment as a function of
its businesses. If the profitability of various operations deteriorates,
or a decision is made to sell assets, the Group may be required to
recognize asset impairment losses or loss on sales of property and
equipment in the future.
3. Risks Related to Deferred Income Taxes
If declining business profits result in lower future taxable income
than estimates used in current tax planning, the recoverable amount
of deferred income taxes could decrease, leading to a write-down
of deferred income taxes.
(21) Risks Related to Litigation
The Group could be subject to various lawsuits in connection with
its business activities, which could affect the Group’s performance.
(22) Risk of Inability to Secure Aircraft Fuel
The Group sees the slot expansions at Tokyo metropolitan area
airports as a major business opportunity. As we plan for business
growth, aircraft fuel consumption volume is expected to increase.
If we are not able to secure appropriate volumes of aircraft fuel, this
development could have an effect on Group aircraft operations.
116
117
Financial / Data Section Consolidated Financial Statements
Consolidated Balance Sheet
ANA HOLDINGS INC. and its consolidated subsidiaries
As of March 31, 2020
ASSETS
Current assets:
Cash and deposits (Notes 15 and 20)
Marketable securities (Notes 4 and 15)
Notes and accounts receivable (Note 15)
Accounts receivable from and advances to unconsolidated subsidiaries and affiliates
Lease receivables (Note 7)
Inventories (Notes 5, 7 and 22)
Prepaid expenses and other
Allowance for doubtful accounts
Total current assets
Property and equipment:
Land (Note 7)
Buildings and structures (Note 7)
Aircraft (Note 7)
Machinery and equipment
Vehicles
Furniture and fixtures
Lease assets (Note 12)
Construction in progress
Total
Accumulated depreciation
Net property and equipment
Investments and other assets:
Investment securities (Notes 4 and 15)
Investments in and advances to unconsolidated subsidiaries and affiliates (Note 6)
Lease and guaranty deposits
Deferred income taxes (Note 10)
Goodwill
Intangible assets
Other assets
Total investments and other assets
TOTAL (Note 17)
Yen (Millions)
2020
2019
U.S. dollars
(Thousands)
(Note 2)
2020
¥ 109,447
¥
68,301
$ 1,005,669
129,200
98,944
2,851
22,823
67,312
225,360
187,529
4,204
26,491
62,130
1,187,172
909,161
26,196
209,712
618,505
141,123
126,672
1,296,728
(538)
(457)
(4,943)
571,162
700,230
5,248,203
53,886
306,084
54,270
268,082
495,139
2,812,496
2,120,347
1,961,881
19,483,111
112,343
105,594
1,032,279
32,741
65,428
11,170
30,858
56,015
12,330
300,845
601,194
102,637
180,005
286,635
1,654,001
2,882,004
2,775,665
26,481,705
(1,301,678)
(1,228,595)
(11,960,654)
1,580,326
1,547,070
14,521,051
108,156
120,619
42,322
18,501
99,824
24,461
101,062
14,339
408,665
42,790
24,330
85,307
51,132
104,048
11,596
439,822
993,806
388,881
169,999
917,247
224,763
928,622
131,755
3,755,076
¥ 2,560,153
¥ 2,687,122
$ 23,524,331
LIABILITIES AND NET ASSETS
Current liabilities:
Short-term loans (Notes 7 and 15)
Current portion of long-term debt (Notes 7 and 15)
Accounts payable (Note 15)
Accounts payable to unconsolidated subsidiaries and affiliates
Advance ticket sales
Accrued expenses
Income taxes payable
Other current liabilities (Note 9)
Total current liabilities
Long-term liabilities:
Long-term debt (Notes 7 and 15)
Liability for retirement benefits (Note 8)
Deferred income taxes (Note 10)
Asset retirement obligations (Note 9)
Other long-term liabilities
Total long-term liabilities
Contingent liabilities (Note 14)
Net assets (Note 13):
Common stock:
Yen (Millions)
2020
2019
U.S. dollars
(Thousands)
(Note 2)
2020
¥
429
¥
336
$
3,941
107,878
196,391
4,325
112,651
229,712
4,544
991,252
1,804,566
39,740
111,827
218,950
1,027,538
36,974
8,441
64,281
60,590
21,374
37,776
339,740
77,561
590,655
530,546
685,933
4,874,997
734,555
163,384
112
1,224
61,462
675,662
158,209
110
3,371
54,524
6,749,563
1,501,277
1,029
11,246
564,752
960,737
891,876
8,827,869
Authorized – 510,000,000 shares;
Issued
– 348,498,361 shares in 2020 and 2019
Capital surplus
Retained earnings
318,789
258,470
550,839
318,789
258,448
548,439
2,929,238
2,374,988
5,061,462
Treasury stock – 13,978,652 shares in 2020 and 13,868,935 shares in 2019
(59,435)
(59,032)
(546,126)
Accumulated other comprehensive income:
Unrealized gain on securities
Deferred gain (loss) on derivatives under hedge accounting
Foreign currency translation adjustments
Defined retirement benefit plans
Total
Non-controlling interests
Total net assets
TOTAL
See accompanying notes to consolidated financial statements.
22,120
(14,595)
2,668
37,622
10,636
2,873
203,252
(134,108)
24,515
(17,828)
(18,362)
(163,815)
1,061,028
1,099,413
9,749,407
7,842
9,900
72,057
1,068,870
1,109,313
9,821,464
¥2,560,153
¥2,687,122
$23,524,331
118
119
Financial / Data Section
Consolidated Statement of Comprehensive Income
ANA HOLDINGS INC. and its consolidated subsidiaries
Year Ended March 31, 2020
Net income
Other comprehensive income (loss) (Note 11):
Unrealized gain (loss) on securities
Deferred gain (loss) on derivatives under hedge accounting
Foreign currency translation adjustments
Defined retirement benefit plans
Share of other comprehensive income (loss) in affiliates
Total other comprehensive income (loss) (Note 11)
Comprehensive income (loss)
Total comprehensive income (loss) attributable to:
Owners of the parent
Non-controlling interests
See accompanying notes to consolidated financial statements.
Yen (Millions)
2020
¥ 25,919
2019
¥111,837
(15,369)
(25,227)
(221)
539
(383)
(40,661)
¥(14,742)
13,115
14,115
(382)
2,930
15
29,793
¥141,630
U.S. dollars
(Thousands)
(Note 2)
2020
$ 238,160
(141,220)
(231,801)
(2,030)
4,952
(3,519)
(373,619)
$(135,458)
¥(12,749)
(1,993)
¥140,613
1,017
$(117,146)
(18,312)
Consolidated Statement of Income
ANA HOLDINGS INC. and its consolidated subsidiaries
Year Ended March 31, 2020
Operating revenues (Note 17)
Cost of sales (Note 22)
Gross profit
Selling, general and administrative expenses (Notes 8 and 18)
Operating income (Note 17)
Other income (expenses):
Interest income
Dividend income
Equity in earnings of unconsolidated subsidiaries and affiliates
Foreign exchange gain (loss), net
Gain on sales of assets
Gain on donation of non-current assets
Interest expenses
Loss on sales of assets
Loss on disposal of assets
Impairment loss (Note 21)
Other, net (Note 22)
Other income (expenses), net
Income before income taxes
Income taxes (Note 10):
Current
Deferred
Total income taxes
Net income
Net income (loss) attributable to non-controlling interests
Net income attributable to owners of the parent
Yen (Millions)
2020
¥1,974,216
1,583,434
390,782
329,976
60,806
2019
¥2,058,312
1,559,876
498,436
333,417
165,019
958
2,073
1,210
473
6,746
3,553
(6,291)
(302)
(7,133)
(25,159)
14,567
(9,305)
51,501
767
2,159
1,559
(1,761)
2,554
2,512
(6,995)
(641)
(11,117)
(1,997)
1,964
(10,996)
154,023
24,407
1,175
25,582
25,919
(1,736)
¥ 27,655
47,354
(5,168)
42,186
111,837
1,060
¥ 110,777
Yen
2020
2019
U.S. dollars
(Thousands)
(Note 2)
2020
$18,140,365
14,549,609
3,590,756
3,032,031
558,724
8,802
19,048
11,118
4,346
61,986
32,647
(57,805)
(2,774)
(65,542)
(231,177)
133,850
(85,500)
473,224
224,267
10,796
235,063
238,160
(15,951)
$ 254,111
U.S. dollars
(Note 2)
2020
Per share of common stock (Notes 3, 13 and 19):
Basic net income
Cash dividends applicable to the year
¥82.66
–
¥331.04
75.00
$0.75
–
Net income per share assuming full dilution is not disclosed as the Company had no potentially dilutive shares outstanding during the years ended March 31, 2020 and 2019.
See accompanying notes to consolidated financial statements.
120
121
Financial / Data Section
Consolidated Statement of Changes in Net Assets
ANA HOLDINGS INC. and its consolidated subsidiaries
Year Ended March 31, 2020
Consolidated Statement of Cash Flows
ANA HOLDINGS INC. and its consolidated subsidiaries
Year Ended March 31, 2020
Thousands
Number of
shares of
common stock
outstanding
Common
stock
Capital
surplus
Retained
earnings
Treasury
stock
Total
shareholders’
equity
Unrealized
gain on
securities
Deferred
gain (loss) on
derivatives
under hedge
accounting
Foreign
currency
translation
adjustments
Defined
retirement
benefit plans
Non-
controlling
interests
Total
net assets
Total
Yen (Millions)
Accumulated other comprehensive income
334,632
¥318,789
¥268,208
¥457,746
¥(59,015) ¥ 985,728
¥ 24,467
¥ (3,471)
¥3,201
¥(21,264)
¥ 2,933
¥11,891 ¥1,000,552
110,777
(20,084)
110,777
(20,084)
(41)
24
(41)
24
(10)
7
(9,760)
(9,760)
–
13,155
14,107
(328)
2,902
29,836
(1,991)
110,777
(20,084)
(41)
24
(9,760)
27,845
Balance at April 1, 2018
N et income attributable to
owners of the parent
C ash dividends ¥60.00 per
share (Note 13)
P urchase of treasury stock
(Note 13)
D isposal of treasury stock
(Note 13)
C hange in the parent’s
ownership interest due
to transactions with
non-controlling interests
Net changes in the year
Total changes during the
fiscal year
Balance at March 31, 2019
334,629
318,789
258,448
548,439
(59,032)
1,066,644
–
(9,760)
90,693
(17)
80,916
13,155
37,622
14,107
10,636
(328)
2,902
2,873
(18,362)
29,836
32,769
(1,991)
108,761
9,900
1,109,313
(125)
15
N et income attributable to
owners of the parent
C ash dividends ¥75.00 per
share (Note 13)
P urchase of treasury stock
(Note 13)
D isposal of treasury stock
(Note 13)
C hange in the parent’s
ownership interest due
to transactions with
non-controlling interests
C hanges in scope of
consolidation
Net changes in the year
Total changes during the
fiscal year
27,655
27,655
(25,105)
(25,105)
(453)
(453)
50
50
22
(150)
22
(150)
27,655
(25,105)
(453)
50
22
(150)
–
22
2,400
(403)
2,019
(15,502)
(25,231)
(205)
534
(40,404)
(2,058)
(40,443)
–
(15,502)
(25,231)
(205)
534
(40,404)
(2,058)
(42,462)
Balance at March 31, 2020
334,519
¥318,789
¥258,470
¥550,839 ¥(59,435) ¥1,068,663 ¥ 22,120 ¥(14,595)
¥2,668 ¥(17,828) ¥ (7,635) ¥ 7,842 ¥1,068,870
Thousands
Number of
shares of
common stock
outstanding
Common
stock
Capital
surplus
Retained
earnings
Treasury
stock
U.S. dollars (Thousands) (Note 2)
Accumulated other comprehensive income
Total
shareholders’
equity
Unrealized
gain on
securities
Deferred
gain (loss) on
derivatives
under hedge
accounting
Foreign
currency
translation
adjustments
Defined
retirement
benefit plans
Non-
controlling
interests
Total
net assets
Total
334,629
$2,929,238 $2,374,786 $5,039,410 $(542,423) $9,801,010 $ 345,695 $ 97,730
$26,398 $(168,721) $ 301,102
$90,967 $10,193,080
(125)
15
254,111
254,111
(230,680)
(230,680)
(4,162)
(4,162)
459
459
202
(1,378)
202
(1,378)
254,111
(230,680)
(4,162)
459
202
(1,378)
–
202
22,052
(3,703)
18,551 (142,442) (231,838)
(1,883)
4,906
(371,257)
(18,910)
(371,616)
– (142,442) (231,838)
(1,883)
4,906
(371,257)
(18,910)
(390,168)
Balance at March 31, 2019
N et income attributable to
owners of the parent
C ash dividends $0.68 per
share (Note 13)
P urchase of treasury stock
(Note 13)
D isposal of treasury stock
(Note 13)
C hange in the parent’s
ownership interest due
to transactions with
non-controlling interests
C hanges in scope of
consolidation
Net changes in the year
Total changes during the
fiscal year
Balance at March 31, 2020
334,519
$2,929,238 $2,374,988 $5,061,462 $(546,126) $9,819,562 $ 203,252 $(134,108) $24,515 $(163,815) $ (70,155) $ 72,057 $ 9,821,464
See accompanying notes to consolidated financial statements.
Cash flows from operating activities:
Income before income taxes
Adjustments for:
Depreciation and amortization (Note 17)
Impairment loss (Note 21)
Amortization of goodwill (Note 17)
Loss on disposal and sales of property and equipment
Gain on sales and valuation of investment securities
Loss on sales of shares of subsidiaries and affiliates
Increase in allowance for doubtful accounts
Increase in liability for retirement benefits
Interest and dividend income
Interest expenses
Foreign exchange loss (gain)
Decrease (increase) in notes and accounts receivable
Increase in other current assets
Increase (decrease) in notes and accounts payable
Increase (decrease) in advance ticket sales
Other, net
Subtotal
Interest and dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities:
Increase in time deposits
Proceeds from withdrawal of time deposits
Purchases of marketable securities
Proceeds from redemption of marketable securities
Purchases of property and equipment
Proceeds from sales of property and equipment
Purchases of intangible assets
Purchases of investment securities
Proceeds from sales of investment securities
Other, net
Net cash used in investing activities
Cash flows from financing activities:
Increase in short-term loans, net
Proceeds from long-term loans
Repayment of long-term loans
Proceeds from issuance of bonds
Repayment of bonds
Repayment of finance lease obligations
Payment for purchases of investments in subsidiaries with no changes
in scope of consolidation
Net increase of treasury stock
Payment for dividends
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Net increase resulting from changes in scope of consolidation
Cash and cash equivalents at end of year (Note 20)
See accompanying notes to consolidated financial statements.
Yen (Millions)
2020
2019
U.S. dollars
(Thousands)
(Note 2)
2020
¥ 51,501
¥ 154,023
$ 473,224
175,739
25,159
4,006
689
(269)
7
419
5,503
(3,031)
6,291
273
82,312
(9,284)
(38,045)
(107,123)
(14,510)
179,637
3,831
(6,371)
(46,928)
130,169
(55,819)
50,789
(175,070)
159,200
(317,604)
151,652
(33,757)
(8,339)
1,424
(2,694)
159,541
1,997
4,031
9,204
(149)
343
51
4,801
(2,926)
6,995
(534)
(7,195)
(20,788)
3,355
37,597
12,694
363,040
3,447
(7,175)
(63,164)
296,148
(45,811)
30,794
(176,060)
196,582
(336,807)
84,917
(39,057)
(18,978)
153
(4,404)
1,614,802
231,177
36,809
6,330
(2,471)
64
3,850
50,565
(27,850)
57,805
2,508
756,335
(85,307)
(349,581)
(984,314)
(133,327)
1,650,620
35,201
(58,540)
(431,204)
1,196,076
(512,900)
466,681
(1,608,655)
1,462,831
(2,918,349)
1,393,476
(310,181)
(76,624)
13,084
(24,754)
(230,218)
(308,671)
(2,115,390)
98
96,684
(82,035)
69,586
(30,000)
(4,609)
(96)
(405)
(25,105)
(249)
23,869
(274)
(76,454)
211,838
553
156
69,710
(87,903)
19,876
(10,000)
(5,602)
(11,326)
(17)
(20,084)
(1,290)
(46,480)
332
(58,671)
270,509
–
900
888,394
(753,790)
639,400
(275,659)
(42,350)
(882)
(3,721)
(230,680)
(2,287)
219,323
(2,517)
(702,508)
1,946,503
5,081
¥ 135,937
¥ 211,838
$ 1,249,076
122
123
Financial / Data Section
Notes to Consolidated Financial Statements
ANA HOLDINGS INC. and its consolidated subsidiaries
Year Ended March 31, 2020
1. Basis of presenting consolidated financial statements
The accompanying consolidated financial statements of ANA HOLDINGS INC. (hereinafter referred to as the “Company”) and its consolidated
subsidiaries have been prepared in accordance with the provisions set forth in the Japanese Financial Instruments and Exchange Act and its
related accounting regulations and in accordance with accounting principles generally accepted in Japan (“Japanese GAAP”), which are different
in certain respects as to the application and disclosure requirements of International Financial Reporting Standards (“IFRS”).
In preparing these consolidated financial statements, certain reclassifications and rearrangements have been made to the consolidated financial
statements issued domestically in order to present them in a form which is more familiar to readers outside Japan. In addition, certain reclassifi-
cations have been made in the consolidated financial statements of the previous fiscal year to conform to the classifications used in the current
fiscal year.
2. Translation of financial statements
The consolidated financial statements presented herein are expressed in Japanese yen and, solely for the convenience of readers outside of
Japan, have been translated into U.S. dollars at the rate of ¥108.83 = US$1, the approximate exchange rate prevailing on the Tokyo Foreign
Exchange Market on March 31, 2020. This translation should not be construed as a representation that the amounts shown could be converted
into U.S. dollars at that or any other rate. Translations of U.S. dollars are rounded down to the nearest thousand and, therefore, the totals shown
in tables do not necessarily agree with the sums of the individual amounts.
3. Summary of significant accounting policies
(a) Consolidation
The consolidated financial statements as of March 31, 2020 include the accounts of the Company and its 62 (62 in 2019) significant subsidiaries
(collectively, the “Group”).
Under the control and influence concepts, those companies in which the Company, directly or indirectly, is able to exercise control over
operations are fully consolidated, and those companies over which the Group has the ability to exercise significant influence are accounted for
by the equity method.
(d) Allowance for doubtful accounts
The allowance for doubtful accounts is stated in amounts considered to be appropriate based on the Group’s past credit loss experience and an
evaluation of potential losses in the receivables outstanding.
(e) Inventories
Inventories include aircraft spare parts, supplies and stock in trade of consolidated subsidiaries, and are stated at cost, principally determined by
the moving-average method. The net book value of inventories in the consolidated balance sheet is written down when their net realizable value
is less than book value. See Note 5 “Inventories” and Note 22 “Supplementary information for the consolidated statement of income” for addi-
tional information.
(f) Property and equipment (excluding leased assets)
Property and equipment, excluding leased assets, are stated at cost less accumulated depreciation. Depreciation of property and equipment is
computed based on the estimated useful lives. Major assets are depreciated by the following method:
Buildings ................................... Straight-line method
Aircraft ...................................... Straight-line method
The Company and certain subsidiaries employ principally the following useful lives for major property and equipment, based upon the
Company’s estimate of durability:
Buildings ................................... 3–50 years
Aircraft ...................................... 9–20 years
Major additions and improvements are capitalized at cost. Maintenance and repairs, including minor remodels and improvements, are charged
to income as incurred.
The Group reviews its long-lived assets for impairment whenever events or changes in circumstance indicate the carrying amount of an asset
or asset group may not be recoverable. The assets of the Group are grouped by individual property in the case of rental real estate, assets
determined to be sold and idle assets, and by management accounting categories in the case of business assets. An impairment loss is
recognized if the carrying amount of an asset or asset group exceeds the sum of the undiscounted future cash flows expected to result from
the continued use and eventual disposition of the asset or asset group. The impairment loss would be measured as the amount by which the
carrying amount of the asset exceeds its recoverable amount, which is the higher of the discounted cash flows from the continued use
and eventual disposition of the asset or the net selling price at disposition. See Note 21 “Impairment loss” for additional information.
Investments in 16 (16 in 2019) unconsolidated subsidiaries and significant affiliates are accounted for by the equity method.
(g) Intangible assets and amortization (excluding leased assets)
The difference between the cost and the underlying net assets at dates of acquisition of consolidated subsidiaries and companies accounted for
by the equity method is amortized using the straight-line method over a period of 10 to 15 years.
Intangible assets are amortized principally by the straight-line method. Cost of software purchased for internal use is amortized by the straight-
line method over five years, the estimated useful life of purchased software.
Investments in 95 (94 in 2019) subsidiaries and affiliates which are not consolidated or accounted for by the equity method are stated at cost.
If the equity method of accounting had been applied to the investments in these companies, the effect on the accompanying consolidated
financial statements would not be material.
All significant intercompany balances and transactions have been eliminated in consolidation. All material unrealized profit included in assets
resulting from transactions within the Group is also eliminated.
Certain subsidiaries have fiscal years ending on December 31 and February 29, and necessary adjustments for significant transactions, if any,
are made in consolidation.
(b) Foreign currency translation
All short-term and long-term monetary receivables and payables denominated in foreign currencies are translated into yen at the rates of
exchange in effect at the balance sheet date, except for payables and receivables hedged by qualified forward exchange contracts, and differ-
ences arising from the translation are included in the consolidated statement of income.
The balance sheet accounts of consolidated foreign subsidiaries are translated into yen at the rates of exchange in effect at the balance sheet
date, except for the components of net assets excluding non-controlling interests which are translated at their historical exchange rates. Revenue
and expense accounts are translated at the average rate of exchange in effect during the year. Differences arising from the translation are
presented as foreign currency translation adjustments in net assets.
(c) Marketable securities and investment securities
Marketable securities and investment securities are classified into three categories: trading, held-to-maturity or available-for-sale. Under the
accounting standard, trading securities are carried at fair value and held-to-maturity securities are carried at amortized cost. Marketable
securities classified as available-for-sale securities are carried at fair value with changes in unrealized holding gain or loss, net of the applicable
income taxes, included directly in net assets. Non-marketable securities classified as available-for-sale securities are carried at cost,
determined by the moving-average method. See Note 4 “Marketable securities and investment securities” for additional information.
(h) Retirement benefits
The retirement benefit plans of the Group cover substantially all employees other than directors and corporate auditors. Under the terms of this
plan, eligible employees are entitled, upon mandatory retirement or earlier voluntary severance, to lump-sum payments or annuity payments
based on their compensation at the time of leaving and years of service with the Company and subsidiaries.
The Company and certain significant domestic subsidiaries have trustee employee pension funds to provide coverage for part of the lump-sum
benefits or annuity payments.
The Company and certain consolidated subsidiaries sponsor defined contribution pension plans as well as defined benefit pension plans.
The Company accounts for the liability for retirement benefits based on the projected benefit obligations and plan assets at the balance sheet
date. The projected benefit obligations are attributed to periods on a benefit formula basis. Actuarial gains and losses and past service costs
that are yet to be recognized in profit or loss are recognized within net assets (accumulated other comprehensive income), after adjusting for
tax effects, and are recognized in profit or loss over the average remaining service years of employees.
(i) Income taxes
The provision for income taxes is computed based on the pretax income included in the consolidated statement of income. The asset and
liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of assets and liabilities. Deferred taxes are measured by applying currently enacted income
tax rates to the temporary differences. See Note 10 “Income taxes” for additional information.
(j) Leases
Leased assets arising from transactions under finance lease contracts are depreciated to a residual value of zero by the straight-line method
using the term of the contract as the useful life.
124
125
Financial / Data Section Notes to Consolidated Financial Statements
(k) Derivatives
(2) Application date
The Group uses derivatives, such as forward foreign currency exchange contracts, interest rate swaps, and commodity options and swaps are to
limit its exposure to fluctuations in foreign currency exchange rates, interest rates and commodity prices. The Group does not use derivatives for
trading purposes.
Derivative financial instruments are carried at fair value with changes in unrealized gains or losses charged or credited to income, except for
those which meet the criteria for deferral hedge accounting under which an unrealized gain or loss is deferred. Receivables and payables
hedged by qualified forward exchange contracts are translated at the corresponding foreign exchange contract rates. Interest rate swaps that
qualify for hedge accounting and meet specific matching criteria are not measured at fair value, but the differential paid or received under the
swap agreements is recognized and included in interest expenses.
(l) Revenue recognition
Passenger revenues, cargo and other operating revenues are recorded when services are provided.
(m) Cash equivalents
Cash equivalents are short-term investments that are readily convertible into cash and exposed to insignificant risk of changes in value.
Cash equivalents include time deposits and negotiable certificates of deposit, all of which mature or become due within three months of
the date of acquisition. See Note 20 “Supplementary cash flow information” for additional information.
(n) Per share information
Basic net income per share is computed by dividing net income attributable to common shareholders by the weighted-average number of
common shares outstanding for the period, retroactively adjusted for stock splits.
Diluted net income per share reflects the potential dilution that could occur if securities were exercised or converted into common stock. Diluted
net income per share of common stock assumes full conversion of the outstanding convertible notes and bonds at the beginning of the year (or
at the time of issuance) with an applicable adjustment for related interest expense, net of tax, and full exercise of outstanding warrants.
Diluted net income per share is not presented as the effect of including potential common shares is anti-dilutive.
Cash dividends per share presented in the accompanying consolidated statement of income are dividends applicable to the respective fiscal
years, including dividends to be paid after the end of the year.
(o) Share remuneration plan for directors
The Company has transactions for delivery of the Company’s treasury stock through a trust as a share remuneration plan (the “Trust for Delivery
of Shares to Directors”) in order to improve its operating performance, increase its corporate value, and raise the directors’ awareness of
shareholder-oriented management.
(1) Transaction outline
Trust for Delivery of Shares to Directors is a system in which funds are contributed by the Company, and shares acquired are distributed to the
Company’s directors in accordance with the Company’s operating performance, etc.
(2) The Company’s treasury stock remaining in the trust
The Company’s treasury stock remaining in the trust is recorded at book value (excluding associated expenses) of the trust and is reflected as
treasury stock in net assets. The book value was ¥340 million for the previous fiscal year and ¥717 million for the current fiscal year. The number
of shares was 107 thousand shares for the previous fiscal year and 209 thousand shares for the current fiscal year.
(p) Unapplied new accounting standard
“Accounting Standard for Revenue Recognition” (Accounting Standards Board of Japan (“ASBJ”) Statement No. 29 – March 31, 2020)
“Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No. 30 – March 31, 2020)
“Implementation Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No. 19 – March 31, 2020)
(1) Overview
The International Accounting Standards Board (“IASB”) and Financial Accounting Standards Board (“FASB”) issued a new revenue standard,
“Revenue from Contracts with Customers” (International Financial Reporting Standard 15 (“IFRS 15”) and Accounting Standard Codification 606
(“Topic 606”) issued by the IASB and FASB, respectively), on May 2014.
Against the background of the fact that IFRS 15 will be effective from periods beginning on or after January 1, 2018 and Topic 606 will be effec-
tive from periods beginning on or after December 15, 2017, the ASBJ issued ASBJ Statement No. 29, “Accounting Standard for Revenue
Recognition,” and ASBJ Guidance No. 30, “Implementation Guidance on Accounting Standard for Revenue Recognition.” The core principle of
the standard and guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an
amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
The ASBJ’s primary policy for developing its accounting standard for revenue recognition was to include the basic principles of IFRS 15 for the
purpose of comparability, between financial statements in accordance with Japanese GAAP and those in accordance with IFRS or accounting
principles generally accepted in the United States of America. Also, for particular items for which industrial practice should be taken into consid-
eration, alternative means are to be provided to the extent that comparability is maintained.
126
The Company will apply the accounting standard and guidance for annual periods beginning on or after April 1, 2021, and is in the process of
measuring the effects of applying the accounting standard and guidance on its consolidated financial statements in future applicable periods.
“Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30 – July 4, 2019)
“Accounting Standard for Measurement of Inventories” (ASBJ Statement No. 9 – July 4, 2019)
“Accounting Standard for Financial Instruments” (ASBJ Statement No. 10 – July 4, 2019)
“Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31 – July 4, 2019)
“Implementation Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No. 19 – March 31, 2020)
(1) Overview
The IASB and FASB established almost the same detailed implementation guidance for Fair Value Measurement (IFRS 13 and Topic 820 issued
by IASB and FASB, respectively).
The ASBJ has since made efforts to align Japanese GAAP to International Accounting Standards, so as to incorporate the aforementioned
implementation guidance for Fair Value Measurement and Disclosures. This resulted in them issuing ASBJ Statement No. 30, “Accounting
Standard for Fair Value Measurement.”
The ASBJ’s primary policy for developing its Accounting Standard for Fair Value Measurement was to include the basic principles of IFRS 13 for
the purpose of comparability, between financial statements in accordance with Japanese GAAP and those in accordance with IFRS or account-
ing principles generally accepted in the United States of America. Also, for particular items for which industrial practice should be taken into
consideration, alternative means are to be provided to the extent that comparability is maintained.
(2) Application date
The Company will apply the accounting standard and guidance for annual periods beginning on or after April 1, 2021, and is in the process of
measuring the effects of applying the accounting standard and guidance on its consolidated financial statements in future applicable periods.
“Accounting Standard for Disclosure of Accounting Estimates” (ASBJ Statement No. 31 – March 31, 2020)
(1) Overview
Regarding “key sources of estimation uncertainty,” required to be disclosed in accordance with “Presentation of Financial Statements”
(International Accounting Standards 1 (“IAS 1”), issued by the IASB in 2003, the ASBJ was requested that it should consider to require disclosure
of such note information for the purpose of enhancing usability of Financial Statements.
In response to such requests, the ASBJ developed and issued ASBJ Statement No. 31. The ASBJ’s primary policy for developing its accounting
standards is not requiring the expansion of individual notes but leading a company to determine the specific content of disclosure in light of the
purpose of disclosure by showing their principle and the purpose of disclosure.
(2) Application date
The Company will apply the accounting standard on March 31, 2021.
“Accounting Standard for Accounting Policy Disclosures, Accounting Changes and Error Corrections” (ASBJ Statement No. 24 – March 31, 2020)
(1) Overview
The ASBJ revised and issued “Accounting Standard for Accounting Policy Disclosures, Accounting Changes and Error Corrections,” in order to
enhance note information on accounting principles and procedures that were adopted when the provisions of relevant accounting standards are
not clear.
Also, in consideration of affect on accounting practices, the guidance is subject to applicable No. 24 of annotations on the accounting principles.
(2) Application date
The Company will apply the accounting standard on March 31, 2021.
(q) Additional information
Accounting estimates associated with the spread of COVID-19
Demand for air transportation in Japan and overseas decreased rapidly toward the end of the current fiscal year due to immigration restrictions
imposed by various countries and the impact of the voluntary restraint of staying home within Japan resulting from the spread of COVID-19.
Accounting estimates in the current fiscal year, such as the valuation of goodwill and the recoverability of deferred tax assets, are based on the
certain assumption that the situation will continue until the second quarter of the next fiscal year and the demand will pick up gradually afterwards.
127
Financial / Data Section Notes to Consolidated Financial Statements
4. Marketable securities and investment securities
Marketable and investment securities at March 31, 2020 and 2019 are summarized as follows:
Current:
Negotiable certificates of deposits
Other
Total
Non-current:
Marketable equity securities
Other
Total
Yen (Millions)
2020
2019
¥129,200
–
¥129,200
¥ 84,141
24,014
¥108,156
¥225,360
–
¥225,360
¥ 88,385
32,234
¥120,619
U.S. dollars
(Thousands)
2020
$1,187,172
–
$1,187,172
$ 773,141
220,656
$ 993,806
The costs and aggregate fair values of marketable and investment securities at March 31, 2020 and 2019 were as follows:
As of March 31, 2020
Securities classified as:
Available-for-sale:
Negotiable certificates of deposit
Marketable equity securities
Held-to-maturity
As of March 31, 2019
Securities classified as:
Available-for-sale:
Negotiable certificates of deposit
Marketable equity securities
Held-to-maturity
As of March 31, 2020
Securities classified as:
Available-for-sale:
Negotiable certificates of deposit
Marketable equity securities
Held-to-maturity
Cost
Unrealized gains
Unrealized losses
Fair value
Yen (Millions)
¥129,200
51,453
938
¥ –
36,211
1,632
¥ –
(3,523)
–
¥129,200
84,141
2,570
Cost
Unrealized gains
Unrealized losses
Fair value
Yen (Millions)
¥225,360
35,574
–
¥ –
52,916
–
¥ –
(105)
–
¥225,360
88,385
–
Cost
Unrealized gains
Unrealized losses
Fair value
U.S. dollars (Thousands)
$1,187,172
472,783
8,618
$ –
332,729
14,995
$ –
$1,187,172
(32,371)
–
773,141
23,614
The proceeds, realized gains, and realized losses on the available-for-sale securities sold during the years ended March 31, 2020 and 2019 were
as follows:
Proceeds
Gain on sales
Loss on sales
Yen (Millions)
2020
¥1,309
1,122
–
2019
¥559
333
–
U.S. dollars
(Thousands)
2020
$12,027
10,309
–
The redemption schedule of available-for-sale securities with maturities and held-to-maturity securities at March 31, 2020 and 2019 is
summarized as follows:
Bonds:
Within 1 year
Over 1 year to 5 years
Over 5 years to 10 years
Over 10 years
Other securities with maturities:
Within 1 year
Over 1 year to 5 years
Over 5 years to 10 years
Over 10 years
Total:
Within 1 year
Over 1 year to 5 years
Over 5 years to 10 years
Over 10 years
5. Inventories
Inventories at March 31, 2020 and 2019 consisted the following:
Inventories (Merchandise)
Inventories (Supplies)
Total
Yen (Millions)
2020
2019
¥ –
–
–
–
129,200
5,299
2,025
–
¥129,200
5,299
2,025
–
¥ –
–
–
–
225,360
–
6,389
–
¥225,360
–
6,389
–
U.S. dollars
(Thousands)
2020
$ –
–
–
–
1,187,172
48,690
18,607
–
$1,187,172
48,690
18,607
–
Yen (Millions)
2020
¥13,490
53,822
¥67,312
2019
¥13,707
48,423
¥62,130
U.S. dollars
(Thousands)
2020
$123,954
494,551
$618,505
6. Investments in and advances to unconsolidated subsidiaries and affiliates
Investments in and advances to unconsolidated subsidiaries and affiliates at March 31, 2020 and 2019 consisted of the following:
Investments in capital stock
Advances
Total
7. Short-term loans and long-term debt
Yen (Millions)
2020
¥37,508
4,814
¥42,322
2019
¥38,565
4,225
¥42,790
U.S. dollars
(Thousands)
2020
$344,647
44,234
$388,881
Short-term loans and current portion of long-term debt at March 31, 2020 and 2019 consisted of the following:
Yen (Millions)
2020
¥ 429
84,057
20,000
3,821
¥108,307
2019
¥ 336
77,883
30,000
4,768
¥112,987
U.S. dollars
(Thousands)
2020
$ 3,941
772,369
183,772
35,109
$995,194
The breakdown of securities for which fair value cannot be reliably determined at March 31, 2020 and 2019 is as follows:
Available-for-sale
Yen (Millions)
2020
¥23,076
2019
¥32,234
U.S. dollars
(Thousands)
2020
$212,037
Short-term loans
Current portion of long-term loans
Current portion of bonds
Current portion of finance lease obligations
Total
128
129
The average interest rates on the above short-term loans were 1.43% and 2.42% per annum in 2020 and 2019, respectively.
Financial / Data Section
Notes to Consolidated Financial Statements
Long-term debt at March 31, 2020 and 2019 consisted of the following:
The following assets were pledged as collateral for short-term and long-term debt at March 31, 2020 and 2019:
Bonds:
1.22% notes due 2024
1.20% notes due 2026
0.38% notes due 2019
0.99% notes due 2036
0.26% notes due 2020
0.88% notes due 2037
Convertible bonds with stock acquisition rights due 2022
Convertible bonds with stock acquisition rights due 2024
0.82% notes due 2038
0.47% notes due 2028
0.27% notes due 2026
0.84% notes due 2039
0.27% notes due 2025
0.28% notes due 2029
0.69% notes due 2039
Yen (Millions)
2020
2019
¥ 30,000
15,000
–
20,000
20,000
10,000
70,000
70,000
10,000
10,000
5,000
15,000
30,000
10,000
10,000
325,000
¥ 30,000
15,000
30,000
20,000
20,000
10,000
70,000
70,000
10,000
10,000
–
–
–
–
–
285,000
U.S. dollars
(Thousands)
2020
$ 275,659
137,829
–
183,772
183,772
91,886
643,204
643,204
91,886
91,886
45,943
137,829
275,659
91,886
91,886
2,986,308
Loans, principally from banks:
S ecured, bearing interest from 0.07% to 2.11% in 2020 and 0.13% to 2.11% in 2019, maturing in
installments through 2040
287,827
281,235
2,644,739
U nsecured, bearing interest from 0.46% to 2.23% in 2020 and 0.46% to 2.23% in 2019, maturing in
installments through 2031
Finance lease obligations:
Finance lease agreements expiring through 2031
Less current portion
Total
The details of the convertible bonds with stock acquisition rights are as follows:
Class of shares to be issued
Total issue price of stock acquisition rights
Initial conversion price
Total issue price
Total issue price of shares issued upon the exercise of stock acquisition rights
Percentage of stock acquisition rights granted
Exercise period
213,130
500,957
16,476
842,433
107,878
203,478
484,713
18,600
788,313
112,651
1,958,375
4,603,114
151,392
7,740,815
991,252
¥734,555
¥675,662
$6,749,563
Zero coupon convertible bonds due 2022
Common stock
Zero
¥5,180 ($47.59) per share
¥70,000 million ($643,204 thousand)
–
100.0%
October 3, 2017 through September 2, 2022
If all of these outstanding warrants had been exercised at March 31, 2020, 13,513,513 shares of common stock would have been issued.
Class of shares to be issued
Total issue price of stock acquisition rights
Initial conversion price
Total issue price
Total issue price of shares issued upon the exercise of stock acquisition rights
Percentage of stock acquisition rights granted
Exercise period
Zero coupon convertible bonds due 2024
Common stock
Zero
¥5,100 ($46.86) per share
¥70,000 million ($643,204 thousand)
–
100.0%
October 3, 2017 through September 5, 2024
If all of these outstanding warrants had been exercised at March 31, 2020, 13,725,490 shares of common stock would have been issued.
The conversion price of the convertible bonds is subject to adjustments to reflect stock splits and certain other events.
As is customary in Japan, short-term and long-term bank loans are made under general agreements which provide that security and guarantees
for future and present indebtedness will be given upon request of the bank, and that the bank shall have the right, as the obligation becomes
due or in the event of default and certain other specified events, to offset cash deposits against such obligations due to the bank.
Assets at net book value:
Aircraft (including aircraft spare parts included in inventories)
Land and buildings
Lease receivables
Others
Total
The aggregate annual maturities of long-term debt after March 31, 2020 are as follows:
Years ending March 31
2021
2022
2023
2024
2025
Thereafter
Total
8. Retirement benefit plans
Yen (Millions)
2020
2019
¥510,607
2,956
12,751
11,135
¥537,449
¥497,719
2,678
14,479
11,135
¥526,012
Yen (Millions)
¥107,878
73,806
132,942
87,388
115,134
325,285
¥842,433
U.S. dollars
(Thousands)
2020
$4,691,785
27,161
117,164
102,315
$4,938,426
U.S. dollars
(Thousands)
$ 991,252
678,176
1,221,556
802,977
1,057,925
2,988,927
$7,740,815
The Company and certain consolidated subsidiaries provide defined contribution pension plans as well as defined benefit pension plans, i.e.,
defined benefit corporate pension plans and lump-sum payment plans for the benefit of employees. Premium severance pay may be paid at the
time of retirement of eligible employees in certain cases.
Certain consolidated subsidiaries adopting defined benefit corporate pension plans and lump-sum payment plans use a simplified method for
calculating retirement benefit expenses and liabilities.
(a) The changes in the defined benefit obligation for the years ended March 31, 2020 and 2019 are as follows:
Balance at the beginning of the fiscal year
Service cost
Interest cost
Actuarial losses (gains)
Benefits paid
Accrued past service cost
Decrease due to transition to the defined contribution pension plans
Other
Balance at the end of the fiscal year
(b) The changes in plan assets for the years ended March 31, 2020 and 2019 are as follows:
Balance at the beginning of the fiscal year
Expected return on plan assets
Actuarial losses
Employer contributions
Benefits paid
Decrease due to transition to the defined contribution pension plans
Other
Balance at the end of the fiscal year
Yen (Millions)
2020
¥223,723
10,216
1,687
2,119
(12,958)
–
–
499
¥225,286
2019
¥227,114
10,036
1,711
(76)
(12,342)
0
(2,827)
107
¥223,723
Yen (Millions)
2020
¥65,990
782
(1,510)
2,611
(5,156)
–
–
¥62,717
2019
¥70,661
834
(421)
2,455
(5,253)
(2,827)
541
¥65,990
U.S. dollars
(Thousands)
2020
$2,055,710
93,871
15,501
19,470
(119,066)
–
–
4,585
$2,070,072
U.S. dollars
(Thousands)
2020
$606,358
7,185
(13,874)
23,991
(47,376)
–
–
$576,284
130
131
Financial / Data Section
Notes to Consolidated Financial Statements
(c) A reconciliation between the liability recorded in the consolidated balance sheet and the balances of the defined benefit obligation and plan
(2) Method of determining the expected rate of return on plan assets
assets at March 31, 2020 and 2019 is as follows:
Funded defined benefit obligation
Plan assets at fair value
Unfunded defined benefit obligation
Net liability arising from defined benefit obligation in the consolidated balance sheet
Liability for retirement benefits
Asset for defined benefits
Net liability arising from defined benefit obligation in the consolidated balance sheet
Yen (Millions)
2020
¥ 74,336
(62,717)
11,619
150,950
¥162,569
¥163,384
(815)
¥162,569
2019
¥ 77,533
(65,990)
11,543
146,190
¥157,733
¥158,209
(476)
¥157,733
(d) The components of net periodic benefit costs for the years ended March 31, 2020 and 2019 are as follows:
Service cost
Interest cost
Expected return on plan assets
Recognized actuarial losses
Amortization of past service cost
Net periodic benefit costs
Yen (Millions)
2020
¥10,216
1,687
(782)
3,569
847
¥15,537
2019
¥10,036
1,711
(834)
3,676
885
¥15,474
U.S. dollars
(Thousands)
2020
$ 683,046
(576,284)
106,762
1,387,025
$1,493,788
$1,501,277
(7,488)
$1,493,788
U.S. dollars
(Thousands)
2020
$ 93,871
15,501
(7,185)
32,794
7,782
$142,763
(e) Amounts recognized in other comprehensive income (before income tax effect) related to the defined retirement benefit plans for the years
ended March 31, 2020 and 2019 are as follows:
Past service cost
Actuarial losses
Total
Yen (Millions)
2020
¥(847)
60
¥(787)
2019
¥ (885)
(3,331)
¥(4,216)
U.S. dollars
(Thousands)
2020
$(7,782)
551
$(7,231)
(f) Amounts recognized in accumulated other comprehensive income (before income tax effect) related to the defined retirement benefit plans at
March 31, 2020 and 2019 are as follows:
Unrecognized actuarial losses
Unrecognized past service cost
Total
(g) Plan assets
(1) Components of plan assets
Plan assets at March 31, 2020 and 2019 consisted of the following:
Bonds
General accounts
Stocks
Cash and deposits
Other
Total
Yen (Millions)
2020
¥17,378
8,281
¥25,659
2019
¥17,277
9,169
¥26,446
U.S. dollars
(Thousands)
2020
$159,680
76,091
$235,771
2020
2019
43%
13
10
4
30
100%
44%
12
11
2
31
100%
The expected rate of return on plan assets has been estimated based on the anticipated allocation to each plan asset class and the
expected long-term returns on plan assets held in each category.
(h) Assumptions used for the years ended March 31, 2020 and 2019 are set forth as follows:
Discount rates
Expected rates of return on plan assets
(i) Defined contribution pension plans
2020
0.1 – 1.2%
1.0 – 2.5%
2019
0.1 – 1.2%
1.0 – 2.5%
The contributions to the defined contribution pension plans of the Company and certain subsidiaries were ¥4,381 million ($40,255 thousand) and
¥4,423 million for the years ended March 31, 2020 and 2019, respectively.
9. Asset retirement obligations
(a) Asset retirement obligations recorded on the consolidated balance sheet
(1) Overview of asset retirement obligations
The Company and its domestic subsidiaries enter into agreements with national government entities that allow for the use of Japanese
government property and have entered into real estate lease contracts with such entities for the Head Office, sales branches, airport branches,
and certain other offices. As the Company and its domestic subsidiaries have restoration obligations for such properties at the end of each lease
period, related legal obligations required by law and the contracts are recorded on the consolidated balance sheet as asset retirement obligations.
(2) Calculation of asset retirement obligations
The Group estimates the expected period of use as 1 to 30 years and calculates the amount of asset retirement obligations with a discount rate
of 0% to 2.27%.
The following table indicates the changes in asset retirement obligations for the years ended March 31, 2020 and 2019:
Balance at the beginning of the fiscal year
Liabilities incurred due to the acquisition of property and equipment
Accretion expense
Liabilities settled
Other
Balance at the end of the fiscal year
Yen (Millions)
2020
¥ 3,853
57
19
(513)
(2,161)
¥ 1,255
2019
¥1,319
67
389
(320)
2,398
¥3,853
U.S. dollars
(Thousands)
2020
$ 35,403
523
174
(4,713)
(19,856)
$ 11,531
(b) Asset retirement obligations not recorded on the consolidated balance sheet
The Company and its domestic subsidiaries enter into agreements with national government entities that allow for the use of Japanese govern-
ment property, and have entered into real estate lease contracts with such entities for land and office at airport facilities, including Tokyo
International Airport, Narita International Airport, New Chitose Airport, Chubu Centrair International Airport, Osaka International Airport, Kansai
International Airport, Fukuoka Airport, and Naha Airport. The Company and its domestic subsidiaries have restoration obligations when they
vacate and clear such facilities. However, as the above airports are considered to be critical infrastructure, it is beyond the control of the
Company alone to determine when to vacate and clear such facilities, and it is also impossible to make reasonable estimates as there are
currently no relocation plans for the above properties. Therefore, the Company and its domestic subsidiaries do not record asset retirement
obligations for the related liabilities.
132
133
Financial / Data Section Notes to Consolidated Financial Statements
10. Income taxes
11. Other comprehensive income
The Company and certain of its domestic subsidiaries are subject to Japanese national and local income taxes which, in the aggregate, resulted
in a normal effective statutory tax rate of 30.62% for the years ended March 31, 2020 and 2019.
The following table presents reclassification and tax effects allocated to each component of other comprehensive income for the years ended
March 31, 2020 and 2019:
The Group files a tax return under the consolidated corporate-tax system, which allows companies to base tax payments on the combined profits
or losses of the parent company and certain of its domestic subsidiaries.
The tax effects of significant temporary differences and tax loss carryforwards which resulted in deferred tax assets and liabilities at March 31,
2020 and 2019 are as follows:
Deferred tax assets:
Liability for retirement benefits
Prepaid expenses
Deferred loss on hedging instruments
Accrued bonuses to employees
Other provisions
Loss on investment in subsidiaries
Long-term unearned revenue
Loss on valuation of inventories
Unrealized gain on inventories and property and equipment
Other
Total gross deferred tax assets
Less valuation allowance
Total net deferred tax assets
Deferred tax liabilities:
Unrealized gain on securities
Deferred gain on hedging instruments
Retained earnings of subsidiaries and affiliates
Other
Total gross deferred tax liabilities
Net deferred income taxes
Yen (Millions)
2020
2019
¥ 50,286
9,901
8,723
6,608
6,537
6,091
5,270
4,763
4,673
28,827
131,679
(14,268)
117,411
(10,981)
(2,681)
(2,388)
(1,649)
(17,699)
¥ 48,750
8,356
–
13,105
4,898
5,305
6,309
3,687
4,597
26,173
121,180
(11,373)
109,807
(16,134)
(4,735)
(2,283)
(1,458)
(24,610)
U.S. dollars
(Thousands)
2020
$ 462,060
90,976
80,152
60,718
60,066
55,968
48,424
43,765
42,938
264,881
1,209,951
(131,103)
1,078,847
(100,900)
(24,634)
(21,942)
(15,152)
(162,629)
¥ 99,712
¥ 85,197
$ 916,217
A reconciliation of the difference between the normal effective statutory tax rate and the actual effective income tax rate for the years ended
March 31, 2020 and 2019 is as follows:
Normal effective statutory tax rate
Reconciliation:
Impairment loss
Amortization of goodwill
Expenses not deductible for income tax purposes
Inhabitants tax per capita levy
Loss on investment in subsidiaries
Income taxes for prior periods
Changes in valuation allowance
Other, net
Actual effective income tax rate
2020
30.62%
2019
30.62%
13.49
2.38
1.30
0.39
–
(0.81)
3.54
(1.24)
–
0.80
0.46
0.14
(5.57)
(1.78)
2.81
(0.09)
49.67%
27.39%
134
Unrealized gain (loss) on securities:
Amount arising during the fiscal year
Reclassification adjustments to profit or loss
Amount of unrealized gain (loss) on securities before tax effect
Tax effect
Total
Deferred gain (loss) on derivatives under hedge accounting:
Amount arising during the fiscal year
Reclassification adjustments to profit or loss
Amount of deferred gain (loss) on derivatives under hedge accounting before tax effect
Tax effect
Total
Foreign currency translation adjustments:
Amount arising during the fiscal year
Total
Defined retirement benefit plans:
Amount arising during the fiscal year
Reclassification adjustments to profit or loss
Amount of defined retirement benefit plans before tax effect
Tax effect
Total
Share of other comprehensive income (loss) in affiliates:
Amount arising during the fiscal year
Reclassification adjustments to profit or loss
Total
Yen (Millions)
2020
2019
¥(19,764)
(764)
(20,528)
5,159
(15,369)
(41,013)
4,424
(36,589)
11,362
(25,227)
(221)
(221)
(3,629)
4,416
787
(248)
539
(381)
(2)
(383)
¥19,155
(221)
18,934
(5,819)
13,115
9,585
10,671
20,256
(6,141)
14,115
(382)
(382)
(345)
4,561
4,216
(1,286)
2,930
102
(87)
15
U.S. dollars
(Thousands)
2020
$(181,604)
(7,020)
(188,624)
47,404
(141,220)
(376,853)
40,650
(336,203)
104,401
(231,801)
(2,030)
(2,030)
(33,345)
40,577
7,231
(2,278)
4,952
(3,500)
(18)
(3,519)
Total other comprehensive income (loss)
¥(40,661)
¥29,793
$(373,619)
12. Leases
As lessee
(a) Finance leases
Finance lease transactions are capitalized by recognizing lease assets and lease obligations in the consolidated balance sheet.
Tangible fixed lease assets include mainly aircraft, flight equipment, host computers and peripheral equipment. Intangible lease assets include
software. The depreciation method for leased assets is described in Note 3 (j) “Leases.”
(b) Operating leases
The amount of outstanding future lease payments under non-cancelable operating leases are as follows:
Current portion of operating lease obligations
Long-term operating lease obligations
Total
As lessor
(a) Operating leases
Yen (Millions)
2020
¥ 62,649
318,817
¥381,466
2019
¥ 54,866
265,832
¥320,698
U.S. dollars
(Thousands)
2020
$ 575,659
2,929,495
$3,505,154
The amount of outstanding future lease receivables under non-cancelable operating leases are as follows:
Current portion of operating lease receivables
Long-term operating lease receivables
Total
Yen (Millions)
2020
¥ 2,170
15,373
¥17,543
2019
¥ 949
6,983
¥7,932
U.S. dollars
(Thousands)
2020
$ 19,939
141,257
$161,196
135
Financial / Data Section
Notes to Consolidated Financial Statements
13. Supplementary information for the consolidated statement of changes in net assets
14. Contingencies
Supplementary information for the consolidated statement of changes in net assets for the year ended March 31, 2020 consisted of the following:
The Group was contingently liable as a guarantor of loans, principally to affiliates, totaling ¥2,080 million ($19,112 thousand) at March 31, 2020.
(a) Dividends
Under the Companies Act of Japan (the “Companies Act”), the appropriation of unappropriated retained earnings of the Company with respect
to a financial period is made by resolution of the Company’s shareholders at a general meeting to be held subsequent to the close of the
financial period and the accounts for that period do not therefore reflect such appropriation.
(1) Dividends paid to shareholders
Date of approval
June 21, 2019
Resolution
approved by
Ordinary General
Meeting of
Shareholders
Type of
shares
C ommon
stock (*1)
Yen (Millions)
U.S. dollars
(Thousands)
Amount
Amount
Paid from
Retained
earnings
Yen
U.S. dollars
Dividends
per share
Dividends
per share
Shareholders’
cut-off date
Effective date
¥25,105
$230,680
¥75.00
$0.68
March 31, 2019
June 24, 2019
(*1) The total amount of dividends does not include ¥9 million ($81 thousand) in dividends to be paid to the subsidiaries and affiliates. This is because the shares held by
subsidiaries and affiliates are recognized as treasury stock.
(2) Dividends with a shareholders’ cut-off date within the current fiscal year but an effective date within the subsequent fiscal year
There are no applicable items.
The Companies Act requires that an amount equal to 10% of dividends must be appropriated as a legal reserve (a component of retained
earnings) or as additional paid-in capital (a component of capital surplus), depending on the equity account charged upon the payment of such
dividends, until the aggregate amount of legal reserve and additional paid-in capital equals 25% of the common stock. Under the Companies
Act, the total amount of additional paid-in capital and legal reserve may be reversed without limitation. The Companies Act also provides that
common stock, legal reserve, additional paid-in capital, other capital surplus, and retained earnings can be transferred among the accounts
within equity under certain conditions upon resolution of the shareholders.
(b) Type and number of outstanding shares
As of March 31, 2020
Type of shares
Issued stock:
Common stock
Total
Treasury stock:
Common stock (*1, *2, *3)
Total
Number of shares (Thousands)
Balance at
beginning of year
Increase in shares
during the year
Decrease in shares
during the year
Balance at
end of year
348,498
348,498
13,868
13,868
–
–
125
125
–
–
15
15
348,498
348,498
13,978
13,978
(*1) The increase of 125 thousand shares of treasury stock is the total of 8 thousand shares that the Company purchased from holders of fractional shares; and 116 thousand
shares in the Company that were purchased by the Trust for Delivery of Shares to Directors.
(*2) The decrease of 15 thousand shares of treasury stock is the total of 0 thousand shares that the Company sold to the holders of fractional shares at their request; and 14
thousand shares in the Company that were sold by the Trust for Delivery of Shares to Directors.
(*3) Treasury stock includes 209 thousand shares held by the Trust for Delivery of Shares to Directors.
As of March 31, 2019
Type of shares
Issued stock:
Common stock
Total
Treasury stock:
Common stock (*1, *2, *3)
Total
Number of shares (Thousands)
Balance at
beginning of year
Increase in shares
during the year
Decrease in shares
during the year
Balance at
end of year
348,498
348,498
13,866
13,866
–
–
10
10
–
–
7
7
348,498
348,498
13,868
13,868
(*1) The increase of 10 thousand shares of treasury stock is 10 thousand shares that the Company purchased from holders of fractional shares.
(*2) The decrease of 7 thousand shares of treasury stock is the total of 0 thousand shares that the Company sold to the holders of fractional shares at their request; and 6
thousand shares that were sold by the Trust for Delivery of Shares to Directors.
(*3) Treasury stock includes 107 thousand shares held by the Trust for Delivery of Shares to Directors.
136
The Group was contingently liable as a guarantor for a stock transfer agreement between third parties, totaling ¥6,111 million ($56,151 thousand)
at March 31, 2020.
The Group was contingently liable as a guarantor of loans, principally to affiliates, totaling ¥2,685 million at March 31, 2019.
The Group was contingently liable as a guarantor for a stock transfer agreement between third parties, totaling ¥6,111 million at March 31, 2019.
15. Financial instruments and related disclosures
Overview
(a) Group policy for financial instruments
The Group limits its fund management to short-term time deposits and raises funds through borrowings from financial institutions, including
banks. The Group uses derivatives for the purpose of reducing the risks described below and does not enter into derivatives for speculative
or trading purposes.
(b) Types of financial instruments and related risk
Trade receivables (notes and accounts receivable) are exposed to credit risk in relation to customers.
Marketable securities and investment securities are exposed to the risk of market price fluctuations. Those securities are composed mainly of
the shares of other companies with which the Group has business relationships.
Substantially all trade payables have payment due dates within one year.
Borrowings are taken out principally for the purpose of making capital investments, and certain long-term debt with variable interest rates is
exposed to interest rate fluctuation risk. However, to reduce such risk for long-term interest-bearing debt at variable rates, the Group utilizes
interest rate swap transactions as hedging instruments. Interest rate swaps that qualify for hedge accounting and meet specific matching criteria
are not measured at fair value, but the differential paid or received under the swap agreements is recognized and included in interest expenses.
For derivatives, in order to reduce the foreign currency exchange rate risk arising from receivables and payables denominated in foreign curren-
cies, the Group enters into forward foreign exchange contracts for specific receivables and payables denominated in foreign currencies, mainly
for aircraft purchase commitments. In addition, the Group enters into commodity derivative transactions such as swaps and options to mitigate
fluctuation risk of the commodity prices of fuel and to stabilize operating profit.
1) Management of credit risks (risks such as breach of contract by customers)
The Group manages its credit risk from receivables on the basis of internal guidelines, which include monitoring of payment term and balances
of major customers by each business administration department to identify the default risk of customers at an early stage.
As for derivatives, the Group believes that the credit risks are extremely low, as it enters into derivative transactions only with reputable financial
institutions with sound credit profiles.
2) Management of market risks (fluctuation risks of foreign currency exchange rates and interest rates)
In order to reduce foreign currency exchange rate risks, the Group principally utilizes forward foreign exchange contracts for receivables and
payables denominated in foreign currencies. In order to mitigate the interest rate fluctuation risks related to debt, the Group utilizes interest rate
swap transactions. In addition, the Group enters into commodity derivative transactions such as swaps and options to mitigate fluctuation risk
related to commodity prices for fuel.
As for marketable securities and investment securities, the Group periodically reviews the fair values and the financial conditions of the issuers to
identify and mitigate risks of impairment.
There are internal management regulations for derivative transactions which set forth transaction authority and limits on transaction amounts.
The Group enters into derivative transactions in accordance with such policies. Moreover, the Group reports plans and results of methods and
ratios for offsetting risks at the quarterly meetings of the Board of Directors.
3) Management of liquidity risks related to financing (risks that the Group cannot meet the due dates of payables)
The Group manages liquidity risks by establishing a financial plan in order to procure and invest funds that are necessary for the operation of the
Group over a certain period of time, in accordance with the Group’s business operating plan and budget.
(c) Supplementary explanation of the estimated fair value of financial instruments
The fair value of financial instruments is based on their quoted market price, if available. When there is no quoted market price available, fair
value is reasonably estimated. Since various assumptions and factors are reflected in estimating the fair value, different assumptions and factors
could result in different fair value estimates. In addition, the notional amounts of derivatives presented in Note 16 “Derivatives and hedging
activities” are not necessarily indicative of the actual market risk involved in derivative transactions.
137
Financial / Data Section
Notes to Consolidated Financial Statements
Estimated fair value of financial instruments
(c) Marketable securities and investment securities
The carrying values of financial instruments on the consolidated balance sheet at March 31, 2020 and 2019, and their estimated fair values, are
shown in the following tables. The following tables do not include financial instruments for which fair value cannot be reliably determined (Please
refer to Note 2 below).
The fair values of marketable and investment securities are measured at the quoted market price of the stock exchange for the equity instru-
ments, and at the quoted price obtained from financial institutions for certain debt instruments. The information on the fair values of marketable
and investment securities by classification is included in Note 4 “Marketable securities and investment securities” of the notes to the consoli-
dated financial statements.
As of March 31, 2020
Assets:
Cash and deposits
Notes and accounts receivable
Marketable securities and investment securities
Total assets
Liabilities:
Accounts payable
Short-term loans
Bonds
Convertible bonds with stock acquisition rights
Long-term loans
Total liabilities
Derivatives*
As of March 31, 2019
Assets:
Cash and deposits
Notes and accounts receivable
Marketable securities and investment securities
Total assets
Liabilities:
Accounts payable
Short-term loans
Bonds
Convertible bonds with stock acquisition rights
Long-term loans
Total liabilities
Derivatives*
As of March 31, 2020
Assets:
Cash and deposits
Notes and accounts receivable
Marketable securities and investment securities
Total assets
Liabilities:
Accounts payable
Short-term loans
Bonds
Convertible bonds with stock acquisition rights
Long-term loans
Total liabilities
Derivatives*
Carrying value
Fair value
Differences
Yen (Millions)
¥ 109,447
98,944
214,279
¥ 422,670
¥ 196,391
429
185,000
140,000
500,957
¥1,022,777
¥
(20,664)
¥ 109,447
98,944
216,849
¥ 425,240
¥ 196,391
429
183,874
135,415
501,213
¥1,017,322
(20,664)
¥
Yen (Millions)
¥
–
–
2,570
¥2,570
¥
–
–
1,126
4,585
(256)
¥5,455
–
¥
Carrying value
Fair value
Differences
¥ 68,301
187,529
313,745
¥ 569,575
¥ 229,712
336
145,000
140,000
484,713
¥ 999,761
¥ 15,639
¥ 68,301
187,529
313,745
¥ 569,575
¥ 229,712
336
148,798
142,625
494,238
¥ 1,015,709
¥ 15,639
¥ –
–
–
¥ –
¥ –
–
(3,798)
(2,625)
(9,525)
¥ (15,948)
¥ –
U.S. dollars (Thousands)
Carrying value
Fair value
Differences
$1,005,669
909,161
1,968,933
$3,383,763
$1,804,566
3,941
1,699,898
1,286,409
4,603,114
$9,397,932
$ (189,874)
$1,005,669
909,161
1,992,548
$3,907,378
$1,804,566
3,941
1,689,552
1,244,280
4,605,467
$9,347,808
$ (189,874)
$
–
–
23,614
$23,614
$
–
–
10,346
42,129
(2,352)
$50,124
–
$
* The value of assets and liabilities arising from derivatives is shown as a net value, and the amount in parentheses represents a net liability position.
Notes:
1. Methods to determine the estimated fair value of financial instruments and other matters related to securities and derivative transactions
Assets
(a) Cash and deposits
The carrying values of cash and deposits approximate fair value because of their short maturities.
(b) Notes and accounts receivable
The carrying values of notes and accounts receivable approximate fair value because of their short maturities.
Liabilities
(a) Accounts payable
The carrying values of accounts payable approximate fair value because of their short maturities.
(b) Short-term loans
The carrying values of short-term loans approximate fair value because of their short maturities.
(c) Bonds
The fair value of bonds issued by the Company is measured at the present value of the total of principal and interest discounted by an interest
rate determined by taking into account the remaining period of each bond and current credit risk.
(d) Long-term loans
The fair values of long-term loans are determined by discounting the cash flows related to the debt at the Group’s assumed corporate
borrowing rate.
2. Financial instruments for which it is extremely difficult to determine the fair value
As of March 31, 2020
Unlisted stocks
Yen (Millions)
2020
¥23,076
2019
¥32,234
U.S. dollars
(Thousands)
2020
$212,037
Because no quoted market price is available and the fair value cannot be reliably determined, the above financial instruments are not included in
the fair value tables above.
3. The redemption schedule for receivables and available-for-sale and held-to-maturity securities with maturities at March 31, 2020 and 2019 is
summarized as follows:
As of March 31, 2020
Deposits
Notes and accounts receivable
Held-to-maturity bonds
Other securities with maturities
Total
As of March 31, 2019
Deposits
Notes and accounts receivable
Held-to-maturity bonds
Other securities with maturities
Total
As of March 31, 2020
Deposits
Notes and accounts receivable
Held-to-maturity bonds
Other securities with maturities
Total
Due in
one year or less
¥108,572
98,944
–
129,200
¥336,716
Due in
one year or less
¥ 67,546
187,529
–
225,360
¥480,435
Due in
one year or less
$ 997,629
909,161
–
1,187,172
$3,093,963
Yen (Millions)
Due after one year
through five years
Due after five years
through ten years
Due after
ten years
¥ –
–
–
5,299
¥5,299
¥ –
–
–
2,025
¥2,025
¥–
–
–
–
¥–
Yen (Millions)
Due after one year
through five years
Due after five years
through ten years
Due after
ten years
¥–
–
–
–
¥–
¥ –
–
–
6,389
¥6,389
¥–
–
–
–
¥–
U.S. dollars (Thousands)
Due after one year
through five years
Due after five years
through ten years
Due after
ten years
$
–
–
–
$
–
–
–
48,690
$48,690
18,607
$18,607
$–
–
–
–
$–
138
139
Financial / Data Section
Notes to Consolidated Financial Statements
4. The redemption schedule for bonds, loans and other interest-bearing liabilities at March 31, 2020 and 2019 is summarized as follows:
As of March 31, 2020
Short-term loans
Bonds
Convertible bonds with stock acquisition rights
Long-term loans
Total
As of March 31, 2019
Short-term loans
Bonds
Convertible bonds with stock acquisition rights
Long-term loans
Total
As of March 31, 2020
Short-term loans
Bonds
Convertible bonds with stock acquisition rights
Long-term loans
Total
16. Derivatives and hedging activities
Yen (Millions)
Due in
one year or less
Due after one year
through five years
Due after five years
through ten years
¥
429
¥
–
¥
–
20,000
–
84,057
30,000
140,000
228,056
¥104,486
¥398,056
70,000
–
138,900
¥208,900
Due after
ten years
–
¥
65,000
–
49,944
¥114,944
Yen (Millions)
Due in
one year or less
¥ 336
Due after one year
through five years
¥ –
Due after five years
through ten years
¥ –
30,000
–
77,883
¥108,219
50,000
70,000
239,514
¥359,514
25,000
70,000
126,097
¥221,097
U.S. dollars (Thousands)
Due in
one year or less
$ 3,941
Due after one year
through five years
$
–
Due after five years
through ten years
$
–
$
183,772
–
772,369
275,659
1,286,409
2,095,525
643,204
–
1,276,302
Due after
ten years
¥ –
40,000
–
41,219
¥81,219
Due after
ten years
–
597,261
–
458,917
$960,084
$3,657,594
$1,919,507
$1,056,179
The Group operates internationally and is exposed to the risk of fluctuations in foreign currency exchange rates, interest rates and jet fuel prices.
In order to manage these risks, the Group utilizes forward exchange contracts to hedge certain foreign currency transactions related to purchase
commitments, principally of flight equipment, and foreign currency receivables and payables. Also, the Group utilizes interest rate swaps to
minimize the impact of interest rate fluctuations related to outstanding debt. In addition, the Group also enters into a variety of swaps and options
in its management of risk exposure related to jet fuel prices. The Group does not use derivatives for speculative or trading purposes.
The Group has developed internal hedging guidelines to control various aspects of derivative transactions, including authorization levels and
transaction volumes. The Group enters into derivative transactions in accordance with these internal guidelines. Derivative and hedging transac-
tions initiated by respective operational departments have been examined by the accounting department and these transactions, including their
measures and ratios, are generally monitored by management on a quarterly basis. Assessment of hedge effectiveness is examined at inception
and, on an ongoing basis, periodically.
The Group is also exposed to credit-related losses in the event of non-performance by counterparties in regard to derivative financial
instruments; however, it is not expected that any counterparties will fail to meet their obligations, as the majority of the counterparties are
internationally recognized financial institutions.
Summarized below are the notional amounts and estimated fair values of the derivative financial instruments outstanding at March 31, 2020 and
2019 for which hedged accounting has been applied.
(a) Derivative transactions to which hedge accounting is not applied
(1) Currency-related transactions
As of March 31, 2020
Forward foreign exchange contracts:
Sell:
Buy:
Total
USD
EUR
Other
USD
EUR
Other
Yen (Millions)
Notional amount
Total
Maturing after one year
Fair value
¥ –
–
–
103
–
–
¥103
¥ –
–
–
103
–
–
¥103
¥–
–
–
0
–
–
¥0
As of March 31, 2019
Forward foreign exchange contracts:
Sell:
Buy:
Total
As of March 31, 2020
Forward foreign exchange contracts:
Sell:
Buy:
Total
(2) Commodity-related transactions
As of March 31, 2020
C ommodity (crude oil) swap contracts for accounts
payable, accounted for by the deferral method:
Receive/floating and pay/fixed
C ommodity (crude oil) option contracts, accounted for
by the deferral method:
Sell:
Buy:
Total
USD
EUR
Other
USD
EUR
Other
USD
EUR
Other
USD
EUR
Other
Yen (Millions)
Notional amount
Total
Maturing after one year
Fair value
¥ –
–
166
5,540
–
355
¥6,061
¥–
–
–
–
–
–
¥–
¥–
–
0
2
–
0
¥2
U.S. dollars (Thousands)
Notional amount
Total
Maturing after one year
Fair value
$ –
–
–
946
–
–
$946
$ –
–
–
946
–
–
$946
$–
–
–
0
–
–
$0
Yen (Millions)
Notional amount
Total
Maturing after one year
Fair value
Crude oil (Put)
Crude oil (Call)
¥1,002
431
555
¥1,988
¥–
–
–
¥–
¥(423)
(99)
(54)
¥(576)
As of March 31, 2019
C ommodity (crude oil) swap contracts for accounts
payable, accounted for by the deferral method:
Receive/floating and pay/fixed
C ommodity (crude oil) option contracts, accounted for
by the deferral method:
Sell:
Buy:
Total
Crude oil (Put)
Crude oil (Call)
Yen (Millions)
Notional amount
Total
Maturing after one year
Fair value
¥–
–
–
¥–
¥–
–
–
¥–
¥–
–
–
¥–
U.S. dollars (Thousands)
Notional amount
Total
Maturing after one year
Fair value
As of March 31, 2020
C ommodity (crude oil) swap contracts for accounts
payable, accounted for by the deferral method:
Receive/floating and pay/fixed
C ommodity (crude oil) option contracts, accounted for
by the deferral method:
Sell:
Buy:
Total
Note: The calculation of fair value is based on the data obtained from financial institutions.
Crude oil (Put)
Crude oil (Call)
$ 9,207
3,960
5,099
$18,267
$–
–
–
$–
$(3,886)
(909)
(496)
$(5,292)
140
141
Financial / Data Section Yen (Millions)
Notional amount
As of March 31, 2020
F orward foreign exchange contracts for accounts
receivable, accounted for by the deferral method:
Total
Maturing after one year
Fair value
Sell:
Notes to Consolidated Financial Statements
(b) Derivative transactions to which hedge accounting is applied
(1) Currency-related transactions
As of March 31, 2020
F orward foreign exchange contracts for accounts
receivable, accounted for by the deferral method:
Sell:
F orward foreign exchange contracts for accounts
payable, accounted for by the deferral method:
Buy:
C urrency option contracts for accounts payable,
accounted for by the deferral method:
Sell:
Buy:
F orward foreign exchange contracts,
accounted for as part of accounts receivable:
Sell:
F orward foreign exchange contracts,
accounted for as part of accounts payable:
Buy:
C urrency swap contracts for accounts payable,
accounted for as part of accounts payable:
Receive/USD and pay/JPY
Total
As of March 31, 2019
F orward foreign exchange contracts for accounts
receivable, accounted for by the deferral method:
Sell:
F orward foreign exchange contracts for accounts
payable, accounted for by the deferral method:
Buy:
C urrency option contracts for accounts payable,
accounted for by the deferral method:
Sell:
Buy:
F orward foreign exchange contracts,
accounted for as part of accounts receivable:
Sell:
F orward foreign exchange contracts,
accounted for as part of accounts payable:
Buy:
C urrency swap contracts for accounts payable,
accounted for as part of accounts payable:
Receive/USD and pay/JPY
Total
USD
EUR
Other
USD
EUR
Other
USD (Put)
USD (Call)
USD
EUR
Other
USD
EUR
Other
USD
EUR
Other
USD
EUR
Other
USD (Put)
USD (Call)
USD
EUR
Other
USD
EUR
Other
¥ 418
–
–
359,747
500
17
46,403
51,225
218
–
6
9,469
111
1
–
¥468,115
¥
–
–
–
143,268
–
–
30,696
33,897
–
–
–
–
–
–
–
¥
(1)
–
–
11,984
(4)
(2)
(978)
2,163
(*)
(*)
(*)
(*)
(*)
(*)
(*)
¥207,861
¥13,162
Yen (Millions)
Notional amount
Total
Maturing after one year
Fair value
¥ 6,165
0
77
334,460
188
138
45,366
41,012
302
48
39
17,931
999
4
–
¥446,729
¥ –
–
–
169,059
–
–
32,274
29,221
–
–
–
–
–
–
–
¥ (64)
0
0
7,843
(8)
(2)
1,575
(643)
(*)
(*)
(*)
(*)
(*)
(*)
(*)
¥230,554
¥8,701
U.S. dollars (Thousands)
Notional amount
Total
Maturing after one year
Fair value
USD
EUR
Other
USD
EUR
Other
USD (Put)
USD (Call)
USD
EUR
Other
USD
EUR
Other
$
3,840
–
–
3,305,586
4,594
156
426,380
470,688
2,003
–
55
87,007
1,019
9
–
$
–
–
–
1,316,429
–
–
282,054
311,467
–
–
–
–
–
–
–
$
(9)
–
–
110,106
(36)
(18)
(8,986)
19,875
(*)
(*)
(*)
(*)
(*)
(*)
(*)
$4,301,341
$1,909,960
$120,940
F orward foreign exchange contracts for accounts
payable, accounted for by the deferral method:
Buy:
C urrency option contracts for accounts payable,
accounted for by the deferral method:
Sell:
Buy:
F orward foreign exchange contracts,
accounted for as part of accounts receivable:
Sell:
F orward foreign exchange contracts,
accounted for as part of accounts payable:
Buy:
C urrency swap contracts for accounts payable,
accounted for as part of accounts payable:
Receive/USD and pay/JPY
Total
Note: Calculation of fair value is based on the data obtained from financial institutions.
(*) The estimated fair value of forward foreign exchange contracts is included in the estimated fair value of accounts payable, as the amounts in such derivative contracts
accounted for as part of accounts receivable and payable are aggregated with the receivables and payables denominated in foreign currencies that are subject to hedge
accounting. See Note 15 “Financial instruments and related disclosures” for additional information.
(2) Interest-related transactions
As of March 31, 2020
Interest rate swap hedging long-term loans:
Receive/floating and pay/fixed
As of March 31, 2019
Interest rate swap hedging long-term loans:
Receive/floating and pay/fixed
As of March 31, 2020
Interest rate swap hedging long-term loans:
Receive/floating and pay/fixed
Yen (Millions)
Notional amount
Total
Maturing after one year
Fair value
¥82,333
¥53,413
(*)
Yen (Millions)
Notional amount
Total
Maturing after one year
Fair value
¥111,253
¥82,333
(*)
U.S. dollars (Thousands)
Notional amount
Total
Maturing after one year
Fair value
$756,528
$490,792
(*)
(*) Interest rate swap contracts are used as hedges and meet specific matching criteria, the net amount to be paid or received under the interest rate swap contract is added to
or deducted from the interest on the long-term loans. The estimated fair value of interest rate swap contracts is included in the estimated fair value of long-term loans.
(3) Commodity-related transactions
As of March 31, 2020
Total
Maturing after one year
Fair value
Yen (Millions)
Notional amount
C ommodity (crude oil) swap contracts for accounts
payable, accounted for by the deferral method:
Receive/floating and pay/fixed
C ommodity (crude oil) option contracts, accounted for
by the deferral method:
¥ 69,132
¥27,453
¥(24,304)
Sell:
Buy:
Total
Crude oil (Put)
Crude oil (Call)
33,121
42,798
¥145,051
15,468
20,104
¥63,025
(7,229)
(1,717)
¥(33,250)
142
143
Financial / Data Section Notes to Consolidated Financial Statements
As of March 31, 2019
Total
Maturing after one year
Fair value
Yen (Millions)
Notional amount
C ommodity (crude oil) swap contracts for accounts
payable, accounted for by the deferral method:
Receive/floating and pay/fixed
C ommodity (crude oil) option contracts, accounted for
by the deferral method:
¥ 74,591
¥29,073
¥5,234
Sell:
Buy:
Total
Crude oil (Put)
Crude oil (Call)
34,350
44,114
¥153,055
17,211
21,989
¥68,273
(445)
2,147
¥6,936
As of March 31, 2020
Total
Maturing after one year
Fair value
U.S. dollars (Thousands)
Notional amount
C ommodity (crude oil) swap contracts for accounts
payable, accounted for by the deferral method:
Receive/floating and pay/fixed
C ommodity (crude oil) option contracts, accounted for
by the deferral method:
As of and for the year ended March 31, 2020
Operating revenues:
Operating revenues from external customers
Intersegment revenues or transfers
Total
Segment profit
Segment assets
Other items:
Depreciation and amortization
Amortization of goodwill
Increase in property and equipment and intangible assets
Other
Total
Adjustments
Consolidated
Yen (Millions)
¥15,621
28,602
¥44,223
¥ 3,526
25,276
262
–
141
¥1,974,216
395,923
¥2,370,139
¥ 75,522
2,577,468
175,739
4,006
352,325
¥
–
(395,923)
¥(395,923)
¥ (14,716)
(17,315)
–
–
(964)
¥1,974,216
–
¥1,974,216
¥ 60,806
2,560,153
175,739
4,006
351,361
Notes:
1. “Other” refers to all business segments that are not included in the reportable segments, such as facility management, business support, and other operations.
2. Adjustments are as follows:
(a) Adjustments to segment profit consist of the elimination of intersegment transactions of ¥(9,979) million and corporate expenses of ¥(4,734) million.
(b) Adjustments to segment assets consist of long-term investments (investment securities and stocks of subsidiaries and affiliates) in consolidated subsidiaries of ¥157,553
$ 635,229
$252,255
$(223,320)
million and eliminations of intersegment transactions of ¥(174,868) million.
(c) Adjustments to increase in property and equipment and intangible assets mainly consist of the elimination of intersegment transactions.
3. Segment profit is reconciled to operating income on the consolidated statement of income.
Sell:
Buy:
Total
Crude oil (Put)
Crude oil (Call)
304,337
393,255
$1,332,821
142,129
184,728
$579,114
(66,424)
(15,776)
$(305,522)
Note: The calculation of fair value is based on the data obtained from financial institutions.
17. Segment information
(a) Description of reportable segments
The reportable segments of the Company and its consolidated subsidiaries are components for which discrete financial information is available
and whose operating results are regularly reviewed by the Executive Committee to make decisions about resource allocation and to assess
performance.
The Group’s reportable segments are categorized under “Air Transportation,” “Airline Related,” “Travel Services,” and “Trade and Retail.”
The “Air Transportation” segment conducts domestic and international passenger operations, cargo and mail operations, and other transporta-
tion services. The “Airline Related” segment conducts air transportation-related operations, such as airport passenger and ground handling
services and maintenance services. The “Travel Services” segment conducts operations centering on the development and sales of travel plans.
It also conducts planning and sales of branded travel packages using air transportation. The “Trade and Retail” segment conducts mainly import
and export operations of goods related to air transportation and is involved in in-store and non-store retailing.
(b) Methods of measurement for the amounts of sales, profit, assets, and other items for each reportable segment
The accounting policies of the reportable segments are substantially the same as those described in Note 3 “Summary of significant accounting
policies.”
Segment performance is evaluated based on operating income or loss. Intersegment sales and transfers are based on current market prices.
(c) Information about sales, profit, assets, and other items
As of and for the year ended March 31, 2020
Operating revenues:
Operating revenues from external customers
Intersegment revenues or transfers
Total
Segment profit
Segment assets
Other items:
Depreciation and amortization
Amortization of goodwill
Increase in property and equipment and intangible assets
Yen (Millions)
Reportable Segments
Air
Transportation
¥1,658,763
78,974
¥1,737,737
¥ 49,550
2,305,293
168,296
3,889
343,476
Airline Related
Travel Services
Trade and Retail
Subtotal
¥ 49,804
249,629
¥299,433
¥ 18,144
147,275
5,323
3
6,200
¥134,759
9,237
¥143,996
¥ 1,393
42,405
553
–
258
¥115,269
29,481
¥144,750
¥ 2,909
57,219
1,305
114
2,250
¥1,958,595
367,321
¥2,325,916
¥ 71,996
2,552,192
175,477
4,006
352,184
As of and for the year ended March 31, 2019
Operating revenues:
Operating revenues from external customers
Intersegment revenues or transfers
Total
Segment profit
Segment assets
Other items:
Depreciation and amortization
Amortization of goodwill
Increase in property and equipment and intangible assets
As of and for the year ended March 31, 2019
Operating revenues:
Operating revenues from external customers
Intersegment revenues or transfers
Total
Segment profit
Segment assets
Other items:
Depreciation and amortization
Amortization of goodwill
Increase in property and equipment and intangible assets
Yen (Millions)
Reportable Segments
Air
Transportation
¥1,728,645
85,772
¥1,814,417
¥ 160,556
2,409,579
152,948
3,889
370,778
Airline Related
Travel Services
Trade and Retail
Subtotal
¥ 51,783
239,268
¥291,051
¥ 13,178
148,288
4,496
28
1,838
¥140,805
9,941
¥150,746
¥ 606
60,163
507
–
241
¥122,454
28,225
¥150,679
¥ 3,706
61,019
1,354
114
1,156
¥2,043,687
363,206
¥2,406,893
¥ 178,046
2,679,049
159,305
4,031
374,013
Other
Total
Adjustments
Consolidated
Yen (Millions)
¥14,625
26,333
¥40,958
¥ 2,275
23,434
236
–
269
¥2,058,312
389,539
¥2,447,851
¥ 180,321
2,702,483
159,541
4,031
374,282
¥ –
(389,539)
¥(389,539)
¥ (15,302)
(15,361)
–
–
1,582
¥2,058,312
–
¥2,058,312
¥ 165,019
2,687,122
159,541
4,031
375,864
Notes:
1. “Other” refers to all business segments that are not included in the reportable segments, such as facility management, business support, and other operations.
2. Adjustments are as follows:
(a) Adjustments to segment profit consist of the elimination of intersegment transactions of ¥(8,937) million and corporate expenses of ¥(6,365) million.
(b) Adjustments to segment assets consist of long-term investments (investment securities and stocks of subsidiaries and affiliates) in consolidated subsidiaries of ¥171,058
million and eliminations of intersegment transactions of ¥(186,419) million.
(c) Adjustments to increase in property and equipment and intangible assets mainly consist of the elimination of intersegment transactions.
3. Segment profit is reconciled to operating income on the consolidated statement of income.
As of and for the year ended March 31, 2020
Operating revenues:
Operating revenues from external customers
Intersegment revenues or transfers
Total
Segment profit
Segment assets
Other items:
Depreciation and amortization
Amortization of goodwill
Increase in property and equipment and intangible assets
U.S. dollars (Thousands)
Reportable Segments
Air
Transportation
$15,241,780
725,663
$15,967,444
$ 455,297
21,182,514
1,546,411
35,734
3,156,078
Airline Related
Travel Services
Trade and Retail
Subtotal
$ 457,631
2,293,751
$2,751,382
$ 166,718
1,353,257
48,911
27
56,969
$1,238,252
84,875
$1,323,127
12,799
$
389,644
$1,059,165
270,890
$1,330,056
26,729
$
525,764
$17,996,829
3,375,181
$21,372,011
$ 661,545
23,451,180
5,081
–
2,370
11,991
1,047
20,674
1,612,395
36,809
3,236,092
144
145
Financial / Data Section
Net sales to third parties by countries or areas grouped according to geographical classification for the years ended March 31, 2020 and 2019
are summarized as follows:
19. Amounts per share
Yen (Millions)
2020
¥1,631,052
343,164
2019
¥1,676,226
382,086
¥1,974,216
¥2,058,312
U.S. dollars
(Thousands)
2020
$14,987,154
3,153,211
$18,140,365
Amounts per share at and for the years ended March 31, 2020 and 2019 are as follows:
Net assets per share
Net income per share
Notes to Consolidated Financial Statements
As of and for the year ended March 31, 2020
Operating revenues:
Operating revenues from external customers
Intersegment revenues or transfers
Total
Segment profit
Segment assets
Other items:
Other
Total
Adjustments
Consolidated
U.S. dollars (Thousands)
$143,535
262,813
$406,349
$ 32,399
232,252
$18,140,365
3,637,995
$21,778,360
$ 693,944
23,683,432
$
–
(3,637,995)
$(3,637,995)
$ (135,220)
(159,101)
$18,140,365
–
$18,140,365
$ 558,724
23,524,331
Depreciation and amortization
Amortization of goodwill
Increase in property and equipment and intangible assets
2,407
–
1,295
1,614,802
36,809
3,237,388
–
–
(8,857)
1,614,802
36,809
3,228,530
(d) Information about geographical areas
Japan
Overseas
Total
Notes:
1. “Overseas” consists substantially of the Americas, Europe, China and Asia.
2. Net sales of “Overseas” represents sales made in countries or areas other than Japan.
(e) Information about impairment loss on long-lived assets
For the year ended March 31, 2020
Impairment loss
For the year ended March 31, 2019
Impairment loss
For the year ended March 31, 2020
Impairment loss
Yen (Millions)
Reportable Segments
Airline Related
¥2,494
Travel Services
¥–
Trade and Retail
¥–
Other
¥–
Adjustments
¥–
Total
¥25,159
Yen (Millions)
Reportable Segments
Airline Related
¥1,997
Travel Services
¥–
Trade and Retail
¥–
Other
¥–
Adjustments
¥–
Total
¥1,997
U.S. dollars (Thousands)
Reportable Segments
Airline Related
$22,916
Travel Services
$–
Trade and Retail
$–
Other
$–
Adjustments
$–
Total
$231,177
Air
Transportation
¥22,665
Air
Transportation
¥–
Air
Transportation
$208,260
(f) Information about amortization and the remaining balance of goodwill
As of and for the year ended March 31, 2020
Amortization of goodwill
Balance at the end of the fiscal year
As of and for the year ended March 31, 2019
Amortization of goodwill
Balance at the end of the fiscal year
As of and for the year ended March 31, 2020
Amortization of goodwill
Balance at the end of the fiscal year
Yen (Millions)
Reportable Segments
Airline Related
¥3
Travel Services
¥–
Trade and Retail
¥114
Other
¥–
¥–
¥458
Yen (Millions)
Reportable Segments
Airline Related
¥28
Travel Services
¥–
Trade and Retail
¥114
Other
¥ 3
¥–
¥572
U.S. dollars (Thousands)
Reportable Segments
Airline Related
$27
Travel Services
$–
Trade and Retail
$1,047
Other
$ –
$–
$4,208
¥–
¥–
¥–
¥–
$–
$–
Air
Transportation
¥ 3,889
¥24,003
Air
Transportation
¥ 3,889
¥50,557
Air
Transportation
$ 35,734
$220,554
Adjustments
¥–
¥–
Total
¥ 4,006
¥24,461
Adjustments
¥–
¥–
Total
¥ 4,031
¥51,132
Adjustments
$–
Total
$ 36,809
$–
$224,763
18. Selling, general and administrative expenses
The main components of selling, general and administrative expenses for the years ended March 31, 2020 and 2019 are as follows:
Commissions
Advertising
Employees’ salaries and bonuses
Provision for accrued bonuses to employees
Retirement benefit expenses
Depreciation
Yen (Millions)
2020
¥103,495
11,830
39,446
3,879
3,329
27,616
2019
¥105,678
12,813
39,760
7,913
3,462
24,828
U.S. dollars
(Thousands)
2020
$950,978
108,701
362,455
35,642
30,588
253,753
Yen
2020
¥3,171.80
82.66
2019
¥3,285.46
331.04
U.S. dollars
2020
$29.14
0.75
Notes: 1. Net income per share assuming full dilution is not disclosed as the Company had no potentially dilutive shares outstanding during the years ended March 31, 2020 and 2019.
2. The basis for calculating net income per share is as follows:
Years ended March 31
Net income attributable to common shareholders
Amount not attributable to common shareholders
Net income attributable to common stock
Weighted-average number of shares outstanding during the fiscal year (in thousands)
3. The basis for calculating net assets per share is as follows:
As of March 31
Net assets
Amounts deducted from total net assets:
Non-controlling interests
Net assets attributable to common stock at the end of the fiscal year
N umber of shares of common stock at the end of the fiscal year used to
determine net assets per share (in thousands)
Yen (Millions)
2020
¥ 27,655
–
¥ 27,655
334,559
2019
¥110,777
–
¥110,777
334,632
Yen (Millions)
2020
¥1,068,870
2019
¥1,109,313
U.S. dollars
(Thousands)
2020
$ 254.11
–
$ 254.11
334,559
U.S. dollars
(Thousands)
2020
$9,821.46
(7,842)
¥1,061,028
(9,900)
¥1,099,413
(72.05)
$9,749.40
334,519
334,629
334,519
The average number of shares of the Company held by the Trust for Delivery of Shares to Directors for the years ended March 31, 2020 and 2019
were 173 thousand and 108 thousand, respectively. The shares held by the trust were deducted from the weighted-average number of shares
outstanding during each of the years ended March 31, 2020 and 2019.
The number of shares of the Company held by the Trust for Delivery of Shares to Directors at March 31, 2020 and 2019 were 209 thousand and
107 thousand, respectively. The shares held by the trust were deducted from the number of shares of common stock at the end of each of the
fiscal years ended March 31, 2020 and 2019, which were used to determine net assets per share.
20. Supplementary cash flow information
A reconciliation of the difference between cash and deposits stated in the consolidated balance sheet at March 31, 2020 and 2019 and cash and
cash equivalents in the consolidated statement of cash flows is as follows:
Cash and deposits
Time deposits with maturities of more than three months
Marketable securities
Marketable securities with maturities of more than three months
Cash and cash equivalents
Yen (Millions)
2020
¥109,447
(31,120)
129,200
(71,590)
¥135,937
2019
¥ 68,301
(26,103)
225,360
(55,720)
¥211,838
U.S. dollars
(Thousands)
2020
$1,005,669
(285,950)
1,187,172
(657,814)
$1,249,076
146
147
Financial / Data Section
Notes to Consolidated Financial Statements
21. Impairment loss
23. Subsequent events
1. Conclusion of a commitment line contract
The Company entered into a short-term commitment line agreement with the terms described below on April 28, 2020.
(a) Counterparty
Main domestic financial institution
(b) Total commitment
¥350,000 million ($3,216,024 thousand)
(c) Amount of drawdown
None
(d) Contract date
April 28, 2020
(e) Assets pledged as collateral or guarantees None
2. Borrowing of funds
The Company has executed loans from Development Bank of Japan Inc.
(a) Use of funds
(b) Counterparty
(c) Loan amount
(d) Interest rate
(e) Execution date
(f) Repayment date
Working capital
Development Bank of Japan Inc.
¥350,000 million ($3,216,024 thousand)
Floating rates
May 28, 2020 and June 29, 2020
Long-term period determined by individual negotiation
(g) Assets pledged as collateral or guarantees Existent
The Group reviewed its long-lived assets for impairment for the years ended March 31, 2020 and 2019. As a result, the Group recognized
impairment losses of ¥25,159 million ($231,177 thousand) and ¥1,997 million, included in other expenses, for the years ended March 31, 2020
and 2019, respectively. The details are as follows:
For the year ended March 31, 2020
Application
Assets expected to be sold
Location
Miami, Florida
Others
Peach Aviation Limited
Category
Machinery, lease assets, and
other assets
Goodwill
Total
Yen (Millions)
U.S. dollars
(Thousands)
Impairment loss
¥ 2,494
$ 22,916
22,665
¥25,159
208,260
$231,177
Note: The Group grouped its operating assets for impairment testing based on management accounting categories, and also grouped lease assets, assets to be disposed of by
sale and idle assets on an individual basis. Business assets in Miami, Florida were written-down to recoverable amounts, based on the updated business plan. As a result,
an impairment loss of ¥2,494 million ($22,916 thousand) was recognized. Details are as follows: ¥1,767 million ($16,236 thousand) for machinery, ¥693 million ($6,367
thousand) for lease assets, and ¥32 million ($294 thousand) for other assets.
Also, goodwill for Peach Aviation Limited, a consolidated subsidiary of the Company, were written-down to recoverable amounts,based on their value in use. As a result,
an impairment loss of ¥22,665 million ($208,260 thousand) was recognized.
The recoverable amount of these assets was measured at its net selling price or their value in use. The net selling price is determined by estimates of selling cost and
selling price. The value in use is calculated by discounting the future cash flows at discount rates of 11.5%.
For the year ended March 31, 2019
Application
Assets expected to be sold
Location
Miami, Florida
Category
Machinery, lease assets and
other assets
Total
Yen (Millions)
¥1,997
¥1,997
Note: The Group grouped its operating assets for impairment testing based on management accounting categories, and also grouped lease assets, assets to be disposed
of by sale and idle assets on an individual basis. Business assets in Miami, Florida were written-down to recoverable amounts, based on the updated business plan.
As a result, an impairment loss of ¥1,997 million ($17,992 thousand) was recognized. Details are as follows: ¥1,433 million ($12,911 thousand) for machinery,
¥410 million ($3,694 thousand) for intangible assets, ¥49 million ($441 thousand) for lease assets, and ¥103 million ($928 thousand) for other assets.
The recoverable amount of the above assets was measured at its net selling price as determined by estimates of selling cost and selling price.
22. Supplementary information for the consolidated statement of income
(a) Write-downs of inventories
Inventories were valued using prices after write-downs of book value due to a decrease in net selling value.
Write-downs of inventories included in cost of sales are as follows:
Note: Figures in parentheses represent gains from the reversal of write-downs.
(b) Other income (expenses), net
Gain on sales of investment securities
Compensation payments received
Valuation loss on investments in securities
Litigation settlement fees related to anti-trust law claims
Other
Other income (expenses), net
Yen (Millions)
2020
¥1,181
2019
¥5,779
U.S. dollars
(Thousands)
2020
$10,851
Yen (Millions)
2020
¥ 1,122
17,897
(853)
–
(3,599)
¥14,567
2019
¥
–
6,810
–
(6,423)
1,577
¥ 1,964
U.S. dollars
(Thousands)
2020
$ 10,309
164,449
(7,837)
–
(33,069)
$133,850
148
149
Financial / Data Section Independent Auditor’s Report
150
151
Financial / Data Section Independent Auditor’s Report
Glossary
Passenger Business Terms
Available Seat-Kilometers (ASK)
A unit of passenger transport capacity, analogous
to “production capacity.” Total number of seats x
Transport distance (kilometers).
Revenue Passenger-Kilometers (RPK)
Total distance flown by revenue-paying passen-
gers aboard aircraft. Revenue-paying passengers
x Transport distance (kilometers).
Load Factor
Indicates the seat occupancy ratio (status of
seat sales) as the ratio of revenue passenger-
kilometers to available seat-kilometers. Revenue
passenger-kilometers / Available seat-kilometers.
Yield
Unit revenues per revenue passenger-kilometer.
Revenues / Revenue passenger-kilometers.
Unit Revenues
Quantitatively measures revenue management
performance by showing unit revenues per
available seat-kilometer (Revenues / Available
seat-kilometers). Calculated as yield (Revenues /
Revenue passenger-kilometers) x load factor
(Revenue passenger-kilometers / Available
seat-kilometers).
Unit Cost
Indicates cost per unit in the airline industry.
Calculated as cost per available seat-kilometer.
Revenue Management
This management technique maximizes revenues
by enabling the best mix of revenue-paying
passengers through yield management that
involves optimum seat sales in terms of optimum
timing and price based on network and fare
strategy.
Optimizing Supply to Demand
Involves flexibly controlling production capacity
(available seat-kilometers) according to
demand trends in ways such as increasing or
decreasing the frequencies on routes and
adjusting aircraft size.
Cargo Business Terms
Available Ton-Kilometers (ATK)
A unit of cargo transport capacity expressed as
“production capacity.” Total cargo capacity (tons)
x Transport distance (kilometers).
Revenue Ton-Kilometers (RTK)
Total distance carried by each revenue-paying
cargo aboard aircraft. Revenue-paying cargo
(tons) x Transport distance (kilometers).
Freighter
Dedicated cargo aircraft. Seats are removed from
the cabin space where passengers would
normally sit, and the space is filled with contain-
ers or palletized cargo.
Belly
The space below the cabin on passenger aircraft
that is used to transport cargo.
Okinawa Cargo Hub & Network
The ANA Group’s unique cargo network. With
Okinawa (Naha) Airport as an international cargo
hub, the network uses late-night connecting
flights in a hub and spoke system servicing major
Asian cities.
Airline Industry and
Company Terms
IATA
The International Air Transport Association.
Founded in 1945 by airlines operating flights
primarily on international routes, functions include
managing arrival and departure slots at airports
and settling receivables and payables among
airline companies. Approximately 290 airlines are
IATA members.
ICAO
The International Civil Aviation Organization. A
specialized agency of the United Nations created
in 1944 to promote the safe and orderly develop-
ment of international civil aviation. More than 190
countries are ICAO members.
Star Alliance
Established in 1997, Star Alliance was the first
and is the world’s largest airline alliance. ANA
became a member in October 1999. As of July
2020, 26 airlines from around the world are
members.
Code-Sharing
A system in which airline alliance partners allow
each other to add their own flight numbers on
other partners’ scheduled flights. The frequent
result is that multiple companies sell seats on one
flight. Also known as jointly operated flights.
Antitrust Immunity (ATI)
Granting of advance approval for immunity from
competition laws when airlines operating
international routes cooperate on planning
routes, setting fares, conducting marketing
activities, or other areas, so that the airlines are
not in violation of the competition laws of such
countries. In Japan, the United States, and South
Korea, the relevant department of transportation
grants ATI based on an application (in countries
other than these three, it is common for a bureau
such as a fair trade commission to be in charge),
but in the European Union the business itself
performs a self-assessment based on the law.
ATI approval is generally based on the two
conditions that the parties do not have the power
to control the market and approval will increase
user convenience.
Joint Venture
A joint business in the international airline
industry between two or more airlines.
Restrictions such as bilateral air agreements
between countries and caps on foreign capital
investments still exist in the international airline
industry. Therefore, airlines form ATI-based joint
ventures, instead of the commonly known
methods used in other industries such as capital
tie-ups and M&As, etc. By forming joint ventures,
airlines in the same global alliance are able to
offer travelers a broader, more flexible network
along with less expensive fares, thus strengthen-
ing their competitiveness against other alliances
(or joint ventures).
Full Service Carrier (FSC)
An airline company that serves a wide range of
markets based on a route network that includes
code-sharing connecting demand. FSCs offer
multiple classes of seats and provide in-flight
food and beverages that are included in advance
in the fare paid. FSCs are also called network
carriers or legacy carriers when compared with
low cost carriers (LCCs).
Low Cost Carrier (LCC)
An airline that provides air transportation services
at low fares based on a low-cost system that
includes using a single type of aircraft, charging
for in-flight services, and simplifying sales.
Fundamentally, LCCs operate frequent short- and
medium-haul point-to-point flights (flights
between two locations).
Maintenance, Repair, and Overhaul
(MRO) Business
A business that is contracted to provide aircraft
maintenance services using its own maintenance
crew and other personnel, along with dedicated
facilities. Services include the maintenance,
repair, and overhaul of aircraft and other equip-
ment owned by airlines.
Dual Hub Network Strategy
A strategy for using the two largest airports in the
Tokyo metropolitan area (Haneda and Narita) for
different yet complementary strategic aims and
functions. At Haneda, which offers excellent
access from central Tokyo, the strategy targets
overall air travel demand in the Tokyo metropoli-
tan area, including the outskirts of Tokyo, as well
as demand for connecting flights from various
Japanese cities to international routes that
harness ANA’s existing domestic network.
Meanwhile, at Narita the strategy aims to capture
transit demand for travel between third countries
via Narita, focusing on Trans-Pacific travel
between North America and Asia / China. This will
be accomplished by upgrading and expanding
the international network and enhancing connect-
ing flights by setting efficient flight schedules.
152
153
Financial / Data Section Market Data
International Passenger Market
Domestic Passenger Market
Global Air Transportation Passenger Volume by Region
Foreign Visitor Arrivals / Number of Japanese Overseas Travelers
Number of Domestic Passengers and LCC Share
Top 10 Airports in Japan by Number of Passengers
For further information, Fact Book 2020 can be downloaded
from the ANA Group corporate website in PDF format.
https://www.ana.co.jp/group/en/investors/irdata/annual/
RPK
(Billions)
9,000
6,000
3,000
0
(Left)
(Right)
3,011
3,000
8,679
2,320
2,000
1,932
2014
2015
2016
2017
2018
2019
786
442
185
1,000
0
(CY)
(Millions)
32
24
16
8
0
27.76
18.13
Number of Passengers
(Thousands)
100,000
80,000
60,000
40,000
20,000
0
2014
2015
2016
2017
2018
2019
(FY)
2013
2014
2015
2016
2017
2018
2019
20
16
12
8
4
0
(FY)
1
2
3
4
Tokyo (Haneda)
Tokyo (Narita)
Osaka (Kansai)
Fukuoka
5 Sapporo (New Chitose)
6 Okinawa (Naha)
7
Osaka (Itami)
8 Nagoya (Chubu)
39,541
28,663
23,035
22,814
20,613
15,765
12,590
9
10
Kagoshima
5,769
Sendai
3,718
LCC Share
(%)
Ranking
Airport
(Thousands)
81,707
Total
Asia-Pacific
Europe
North America
Middle East
Latin America
Africa
Foreign Visitor Arrivals
Japanese Overseas Travelers
2014
2015
2016
(Left)
Full Service Carriers
LCCs
(Right)
2017
2018
LCC Share
2019
0
20,000
40,000
60,000
80,000
100,000
Number of Passengers on Domestic Operations
Number of Passengers on International Operations
Source: International Air Transport Association (IATA), 2020
Source: Japan National Tourism Organization (JNTO), 2020
Source: Ministry of Land, Infrastructure, Transport and Tourism, fiscal 2019
Note: Compilation from reports on Status of Airport Operations, fiscal 2019
Source: Ministry of Land, Infrastructure, Transport and Tourism, fiscal 2019
Foreign Visitor Arrivals by Country / Region
ANA Domestic Passenger Business: ASK, RPK, and Number of Passengers
ANA’s Top 10 Domestic Scheduled Flights by Number of Passengers
FY2019
27.76 million
(–12.2% YoY)
Malaysia 1 .6%
Vietnam 1 .7%
Australia 2.1%
The Philippines 2.2%
Thailand 4.3%
U.S.A. 5.6%
Hong Kong 7.7%
South Korea 14.3%
Others 14.2%
Composition
China 30.4%
Taiwan
15.8%
(Millions)
80,000
60,000
40,000
20,000
0
(Thousands)
60,000
42,916
58,552
39,502
45,000
30,000
15,000
0
2015
2016
2017
2018
2019
(FY)
Source: Japan National Tourism Organization (JNTO), 2020
(Left)
RPK
ASK
(Right)
Number of Passengers
Ranking
(FY2019)
Route
1 Haneda–New Chitose
2
3
4
5
Haneda–Fukuoka
Haneda–Itami
Haneda–Okinawa
Haneda–Hiroshima
6 Haneda–Matsuyama
7
8
Haneda–Kansai
Haneda–Nagasaki
9 Haneda–Kagoshima
10 Haneda–Kumamoto
(Thousands)
3,741
3,543
2,836
2,688
1,165
971
883
783
765
729
1,000
0
2,000
3,000
4,000
5,000
Note: Figures include revenue passengers on ANA flights and code-share flights operated
by partner airlines.
Shares by Alliance (RPK)
Share of Passengers on Domestic Operations by Airline
24.9%
16.0%
42.1%
53.6%
13.3%
46.2%
16.8%
16.2%
17.1%
International
Domestic
21.7%
15.6%
16.5%
Total
Star Alliance
Oneworld
SkyTeam
Others
Source: International Air Transport Association (IATA), 2020
154
21%
33%
44%
Number of Passengers
(Total)
+6.1%
25%
33%
42%
FY2015 96,059 thousand
ANA
JAL
Others
FY2019 101,872 thousand
Note: Figures for ANA exclude Vanilla Air Inc. and Peach Aviation Limited.
Sources: 1. Figures for ANA, JAL: The companies’ annual securities reports (consolidated basis)
2. Figures for total: Ministry of Land, Infrastructure, Transport and Tourism, a preliminary report for fiscal 2019
155
Financial / Data Section
ANA-Operated International Routes
Stockholm
Stockholm
Dusseldorf
Dusseldorf
London
London
Paris
Paris
Vienna
Vienna
Brussels
Brussels
Frankfurt
Frankfurt
Munich
Munich
Milano
Milano
Moscow
Moscow
Istanbul
Istanbul
Chengdu
Chengdu
Hangzhou
Hangzhou
Delhi
Delhi
Hong Kong
Hong Kong
Mumbai
Mumbai
Chennai
Chennai
Phnom Penh
Phnom Penh
Vladivostok
Vladivostok
Shenyang
Shenyang
Dalian
Dalian
Beijing
Beijing
Seoul
Seoul
Shanghai
Shanghai
Wuhan
Wuhan
Qingdao
Qingdao
Shenzhen
Shenzhen
Xiamen Taipei
Xiamen Taipei
Guangzhou
Guangzhou
Hanoi
Hanoi
Yangon
Yangon
Bangkok
Bangkok
Ho Chi Minh City
Ho Chi Minh City
Kuala Lumpur
Kuala Lumpur
Manila
Manila
Singapore
Singapore
Jakarta
Jakarta
Osaka (Kansai)
Perth
Perth
Sydney
Sydney
Haneda routes
Narita routes
Haneda / Narita routes
Osaka routes
Dalian
Beijing
Qingdao
Shanghai
Hangzhou
Hong Kong
Note: Including routes suspended due to COVID-19
Compilation by ANA HOLDINGS INC. (As of September 1, 2020)
Haneda Narita
Haneda Narita
Vancouver
Vancouver
Seattle
Seattle
San Francisco
San Francisco
Chicago
Chicago
New York
New York
Los Angeles
Los Angeles
Washington, D.C.
Washington, D.C.
Honolulu
Honolulu
San Jose
San Jose
Houston
Houston
Mexico City
Mexico City
Peach Aviation-Operated Routes
Sapporo (New Chitose)
Niigata
Kushiro
Sendai
Osaka
(Kansai)
Tokyo (Narita)
Tokyo (Haneda)
Fukuoka
Seoul (Incheon)
Nagasaki
Miyazaki
Kagoshima
Shanghai
Taipei
(Taoyuan)
Hong Kong
Ishigaki
Amami Oshima
Kaohsiung
Okinawa (Naha)
Bangkok
セブ
セブ
156
157
Financial / Data Section Social Data
Environmental Data
WEB
See the ANA Group corporate website for more:
https://www.ana.co.jp/group/en/csr/data/
The following data represents ANA Group environmental performance. Fiscal 2019 data includes performance for Peach Aviation and Vanilla Air.
Human Resources Data (ANA)
Number of employees (As of March 31 of each year)
Number of employees hired overseas
(As of March 31 of each year)
Average age of employees (As of March 31 of each year)
Average years worked (As of March 31 of each year)
Ratio of female managers
(As of April 1 of each year, excluding individuals 60 years old and over)
Ratio of female directors (As of April 1 of each year)
Number of employees on pregnancy or childcare
leave / Male (As of March 31 of each year)
Unit
2016
People
People
Years
Years
%
%
12,859
1,387
36.0
10.0
12.2
10.5
2017
13,518
2018
13,982
2019
14,242
1,454
1,475
1,442
37.4
13.3
13.3
10.5
37.4
13.8
13.9
10.0
37.5
14.2
14.6
11.9
2020
14,830
1,464
38.0
13.6
15.2
13.3
People
586/5
545/13
587/19
629/20
645/29
Number of employees on nursing care leave
(As of March 31 of each year)
People
Ratio of employees with disabilities*1 (As of June 1 of each year)
%
Work-related accidents (As of March 31 of each year)
Ratio of employees with healthy BMI*2 (As of March 31 of each year)
Male
Female
Ratio of employees that smoke (As of March 31 of each year)
Male
Female
Employee obesity rate*3 (As of March 31 of each year)
Male
Female
%
%
%
%
%
%
12
2.32
66
63.1
75.2
22.9
4.9
13.4
0.9
14
2.38
109
69.1
69.8
19.4
4.0
14.9
1.2
15
2.49
82
70.2
72.0
19.1
3.9
15.7
1.3
16
2.57
111
72.9
72.6
17.2
3.7
11.1
1.4
10
2.68
69
72.5
73.0
16.7
3.1
12.9
1.0
*1 Total of ANA HOLDINGS INC., ANA, and qualified ANA Group companies (total of 11 companies including 1 special subsidiary)
*2 Ratio of employees with BMI of 18.5%–25.0%
*3 Changing calculation standards from 2018
Before 2017: Ratio of employees receiving guidance from designated healthcare professionals
2018 and later: Ratio of employees meeting criteria for metabolic syndrome
See the following webpage for more about the 37th Yen-Based Bond (Social Bond), issued in May 2019:
https://www.anahd.co.jp/group/en/pr/201904/20190417.html
Flight-Related Data (All Passenger Flights on ANA International and Domestic Services)
(FY)
In-service rate
On-time departure rate*4
On-time arrival rate*4
*4 Delays of 15 minutes or less, excluding canceled flights
Customer-Related Data
(FY)
Unit
%
%
%
2015
98.9
90.6
88.0
2016
98.9
87.6
85.4
2017
98.8
86.1
84.0
2018
98.2
88.4
86.5
2019
97.4
88.7
87.5
Unit
2015
2016
2017
2018
2019
Number of customer feedback reports
73,688
73,892
114,273
105,723
117,628
[Breakdown by route type]
Domestic
International
Other
[Breakdown by report type]
Complaint
Compliment
Comment / Request
Other
158
%
%
%
%
%
%
%
46.1
39.5
14.5
35.8
21.2
26.1
16.9
48.3
37.4
14.3
43.4
16.8
21.5
18.3
56.0
40.1
3.9
41.1
18.5
20.8
19.5
62.4
34.8
2.7
45.8
19.8
16.5
17.8
59.5
37.9
2.7
42.3
21.1
16.6
20.1
Climate Change Countermeasures
(FY)
Carbon dioxide (CO2) emissions
Total
[Breakdown]
Aircraft
Passenger
Cargo
Ground equipment and vehicles
[Scope 1/2/3]
Scope 1
Scope 2
Scope 3
Unit
2015
2016
2017
2018
2019
10,000 tons
1,074
1,126
1,161
1,156
1,246
1,062
(1,005)
(57)
11.5
1,114
(1,058)
(56)
11.8
1,148
(1,097)
(50)
13.5
1,065
1,118
1,152
8.3
0.1*3
8.3
0.4*3
9.2
0.4*3
1,143
(1,098)
(45)
13.2
1,147
8.9
150.4*2
1,233
(1,196)
(37)
12.6
1,237.5
8.4
418.1*1
Aircraft CO2 emissions per RTK
kg-CO2
1.05
1.00
0.96
0.97
1.01
Total energy consumption
Total
Crude oil equipment: 10,000 kl
Aircraft energy consumption
Ground energy consumption
Ozone depletion (ANA only)
Fluorocarbon (Aircraft)
Halon
Fuel-efficient aircraft*4
kg
kg
Number of fuel-efficient aircraft
Aircraft
Ratio of fuel-efficient aircraft (ANA-brand jet aircraft only) %
Ratio of fuel-efficient aircraft
(Including Peach Aviation, Vanilla Air)
%
*1 Scope 3 data for FY2019 is calculated in all categories.
*2 Scope 3 data for FY2018 is calculated in categories 2–4, 6, 7, and assured.
*3 Scope 3 data for FY2015–2017 is calculated in categories 6, 7, and assured.
*4 Boeing 777, 787, 737-700, -800, Airbus A320neo, and A321neo
414
408
5.5
16.4
8.3
148
64.9
—
434
428
5.5
8.8
29.4
155
66.0
—
448
441
6.5
5.3
5.0
162
69.5
—
446
439
6.4
9.4
28.8
183
75.9
—
480
474
6.3
2.7
31.7
199
81.2
70.3
See the following webpage for more about the 36th Yen-Based Bond (Green Bond), issued in October 2018:
https://www.anahd.co.jp/group/en/pr/201809/20180928.html
Resource Savings
(FY)
Waste produced
Total
[Breakdown]
Unit
2015
2016
2017
2018
2019
1,000 tons
28.9
36.8
37.5
34.3
32.6
General waste (Cabin waste and sewage included)
General waste (Ground waste included)
Industrial waste
Total paper consumption
1,000 tons
Total water consumption
Clean water
Non-potable water
10,000 kl
10,000 kl
22.4
2.9
3.6
4.7
51.5
6.3
28.7
3.0
5.1
4.6
57.8
7.2
31.5
2.6
3.4
4.0
61.4
9.4
28.4
2.7
3.2
3.2
61.1
8.6
26.9
2.5
3.2
3.1
59.6
9.2
159
Financial / Data Section The ANA Group Profile
Corporate Data (As of March 31, 2020)
ANA HOLDINGS INC. Organization (As of July 1, 2020)
Corporate Profile
Corporate Communications and Branding
Trade Name
ANA HOLDINGS INC.
Administrator of Register
General Meeting of
Shareholders
Internal Audit Division
Board of Directors
Chairman
President &
Chief Executive Officer
Audit & Supervisory
Board Members
Audit & Supervisory Board
Audit & Supervisory Board
Members Office
Group Management Committee
Group ESG Management
Promotion Committee
General Administration
Corporate Sustainability
Executive Secretariat
Government & Industrial Affairs
Legal & Insurance
Human Resources Strategy
D&I Promotion
Group IT Management
Digital Design Lab
Corporate Planning
Business Development
Finance, Accounting & Investor Relations
Business Management
Facilities Planning
Corporate Strategy
Finance, Accounting
Number of Subsidiaries and Affiliates (As of March 31, 2020)
Operating segment
of which, consolidated
of which, equity method
of which, equity method
Total of subsidiaries
Total of affiliates
Air Transportation
Airline Related
Travel Services
Trade and Retail
Others
Total
6
48
5
61
8
128
5
37
5
8
7
62
—
—
—
—
1
1
4
5
3
3
30
45
1
2
1
1
10
15
Major Subsidiaries (As of March 31, 2020)
Company name
Amount of capital (¥ Millions)
Ratio of voting rights holding (%)
Principal business
Air Transportation
ALL NIPPON AIRWAYS CO., LTD.
Air Japan Co., Ltd.
ANA WINGS CO., LTD.
Peach Aviation Limited
Airline Related
ANA Cargo Inc.
Overseas Courier Service Co., Ltd.
ANA Systems Co., Ltd.
Travel Services
ANA Sales Co., Ltd.
Trade and Retail
ALL NIPPON AIRWAYS TRADING Co., Ltd.
25,000
50
50
7,515
100
100
80
1,000
1,000
Note: No specified wholly owned subsidiaries as of the end of the fiscal year under review.
100.0
100.0
100.0
77.9
100.0
91.5
100.0
100.0
Air transportation
Air transportation
Air transportation
Air transportation
Cargo operations
Express shipping business
Innovation and operation of IT systems
Planning and sales of travel packages, etc.
100.0
Trading and retailing
Date of Foundation
December 27, 1952
of Shareholders
Sumitomo Mitsui Trust Bank, Limited
Head Office
Shiodome City Center, 1-5-2
Higashi-Shimbashi, Minato-ku,
(Stock Transfer Agency Department)
1-4-1, Marunouchi, Chiyoda-ku, Tokyo
Number of Employees
45,849 (Consolidated)
American Depositary
Receipts Ratio (ADR:ORD): 5:1
Tokyo 105-7140, Japan
Independent Auditor
Deloitte Touche Tohmatsu LLC
Paid-In Capital
Fiscal Year-End
Number of Shares of
¥318,789 million
March 31
Common Stock
Authorized: 510,000,000 shares
Issued: 348,498,361 shares
Number of Shareholders 519,317
Stock Listing
Ticker Code
Tokyo
9202
Exchange: OTC (Over-the-Counter)
Symbol: ALNPY
CUSIP: 032350100
Depositary:
The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286, U.S.A.
Tel: 1-201-680-6825
U.S. Toll Free: 1-888-269-2377
(888-BNY-ADRS)
URL: https://www.adrbnymellon.com
Scope of This Report
High
S
t
a
k
e
h
o
d
e
r
s
l
’
p
r
i
o
r
i
t
i
e
s
Reported in
this report
Annual Report (Hard Copy and PDF)
PDF version
https://www.ana.co.jp/group/en/investors/irdata/annual/
Reported
on the website
Management priorities
For Further Information (Website)
Corporate Profile https://www.ana.co.jp/group/en/about-us/
Investor Relations https://www.ana.co.jp/group/en/investors/
Sustainability
https://www.ana.co.jp/group/en/csr/
High
Fact Book 2020
Fact Book 2020 can be downloaded from the Company’s corporate
website in PDF format. This document contains financial data and
information on the domestic and international markets and LCC status.
https://www.ana.co.jp/group/en/investors/irdata/annual/
Forward-Looking Statements
This report contains statements based on the ANA Group’s current plans, estimates, strategies, and beliefs; all statements that are not statements of historical fact are forward-
looking statements. These statements represent the judgments and hypotheses of the Group’s management based on currently available information. Air Transportation
Business, the Group’s core business, involves government-mandated costs that are beyond the Company’s control, such as airport utilization fees and fuel taxes.
In addition, conditions in the markets served by the ANA Group are subject to significant fluctuations. Factors that could affect actual results include, but are not limited to,
economic trends, sharp changes in exchange rates, fluctuations in the price of crude oil, and disasters.
Due to these risks and uncertainties, the Group’s future performance may differ significantly from the contents of this report. Accordingly, there is no assurance that the
forward-looking statements in this report will prove to be accurate.
ANA HOLDINGS INC.
Contact
Shiodome City Center, 1-5-2 Higashi-Shimbashi, Minato-ku, Tokyo 105-7140, Japan
Investor Relations
E-mail: ir@anahd.co.jp
160
161
Financial / Data Section