Annual Report 2024 Fiscal 2023 (Year ended March 2024) Uniting the World in Wonder ‘Waku waku’ is what moves people to push what’s possible. It’s Japanese for the joy and excitement of discovering the unknown. And when passed from person to person, becomes a force that creates a brighter world, united in wonder. The sky is full of possibilities, which has allowed us to bring together people, products and experiences for decades. Now, we’re expanding our horizons and spreading ‘waku waku’ across the world. So, we wonder, can we make travel more enjoyable? Can we renew the way we transport products? Can we bring excitement to life, while being kind to the earth? Together with an elevated experience in the sky, we can explore more incredible discoveries that will lead to a better tomorrow. Here is where our new adventure begins. When people connect across borders and unite beyond countries, the world offers endless opportunities. Together, let our hearts wonder and fill the world with ‘waku waku.’ 1 2 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 sustain- able 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. 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 Uniting the World in Wonder ANA inspires our employees, customers, and society to explore endless possibilities with diverse connections that begin in the sky. 2 About Annual Report 2024 The ANA Group pursues sustainable corporate value enhancement through our management vision, Uniting the World in Wonder. This year’s annual report offers enhanced details of our analysis of management capital, the business environment, and our actions to improve capital efficiency. We also highlight the process of creat- ing social and economic value based on the power of our people and teamwork. Read further under the past and the future regarding how every ANA Group employee executes business strategies and responds to medium- and long-term materialities through higher levels of expertise and team spirit. We hope that this annual report serves as another tool for meaningful communica- tions assisting stakeholders in their understanding of ANA Group value creation. Contents of This Report The ANA Group (ANA HOLDINGS INC. and its consolidated subsidiaries) strives to create social and economic value, leveraging the strengths we have cultivated based on the spirit of our founders. In so doing, we expect to gener- ate sustainable growth in corporate value. This report presents an overall pic- ture of the philosophy and value creation handed down over generations. We also address our business strategies for overcoming crises and returning to growth, as well as medium- to long-term sustainability initiatives and the man- agement foundation that supports these corporate activities. Editorial Policy The ANA Group emphasizes proactive communication with stakeholders in all of our business activities. In Annual Report 2024, we aim to encourage a deeper comprehensive understanding of the social and economic value cre- ated by the ANA Group through our management strategies, our business, and our environmental, social, and governance (ESG) activities. Further, we have published information on the activities we selected as being of particular impor- tance 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, 2023 to March 31, 2024 (including some activities in and after April 2024). • 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. Contents 04 The Value Creation Process 04 Passing Down Our Founding Spirit 06 Our Strengths 08 The Value Creation Process 10 Strengthening Management Capital 12 Management Message 12 Message from the President & CEO 18 Message from the CFO 24 ANA Group Management Strategy 24 ANA Group Management Cycle 26 Economic Condition Analysis 30 Business Strategy 42 DX Strategy 46 Materiality: People 48 Human Capital Strategy 60 Materiality: Environment 62 Transition Strategy 74 Materiality: Regional Revitalization 76 ANA Group ESG Management 78 Management Foundations 80 Safety 84 Corporate Governance 86 Outside Director Roundtable Discussion 102 Risk Management 105 Compliance 106 Co-Creation with Stakeholders 110 Responsible Dialogue with Stakeholders 112 Financial Results and Other Information 3 2 2030 Passing Down Our Founding Spirit The Value Creation Process Keeping with the Times and Delivering Abundance for Society The Philosophy of Our Founders: MIDORO Masuichi and OKAZAKI Kaheita In Japan's traumatic postwar environment, ANA founders MIDORO Masuichi (inaugural president), OKAZAKI Kaheita (second president), and other entre- preneurs embarked on a mission to contribute to their nation and communities through the aviation business. They began with just two helicopters, believing in a future where airplanes would foster more abundant lifestyles. Driven by the belief that airlines should not only pursue profit, but also be an independent entity true to the ideals of serving the public good, ANA was Japan’s first purely private airline, boldly embracing business opportunities while remaining true to our founding management philosophies: A Business with Integrity, A Resolute and Independent Business, and A Self-Reliant Business. More Abundant Lifestyles More Abundant Living Founded in 1952 MIDORO Masuichi Inaugural President OKAZAKI Kaheita Second President 1953 First commercial helicopter flight 1955 Tokyo–Nagoya–Osaka route begins service 1950s Pesticide spraying More Comfortable Air Travel Mileage-Based Ecosystem New Experiences Travel for All New Travel New Logistics 5 4 Diverse Connections that Begin in the Sky ANA inspires our employees, customers, and society to explore endless possibilities with diverse connections that begin in the sky. Management Vision The greatest strength of the ANA Group is the power of our people who demonstrate expertise in aviation and a passion for cus- tomer service. We practice the ANA's Way, a group code of conduct that has been in our DNA since our founding, as we engage in coordinated teamwork that crosses company and organizational boundaries. This power of people and teamwork represents human capital within the ANA Group. Financial capital supports value creation through solid financial management capabilities, including cost management skills, flexible and agile financing, and risk management for market fluctuations. At the same time, strong relation- ships of trust (social and relationship capital) with various stakeholders built over years of interactions represents another important management capital for the ANA Group. We achieve sustainable growth by leveraging and maximizing these three capitals. 2010 2000 1990 2023 (FY) 2011 Great East Japan Earthquake 2008 Global Financial Crisis 2003 SARS Epidemic 2001 September 11 Terrorist Attacks in the United States 2020 COVID-19 1994 Kansai International Airport Opens 2014 Expansion of International Slots at Haneda Airport 1952 1970 1960 Founding Revenue Passenger-Kilometers (RPK) ■ Peach / AirJapan ■ ANA International Services ■ ANA Domestic Services Human Capital The power of our people who care for our customers through highly specialized expertise in aviation teamwork to collaborate and cooperate ANA’s Way “Anshin, Attaka, Akaruku-genki!” (Trustworthy, Heartwarming, Energetic!) Social and Relationship Capital Strong relationships of trust with stakeholders Financial Capital Solid financial management Safety We always hold safety as our utmost priority, because it is the foundation of our business. Customer Orientation We create the highest possible value for our customers by viewing our actions from their perspective. Social Responsibility We are committed to contributing to a better, more sustainable society with honesty and integrity. Team Spirit We respect the diversity of our colleagues and come together as one team by engaging in direct, sincere and honest dialogue. Endeavor We endeavor to take on any challenge in the global market through bold initiative and innovative spirit. I m p r o v e d P r o f it a b i li t y R e i n v e s t P r o f it s i n H u m a n C a p i t a l H i g h - Q u a li t y S e r vi c e s I m p ro v e d C S A c ti v it i e s Mission Statement at the Time of Our Founding 高 潔 な 企 業 権 威 に 屈 す る こ と の な い 、 主 体 性 を 持 つ 企 業 独 立 独 歩 で き る 企 業 Founding Spirit 1978 Narita International Airport Opens 1980 The Value Creation Process Our Strengths A Business with Integrity A Resolute and Independent Business A Self-Reliant Business “Hardship Now, Yet Hope for the Future” “Wakyo”(Close Cooperation) “Trust and love are the threads that weave a beautiful world” 2013 Transition to a Holding Company Structure 6 7 Customer Base As of March 2024, the ANA Mileage Club had approximately 42 million members. We continue to use miles as a hook to increase the number of touchpoints between the ANA Group and our customers, building stronger relationships of trust by incor- porating customer feedback into service improvements. Collaborations with Other Airlines ANA has been a member of Star Alliance since 1999, coop- erating with Star Alliance entities in various services. We also partner and code-share with many airlines domestically and internationally. By building good relationships with other airlines, we create a more convenient network for customers and improve our services. Diverse Business Partners and Local Governments The ANA Group establishes relationships of trust with com- panies and organizations in Japan and overseas through a broad range of transactions. These transactions include the procurement of aircraft, engines, parts, and fuel oil, as well as contract services for airport ground handling and aircraft maintenance. We also work with local governments to promote regional development and exchange in the areas we serve. Cost Management Over the years, we have encountered a number of risk events in the external environment affecting air transport demand, resulting in a significant decline in operating reve- nues. With every event, group employees worked together under the leadership of our management team to implement cost structure reforms to overcome the challenging business environment and achieve further profit growth. Customer Delight, Increased Stakeholder Trust Number of Alliance/Code- Share Partners Number of Mileage Members Value-Added Productivity Employee Engagement Number of Partners/ Affiliates In 2002, ANA implemented customer satisfaction (CS) reform under the banner of pursuing customer satisfaction to become the airline of choice for more customers. We clarified the meaning of listening closely to customer feedback, part of the ANA Group action guidelines at the time, incorporating specific measures into our corporate strategy. In this way, we ensured that every employee works with a strong desire to please customers, establishing a culture of cooperation that transcends departmental boundaries. Pursuit of CS Expertise Group Air Transportation Business employees, including flight crew, flight attendants, aircraft mechanics, and airport staff, must have an extremely high level of expertise in their respec- tive duties. We develop truly professional human capital through practice, training, and experience in every workplace to maintain and improve high safety standards and world-class quality service standards. Teamwork Close cooperation among different companies and job categories is indispensable in offering high quality and services in terms of safety, on- time operations, and comfort. We embrace the belief in harmonizing without necessarily agree- ing as the backbone of our interactions, engag- ing in teamwork to produce results that reflect detailed discussions and concerted efforts to achieve objectives. This teamwork is the driving force behind ANA Group value creation. Number of Group Employees Operating Income Margin Shareholders’ Equity Ratio Corporate Strategy Simultaneous Creation of Social and Economic Value Address Materialities (medium-, long-term) The Value Creation Process Human Capital The Power of Our People Teamwork Social and Relationship Capital Strong relationships of trust with stakeholders Financial Capital Solid financial management 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 Value Creation Process The ANA Group aims to create a virtuous cycle of value-added cre- ation through investments in human capital to maximize the power of our people and teamwork, the true sources of value creation. We will achieve the simultaneous creation of social and economic value through corporate strategies for business and our response to medium- to long-term materiality, reflecting an analysis of opportunities and risks in the ANA Group environment. In the course of these pro- cesses, we intend to strengthen and reinvest in human capital, finan- cial capital, and social and relationship capital, leading to higher levels of sustainable corporate value enhancement. Link with business strategies 8 9 Analysis of the External and Internal Environment (Opportunities and Risks) Increasing Basic Quality & Productivity Customer Delight, Increased Stakeholder Trust Management Foundations Corporate Governance Safety Co-Creation with Stakeholders Opportunities • Increase in the number of inbound travelers to Japan • High airfares • Improved cargo business profitability • Advances in digitization and generative AI • Business Structure Reform for a more resilient cost structure Risks • Labor shortages in the airline industry • Ongoing Russia–Ukraine situation • Declining domestic population, stagnant local economies • Actions to reduce environmental footprint • Rising fuel market prices and weakening yen People • Human capital • DEI • Human rights Human Capital Strategy 1 Enhance team spirit 2 Increase the power of people professional expertise 3 Become an organization that is resilient to change 4 Create comfortable work environments Environment Regional Revitalization Business Strategy (Short-, Medium-Term) Financial Strategy Recover financial base DX Strategy Business transformation Three Pillars of Strategy Maximize profits in airline business through multi-branding Expand non-airliine profit domains Expand the ANA Economic Zone Cycle of Value Creation Beginning with Investments in Human Capital Human Capital Value-Added Productivity +15% FY2025 target (vs. FY2018) • Increase operations human capital, specialized human capital to execute strategies • High ANA Group employee engagement Management Capital Expansion Achieve Our 2030 Management Vision Society Solutions to social issues Contribution to sustainable societies Shareholders Expand profits Employees and Customers Enriched lives ANA’s Way Transition Strategy (Initiatives to reduce CO2 emissions) • Reduce waste in resources and food • Biodiversity conservation • Innovate to resolve social issues • Regional revitalization through social contribution and resolving social issues Amplify employee engagement by encouraging a greater appreciation of each capital Financial Capital • Achieve profitability and financial strength as a global top-tier company • ROE 12% or more • Maintain shareholders' equity ratio at 45% Social and Relationship Capital Mission Statement at the Time of Our Founding / Founding Spirit • A Business with Integrity • A Resolute and Independent Business • A Self-Reliant Business • Expand customer base • Pursue new relationships and expand partnerships for co-creation • Hardship Now, Yet Hope for the Future • Wakyo (Close Cooperation) The Value Creation Process Strengthening Management Capital The ANA Group has accumulated a variety of capital over the course of our history. As we implement our corporate strategy in light of the business environment, we continue to increase these capitals by closing the gap between goals for each capital and the current state of the ANA Group. Our Vision and the Reasons Why Current Status of Capitals (Input) *As of March 2024 Examples of Improvements Examples of Monitoring Indicators and Targets (Output) Human Capital Human Capital as the Source of Added Value Highly specialized human capital in our Air Transportation Business must demonstrate their individual skills and teamwork to provide high-quality services. Skills and teamwork are an absolute must for establishing a competitive edge over other companies. We must continue to strengthen human capi- tal if the ANA Group is to continue sustainable growth in these difficult and unpredictable times. The stronger our human capital, the stronger our other management capital will be. The power of our people (highly engaged employees with specialized expertise and skills in aviation) and teamwork (collaboration and cooperation across organizational boundaries) • Group employees 41,225 • ANA’s Way Survey avg. score 3.95 • Ratio of female directors and female managers (ANA Group) 21.3% / 20.2% • Number of Good Job Program messages 172,678 Issue Recognition • Lack of workers to support airport operations and expand business scale • Lack of workers to establish a revenue pillar in the Non-Air Business • Ability to innovate and be agile in response to change • Strengthened dialogue and feedback between management and employees in the field • Facilitated communication across companies and organizations • Expansion of Hand Raising System • Recruited and developed professional human capital • Knowledge development, development of innovative human capital • Diverse employees contributed through their individual strengths • Fostered a culture that encourages change and excitement • Support for senior employees • Revised wage levels and benefit programs • Ensured employee safety and health, creating comfortable work environments • Stronger recruiting activities FY2025 Targets • ANA’s Way Survey avg. score 4.03 • No. of dialogues held by management 1,200 • No. of cross-department messages 200,000 • Value-added productivity +15% improvement (vs. FY2018) • Retention –0.5 pt (vs. FY2020) • Ratio of female directors and female managers 30% (as quickly in the 2020s as possible) Achieve Profitability and Financial Strength as a Global Top-Tier Airline Our Air Transportation Business requires enormous sums of capital for air- craft procurement and other needs. Therefore, we must continue building relationships of trust with the capital and financial markets through sus- tained business growth and solid financial management, maintaining stable financing regardless of the ups and downs of business. Sound financial management supporting the generation of stable profits FY2023 Results • Operating income margin 10.1% • ROA 6.1% • ROE 16.5% • EPS ¥335 • Shareholders’ equity ratio 29.3% • Credit rating R&I: A- (Stable), JCR: A- (Positive) Issue Recognition • Quick restoration of financial base damaged by COVID-19 Through FY2025: • Priority given to financial base restoration • Build shareholders’ equity through profit accumulation • Maintain high level of cash on hand • Maintain A credit rating FY2026 and After: • Reduce total assets • Accumulate shareholders’ equity Targets for FY2026 and After • EPS to pre-COVID-19 level • Shareholders’ equity ratio 45% Targets for FY2030 • Operating income margin 10% or higher • ROA 8% or higher • ROE 12% or higher Expanding Partnerships to Co-Create Mobility and Relationships We must maintain good relationships with customers and a vast range of stakeholders to be the airline of choice. At the same time, we continue to build a network of partners with whom we create new services and work together to revitalize economies for relationships that go beyond the mere movement of people and goods. Strong relationships with stakeholders • Number of airports served 335 (including code-share) • ANA Mileage Club members 42 million • Number of JV partner airlines 4 • Number of code-share partners 30 • Number of Star Alliance member airlines 26 • Number of shareholders 761,448 • Individual and comprehensive cooperation agreements with local governments 24 Good business relationships with suppliers, manufacturers, contractors, and other business partners Issue Recognition • Build a network of co-creation to support corporate strategy • Expand route network further (expand multi-brand capacity, partnerships with domestic and international airlines) • Increase ANA Mileage Club membership • Provide timely and appropriate information to the capital markets • Increase opportunities for dialogue between management and stakeholders • Support regional revitalization through collaboration with local governments • Conduct fair and transparent procurement across the supply chain based on the ANA Group Procurement Policy Continuing to be the World’s Airline of Choice, While Pursuing Customer Satisfaction and Creating New Value We intend to enhance the knowledge and expertise accumulated in the Air Transportation Business to expand into the contract and solutions businesses to an even greater degree, growing the ANA Economic Zone by leveraging the ANA Brand quality. Data-driven thinking and action create value and ensure quality uninflu- enced by personal feelings or rules of thumb. Knowledge and expertise fostering customer satisfaction and high brand power • ANA brand strength SKYTRAX 5 Star for 11 consecutive years (2012-2023) • Expertise cultivated in the airlines business • Detailed manuals for maintaining high basic quality as an organization • BlueLake data platform Issue Recognition • Improve ANA brand recognition overseas • Strengthen IT infrastructure and foster a culture of data usage • Utilize expertise cultivated in aviation to advance Non-Air Business • Strengthened branding overseas • Created a mechanism for sharing and leveraging cross-organiza- tional expertise • Expanded BlueLake data use • Fostered a culture of data use • Strengthened data management and digital governance • Secured digital talent and supported their development • Continued SKYTRAX 5-Star status • Increase amount of usable data 4x by FY2025 (vs. FY2022) Improve brand strength by monitoring the following operations quality indicators • Safety • On-time performance • Customer satisfaction Establishing a Structure to Expand Business in Line with Demand and Improve Basic Quality We procure aircraft systematically from a long-term perspective to expand routes and flights to meet the needs of our customers. At the same time, we provide safe, environmentally friendly, high-value, world-class airline services, increasing our fleet composition of fuel-effi- cient aircraft and building integrated operating systems. A wide variety of aircraft and support facilities, systems • ANA Group aircraft 276 (including 11 cargo planes) • Ratio of fuel-efficient aircraft 81% • ANA Blue Base training facility • Maintenance facilities supporting safety • Operating systems supporting basic operational quality Issue Recognition • Strengthen overall capacity to support corporate strategy • Engaged in fleet strategy based on network strategy • Reorganized freighters by making NCA a subsidiary • Increased fuel-efficient equipment • Made investments in facilities and systems to improve basic quality further FY2025 Targets • No. of ANA Group aircraft 285 to 295 • Capital expenditures ¥270 billion (average over FY2023-2025) Targets by the End of FY2030 • Mid- and narrow-body aircraft in fleet 80% • International ANA brand aircraft in fleet 45% • Fuel-efficient aircraft in fleet 90% Natural Capital Balancing the Creation of Abundant Societies and Business Sustainability Air travel is a highly convenient, long-distance, high-speed mode of trans- portation. At the same time, air travel is considered one of the most envi- ronmentally hazardous modes of transportation. Obviously, reducing the environmental impact of air travel is an important issue. We intend to strengthen our efforts across a wide range of areas to provide transporta- tion services for more abundant lives and a safe global environment. To this end, we are stepping up efforts in climate change mitigation, primarily through the reduction of greenhouse gas emissions, biodiversity conser- vation, and the effective use of resources. Effective use of resources through day-to-day efforts FY2023 Results • CO2 emissions 15.1% reduction (vs. FY2019; aircraft operations) • CO2 emissions 21.4% reduction (vs. FY2019; excluding aircraft operations) • Reduce resource waste ratio 49.0% reduction (vs. FY2019) • Reduce food waste ratio 4.3% Issue Recognition • Achieve net zero CO2 emissions and sustainable business growth • Operational Improvements and New Aircraft Technologies • Shifting to low-carbon aviation fuel, including SAF* • Used emission trading schemes • Used negative emissions technologies (NETs) • Shifted to services that reduce resource and food waste ratios • Eliminated illegal wildlife trade through air transportation • Engaged in environmental conservation activities aimed at biodi- versity conservation, etc. * SAF: Sustainable aviation fuel FY2030 Targets • CO2 emissions from aircraft operations Net 10%+ reduction (vs. FY2019) • Replace 10% or more of fuel used with SAF • CO2 emissions excluding aircraft flight operations Net 33%+ reduction (vs. FY2019) • Resource waste ratio 70%+ reduction (vs. FY2019) • Food waste ratio 3.8% or less • Biodiversity conservation (elimination of illegal wildlife trade via air transportation; environmental conservation activities, etc.) Intellectual Capital Manufactured Capital Financial Capital 10 11 Social and Relationship Capital SHIBATA Koji President & Chief Executive Officer, Representative Director Message from the President & CEO Management Message FY2023-25 ANA Group Corporate Strategy Progress In fiscal 2023, the ANA Group posted operating income at the ¥200 billion level for the first time in our history, reach- ing the target for the final year of the ANA Group Corporate Strategy in only our first year under the new plan. Operating income margin exceeded 10% for the first time ever, and ROE reached a record high of 16.5%. The Company has improved performance rapidly in just three years since posting our largest-ever loss in fiscal 2020. These strong results were due in part to the recovery in passenger demand on domestic routes in the wake of COVID-19 being reclassified to a Category 5 infectious disease under Japan’s Act on the Prevention of Infectious Diseases. Tightening supply–demand balance on interna- tional routes and high unit price also contributed. Other factors include the impact of fixed cost reductions under Business Structure Reform and, of course, the efforts of the ANA Group employees who have worked so hard and creatively to recover capacity. At the same time, we must not forget to thank you, our stakeholders, for your support. We announced the resumption of dividends at the end of the interim period and raised the year-end divi- dend from ¥30 to ¥50 per share to reward our shareholders who believed in and supported our revival. However, dividends and the dividend payout ratio (14.9% for fiscal 2023) remain insufficient at levels still lower than pre- COVID-19. We intend to recover our financial base to pre-pandemic levels as quickly as possible, after which we will raise shareholder returns. We are progressing generally in line with the action plans formulated under the ANA Group Corporate Strategy. In February 2024, Air Japan Co., Ltd. launched international routes under the AirJapan brand, adding another brand to the ANA and Peach multi-brand approach. ANA is increasing international route sales steadily while recovering business scale. This recovery includes the announcement of service to Milan, Stockholm, and Istanbul from December 2024 onward— service that had been postponed due to the impact of COVID-19. To grow our Cargo business, we continue to make arrangements for obtaining approvals from authori- ties in various countries in connection with the basic agreement to acquire all shares of Nippon Cargo Airlines Co., Ltd. from NYK Line. Our fiscal 2024 reflects plans We are making even greater strides, driven by the strength and teamwork of ANA Group employees. for lower profits due to reduced government support and increased maintenance costs. In fiscal 2025, however, we aim to return to operating income at the ¥200 billion level. To gain a foothold for full-fledged growth, we intend to implement the strategies described in the ANA Group Corporate Strategy consistently and steadily. A Shift in Management Focus to the Medium and Long Term The current corporate strategy runs through fiscal 2025. Given that performance has stabilized to a certain degree, however, we plan to shift management focus to the medium and long term, accelerating discussions toward business growth on all cylinders. Specifically, the Board of Directors has begun analyzing our business environment and discussing issues to address over the next 10 years through fiscal 2035. The construction of a new third runway at Narita International Airport is sched- uled to be completed by the end of March 2029. With the additional capacity, Prime Minister Kishida reiterated the government’s target for 60 million inbound travelers by 2030 at the April 2024 ministerial Council for Promoting Japan as a Tourism Nation. The Travel Agency projects that demand for air transportation will grow with the expansion of the Indian and Southeast Asian economies, and we expect a significant opportu- nity for growth in air transportation demand and supply. After identifying our aims to what extent, we will formu- late our next management strategy through backcasting, showing our investors the future growth story of the ANA Group. Here, I want to share my thoughts on the three areas we believe will be growth drivers. International Passenger Business as the Pillar of Further Growth by Conducting Management that Overlooks the Whole World The first point is the International Passenger Business, which will eventually become a pillar of profit growth. In fiscal 2023, ANA International Passenger revenues were ¥728.1 billion, surpassing Domestic Passenger revenues for the first time ever and becoming a pillar of our busi- ness in both name and practice. I joined the Company chasing a dream to work in some capacity related to international flights at ANA. Ever since, I have been 12 13 involved in the International Passenger Business, so this is a very inspirational moment for me. When I joined ANA in 1982, operating revenues were approximately ¥420 bil- lion. Revenues have increased fivefold in about 40 years, and the International Passenger Business has been the power behind this growth. At the same time, several air- lines around the world, mainly in Europe and the U.S., have revenues more than twice the size of the ANA Group. We still have room to aim higher. Looking at the current routes operated by the ANA Group around the globe, South America and Africa are considered white spots (empty zones where we do not operate our own direct flights). For example, I recently vis- ited Brazil. The trip took a total of more than 30 hours between Haneda Airport and connections to flights of other airlines. I don’t imagine this style of travel is very comfortable for most people. Many destinations even out- side South America and Africa are inconvenient to access, including airports located outside major cities. ANA, Peach, and AirJapan will expand the number of destinations to create an infrastructure for customers to travel more quickly and conveniently to any point in the world. Each brand will take advantage of their respective characteristics and strengthen alliances with overseas air- lines—particularly those of Star Alliance. Offering the best mix of in-house and code-share flights, we will create a truly global network offering broad access to the world with more destination options and more convenient con- nection schedules. The number of visitors to Japan continues to increase. At the same time, we recognize significant room for improvement in ANA Group overseas sales, both in terms of passenger volume and unit price. When I engage in overseas investor relations, I sometimes hear from local investors that given the world-class ANA service quality, we should be able to raise the unit price. While our fares have been traditionally higher than the competition, we believe there is room to increase profit from our interna- tional routes by raising awareness overseas, improving convenience for non-Japanese customers, and expanding sales channels. Domestic Passenger Business as a Stable Revenue Platform The second pillar is to improve the profitability of our Domestic Passenger Business. Although domestic routes have been a stable base of revenue for many years, prof- itability has begun to show signs of weakening more recently. In addition to the existing structural issues, including a shrinking domestic population and large fluc- tuations in demand depending on the day of the week and time of day, we believe a combination of other fac- tors have contributed to a decline in domestic passen- gers. These factors include a decline in business demand due to the rising trend of online meetings, soaring fuel oil prices, increased maintenance costs due to the aging of aircraft, and rising domestic wages and prices. Certain issues will require time to resolve, but we will take care of the issues we can handle in-house as quickly as possible. The first of these issues is to build an optimal fleet portfolio based on the size of the market. We were sad to see that the former Mitsubishi Aircraft Corporation abandoned the development of the SpaceJet. At the same time, we must move forward decisively in selecting narrow-body aircraft of around 100 seats to replace the void left behind. We will improve load factors and increase asset efficiency through a route network, sched- ule, and appropriate aircraft to meet the demand for flights as we increase the ratio of narrow-body aircraft over the medium term. The second is to expand the number of travelers to rural areas. The Japanese government has made tourism an important policy pillar. The ANA Group also pursues regional revitalization as a materiality. Communicating the rich nature, cultures, food, and other attractions of each region—as well as by matching regional issues with ANA Group assets—we will encourage mobility and personal interactions through tourism and agriculture, promoting the use of ANA Group-operated flights. Today, in-country travel by inbound travelers accounts for about 3% of all domestic passengers. We want to expand this ratio in the future. We must address numerous other issues to improve profitability in terms of revenue and cost approaches. Examples include utilizing more sophisticated marketing and introducing more labor savings in ground handling. Air transportation is indispensable for an island nation such as Japan. We must continue to implement multifaceted struc- tural reforms and establish a stable revenue platform if we are to help revitalize regional economies and fulfill our roles and responsibilities in a sustainable manner. DX as the Center of Management Strategy The third point is digital transformation (DX). In an envi- ronment of rapid change and diversifying customer needs, we must make effective use of digital technolo- gies and data across the ANA Group, speeding up management decision-making and pursuing transforma- tions that include more attentive services to customers. Based on this strong desire, we moved our DX strategy beyond the former positioning as a part of our manage- ment foundation, placing DX at the center of our busi- ness strategy. One key topic is to balance enhanced productivity with improved customer and employee experience. We already pursue automation and mechanization in a vari- ety of ground handling tasks. We will see significant labor savings if we extend these technologies to other key airports. Through generative AI and other advanced technologies in other operations, customer service, and staff operations, we aim to maximize the value we pro- vide employees and customers. We will create an envi- ronment with the best mix of human and digital, allowing our people to focus on what they do best. DX is also important in the evolution of ANA Smart Travel to provide customers with a more comfortable travel experience. For example, some overseas airlines are ahead of the curve in terms of convenient services, such as mobile flight rebooking in the event of a flight cancellation. We will accelerate functional improvements to our website and the ANA app to ensure a smoother, more stress-free experience at every stage of the travel process, from planning and booking to airports, boarding, and arrival. Another important topic is to create group synergies through data usage. The ANA Group collects data across several businesses, including data on approxi- mately 42 million ANA Mileage Club members. However, we have yet to utilize this wealth of information to its full potential. By upgrading to one-to-one marketing based on customer preferences, consumption behavior pat- terns, and other information, we will expand the ANA Economic Zone, offering more opportunities to use air and non-air services to more customers. ANA Group-Style Human Capital Management Achieving a Virtuous Value Creation Cycle Centered on Human Capital Human capital is the axis around which the ANA Group value creation process revolves. In fact, a full 80% of the compliments and 40% of the complaints we receive from customers at our contact center relate to human ser- vices. This fact proves that what customers expect most from us is high service quality from our employees. Providing customer experience value that exceeds expectations and creates customer delight is our aim when we say Uniting the World in Wonder. We held a Corporate Transformation Council in fiscal 2023 to communicate our new management vision, increase productivity, and foster work-style reform. In fiscal 2024, we are developing initiatives to put ANA Group-style human capital management into practice, rolling out this system in a progressive manner. First, we clearly communicated to employees management’s intention to invest generously in human capital. We also unveiled the value creation cycle by which we enhance basic quality and productivity through improved engage- ment. In turn, this cycle leads to customer satisfaction, social value, and economic value. I then shared my thoughts on human capital management with directors and division heads, asking them to hold dialogues with employees in their respective workplaces. The phrase human capital management sounds very formal, but I urge managers to create an atmosphere in which employees feel comfortable stating their true opinions. I want managers to listen to and accept feedback with sincerity, basing discussions on true feelings and taking prompt action for actionable measures by management or employees. The most important factor in practicing the value creation cycle is to create work environments in which employees have a sense of job satisfaction and work with vitality and enthusiasm. I want to create envi- ronments in which employees see themselves as responsible for solving workplace issues, expressing their honest opinions without reserve. To this end, we will increase opportunities for two-way dialogue between management and employees, at the same time pursuing fair, impartial organizational management and a culture that embraces diversity. To raise wages sustainably while seeking profits in the future, we must add value through the power of people. Customers must feel that the value they receive is worth the higher fares compared to other companies. We will achieve this virtuous value creation cycle while increasing value-added productivity (see p.49) to estab- lish a competitive advantage through more refined and consistent ANA Group quality. Message from the President & CEO Management Message 14 15 Understanding the Thoughts and Feelings of Our Employees We practice the three reality principle, which emphasizes visiting the real site, understanding the real situation, and being realistic. To practice this principle, I take the time to visit and converse with ANA Group employees in their actual work locations. At the end of 2023, I made three visits to our maintenance shop, going early in the morning at 5:00 a.m. to see employees working on aircraft and engines. In guiding the rudder of our business, I place high importance on understanding the thoughts and feel- ings of our employees. I want to gain a deep understand- ing of what each employee does every day. In what kind of environment do they work? What are they thinking? I want to understand not from a superficial level, but more deeply from the same perspective as our employees. Only when we empathize truly with our employees can we speak in words that resonate with them. Only then can we reach out when they are in need and set the perfect stage for them to achieve their full potential. From this perspec- tive, the job of a president is not only about management skills but also about work skills that include an in-depth knowledge of business and the ability to get work done. Even today, I strive constantly to improve my work skills. Having received requests from one of our workplaces to add one more service member due to the heavy work- load of flight attendants and the time required to serve customers, in fiscal 2023 our flight attendant division began a careful study of various perspectives, including perspectives of employees, customers, and productivity. I personally observed the service on an actual flight and spoke directly with flight attendants about specific service procedures and operational difficulties. After carefully con- sidering the situation and taking into account the feelings of the employees, I supported the decision to increase the number of service members on the relevant flights. By combining several measures, we improved customer ser- vice times without increasing the overall organizational headcount. This is just one case in point, and I believe that an accurate understanding of employee thoughts and feelings should be the basis for many types of manage- ment decisions. Teamwork Is a Unique Strength After discussions about the ANA Group strengths underly- ing our human capital management story, we once again came to the conclusion that teamwork is our most unique strength. Peter Drucker, the father of modern business management, famously said, “Culture eats strategy for breakfast.” The driving force by which we weathered the COVID-19 pandemic was nothing more or less than the team spirit as described in ANA’s Way; the spirit of wakyo (close cooperation). At the beginning of 2024, a collision occurred between a Japan Airlines flight and the Japan Coast Guard aircraft on a runway at Haneda Airport. It was our own ground handling staff who worked with the firefighters to guide evacuees away from the damaged air- craft. Our ground staff and mechanics also helped the evacuees access bathrooms on ANA aircraft. I believe this episode is proof of the strong sense of mission shared by our employees as individuals involved in the airline busi- ness who work together as a team every day. To ensure we always retain these unique strengths, we continue to encourage active communication within the group and strive for teamwork-based value creation. Becoming a Beloved Company Another major element helping us survive the COVID-19 pandemic was the support we received from stakeholders with whom our employees had built relationships of trust over our nearly 70-year history, including investments, loans, and employee secondments. I came to understand firsthand how non-financial capital not presented on finan- cial statements—relationships of trust with employees, customers, and society—can be of real value when a company is in crisis. Creating ANA Group fans through our businesses and becoming a beloved company are essential for increasing corporate value. These factors also represent the greatest tool for risk management. To deepen relationships with our stakeholders, we will con- tinue to engage in management from a long-term per- spective, focusing on more than our own profits and building a corporate culture where ANA Group executives and employees act with integrity. We are dedicated to practicing ANA Group-style human capital management, and we will strive to foster an atmosphere where employ- ees and people outside the Company feel a sense of attachment to the ANA Group. Evolution toward an Integrated Management Philosophy I mentioned that we are shifting our management focus to the medium to long term. I also want the ANA Group to evolve toward an integrated management philosophy. As part of our efforts to achieve this goal, we began to study redefining materiality. We defined our current base of materiality in fiscal 2015, and we have not revised materi- ality significantly since. We plan to redefine what we view as our challenges, taking into account the post-COVID-19 business environment and the role we should play. These considerations will serve as a new basis for our next man- agement strategy in fiscal 2026 and beyond. When we formulate management strategies based on materiality, we strengthen the link between business strategies and ESG strategies. We also raise the awareness of Group employees regarding sustainability and tie materiality to concrete, practical actions. CFO NAKAHORI Kimihiro explains elsewhere in this integrated report our policy for achieving a price-to-book ratio (PBR) of 2 times. (See p.22) To achieve a PBR that exceeds accounting value significantly, we must visualize our non-financial capital, especially human capital, which is the strength of the ANA Group. We must clarify the rela- tionship between non-financial capital and financial values, using data to communicate our value creation process in a more coherent story than we have to date. This story will benefit ANA Group employees in establishing a common understanding of the Company’s strengths, to understand accurately the meaning and aims of strategies and measures, and to work with a sense of conviction in the process of improving corporate value. We intend to make progress in this area through trial and error. Toward the Next Stage: Our Will to Enhance Corporate Value Struggling and Forging New Paths The recovery in demand following the COVID-19 pan- demic has slowed. Now is a critical juncture to determine whether we can achieve sustainable growth. In the pro- cess of implementing change, we expect to encounter challenges. But if we keep moving forward with a strong will—never giving up—a path will surely open. I have had many experiences in my working life in which, faced with difficult challenges, I focused singly on the one outcome I desired. After thinking deeply and pondering at length, I eventually arrived at an answer to break through the diffi- cult situation from unexpected sources. Our management team, every employee, and I will continue to ponder mea- sures to create added value. We will push forward directly toward our goals, forging new paths to the future of the ANA Group. A Further Leap Ahead, Together with Group Employees The International Air Transport Association (IATA) projects that the total number of passengers worldwide in 2024 will be approximately 4.7 billion, a record high. The airline business, which is the mainstay of the ANA Group, will undoubtedly continue to be a growth industry. When faced with COVID-19, people outside the Company con- cluded that the investment related to the expansion of international flight slots at Haneda Airport in 2020 had backfired. At the time, such opinions had an impact on our business performance; however, our willingness to take on the challenge of growing our business remains unchanged to this day. Of course, we must return to a growth trajectory to avoid a repeat of history. At the same time, we must engage in total risk management and strengthen our resistance to volatility in both business and financial aspects. Our company song was composed 62 years ago on the occasion of the 10th anniversary of the Company’s founding. The lyrics of that song say, “building a bridge of love that connects the world, with pride and determina- tion, we go forward today with our hands and wings.” Our predecessors were already thinking about the global skies back then. Their lofty aspirations led to our vision of Uniting the World in Wonder. Since our very first days, the spirit of creating connections in the sky, expanding the potential of our employees, customers, and society, and contributing to a future full of dreams has been the foun- dation of the unyielding spirit of the ANA Group. Today, 41,000 ANA Group employees share the same passion- ate aspirations as our predecessors. We work hard every day to achieve the same goals. To me, this is our greatest asset and the driving force behind the growth of our group. I will take the responsibility to unite the dreams and hopes of our employees to contribute to a peaceful soci- ety by connecting the hearts and minds of people around the world through the movement of people and goods. I will take the responsibility to ensure we take a leap ahead toward the skies of the future. I ask for your continued support and encouragement of the ANA Group. August 2024 SHIBATA Koji President & Chief Executive Officer, Representative Director Message from the President & CEO Management Message 16 17 Message from the CFO Management Message Toward Improving Return on Capital and Share Price Further Q The ANA Group posted record profits in fiscal 2023. What were the factors behind this strong performance? The ANA and Peach brands captured the strong post- COVID-19 inbound travel demand effectively, resulting in a sig- nificant increase in operating revenues, particularly in the Passenger Business. The brands improved profitability by controlling yields to a high standard, even as the scale of oper- ations recovered. In terms of expenses, we controlled fixed costs and leveraged continued partial government support, including subsidies and exemptions of taxes and public dues. Q What is your perception of the current balance sheet? We recognize that the balance sheet is inflated temporarily, mainly due to an increase in cash and deposits and interest- bearing debt resulting from funds procured to prepare against the possibility of the prolonged impact of the COVID-19 pan- demic. The current balance sheet poses a challenge from the standpoint of efficiency. We plan to reduce our balance sheet over the medium term by using cash on hand for interest-bear- ing debt repayments. We also plan to manage our aircraft, spare engines, and spare parts—the ANA Group’s main assets—appropriately, while reducing cross-shareholdings. Q Describe the repayment plan for the subordinated loans, which could be considered one measure to reduce the balance sheet. As we progress in restoring our financial base with the recovery in our performance, we intend to use cash on hand to repay ¥200 billion each in 2025 (tranche A) and 2027 (tranche B) as early repayments. We will keep a close eye on the impact of the change in lease accounting standards scheduled for fiscal 2027 and beyond. Q What are the conversion terms of the ¥150 billion in euro–yen convertible bonds issued in December 2021? The bonds in question have a 120% soft call option provision designed to facilitate conversion. Under this provision, if the Company’s share price (closing price of ¥2,883 at the time of issuance; ¥2,838.4 as of April 1, 2024) remains at 120% or more of the conversion price for 20 consecutive trading days (equivalent to ¥3,460 or more at the time of issuance; ¥3,407 or more as of April 1, 2024), the Company has the right to redeem the bonds at 100% of the principle in advance of or on December 10, 2024, which is three years after the issuance date. If the Company exercises this option, the share price will be above the conversion price, and bondholders will find it economically rational to convert to shares prior to early redemption. This provision has the effect of encouraging con- version to shares. We established these terms to ensure a certain degree of flexibility in future financial strategies. The Company’s share price reference in this provision begins on August 15, 2024. If our share price (closing price) exceeds ¥3,407 for 20 consecutive trading days after that date, we will be able to reduce interest-bearing debt and increase equity by ¥150 billion by exercising the soft call option. On the other hand, we may not make a decision to exercise this right immediately considering share price level and our medium-term targets for shareholders’ equity and sharehold- ers’ equity ratio. If the bonds are not converted into shares, the bonds will simply be zero coupon low interest bonds, redeemed when due. We plan to determine the funds based on the Company’s financial condition, interest rates, capital market trends, and other factors at the time. Q In what direction will you aim your balance sheet over the medium term? The policy under the current ANA Group Corporate Strategy (FY2023-25) is to prioritize restoring our financial base by build- ing shareholders’ equity through profit accumulation. We expect our shareholders’ equity ratio at the end of fiscal 2025 to be around 37%. In fiscal 2026 and beyond, we believe the appropriate level of liquidity on hand will be ¥500 billion and are targeting a shareholders’ equity ratio of around 45% as we continue to strengthen our risk tolerance capable of dealing with another large-scale pandemic. ANA aims to obtain a credit rating of A from R&I. Q What progress have you made in restoring the group’s financial base, as described in the ANA Group Corporate Strategy? The strong performance of our Passenger Business led to a steady recovery in profits and cash flow generation. We are restoring our financial base at a pace faster than anticipated. Shareholders’ equity amounted to ¥1,044.5 billion, and our shareholders’ equity ratio was 29.3%, improving by about 4 points compared with the previous fiscal year. We think the appropriate level of liquidity on hand from a medium-term per- spective is ¥500 billion. When correcting to that level, the shareholders’ equity ratio would be 37.1%, maintaining financial soundness. Rating and Investment Information, Inc. (R&I) rec- ognized our rapid recovery in earnings and finances, upgrading our credit rating to A- and helping ensure flexibility in financing. Fiscal 2023 in Review Balance Sheet Management 1 2 NAKAHORI Kimihiro Member of the Board of Directors, Executive Vice President Group Chief Financial Officer (1) Real net debt-to-equity ratio* 0.73 (2) Shareholders’ equity of ¥919.2 billion or more In the case of tranche A for (1) and (2), we consider the recognized equity of tranche B. Early Repayment Terms (Without Refinancing) * (Loans + Bonds + Lease obligations + Future lease payments) - (Cash and deposits + Marketable securities) Shareholders’ equity (Net assets - Non-controlling interests) Our financial management policy is to maintain an appropri- ate level of shareholders’ equity in line with business risks so that we can adapt to various changes in the business environment, and we will continue to utilize hybrid financing, such as subordinated loans and subordinated bonds, as one of our financing methods as needed. We are strengthening management that is oriented toward the cost of capital and share price, striving for improved corporate value over the medium to long term. Liquidity on hand 1,257.8 Liquidity on hand 500.0 Liquidity on hand 800.0–900.0 Interest-bearing debt 1,484.0 Interest-bearing debt 726.2 Interest-bearing debt 1,050.0 Shareholders’ equity 1,044.5 Shareholders’ equity 1,044.5 Shareholders’ equity 1,200.0–1,250.0 FY2023 FY2023 After adjusting for liquidity on hand FY2025 Forecast Total assets Shareholders’ Equity ratio ¥3,569.5 billion 29.3% ¥2,811.7 billion 37.1% Approx. ¥3,300.0 billion Approx.37% Medium-Term Direction a) Reduce total assets • Liquidity on hand to ¥500 billion b) Accumulate shareholders’ equity • Shareholders’ equity ratio to 45% (¥ Billions) Total assets Shareholders’ Equity ratio 18 19 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2.5 5.1 9.8 11.6 15.1 16.5 10.6 10.8 2.6 0 4 8 12 16 20 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 ROE 16.5 7.1 0 4 8 12 16 20 CAPM-based cost of equity Projected cost of equity (CAPM + α) 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 2 4 6 8 10 7.3 1.2 2.3 4.4 5.6 5.4 1.4 5.2 7.6 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 0.2 0.4 0.6 0.8 1.0 0.8 0.7 0.8 0.8 0.8 0.8 0.8 0.3 0.3 0.5 0.6 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 1 2 3 4 5 2.7 2.8 2.9 2.9 2.6 2.5 2.4 2.8 3.6 4.0 3.6 Message from the CFO Management Message Toward Improving Return on Capital and Share Price Further Q How do you view ROE levels historically? What initiatives are you taking to improve ROE? From a premise of financial soundness, we work to maximize corporate value by improving ROE. With the expansion of slots at Haneda Airport in fiscal 2014, we increased our routes and network focused on international routes while improving profit- ability, leading to an ROE in excess of 10% for fiscal 2016. On the other hand, ROE declined due to weakening earnings caused by the COVID-19 pandemic after the first half of 2020. In fiscal 2022, ROE again exceeded 10%, reaching a record high of 16.5% in fiscal 2023, as passenger demand recovered and we engaged in detailed cost management. Our policy is to improve ROE by increasing profitability (net income margin) and efficiency (asset turnover). We plan to increase profitability by expanding our strong International Passenger Business and investing in growth, including in new business sectors. In addition, we intend to accelerate discussions on our airline portfolio (ANA, Peach, AirJapan) and business portfolios (passenger and cargo; air- lines and non-air) to optimize the allocation of management resources across the ANA Group. As mentioned above in terms of efficiency, we recognize the balance sheet challenges we face, and we will continue to manage the balance sheet for effective value creation. Q What is your perspective on cost of equity? While we believe that ongoing communications with investors is the most important way to determine the appropriate cost of equity, we also monitor the cost of equity as calculated by the capital asset pricing model (CAPM) and earnings yield. ROE for fiscal 2023 was 16.5%, compared to our recognized 7.1% cost of equity based on CAPM. We believe this is a sufficient equity spread. Note that the CAPM-based cost of equity was in the 5% range prior to the pandemic. The cost of equity has been on an upward trend since the end of the pandemic, partly due to changes in leveraged beta. Given the most recent views from the capital market, we believe we must maintain a cost of equity at around 8%. We intend to maintain an equity spread of at least 4%, looking to possibly raise our current medium-term ROE target of 12%. We will continue to engage in constructive dialogue with a wide range of investors, striving to understand the expectations of the capital markets. Q What steps are you taking to reduce the cost of equity to ensure a stable equity spread? We are implementing three broad categories of initiatives to reduce the cost of equity. The first is to control interest-bearing debt in light of an optimal capital structure. Our analysis of the changes in levered and unlevered betas indicates that the cost of capital has increased with higher financial risk due to the increase in Interest- bearing debt since the COVID-19 pandemic. We will improve our financial security by repaying interest-bearing debt consistently. The second is to control performance volatility. Struggling performance during the COVID-19 pandemic was inevitable. Learning from this experience, we know the importance of building a strong business structure and implementing a portfolio strategy capable of with- standing risk events. The third relates to our ESG initiatives. We must remove uncertainties to future growth from a medium- to long-term perspective, focusing on measures to reduce CO2 emis- sions, an important issue for an airline group. We will reduce the cost of capital through progress in these three initiatives as we communicate closely with the capital markets. Return on Capital and Cost of Equity 3 Return on Equity (ROE) (%) ROE and Cost of Equity (%) (FY) • Expand the International Passenger Business and improve profitability • Expand business through growth investments, including new business sectors • Accelerate discussions on the airline portfolio and business portfolio to optimize the alloca- tion of management resources across the group • Optimize investment scale • Optimize assets owned (aircraft, engines, parts, etc.) • Reduce cross-shareholdings • Maintain a certain level of liquidity on hand and shareholders’ equity against risk events • Maintain liquidity on hand at ¥500 billion • Maintain shareholders’ equity ratio at 45% Future Guidelines ROE Target 12% or more Cost of Equity Approximately 8% Equity Spread Target 4% or more Note: Fiscal 2020 and fiscal 2021 omitted due to net losses. Note: Fiscal 2020 and fiscal 2021 omitted due to net losses. 1. Control interest-bearing debt • Repay interest–bearing debt consistently (¥500 billion–¥600 billion: forecast total for 2023–2025) • Early repayments of subordinated loans (FY2025 and FY2027) 2. Control performance volatility • Secure aircraft and human capital to expand profits in the Air Transportation Business • Control fixed costs via cost management • Expand Non-Air Business profit segments 3. Implement ESG initiatives • Ensure the stable procurement of SAF (strengthen outreach and coordination with relevant parties) • Refine estimates of costs for medium- to long-term environmental response (e.g., costs related to CORSIA* compliance) • Strengthen governance (risk management and compliance enhancement initiatives) Step Up IR Activities Present timely and full information disclosures to the capital market and pursue dialogues with investors (FY) (FY) (FY) (FY) Financial Leverage (Debt) (%) Asset Turnover (Efficiency) (Times) Net Income Margin (Profitability) (%) * CORSIA: Carbon Offsetting and Reduction Scheme for International Aviation 20 21 Message from the CFO Management Message Toward Improving Return on Capital and Share Price Further Q What is your view of the current share price and share price indicators? Looking back at past PBR performance, we have been well above 1 times in almost every period, except those impacted by COVID-19. In the past 10 years, however, we have never achieved a PBR of 2 times, remaining in the range of 1 times. The highest share price (closing price) during the same period was ¥4,753 on January 9, 2018. While we posted record profits and profit margins in fiscal 2023, our current share price hovers around ¥3,000. The struggling share price can be attributed to a number of factors, including our public offering in the wake of the COVID-19 pandemic, the increase in outstanding shares (dilutive shares) issued with the issuance of convertible bonds, and the fact that investors may consider shareholder returns insufficient based on our focus on restoring our financial base. However, we believe the most important factor in improving our share price is to communicate the story of medium- to long-term corporate value enhancement to investors. While the forecast for the current fiscal year assumes a decline in profit, management is engaged in deep discussions regarding how we will demonstrate the likelihood of achieving our fiscal 2025 operating income target of ¥200 billion and show a concrete path to the next stage of growth. We aim to achieve a PBR on the order of 2 times and maintain a stable equity spread by raising ROE to our medium-term target of 12% as quickly as possible. Q What are your thoughts on the policy for shareholder returns? In fiscal 2023, we published a release at the end of October announcing the resumption of dividend payments (¥30 per share) for the first time in five years, ultimately paying a divi- dend of ¥50 per share. Dividends per share and the dividend payout ratio remain lower than pre-COVID-19 levels. However, we intend to increase shareholder returns beginning in fiscal 2026, taking into account the restoration of our financial base and the balance between our profit outlook and investments in growth. In addition to dividends, we intend to meet the expec- tations of shareholders by increasing net income per share (EPS) and by increasing our share price. As mentioned above, the number of outstanding shares (dilutive shares) is increasing, which is a factor restraining the growth of EPS. Therefore, the Company will consider the option of share buybacks, assuming we can maintain financial health, which is a medium-term goal. Q Does your officer remuneration system incorporate incentives to increase corporate value over the medium to long term? Our officer remuneration system is performance-linked, com- bining multiple indicators. We designed the system to improve corporate value over the medium to long term, reflect common interests with our shareholders, and encourage sustainable growth. In fiscal 2023, we added new indicators related to the Non-Airline Business/ANA Economic Zone. These new indica- tors encourage management to focus on medium- to long-term growth by addressing materiality. Q What employee incentive program do you have in place? We adopted a plan to grant shares not only to directors but to employees as well. This plan raises employee awareness of our business and encourages employees to play an active role in ANA Group sustainable corporate value enhancement. Share Price A Remuneration System that Contributes to Enhanced Corporate Value 4 5 8.2% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 1.04 1.24 1.20 1.51 1.57 1.44 0 0.5 1.0 1.5 2.0 1.39 1.40 1.41 1.30 0.83 PBR (Times) 8.2% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 55.5 30 35.6 40 50 22.4 21.3 14.4 60 60 75 22.7 14.9 50 0 20 40 60 80 100 0 20 40 60 80 100 Dividends (¥) (%) Incentive Year Implemented Eligibility No. of Shares Restriction Purpose Special incentive FY2022 Employee stock ownership association members 70 — Increase work ethic Restricted stock incentive (RS) FY2023 Employee stock ownership association members 100 3 years Step up incentives for achieving the ANA Group Corporate Strategy (FY) (FY) Note: Calculated using the closing share price at the end of each fiscal year (Left) Cash dividends per share (Right) Payout ratio Fixed (ratio 1.0) Performance-linked (ratio 0.00 to 0.92) Various measures to evaluate single-year results Evaluate contributions to corporate value over the medium to long term Payment according to title, etc. Net income Safety Customer satisfaction Employee satisfaction ROE Non-Airline Business/ ANA Economic Zone indicators ESG indicator Productivity indicator 22 23 ANA Group Management Strategy Information Disclosures Inside and Outside the Company The ANA Group is committed to enriching and improving our information disclosures on strategic initiatives formulated through dialogues, aiming to share our progress and results with stakeholders in an easier-to-understand manner. Responsible Dialogue with Stakeholders The ANA Group Management Strategy cycle begins with dialogue with internal and external stakehold- ers. Our strategies incorporate the latest information and insights gained through dialogues to ensure we understand the impact that changes in social conditions have on our business. We then engage in efforts based on our understanding of societal demands and expectations. The Group also holds dialogues with internal and external stake- holders through information disclosures to ensure these efforts are appropriate. This two-way communication holds us accountable and ensures we maintain management transparency. Responsible Dialogue with Stakeholders during FY2023 P.110 Recent Improvements Redefined route distance Changed unit revenue and yield for domestic flights from the designated distance* to the great-circle distance to be com- parable by the same standards as other companies Changed method of disclosing information on market conditions in our financial results presentation materials Changed sensitivities to fuel, exchange rates, and market conditions to show hedged-in sensitivities Enhanced disclosure information in line with the TCFD recommendations Disclosed financial impact (medium term and long term) and related calculation metrics to indicate the scale of impact on our business in more detail Major Dialogues on ESG Management in FY2023 P.106 Major Disclosures • FY2023-25 ANA Group Corporate Strategy (February 2023) • Annual Report (end of August each year) • Monthly Traffic Results (around the 15th of each month) • Human Rights Report (April 2024) • ANA Group Health and Wellness Report (February 2024) • ESG Context Index https://www.ana.co.jp/group/en/csr/data/pdf/esg.pdf Our approach to ESG management P.76 ANA Group Management Cycle The ANA Group Management Strategy focuses on two time frames: the short term and the medium to long term. We strive to respond flexibly to short-term changes in the business environment while taking into account megatrends and environmental and social issues in demographics, technology, and the environment over the medium to long term. We hold dialogues with various stakeholders, sharing any suggestions and insights obtained through such discussions throughout the Company. We then reflect these suggestions in our business and ESG strategies, disclose any appropriate information on the effort processes and progress, and expand dialogues further. In this way, the ANA Group works to enhance strategy effectiveness. Short-Term Business Strategy [FY2023-25 ANA Group Corporate Strategy] Medium- and Long-Term ESG Strategy [Materiality] ANA Group Management Cycle Stakeholder Dialogue Short-, Medium-, and Long-Term Strategic Initiatives Information Disclosures Inside and Outside the Company * Designated distance by the Ministry of Land, infrastructure,transport&tourism (based on actual flying routes) Specific Initiatives P.30- 24 25 Intellectual Capital • Utilizing expertise cultivated in the airline industry to advance other businesses • Strengthening brand strength overseas • Strengthening IT infrastructure and utilizing internal Group data ANA Group Management Strategy Issues to be monitored over the short- to medium-term cycle (current FY2023-25 ANA Group Corporate Strategy period) Issues to be monitored over the medium- to long-term cycle (up to FY2023/FY2050) Expand catchment areas for passenger demand through our three brands Expand non-air profit domains Leverage our customer base to expand the ANA Economic Zone Generate demand through regional revitalization initiatives Transition to a Business Structure Resilient to Risks Improve profitability to increase free cash flow Recover financial base Improve capital efficiency by reducing total assets Improve Profitability and Strengthen Balance Sheet Management Leverage data and digital technologies to enhance cus- tomer experience value Improve human capital productivity through labor savings Develop and acquire human capital with digital skills Pursue Digital Transformation (DX) Increase value-added productivity starting from human capital investments Fulfill our responsibility to respect human rights throughout the supply chain Create Added Value by Expanding Human Capital Achieve carbon neutrality while accounting for economic rationality Take measures to comply with CORSIA Implement the Transition Strategy Strengthen corporate governance Ensure compliance Make appropriate disclosures and enhance communication Strengthen Governance (Capital Issues Recognition) Manufactured Capital • Recovering the number of aircraft reduced by Business Structure Reform • Shortage of human capital to support operations • Shortage of human capital in the Non-Air Business • Strengthening our ability to innovate with and be agile in our responses to change Human Capital Economic Condition Analysis Financial Capital • Quick recovery of the financial base damaged by COVID-19 measures • Balancing sustainable growth and environmental responses Natural Capital International Situation • Convergence of COVID-19 pandemic • Ongoing Russia–Ukraine situation • Downturn in the Chinese economy • Business scale and network recovery • Higher demand for routes to and from China • Recovery of overseas airlines’ supply • Higher operating costs due to air route changes Financial Market • Ongoing weakening of the yen • Inflation in Japan and overseas • Bank of Japan monetary policy shift • Appropriate reflection of higher costs in fares • Increase in the number of visitors to Japan • Recovery of demand from Japan due to the strengthening of the yen • Deterioration of foreign currency-denominated earnings • Delayed recovery of leisure demand from Japan Airline Industry • Quality issues at Boeing • Mandatory inspections of Pratt & Whitney engines • High airfares due to tight supply and demand • Delays in aircraft delivery schedule • Supply constraints for domestic flights Labor Market • Declining population in Japan • Increasingly diverse work styles and switch to online work • Ongoing wage increases • Higher demand for travel and trans- portation due to increased holidays, workcations, and incomes • Lower number of passengers on domestic flights • Labor shortages in the airline industry • Lower demand for business travel Natural Environment • Increased climate-related risks • Tightening of environmental regulations • Biodiversity loss • Price pass-through of environmental costs stemming from changes in consumer awareness • Positive branding effects from proactive climate change responses • Increase in irregular flights due to weather causes • Increase in costs for environmental responses • Emerging biodiversity risks Technological Advancements • Digital transformation • Use of AI (advances in generative AI) • Lower operating costs • More convenient services • Enhance human capital productivity • New business development • Shortages in digital human capital • Negative impact from system failures • Loss of credibility due to information leaks • AI-inflicted human rights violations Corporate Social Responsibility • Wider regional disparities • Emerging human rights risks • Demand for greater management transparency • Higher demand for travel and mobility from regional revitalization and improved attractiveness • Increase in stakeholder trust • Human rights violations in the supply chain • Reputation risks Major Changes in External Conditions Opportunities / Risks Policies Internal Environment Awareness 26 27 • Building a network of co-creation to pursue management strategies Social and Relationship Capital ANA Group Management Strategy Improve profitability to increase free cash flow Recover financial base Improve capital efficiency by reducing total assets Leverage data and digital technologies to enhance customer experience value Improve human capital productivity through labor savings Develop and acquire human capital with digital skills • Upgrade app functions • Engage in labor savings in airport operations • Develop new businesses using avatars, the metaverse, drones, etc. • Strengthen training programs for digital transformation human capital • Increase earnings per share (EPS) • Repay interest-bearing debt on a consistent basis • Maintain and improve credit ratings • Invest in growth with due consideration for financial discipline • Consider strengthening shareholder returns over the medium term Major Target KPIs in Response Measures Strategic Management Issues Major KPIs Major Initiatives References Strengthen corporate governance Ensure compliance Make appropriate disclosures and enhance communication • Improve the effectiveness of the board of directors • Increase opportunities for dialogue between management and stakeholders As Early as Possible in the 2020s Ratio of female directors 30% Corporate Governance P.84 Expand catchment areas for passenger demand through our three brands Expand non-air profit domains Leverage our customer base to expand the ANA Economic Zone Generate demand through regional revitalization initiatives • Optimize airline portfolio • Expand cargo business (to accommodate the consolidation of NCA) • Appropriate resource allocation • Facilitate customer excursions in air and non-air services • Resolving regional issues through innovation • Revitalize regions through social contributions and social issue resolution • Promote the use of domestic flights among visitors to Japan Improve Profitability and Strengthen Balance Sheet Management Pursue Digital Transformation (DX) Achieve carbon neutrality while accounting for economic rationality Take measures to comply with CORSIA Increase value-added productivity starting from human capital investments Fulfill our responsibility to respect human rights throughout the supply chain • Strengthen team spirit • Enhance employee resourcefulness with professional skills • Foster an organizational culture that encourages change • Create comfortable workplaces for employees • Build transparent supply chains Create Added Value by Expanding Human Capital Materiality People P.46 DEI P.56 Human Rights P.58 • Improve flight operations and upgrade to more fuel-efficient aircraft • Utilize sustainable aviation fuel (SAF) • Use emission trading schemes • Use negative emissions technologies • Disclosures based on TCFD and TNFD recommendations Message from the CFO P.18 Materiality Environment P.60 Materiality Regional Revitalization P.74 Business Strategy P.30 Implement the Transition Strategy Strengthen Governance Transition to a Business Structure Resilient to Risks FY2030 Carbon emission from aircraft operations net 10%+ reduction (vs. FY2019) Replace 10% or more of fuel used with SAF Ratio of fuel-efficient aircraft (for jets) approx. 90% FY2050 Aircraft CO2 emissions net zero FY2025 FY2023-2025 IT investment amount 1.5x (vs. FY2020–2022) Digital human capital 1.6x (vs. FY2022) Amount of data utilized 4x (vs. FY2022) FY2025 Value-added productivity index +15% (vs. FY2018) ANA’s Way Survey average score 4.03/5 Number of dialogues held by management 1,200 Number of public applications within the group 1,200 Number of Change Makers (Leaders of change trained) 300 (cumulative) Turnover rate –0.5 pt (vs. FY2020) Ratio of female managers 30% FY2025 ROA 6–7% ROE 11–12% By FY2030 ROA 8% or higher ROE 12% or higher Efficiency Credit rating Maintain A rating FY2025 Shareholders' equity ratio approx. 37% Medium Term Shareholders' equity ratio 45% level Safety FY2025 Operating revenues ¥2,320 billion Operating income over ¥200 billion Operating income margin over 8.6% By FY2030 Operating income margin over 10% EPS over ¥330 Profitability Economic Condition Analysis As Early as Possible in the 2020s 28 29 Human Capital Strategy P.48 DX Strategy P.42 Financial Strategy P.40 Transition Strategy P.62 By FY2030 Achieve Our Management Vision Uniting the World in Wonder FY2023-FY2025 FY2023-25 ANA Group Corporate Strategy (Announced February 2023) Build a Basis for Growth FY2020 to FY2022 Business Structure Reform (Announced October 2020) Establish a Resilient Business Structure ANA Group Management Strategy In the FY2023-25 ANA Group Corporate Strategy, we have three pillars as strategic themes. Through the promotion of each strategy, we aim to build a basis for growth and transition to a full-fledged growth phase by transforming our business model toward the realization of our vision by fiscal 2030. Toward a Full-Scale Growth Trajectory Transform Business Models Reduced Business Scale to Get through COVID-19 FY2023 Results in Review Having maintained and improved unit prices through yield control and captured recovering passenger demand on both international and domestic routes, we posted operating income of ¥207.9 billion, a new record-high by a wide margin. FY2024 Plan Key Points We anticipate a recovery in demand in the Passenger and Cargo Businesses, planning for record-high operating revenues. At the same time, we expect an increase in costs, which we controlled throughout the COVID-19 pandemic. Our operating income plan calls for ¥170 billion, a year- on-year decrease but higher than before the pandemic. Capture demand at high unit prices, particularly in the Passenger Business Record revenues for the ANA International Passenger Business Demand recovery continues, reaching record levels Consistent and detailed cost management, even as we increased capacity Controlled fixed costs to levels below pre-COVID-19 (FY2019) Increase due to a negative rebound, etc., after the COVID-19 pandemic International Passenger Business +¥25.8 billion Domestic Passenger Business +¥24.0 billion International Cargo Business +¥28.4 billion, etc. Tax reductions, exemptions, subsidies Reduced or terminated Maintenance expenses Increase in maintenance for various engines Investments in human capital Improved productivity and stronger response to labor shortages Changes in the Environment since Publishing the ANA Group Corporate Strategy The pace of ASK growth in the Passenger Business has been slower than expected due to the prolonged Russia–Ukraine situation and the PW1100G engine inspections. In addition, we must respond properly to new opportunities in the Cargo Business and upward cost pressures. Record-high operating income Environmental Changes Delayed recovery of capacity due to continued detours around Russia Conclusion of the NCA share acquisition agreement Inflation in Japan and overseas, labor shortages Profit continues at high levels exceeding pre-COVID-19 ANA Group Response Maintained and improved high unit prices through yield control Rapid consolidation and post-merger strategy development (scheduled finalization: March 31, 2025) Appropriate fare revisions, investments in human capital Operating Revenues Operating Income Operating Expenses Consolidated Operating Revenues and Operating Income (Left) Operating Revenues Operating Income (Right) Operating Income Margin (¥ Billions) (%) Business Strategy 30 31 31 Financial Strategy Restore financial base to pre-COVID-19 levels Reduce total assets FY2020 Reduced Resources Retired 28 aircraft early FY2022 Achieved profitability Operating income ¥120 billion FY2021 Reduced fixed costs significantly ¥255 billion decrease vs. FY2019 Business Strategy Three Pillars Expand non-airline profit domains 1) Practice appropriate resource allocation Expand the ANA Economic Zone 1) Increase the attractiveness of our content 2) Interconnectivity between the everyday and the extraordinary Review of FY2023 Results and Plan for FY2024 Migration Migration Maximize profit in airline business 1) Optimize multi-brand 2) Expand the Cargo Business 2024 (Plan) (FY) 2023 2022 2021 2020 2019 2018 2,190.0 2,055.9 1,707.4 1,020.3 728.6 1,974.2 2,058.3 7.8 10.1 7.0 3.1 8.0 170.0 207.9 120.0 ‒173.1 ‒464.7 60.8 165.0 ‒500 0 500 1,000 1,500 2,000 2,500 –2 0 2 4 6 8 10 Full lineup of routes and services at stable quality Inspiration of Japan Positioning by Brand A bridge to Asia, to deepen exchanges of people, goods & services Live! Pleasant service with no waste Fly Thoughtful Improve market share Expand profit 1) Marketing/sales partnerships 2) Interconnectivity improvement among brands 3) Collaboration and con- solidation of functions Hybrid Premium LCC Inaugural AirJapan Flight Signals the Launch of a Three-brand Strategy. Aiming to Increase Profits through Greater Market Share Full-Service Carrier Haneda Narita Low-Cost Carrier (LCC) Kansai Narita Hybrid Airline Narita Top-tier mobility on the strength of a full lineup of routes and services, offered with consistent quality An airline serving as a bridge across Asia to further the exchange of people, goods, and services, while inspiring human emotion A new kind of air travel based on Japanese concepts and quality • Business/leisure from Japan • Wealthy people from abroad, etc. • Leisure and VFR* • Leisure segment of 20-30 year olds • Inbound travel demand from Asia destinations • Leisure and VFR • Inbound travel demand from Southeast Asia and other countries • Premium quality • One of the world's largest networks to/ from Japan • Contribution to the global environment and society • Reasonable and acceptable prices • Simple and easy-to-use systems • Easy travel, unique programs • Fare levels competitive with LCCs • Service levels to suit all preferences • New levels of comfort • Japan quality Segment Major Airports Brand Concept Targets Value Provided Fiscal 2023 was favorable for both international and domestic passenger operations. Strong inbound travel demand to Japan and domestic leisure demand reflected the reclassification of COVID-19 to a Category 5 infectious disease. We are truly delighted to welcome back so many customers, and I want to express my deepest gratitude for everyone’s tremendous support. Fiscal 2024 will mark a turnaround point in the FY2023- 25 ANA Group Corporate Strategy, which we designed to put the company on a firm footing toward a return to a growth trajectory. We are committed safety as a social responsibility. At the same time, we will accelerate our trans- formation to increase earnings and enhance corporate value, leading to a leap forward in fiscal 2026 and beyond. We believe there is room to expand our customer base from overseas in the Passenger Business by increasing the ANA brand recognition internationally. With the opening of the Haneda–Milan, Haneda–Stockholm, and Haneda– Istanbul routes scheduled before the COVID-19 pandemic, we expect to grow our route network for the ANA brand. Our three airlines—ANA, Peach, and AirJapan—will examine the best way to optimize the group network over the medium to long term. In the Cargo Business, we will leverage our strength as a combination carrier that owns both passenger and freighter aircraft, and we will continue to focus on capturing demand related to automobiles and semiconductors—our main major commodities—as well as demand for special cargo and other high-priced commodities generally considered difficult to transport. We plan to construct Cargo Building No. 8, our largest cargo facility, in the cargo building area at Narita Airport in October 2024. We will consolidate the cargo terminals currently dispersed across six locations to create a highly efficient and competitive system with state- of-the-art equipment and improved productivity. The ANA brand stands for high quality, as evidenced by our highest rating of 5-Star from SKYTRAX for 11 consec- utive years. As we maintain this quality, we will look toward automation and self-service to meet needs and maximize customer experience value through digital tech- nology, in addition to adding value of the type only possible through human services. We also aim to improve productivity and creativity by investing even more in our people, the source of value-added creation, and improv- ing employee engagement. Having overcome the COVID-19 pandemic, we are confident that our efforts were not in error. Momentum is building throughout the Company for a further leap ahead. We will continue to work for rapid change through the spirit of venture that has guided us since our founding, acting with speed and using the new value we gained from the pandemic for Uniting the World in Wonder. In FY2023-25 ANA Group Corporate Strategy, we are aiming to maximize profits in the airline business and advancing a multi brand strategy with ANA, Peach and AirJapan. The new AirJapan brand began operations in February 2024, bringing the Group’s total number of brands to three. We intend to win market share and maximize profits through an optimized portfo- lio, responding to changing needs and behaviors in the wake of the COVID-19 pandemic. Each of these three brands will play a role according to differences in fares, product lineup, and target customer. We intend to execute the brand concept of each company in a way that covers demand globally. The three companies developed a joint air transportation plan in fiscal 2023 to optimize our route network. Other efforts to improve migration among brands through marketing and sales include reservation screen transitions and linking ANA Mileage with Peach Points and AirJapan flight vouchers. We intend to adjust service routes, schedules, the number of flights, etc., while collaborating in aircraft procurement and maintenance, pursuing greater coordination and functional inte- gration among brands to maximize profitability in our airlines business under the ANA Group Corporate Strategy. Message from the President High Low Full Simple Fare Lineup Domestic International Passenger Short-range Mid-range Long-range Benefit of optimizing multi-brand INOUE Shinichi Member of the Board of Directors ANA HOLDINGS INC. President & Chief Executive Officer ALL NIPPON AIRWAYS CO., LTD. 1. Multi-brand Strategy Brand Definitions * VFR: Visiting Friends and Relatives Business Strategy ANA Group Management Strategy Fiscal 2024 Strategy 32 33 ANA Brand (International Passenger) ANA Brand (Domestic Passenger) International Cargo Business (FY) Hawaii Asia China Europe North America 20–30% 10–20% 50–100% 30–40% 5–10% Supply–Demand Balance Beginning to Ease Operating Revenues (¥ Billions) Market Outlook 0 300 600 900 644.9 529.5 669.0 2022 (Results) 2023 (Results) 2024 (Plan) 0 300 600 900 728.1 433.4 754.0 2022 (Results) 2023 (Results) 2024 (Plan) Operating Revenues (¥ Billions) 0 200 100 300 400 184.0 2022 (Results) 2023 (Results) 2024 (Plan) 308.0 155.5 Operating Revenues (¥ Billions) 80 100 120 140 160 -6% 2024 (Plan) 2023 2019 Yield Performance Point Leisure demand expected to remain strong Point Increased demand for major commodities Point Continue to maintain high unit price vs. pre-COVID-19 Approximately 70% Restored production lines More than twice pre-COVID-19 (2019) vs. pre-COVID-19 100%-plus Gradual recovery from 2H vs. FY2023 Approximately +10% Business Demand Automotive-related Leisure Demand Semiconductor-related Fiscal 2023 revenues increased year on year, mainly due to strong leisure demand. We expect fiscal 2024 revenues to exceed fiscal 2023 as we continue to capture leisure demand and maintain unit prices above pre-COVID-19 levels. We expect business demand to remain at approximately 70% of the pre-COVID-19 levels, while leisure demand should con- tinue to exceed pre-COVID-19. ANA will coordinate with Peach to build an optimal route network for capturing strong demand. In addition, certain fares were already raised at the end of March 2024. Our plan calls for an increase in revenue of approxi- mately ¥9.0 billion, including an approximately 5% hike in FLEX and other high-priced fares. By seeking appropriate fares based on demand for each route and flight, we will achieve a unit price level approximately 5% higher than pre-COVID-19. Yield remained higher than planned in fiscal 2023 with strong passen- ger demand, resulting in a significant increase in operating revenues year on year. The fiscal 2024 market outlook calls for an increase in the supply of seats on routes to and from Japan across all routes, while supply- demand balance is expected to ease. The ANA policy calls for increasing the composition ratio of pas- sengers to and from Japan, where the unit cost is relatively high, optimizing passenger mix and maintaining yield. We also plan to expand our route network by increasing capacity on European routes by approximately 30% compared with fiscal 2023. These routes have been slow to recover due to the situation in Ukraine and Russia. Specifically, we will convert the existing Munich and Paris routes to a daily service and resume the Vienna route, which had been suspended due to COVID-19. We will also open three new destinations in Milan, Stockholm, and Istanbul, beginning with the winter schedule in fiscal 2024. Our aim here is to increase revenue by expanding our network for European routes. We are in the process of applying for antitrust immunity (ATI) approval for a joint venture with Singapore Airlines. This joint venture would strengthen our network in Asia, where airline demand should grow in the medium to long term. Through efficient route planning in Asia and Oceania (including Singapore, India, and Australia), improved connections at transit points, and a standard fare structure, we aim to increase revenues while improving customer convenience. Fiscal 2023 revenues were lower year on year as the supply–demand balance normalized with the continued decline in demand for major commodities. Performance should recover gradually in fiscal 2024 with a recov- ery in demand for major commodities, particularly automobile- and semiconductor-related. Leveraging the strength of a combination carrier with both cargo and passenger flights, we plan to optimize our route network and space for freighter and passenger aircraft to best capture recovering demand. We expect to maintain unit price at a higher level year on year by capturing special cargo using wide-body freighters and by capturing high unit price merchandise through the highest levels of transportation quality. We expect the effective date of the acquisition of shares of Nippon Cargo Airlines to be March 31, 2025, once the examination of the business combination by the relevant authorities has been com- pleted. We continue making arrangements to finalize the transaction as quickly as possible. 1) Strengthen capture of passenger numbers, focusing on strong leisure demand 2) Implement fare increases, planning for unit price to increase +5% compared to pre-COVID-19 1) Capture recovering demand of major commodities by passenger flights (belly) and freighters 2) Reform Cargo Business strategy after finalizing NCA share exchange Fiscal 2024 Strategy Key Points Fiscal 2024 Strategy Key Points Fiscal 2024 Strategy Key Points 1) Maintain high yields by optimizing passenger mix (focus more on demand to/ from Japan than connection) 2) Increase capacity on European routes by 30% year on year and expand route network Routes to Munich and Paris (daily), route to Vienna (resume), routes to Milan, Stockholm, and Istanbul (new) ANA Group Management Strategy Point Fare Revisions Increased select fares*1 by approximately 5%*2 beginning March 31 Revenue Increase ¥ 9.0 billion Seat supply for routes to/from Japan in Fiscal 2024 (YoY growth; ANA forecast) *1 Premium fares, FLEX fares, shareholder benefits, business tickets, etc. *2 Reduced on certain fares and routes 1. Multi-brand Strategy (Plan Assumptions) (Plan Assumptions) (Plan Assumptions) (Index) Fiscal 2019=100 (FY) (FY) Fiscal 2024 Strategy ATI Approval for a Joint Venture with Singapore Airlines We received conditional ATI approval from the Ministry of Land, Infrastructure, Transport and Tourism in April 2024 for joint ventures between Japan and Singapore and between Japan and other eligi- ble countries*. We also filed an application for ATI approval with the Singaporean authorities, and our application is currently under review. We plan to apply for ATI approval in other countries in due course. * Other eligible countries: Australia, India, Indonesia and Malaysia Business Strategy (FY) 34 35 1) Contribute to group profits by expanding the composition of international routes, particularly in East Asia 2) Improve operations and service quality (e.g., on-time departures) Fiscal 2024 Strategy Key Points Fiscal 2024 Strategy Key Points 0 50 100 150 138.0 90.2 134.5 2022 (Results) 2023 (Results) 2024 (Plan) 0 6 12 18 1.2 15.5 2023 (Results) 2024 (Plan) 0 50 75 25 100 36 7 42 2022 (Results) 2023 (Results) 2024 (Plan) (%) International Domestic Operating Revenues (¥ Billions) Operating Revenues (¥ Billions) By capturing strong inbound travel demand and domestic leisure demand in fiscal 2023, we posted revenues significantly higher year on year. We also posted a full-year operating income for the first time in five fiscal years. We plan to expand the composition of international routes in fiscal 2024, particularly to East Asia. With the prospect of increased market competition, including additional capacity, we plan to lower unit prices year on year. However, we aim to maximize revenue by capturing the strong demand for inbound travel to Japan through improved operations and service quality, as well as measures to stimulate demand. AirJapan began operations in February 2024 as a new brand of the ANA Group. We plan for approximately ¥15.5 billion in AirJapan operating revenues in fiscal 2024. As a hybrid airline, we aim to optimize the group’s overall portfolio by differentiating from the ANA and Peach brands, basing our strengths in comfort and affordable fares that surpass those of our competitors. In fiscal 2024, AirJapan will operate three routes with a two- plane fleet, focusing on attracting strong demand from passengers visiting Japan. Message from the President Message from the President On February 9, 2024, AirJapan began operations as a new brand utiliz- ing mid-body Boeing 787 aircraft to serve the future growth markets of Southeast Asia. We created highly competitive service, including Japanese-style boarding music, in-flight meals highlighting the appeal of food from various regions of Japan, and seats that emphasize comfort. And while we obsess with cabin space to the most minute detail, we offer three types of reasonable fares to meet passenger travel styles. Our first route was Narita–Bangkok. Subsequently, we added Narita–Incheon and Narita–Singapore. Overseas customers account for approximately 80% of the Bangkok route and 70% of the Singapore route, and we have captured new demand for the ANA Group. The AirJapan brand will continue to capture strong inbound travel demand, and over the medium term, we will expand routes gradually in pace with fleet growth. We have encountered certain operational issues since we began service. However, our employees have pulled together to improve ground handling and systems to stabilize operations quality. We will continue to prove our value as the airline of choice by offering experiences, products, and services of the type which AirJapan can be proud. In addition to the AirJapan brand, we are responsible for certain ANA brand international routes. We endeavor to create an organi- zational culture in which every employee aspires to take on new challenges, and I tell our employees that we must master playing on both sides of the ball. Many of our employees come from diverse backgrounds, and in fiscal 2023 we hired our first mid- career employees. AirJapan will continue to hire flight crew, flight attendants, and mid-career employees in fiscal 2024, all of whom we expect to contribute to maximizing ANA Group earnings by exercising their talents. MINEGUCHI Hideki Air Japan Co., Ltd. President and CEO In fiscal 2023, we recovered from the COVID-19 pandemic, sup- ported by the most robust market conditions and demand experienced since our founding. We endeavored to maximize reve- nues on domestic routes by stimulating demand, particularly leisure and VFR demand. On international routes, we resumed the Haneda– Shanghai and Kansai–Shanghai routes in May 2023, increased flights on the Narita–Taipei route in June, and resumed flights on the Kansai– Kaohsiung route in August. By expanding routes, adding flights, and increasing the allocation of resources to international routes, we cap- tured the strong inbound travel demand to Japan. Peach celebrated our 12th anniversary in March 2024. We created a new vision based on our past accomplishments, proclaiming a flight full of respect for everyone as a new step forward. Our goal is to make air travel easy and comfortable for all, helping make that jour- ney part of a cherished memory for our customers, not just a way to travel from point A to point B. That is our desire. We take on the challenge to create new customer value through unique initiatives only available to and possible by Peach. To con- tinue to evolve and grow, we will strive to satisfy more customers through new Peach value, expanding our Asian destinations further as a bridge between Asia and Japan as stated in our cor- porate philosophy. OHASHI Kazunari Peach Aviation Limited Representative Director and CEO Point Open new routes and add more flights to existing routes Narita–Singapore route (launched April 26; five flights per week) Narita–Seoul route changed to daily service (April 29) Narita–Bangkok route changed to daily service (April 30) Revenue Plan Revenue Plan Assumptions: ASK Composition (FY) (FY) (FY) 1. Multi-brand Strategy Expand composition of international routes ANA Group Management Strategy Fiscal 2024 Strategy 1) Increase flight frequencies to major inbound markets in South Asia and elsewhere 2) Strengthen competitive advantage by leveraging superior products and services while stabilizing operations quality Business Strategy 36 37 Profit Growth in Core Businesses Progress to Date Future Actions New Business Development We reduced our fleet through Business Structure Reform during the COVID-19 pandemic, mainly in terms of wide-body aircraft and curbing fixed costs. However, between fiscal 2023 and fiscal 2025 we plan to add mid- and wide-body aircraft, consisting of 15 aircraft including Boeing 787-10 (for domestic and international routes) and Boeing 787-9 (for international flights). In fiscal 2025, we plan to add a Boeing 777-9, the flagship of our international fleet, and a Boeing 737-8 (MAX), a smaller aircraft. We continue to reduce our environmental footprint by adopting fuel-efficient aircraft. In other matters, the discontinuation of SpaceJet develop- ment delayed the upgrade of next-generation regional jets (under 100 seats). We will consider the direction and timing of the next available narrow-body aircraft/regional jet from the perspective of a changing environment and the profitability of the Domestic Passenger business. Introducing the Boeing 787-10, Next-Generation Flagship for Domestic Routes In March 2024, the ANA Group became the first Japanese air- line to operate Boeing 787-10 aircraft with specifications for domestic routes in Japan. With the longest fuselage (68.3 m) in the 787 series, this latest model aircraft boasts a total of 429 seats (28 premium class and 401 economy class seats), com- bining low fuel consumption and excellent transport capacity. The Boeing 787-10 offers environmental performance and com- fort, offering passengers comfortable and confident air travel. Freighters 2025 2024 2023 2022 2021 2020 2019 34 29 24 12 30 50 24 73 55 2 37 37 24 39 15 84 28 37 36 24 11 8 39 15 90 28 37 38 8 24 41 15 95 29 3 3 3 278 280 290 B767 B787 B777 A380 B737 A320/321 A320/321 (Peach) Prop 0 50 100 150 200 250 300 0 5 10 15 20 25 FYE2023 FYE2024 (Forecast) FYE2025 (Forecast) 11 23 Number of Grounded A320/321neo Aircraft (Aircraft) Fleet Strategy Mechanisms to Encourage Customer Migration and Expand the ANA Economic Zone Initiatives to Expand the Life Value Business Message from the Executive Officer We formulated a new ANA Group Corporate Strategy for the first time in five years since our return to a growth trajectory in the wake of the COVID-19 pandemic. The three pillars of this strategy are (1) Maximize profit in airline business; (2) Expand non-airline profit domains, and (3) Expand the ANA Economic Zone for sustainable growth. The Future Creation Department, responsible for accelerating progress in non-air profit domains, will lead the ANA Group through enthusiastic team management toward achieving our management vision, Uniting the World in Wonder. Beyond building momentum, we will develop new businesses rapidly with a future orientation unbound by past experience or standards. To ensure the achievement of this vision, we will provide comprehen- sive support in the idea creation, proof-of-concept testing, market feasibility study, launch, and revenue stabilization phases. The other pillars of our strategy are to expand the ANA Economic Zone as quickly as possible and create a world in which people live in a mileage-based ecosystem. To this end, we began preparations during the COVID- 19 pandemic with ANA X to expand functions and encourage the use of the Gate App, ANA Mall, and ANA Pay functions. For ANA Group companies to maximize the use of this ANA Economic Zone platform, we must develop a business environment while seeking bold solutions to issues having high management impact. Such issues include capital investment, systems development, securing human capital, and operational structures. Embracing the venture mindset passed down in the ANA Group since our founding in 1952 with two helicopters, we will pursue open innovation with startups and other business partners, doing our utmost to create new value. I urge you to look forward to how the ANA Group’s business portfolio will change in the future. TSUDA Yoshiaki ANA HOLDINGS INC. Executive Vice President Director of Future Creation, ANA Economic Sphere 2. Life Value Business / 3. Expansion of the ANA Economic Zone 1. Multi-brand Strategy Gate App Relaunched the ANA Mileage Club App as the ANA Economic Zone Gate App Includes mini apps that seamlessly connect ANA Group services* * ANA, ANA Pocket, ANA’s Hometown Tax, Travel CUBE, ANA Mall, etc. Add/upgrade original, attractive mini apps Expand cross-selling between air/non-air businesses Generate advertising revenues with registered user growth New EC Mall Launch a mall offering everyday items beyond travel-related products Pursue an attractive product lineup through the best mix of direct management and partnerships Expanded from 23 stores (at time of launch) to 111 stores as of June 30, 2024 Expand the number of stores and attract large stores Improve UI/UX to focus on purchase flow Optimize data-driven recommendations New Payment Function Significantly expanded payment functions as a wallet in the ANA Economic Zone Payment equates 1 mile to 1 yen, helping create a world in which people live in a mileage-based ecosystem * Charge: Credit card, bank account, ATM, miles; Payment: iD, Visa touch, online Diversify recharging and payment methods Accumulate and use purchasing data to encourage migration Minimize customer churn rate by reducing lost mileage Build a Travel as a Service (TaaS) platform Shift from packaged sales to seamless single-product sales Leverage alliance strategy to expand service lineup (lodging, secondary transportation, experiences, etc.) Improve UI/UX and upgrade recommendation functions Completed ¥7.7 billion in funding from nine companies by July 2024 Develop the AI Omotenashi avatar for customer service operations Accelerate proof-of-concept tests with strategic partners (ANA, Yamada HD, LIXIL, etc.) General sales are planned to begin in 2026; IPO planned for fiscal 2027 ANA Future Frontier Fund, ANA Group’s First Corporate Venture Capital (CVC) Fund! In April 2024, we and Global Brain established a corporate venture capital (CVC) fund, “ANA Future Frontier Fund L.P.” We will accelerate open innovation tran- scending national and corporate boundaries by investing in promising startups from around the world. Areas of investment represent a wide range of specialties: (1) next-generation mobility (air mobility, drones, MaaS, space, etc.); (2) customer base utilization businesses (fintech, NFT, data analytics, etc.); (3) carbon neutrality (SAF, DAC, carbon offset, etc.); and (4) aviation service and operations (AI, robotics, etc.). By enlisting the help of startups, we aim to create new businesses, strengthen existing businesses, and improve the efficiency of airline services and operations. We must improve in areas where we cannot nec- essarily improve with our own resources and assets alone if we are to capture new revenue opportunities. Strengthen retail business profitability (retail stores and duty-free stores) through DX Grow the scale of the electronics business to capture the expansion phase in the semiconductor market Enter the space-related business by leveraging Airline Group expertise Create new businesses through business and capital alliances Prepare for operations during the EXPO 2025 OSAKA, KANSAI, JAPAN Coordinate with related parties to begin commercial operations during fiscal 2026 Established a structure in Japan to commercialize with Joby Aviation of the U.S. Partner with real estate operators and large retailers to develop facilities at origin and destination sites • Add mini app within the ANA app for Hometown Tax donations • Redesign ANA Aozora Ichiba (website selling local products) and open as the MeGourmet store in the ANA Mall • Began directing users to the overseas travel insurance sales site from the completion screen of the international flight reservation function on ANA Sky Web • Sell small, short-term insurance products within ANA Pay/Pocket Examples of Migration within the Group Our Airbus A320/321neo aircraft were idled due to Pratt & Whitney PW1100G engine inspections. To deal with this situa- tion, we intend to take measures that include deploying mid- and wide-body aircraft on certain routes operated using the A320/321neo. This approach means we will not be able to optimize aircraft allocation to meet demand for the foreseeable future. We are resolving the number of idle aircraft over time, and we continue discussions with the engine manufacturer to resolve the issue as soon as possible. Avatar Air Mobility Travel Services Trade and Retail (FY) ANA Group Management Strategy Fiscal 2024 Strategy Number of Aircraft by Model (Aircraft) Business Strategy 38 39 Future Profitability Goals Financial Strategy Value Creation Goals Recover Financial Base Capital Expenditure Plan Recover financial base Reduce total assets Liquidity on hand Interest- bearing debt Shareholders’ equity ratio Credit rating (R&I) ¥1,257.8 billion ¥1,482.0 billion 29.3% Recover A rating (A-) ¥ 800.0 – ¥ 900.0 billion ¥1,050.0 billion Approximately 37% Maintain A rating ¥ 500.0 billion Control in light of an optimal capital structure Shareholders’ equity ratio to 45 % Acquire A flat While we are making steady progress in recovering our financial base, we have not made any major changes to our previously announced financial strategy. Our approach to the allocation of management resources in the FY2023-2025 ANA Group Corporate Strategy will continue to emphasize financial disci- pline, while steadily generating free cash flow as we invest conscientiously and maintain stable dividends to shareholders. Shareholders’ equity will increase through profit accumulation as we repay interest-bearing debt using free cash flow and cash on hand, creating strong financial resilience. International Business expansion in the post-COVID-19 growth phase will be indispensable. In the same vein, we must assume a reasonable risk of performance fluctuations based on the characteristics and scale of the business. In addition to the working capital required for normal operations and funds to repay debt and make investments, contingency reserves should include funds for advanced ticket sales and funds to cover fixed cost expenditures until other funds are procured. Based on these considerations, we estimate that the appropriate level of liquidity on hand over the medium term is ¥500 billion. Some investors have said that current liquidity on hand may be excessive. We will lower this balance gradually to the ¥500 billion level through the repayment of subordinated loans, scheduled for fiscal 2025 and later. FY2023 Results FY2025 Forecast Medium-Term Direction Last, let’s look at our value creation goals. We aim to achieve record-high consolidated operating income of ¥200 billion in fiscal 2025 by recovering capacity to roughly pre-COVID-19 levels. We will continue to maintain a high level of profit as we strengthen our non-financial approach to medium- and long- term growth, including human capital and the environment. Fiscal 2030 is the target year for achieving our new manage- ment vision. The ANA Group will work as one to return to a growth stage, supporting our aim to be a global top-tier airline in terms of profitability and financial strength. FY2023-25 ANA Group Corporate Strategy Build basis for growth FY2026 and beyond Full-scale growth FY2022 FY2023 FY2025 FY2030 FY2024 ¥120.0 billion Result ¥ 207.9 billion Highest Profit Pre-COVID ¥165.0 billion (FY2018) Medium-Term Target ¥120.0 billion Medium-Term Target ¥ 200.0 billion Plan ¥170.0 billion Target Over ¥200.0 billion 0 100 200 300 240.0 level 300.0 level 2025 (Forecast) 2024 (Forecast) 2023 (Results) 2023 (Plan) 260.0 240.4 Capital Expenditures (¥ Billions) The timing of certain investments planned for fiscal 2023 will be postponed to fiscal 2024 or later due to the delay in the receipt of some aircraft. We expect the total over the three years from fiscal 2023 to fiscal 2025 to be around ¥700 billion to ¥800 bil- lion, well within the range of the original plan. ¥700.0 billion to ¥800.0 billion total over three years Avg. ¥270.0 billion per fiscal year (FY) Business Strategy ANA Group Management Strategy Fiscal 2024 Strategy Profitability Capital Efficiency Operating Revenues EBITDA Operating Income EPS Net Income ROA ROE Operating Income Margin ¥ 2,055.9 billion ¥ 350.2 billion ¥ 207.9 billion ¥ 335.1 ¥ 157.0 billion 6.1% 16.5% 10.1% ¥ 2,190.0 billion ¥ 319.0 billion ¥170.0 billion ¥ 234 ¥110.0 billion 7.8% FY2023 Results FY2024 Plan Over 10% Over 8% Over 12% Above Pre-COVID-19 Level Global Top-Tier Profitability Medium-Term Direction 40 41 Consolidated Operating Revenues DX Strategy ANA Group Management Strategy DX Strategy In this age of volatility, uncertainty, complexity, and ambiguity, companies must think about conducting business with a constant awareness of the use and transformation of digital technologies. Companies cannot afford to be bound by the status quo or perceived reality, but should instead work with an eye toward the kind of world we want to create or change. The ANA Group formulated the DX Vision to define our ideal future in relation to digital transformation (DX). We seek busi- ness transformation that creates a sense of wonder not only through reformed internal business processes but also through digital technologies and data. In this way, we aim to improve employee experience (EX) through smarter work styles, customer experience (CX) by exceeding expectations, and sustainability transformation (SX) by balancing corporate sustainability and ESG compliance. The current ANA Group Corporate Strategy covers fiscal 2023 through fiscal 2025. This strategy emphasizes strength- ening our capacity to transform, including groupwide data management and the recruitment and developmental support of technology-literate human capital (“digital talent”). These two elements are critical for the group to achieve new value in the real-world transportation of people and goods and expanding our virtual and digital businesses by adapting to changes in society. The use of data is of particular importance in this context. We plan to integrate data collected from the management, marketing, and operations areas of our business, utilizing the data across the group, instead of hoarding data in vertical silos. This shift to data-driven business models will help us acquire new customers and expand the ANA Economic Zone. In the past, we stated that DX is one important element in our management foundation. To respond properly to the various environmental changes surrounding the airline industry, we must redefine DX as the center of our corporate strategy, moving boldly forward to transform our businesses. We must engage in the following three specific measures to ensure the competitiveness of the ANA Group: (1) Smart travel (maximize customer experience value by leveraging customer data and enhancing human services based on scene characteristics); (2) Operational sophistication (achieve business process reforms through the fusion of real and virtual); and (3) Concrete digital strategy that multiplies the power of people (improve productivity and enhance competitiveness by using digital technology and focusing on tasks that only people can perform). While we continue to strengthen our DX infrastructure, we are accelerating the transformation in our operations and businesses as we seek to achieve our DX Vision and the goal beyond: Uniting the World in Wonder. 42 43 Achieving Our DX Vision Digital Transformation Business transformation through digital and data DX Vision DX EX Employee Experience Foster smart work styles to increase engagement through rewarding and self-fulfilling work CX Customer Experience Deliver smart experience value that exceeds expectations SX Sustainability Transformation Pursue value creation that balances corporate sustainability and ESG Pursue digital to develop the power of our people Use digital to support customer service Use digital to contribute to decarbonized societies Using AI to Optimize In-Flight Meal Loading Reducing food waste and improving customer satisfaction are important topics related to in-flight meal loading. The ANA Group adopted a system to collect data from various systems related to in-flight meals, using AI to predict the opti- mal number of meals to be loaded. This program helps us minimize waste related to in-flight meals, while ensuring flexibility to meet diverse passenger needs and sudden schedule changes. The approach has been particularly effective for ANA domestic premium class, where the number of passengers often fluctuates until the last minute. Using AI also aids the efficiency of infor- mation gathering and forecasting. We expect to improve forecasting accuracy further as we accumulate more data. We continue to pursue value creation that balances corporate sustainability and ESG, utilizing ANA Group digital data across a broad range of settings. ANA App Redesign We redesigned the ANA app in November 2023. The My Booking screen redesign provides smoother access to all information related to boarding. The app improved three function buttons (“Seat,” “Check-In,” and “Mobile Boarding Pass”) to display more quickly depending on status of the customer. In addition, the app offers personalized rec- ommendations based on customer interests and concerns. The ANA Digital Hangar (ADH) team drove this major upgrade through agile develop- ment. The team focused on rapid function development, moving from hypothesis to implementation while focusing on customer experience value. We will continue to evolve ANA Smart Travel to maximize customer experience value and provide smooth and stress-free travel for all. Ground Handling Operations Automation and Mechanization The ANA Group is building a mechanism to support airport operations to secure human resources necessary for airport work. These mechanisms aim to improve the attractiveness of work and encourage innovation, leading to smaller, more resilient operational structure. As part of this effort, we have conducted demonstration tests for the practical use of uncrewed transport. The tests involve using a self-driving towing tractor (truck used to move cargo onboard aircraft) at Haneda Airport, where the cargo shed and terminal are separated by a long distance and cargo transportation requires significant labor. Current testing focuses on autonomous driving Level 4*. We aim for practical implementation at Haneda Airport by the end of 2025, once we verify economic feasibility and other matters. We will continue to reevaluate the roles of people and technology from top to bottom, making the most of automation and mechanization in airport ground handling operations to raise productivity. At the same time, we will dig deeper to improve work of the type only people can do, maximizing customer value while raising the sense of reward and job satisfaction among employees. Ultimately, we expect these efforts to increase the attractiveness of the airline industry even further. * Autonomous driving level 4: All driving operations are automated across a limited area that meets specific driving environment conditions. Major Initiatives to Improve Our DX Infrastructure (FY2023-25 ANA Group Corporate Strategy) IT Investment Investment Amount FY2023–25 1.5 times (vs. FY2020–2022) Human Resources Digital Talent FY2025 1.6 times (vs. FY2022) Data Management Amount of usable data FY2025 4 times (vs. FY2022) Improving Our DX Infrastructure DX Strategy ANA Group Management Strategy DX Infrastructure Major Initiatives The aim of the FY2023-25 ANA Group Corporate Strategy is to enhance our DX infrastructure through three initiatives: recruiting and developing digital talent, data usage, and IT investment. In pursuing DX, we must not only secure specialized human resources but also develop human resources capable of using digital technology effectively in every department. We must improve the digital literacy of all employees and create new value by combining these business and digital skills. In fiscal 2022, the ANA Group established an education system for digital skills, called ANA Digital Resonance, to recruit and develop digital talent within the group. The program is designed in particular to develop Digital Leads, who will lead business transformation in every operating department through digital and data. In addition to basic knowledge, the program offers two courses for problem-solv- ing using digital data in specific business scenarios. Instructors from the ANA Digital Transformation Office guide participants through approximately three months of training, after which participants are ready to solve problems independently and create new value in their respective departments. As of the end of fiscal 2023, approximately 70 individuals have graduated, including representatives from group companies. We aim to expand the scope of DX in our businesses through continuing efforts. We also improve digital literacy targeting various levels of employees, holding discussions on the use of AI among management and sharing examples of DX initiatives with all group employees. In addition to hiring new graduates and specialized mid- career professionals, we secure digital talent by actively identifying and training people with digital backgrounds already within the group. These plans and measures are progressing in line with plans. In terms of data usage, we are looking to use BlueLake, adopted in 2022, at an even more advanced level. As the ANA Group data usage platform, BlueLake provides dashboard functions, advanced analysis tools, data extraction, and other functions. A team of young employees led develop- ment, which they completed in about four months. We established an agile team of in-house data engineers and scientists to expand the data that currently works to con- nect various systems and support their use based on the needs of each department. As a result of these efforts, we increased the amount of data available for use across the group as of the end of fiscal 2023 by 2.5 times compared with fiscal 2022. And we are making steady progress toward creating a data-driven decision-making cycle. One example of how data visualization using BlueLake speeds up the decision-making cycle is our ability to visual- ize the number of customer reservations and confirm the gap between expected demand and sales via the BlueLake dashboard. We are conducting truly data-driven decision- making, with members of the same department making decisions based on data and a shared understanding. We will continue to expand data available to pursue business transformation at a more sophisticated level based on multi- faceted analysis and data use. We increased IT investment by 1.3 times compared with fiscal 2020 through fiscal 2022. These investments include an enterprise system upgrade project to integrate our inter- national and domestic passenger services systems and make systematic improvements to customer experience value, productivity, and other initiatives. As we continue to improve our DX infrastructure, we will create value through group synergies resulting from digital and data, evolving ANA Group data-driven management. Digital Lead training 44 45 Message from the CHO People ANA Group Management Strategy Materiality Basic Approach We define people as a materiality at the ANA Group (human capital, DEI, and human rights). Our aim is to create a virtuous cycle of value-added creation through investments in human capital to maximize the power of our people and teamwork, the true sources of value creation. In this way, we will seek sustainable corporate value enhancement. Further, diversity, equity, and inclusion (DEI) is a groupwide effort under which we develop human capital for sustainable growth and to respond to the diversity of our customers. Meanwhile, ANA Group business operations have the potential to impact the human rights of a variety of stakeholders. We take appropriate measures to respect the human rights of group employees as well as the rights of people in our supply chain. In addition to being an ANA HOLDINGS director, I began serving as head of Group Corporate Strategy and Group CHO in fiscal 2023. Having a single director in charge of corporate strategy and human capital strategy is an effec- tive way to link both strategies, and we have already embarked on activities to strengthen this link. At the beginning of the fiscal year, the Human Resources Department and Corporate Planning Department collaborated in further discussions on issues related to people and organizations for accom- plishing our corporate strategy. We received advice from investors and experts, revisiting the linkage with our human capital strategy. Based on these discus- sions, we implemented an action plan to strengthen our human capital, the source of the ANA Group value. This plan reflects management-level discussions on what makes human capital management at the ANA Group unique and what measures we should take. The strengths of our group are the power of our people—the high level of expertise and skills in aviation and our desire and attitude to bring smiles and joy to cus- tomers—and the power of our organization—teamwork that transcends job descriptions and other organizational barriers to produce results through collaboration. To accelerate our management approach that leverages these strengths, Group Representative Director, President and CEO Shibata communicates the cycle of added value creation beginning with investments in human capital to employees to raise awareness. First, we invest in human capital to improve employee engagement, enhance the individual sense of ownership, and raise the motivation to achieve. The consistent pursuit of basic quality and improved productivity by all ANA Group employees working toward the same goal results in customer satisfaction and stakeholder trust, leading ulti- mately to increased social and economic value. In the process of these activities, we must amplify the mindset of taking the next action, helping every employee experi- ence the joy, confidence, and conviction of his or her own growth and contribution. In this way, employee success results in a sustainable value creation cycle. One way we put this cycle in motion is through higher wages, which had been controlled during the COVID-19 pandemic. We raised bonuses and increased base wages for a second consecutive year. We also invest in a wide range of human capital initiatives, including improved ben- efits and training programs. While costs will increase in the short term, we told our employees that we cannot survive or raise wages sustainably without increasing profits. Productivity improvements and value-added creation are how we will ensure profit growth over the medium term. To this end, our management team listens to employ- ees and ensures meaningful dialogue to gain a firm grasp of information from the front lines, reporting back to the front lines the results of employee input. We will create a resilient ANA Group by fostering environments in which employees embrace a strong sense of ownership and contribute through their talents. NAOKI Yoshiharu Executive Vice President, Representative Director Group Chief Human Resource Officer (CHO) 46 47 We create a strong ANA Group by enhancing the individual sense of ownership and motivation to achieve. Value Creation Sustainable Corporate Value Enhancement Enriching the Lives of Employees, Their Families, and Others Accomplishing Our Corporate Strategy Human Capital Employees who embrace a strong sense of ownership, take action under their own initiative, and achieve lofty goals DEI Respond to the diversity of our customers and develop human capital for sustainable growth Human Rights Respect the human rights of ANA Group employees and the people in our supply chain Increase the Power of People × Professional Expertise Improve productivity and nurture individual growth Become an Organization that Is Resilient to Change Respect diversity and foster the ability to transform Enhance Team Spirit Foster a flourishing corporate culture of mutual praise, encouragement, and support Create Comfortable Work Environments Rebuild the foundation damaged by the COVID-19 pandemic and continue to improve systems 4 3 1 Key Concept 2 Key Concept Key Concept Key Concept Through investments in human capital, we encourage every ANA Group employee to embrace transformation and contribute to a virtuous value creation cycle unique to the ANA Group. Human capital is the greatest asset of the ANA Group. We intend to improve productivity and enhance engagement, beginning with investments in human capital. The goal of these measures is to maximize the value of every employee, increasing corporate value (social and economic value) over the medium to long term. To this end, we will step up human capital strategy initiatives and ensure the reliable advancement of the value creation cycle. The ultimate goal of our human capital strategy is to achieve the sustainable enhancement of corpo- rate value (social value and economic value), as well as to enrich the lives of our employees, their fami- lies, and all others involved with the ANA Group. Every employee will embrace a strong sense of ownership, take action under their own initiative, and achieve lofty goals. Human Capital Strategy The Cycle of Value Creation Begins with Investments in Human Capital Human Capital Strategy ANA Group Management Strategy 49 48 Increasing Engagement of Group Employees Raise job satisfaction and the willingness to take on challenges, encouraging employees to embrace a sense of ownership in accomplishing the ANA Group Corporate Strategy Enhance the Social and Economic Value of the ANA Group Generate social value (environment, employee well-being, community cre- ation, etc.) and economic value (profit) simultaneously Customer Delight Increase the number of ANA Group fans through the wonder, excitement, and joy we bring to our customers KGI KPI Value-Added Productivity*1 (ANA Brand) +15% (vs. FY2018) (FY2025 target) Net Promoter Score (NPS) Domestic routes +0.7 pt, International routes +1.3 pt (FY2024 targets) *1 Formula = (Operating Income*2 + Personnel Expenses)/No. of Employees *2 Total of Air Transportation Business and Airline Related Business Increasing Basic Quality & Productivity Establish a competitive advantage by refining ANA Group quality through individual employee contributions and teamwork KPI KPI ANA’s Way Survey Average score of 4.03* (FY2025 target) across all questions * 5-point scale SKYTRAX 5-Star Rating (FY2024 target) 1 4 2 3 Invest in Human Capital Increasing Basic Quality & Productivity Customer Delight Enhance the Social and Economic Value of the ANA Group Transformation Transformation Transformation Transformation Increasing Engagement of Group Employees Identify Issues Related to People and Organizations, and Define Human Capital Strategy Keys We identified issues related to human capital and strategy execution to increase the practicability of our corporate strategy. We also identified issues related to increasing engagement based on an analysis of employee awareness surveys. Through these activities, we defined priority issues to address through our human capital strategy. Human Capital Strategy Priority Measures and Main KPIs To accomplish our corporate strategy, we engage in four measures that leverage the ANA Group’s greatest strengths: (1) Enhance team spirit, (2) Increase the power of people x professional expertise, (3) Become an organization that is resilient to change, and (4) Create comfortable work environments. The Linkage between Corporate Strategy and Human Capital Strategy Corporate Strategy Job satisfaction and sense of accomplishment Pride in working for the ANA Group Expectations for the future of the ANA Group Improve Engagement People and Organizations Create a business structure resilient to risks Maximize profit in the Air Transportation Business Ability to innovate and be agile in response to change Shortage of human capital in the Non-Air Business Key Concepts Future Aim Issues Human Capital Strategy FY2023 ANA’s Way Survey (ANA Group Employee Engagement Survey) [Survey Overview] Total of 46 ANA Group companies, 35,280 respondents (95.9% response), and 68 questions [Survey Results] • We expect the overall score to remain high, although this year’s results were slightly lower than fiscal 2022. • Our major KPI scores related to engagement are also trending high. (FY) 2019 2020 2021 2022 2023 Average Score, All Questions 3.80 3.90 3.97 3.96 3.95 Major Engagement KPIs* (1) Sense of job satisfaction and accomplishment in current work 3.74 3.75 3.68 3.75 3.80 (2) Pride in working for the ANA Group 4.09 3.84 3.99 4.05 4.05 (3) Positive expectations for the future of the ANA Group – – 3.61 3.82 3.87 * An analysis based on the results of past employee engagement surveys confirms the high correlation between job satisfaction and sense of accomplish- ment and pride in working for the ANA Group with revenue and profit per employee. Correlation between Main Engagement KPIs and Questions in the ANA’s Way Survey Correlation between Questions and (1) Job Satisfaction/ Sense of Accomplishment 5.0 (Points) 4.8 4.6 4.4 4.2 4.0 3.8 3.6 3.4 3.2 3.0 0.20 0.30 0.40 0.50 0.60 Score by Question (5 Points Maximum) Needs Improvement High Correlation with Engagement, Low Score Priority Issues for Improving Engagement Employees chart their own career goals Work assignments appropriate to workload, ability, and responsibility Information from the front line is communicated to management * Analyses using other main engagement KPIs revealed the same issues. Major KPIs Establish a second pillar of earnings in the Non-Air Business Shortage of human capital to support operations (Correlation Coefficient) 1 Enhance Team Spirit 1 Enhance Team Spirit 2 Increase the Power of People Professional Expertise 2 Increase the Power of People Professional Expertise 3 Become an Organization that Is Resilient to Change 3 Become an Organization that Is Resilient to Change 4 Create Comfortable Work Environments 4 Create Comfortable Work Environments Human Capital Strategy ANA Group Management Strategy A. Employees chart their own career goals B. Appropriate work assignments C. Smooth communications from the field to management Issues in Improving Engagement 50 51 Accomplishing Our Corporate Strategy Raise Motivation to Achieve and Ability to Perform Increase the Power of People Professional Expertise Increase the Power of People Professional Expertise Become an Organization that Is Resilient to Change Respect diversity and foster the ability to transform Enhance Team Spirit Foster a flourishing corporate culture of mutual praise, encouragement, and support Number of dialogues held by management FY2023 result: 1,090 FY2025 target: 1,200 Number of Good Job Program submissions (Number of cross-company, cross-department messages) FY2023 result: 172,678 FY2025 target: 200,000 We will create an inclusive culture in which all employees can freely express their opinions by improving dialogue and providing consistent feedback to ensure information from the front lines is conveyed to management. Expand the hand raising system and other career support measures. Number of public applications within the Group FY2023 result: 1,017 FY2025 target: 1,200 Step up recruitment of human capital who can contribute immediately in key positions. Number of professionals capable of contributing immediately FY2023 result: 130 FY2025 target: 160 Pursue knowledge and create new businesses. Number of new business proposals FY2023 result: 183 FY2025 target: 220 Encourage diverse employees to contribute through their individual strengths. Job satisfaction among mid-career hires. Launched a survey in FY2024, pursuing measures to address issues Fostered a culture that encourages change and excitement. Number of Change Makers FY2023 result: 116 FY2025 target: 300 (FY2023 to FY2025) Support senior employees with diverse skills and experience to encourage work with drive, energy, and freedom to express their individual talents. Percentage of employees extending employment after retirement FY2023 result: 85% FY2025 target: 90% We intend to leverage the Good Job Program to strengthen vertical, horizon- tal, and diagonal communication across companies and organizations. Promoting ANA’s Way and enhancing the sense of unity among employees will also contribute significantly in this area. Create Comfortable Work Environments Rebuild the foundation damaged by the COVID-19 pandemic and continue to improve systems Turnover rate (vs. FY2020) FY2023 result: –0.5 pt. FY2025 target: –0.5 pt. Create attractive workplaces through enhanced benefit programs across the ANA Group, including offering more public holidays and encouraging employees to take paid time off. Number of comeback hires FY2023 result: 43 FY2025 target: 52 Create secure work environments at each career stage, offering comeback employment, a workplace selection system, and other measures. Key Concept Key Concept 3 2 Key Concept 1 4 Key Concept Improve productivity and nurture individual growth Human Capital Strategy ANA Group Management Strategy Enhance Team Spirit Dialogue between the Field and Management Increase the Power of People Professional Expertise Open Recruitment within the Group Create Comfortable Work Environments Health Management We are adding more transfer opportunities through open recruit- ment within the group as a means to help ANA Group employees plan and accomplish their career goals. Through open recruitment and other opportunities to experi- ence a transfer, employees gain a variety of experience and a deeper understanding of other businesses. These transfers foster stronger inter-company cooperation and the development of human capital across the group. In addition, ANA offers more transfers through open recruit- ment for employees to take on challenges in new business areas and deepen their expertise. Last fiscal year, we added open recruitment for manager and section manager level posi- tions to encourage career development at middle management positions and higher. As part of the ANA Group Management Vision, Uniting the World in Wonder, we offer Wonder x Concurrent In-House Internships* to support growth and relearning through diverse work experiences. * An open recruitment for human capital allowing employees to work concurrently in another department for up to four days per month (period varies by department; maxi- mum six months as a general rule) The ANA Group places great importance on providing more opportunities for dialogue between management and employ- ees around the world. Every year, Group companies and divisions hold dialogues based on a selected topic. In fiscal 2023, we fostered deeper dialogue on topics selected by management, as well as topics related to employee job satisfaction and actions to achieve our new management vision. In fiscal 2024, we will pursue dialogue on the topic of maximizing the power of ANA Group people and organiza- tions, strengthening initiatives related to the power of our people and teamwork—the sources of value creation—toward achieving sustainable corporate value enhancement. We encourage an inclusive culture in which all employees express their opinions freely. We accomplish this culture by strengthen- ing dialogue and providing consistent feedback to ensure information from the front lines is communicated to management. We launched the Good Job Program in 2001 as a tool to foster a culture of mutual appreciation and respect. Through this program, colleagues send messages to each other related to efforts in day-to-day operations. In fiscal 2023, the ANA Group as a whole sent 870,000 mes- sages through this program. We emphasize the number of cross-company, cross-depart- ment messages as a KPI indicating enhanced team spirit. In fiscal 2023, the number of such messages was 172,678. The Good Job Program includes a mechanism for expressing appreciation and well wishes to those whose affiliation or name is unknown. We counted 3,617 such messages in fiscal 2023. We use these experiences as content for internal newsletters and videos. We will continue a broad range of initiatives to foster team- work, which we consider an ANA Group strength. In February 2024, the ANA Group became the first Japanese airline to publish a health white paper, the ANA Group Health White Paper. This white paper serves as a medium to consoli- date and disseminate information on health management. We disclose and communicate progress in each policy and initiative under the ANA Group FY2023–29 Medium-Term Health Management Plan. In this way, we pursue health management in the group and draw nearer to achieving our 2030 vision of embodying Anshin, Attaka, Akaruku-genki! (Trustworthy, Heartwarming, Energetic!) and becoming the No. 1 company in Japan that values employee health. Examples of Wonder x Concurrent In-House Internships Head office/ center staff work experience Project work experience Skills acquisition Participants learn planning and coordination skills, build personal networks, and develop a vision for their future careers. Participation in relatively short-term projects, taking on the challenge to produce clear outputs and grow professionally. Acquire skills and knowledge that will lead to self-directed career development and expertise. Examples of Initiatives Supporting Priority Measures ANA Group Health White Paper 2023 (in Japanese only) https://www.ana.co.jp/group/csr/human_resources/health_care/pdf/ana_report.pdf 2022 2023 68% 0 20 40 60 80 100 75% ＋7 pt (FY) Good Job Program Utilization Rate Number of Cross-Company, Cross-Department Messages * Fiscal 2022 results since July, when we began tracking results. 2022 2023 0 50,000 100,000 150,000 200,000 135,003 172,678 +37 thousand * (FY) Enhance Team Spirit Good Job Program 52 53 Key Concept Key Concept Key Concept 1 2 4 (%) Key Concept 1 Fiscal 2023 Awards Customer Orientation Award Model reproduction of an airplane idea drawn by an elementary school student! An Unforgettable Summer Memory: ANA Magic through Inter-Division Collaboration, Attracting a Following A public relations department staff member posted an airplane design (creatively original air- craft livery and in-flight service idea) received from an elementary school student on the Company’s internal social media. The post attracted many likes and comments from employees. Moved by the efforts, aircraft mechanics proposed to invite the child to an ANA Blue Hangar Tour, which quickly gained support from several other departments. After the tour, the child received a model plane based on his drawing as a surprise souvenir gift. ANA received a thank-you emaill from the child, who said he now loves ANA even more and hope to work as a mechanic or in other airplane support duties in the future. Fiscal 2023 Awards ANA’s Way Spirit Award (Team Spirit/Endeavor) Monetizing ANA Knowledge Development and Sales of an Aviation Maintenance Tool This initiative was an example of value creation based in the high ANA maintenance quality, borne of unrelenting efforts and aspirations. As the airline with the largest number of Boeing 787 aircraft orders, the ANA Group has developed strengths in maintenance of these aircraft. This initiative was responsible for leveraging our experience to have a maintenance tool we developed included in the Boeing maintenance manual as a standard tool, contributing to improved safety and quality for the airline industry as a whole. Securing the exclusive rights to manufacture and sell this mandatory tool, ANA Group affili- ate FARWEST protected the design of the tool and monetized the tool for sale to other companies. This initiative overcame a number of obstacles through cross-organizational col- laboration beyond the borders of the ANA Group organization. Toward Achieving Our Management Vision The ANA Group strives to create a corporate culture that seeks change as we pursue our Group Management Vision—Uniting the World in Wonder—and grow powerfully in this new era. The Future Creation Project serves as the core of these activities to create a future of excitement. Under this project, Change Makers selected from each group company and workplace coordinate with ANA’s Way Ambassadors to solve workplace issues and take on new challenges. Change Makers Drive Transformation We selected 116 Change Makers from group companies in fiscal 2023. After a year of training and participation in forums, these Change Makers envision an ideal future based on discussions within their respective organizations, identifying issues and implementing workplace actions to achieve these ideals. We drove a push for action through leadership skills and mind- set training from outside instructors, the sharing of activities and mutual concerns, mutual support to solve issues, and more. Change Makers share a recognition of issues in each work- place and exchange opinions actively to create relationships that transcend organizational boundaries and drive a movement for transformation throughout the ANA Group. Fiscal 2024 Change Makers have begun activities, and the movement of transformation continues to face organizational challenges, handed down from generation to generation. The ANA Group works toward an exciting future for employees, customers, and society through a corporate culture in which every employee creates value through change and action. Future Creation Project Change Makers Training Program Pursuing an Ideal Future and Defining Areas for Transformation 1st Training 1st Forum Testing and Implementing Actions for Transformation 2nd Training 2nd Forum Looking Back to Plan for the Next Fiscal Year 3rd Training 3rd Forum Improve the execution of transformation activities through a cycle of mindset and knowledge acquisition, practice, and refinement A total of 20 Change Makers from 11 ANA Group airport operating companies and the ANA Operation Support Center came together as Airport Team ANA to have honest discussions, share airport-related issues, and discuss how to make ANA a company encouraging long-term employment. Through a year of activities, members came to understand the indispensable nature of human relationships for solving issues and improving engagement. One outcome of these activities was the Attractive Airport Development Project, launched in fiscal 2024 with the support of our entire organization. We will continue to work with our colleagues to heighten the attractiveness of work at airports, creating environments in which every one of our more than 10,000 Airport Team members works with drive and energy. TAJINAKA Eri ANA Operations Support Center Administration & Development TANAKA Takuya ANA Fukuoka Airport Co., Ltd. General Administration Department IKAWA Takumi ANA Chubu Airport Co., Ltd. Corporate Planning Department Human Capital Strategy ANA Group Management Strategy What Are the ANA’s Way Awards? We increase engagement by awarding initiatives that act in accor- dance with the ANA Group action guidelines, ANA’s Way, and that contribute to value creation and brand strength based on selec- tion criteria. We present awards to cases of new value creation through the power of our people and teamwork, which are strengths of the ANA Group. Publicizing the awards widely across the Company encourages others to take action toward achieving our manage- ment vision. We received 393 applications from Japan and 99 from overseas in fiscal 2023. A total of 15 ini- tiatives won awards across each of the five categories* under ANA’s Way. * Safety, Customer Orientation, Social Responsibility, Team Spirit, and Endeavor. ANA’s Way Awards Initiatives to Enhance the Power of People and Teamwork Taking Responsibility for the Future of the ANA Group by Creating Attractive Airports 54 55 Diversity, Equity, and Inclusion (DEI) Gender Equality: Diversifying Decision-Making Bodies The ANA Group aims to reach a 30% or higher ratio of female executives and managers as early as possible by 2030. We take action to review personnel and support systems, build capacity, and foster awareness to ensure diversity in group decision-making, as well as aid the autonomous growth of employees. Certain group companies, such as ANA, obtained the highest level of certification under the “Eruboshi” Certification. This certification is based on the Act on Women’s Participation and Advancement in the Workplace established by the Ministry of Health, Labour and Welfare. As customer values diversify and the social environment changes, continuing to be chosen and trusted by all customers is crucial for the future growth of the ANA Group. We will continue to 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 a sustainable inclusive society in which every- one can live together. Diverse Work Styles: Increasing the Percentage of Employees Taking Paternity Leave The ANA Group develops systems that help enhance the lifestyles of employees in various ways, such as through balancing work with childcare and/or nursing care. The ratio of male employees taking childcare leave is increasing through our efforts to promote under- standing among supervisors and workplaces, in addition to the employees themselves. Our three-day paid childcare leave was previously available only at certain companies. By offering this leave to the entire group and encouraging male employees to participate in childcare, we work to support the lives and fulfillment of employees and their families. Fiscal 2023 Percentage of employees taking either or both childcare leave or the three-day parental leave 95.9%*1 (FY2022: 90.7%) Fiscal 2023 Percentage of Employees Taking Childcare Leave 69.8%*1 (FY2022: 57.3%) Ratio of Female Executives Ratio of Female Managers ANA Group*1 11.8% (+1.4%) 20.3% (+1.0%) ANA 23.4% (+7.1%) 20.2% (+0.9%) As of June 2024 (year-on-year change) Employment of People with Disabilities ANA Group Disability Development takes the lead in the ANA Group in empowering employees with disabilities. The department promotes the employment of such individuals throughout the group, cooperating daily with staff members from each group company who are also working to promote the employment of persons with disabilities. Efforts of the department are based on the ANA Group 36K-Employee Kickoff code of conduct for the employment of people with disabilities, established in 2015. Such efforts include improving the hardware and software of working environments for such individu- als while raising awareness through various learning materials and awareness seminars. The ANA Group employs over 900 employ- ees with disabilities as of June 1, 2024, with each group company dedicated to achieving the legally mandated number of employees. We are committed to improving workplaces by creating environments that encourage each person to demonstrate their strengths and play active roles. All 38 group companies achieved the legally mandated number of employees with disabilities Employment rate of people with disabilities as of June 1, 2024*4 2.67% *1 Total of 38 companies: ANA HOLDINGS INC. and 37 companies subject to our management rules *2 Ally: Those concerned for the environment of sexual minorities and offer support by deepening their own understanding *3 Organized by work with Pride *4 Total of ANA HOLDINGS INC., ANA, and qualified ANA Group companies LGBTQ+: Respect for Diversity of Sexuality In 2022, we established the Basic Policy on Respect for Diversity of Sexuality (LGBTQ+) and work to improve workplace environments and pro- mote understanding of these issues. Efforts include expanding our partner system and addressing discrimination. We also launched Ally*2 activities in fiscal 2023, with approximately 380 employees involved in awareness-build- ing activities as Ally members. In addition, 37 group companies were awarded a rating of Gold in PRIDE Index 2023*3, an evaluation index for corporate actions related to LGBTQ+. ANA has received this award for eight consecutive years. Participating in Tokyo Rainbow Pride 2024 as an ally activity Understanding and Addressing Diversity 1 Web Accessibility We implement measures to comply with WCAG 2.1, a global standard of the W3C, and Level AA of JIS X 8341- 3:2016, a Japanese Industrial Standard, to ensure everyone has comfortable access to our website. Check-in Counters Room-type low counters at five major domestic airports including Tokyo (Haneda) and Osaka (Itami) * Installation of low counters at the check- in counter of other airports Telecommunication Relay Service (Provided at the Check-in Counter) We introduced Telecommunication Relay Services* at counters for customers with hearing impairments (located at major domestic airports). * Operators provide simultaneous sign lan- guage and voice interpretation for cus- tomer interactions with airport staff. Self-Driving Electric Wheelchairs We introduced PiiMo self- driving electric wheelchairs at Narita Airport to enhance the convenience of wheelchair users at the airport. Creating a Comfortable Environment for All (Tangible Initiatives) ANA Sorapass Class The ANA Group continues to visit schools for special needs education to teach a hands- on curriculum that addresses characteristics of disabilities for students that are planning school trips through ANA flights. Barrier-Free Hearts Seminars We conduct seminars that invite speakers with disabili- ties and experts in the field to facilitate participants’ under- standing of disabilities and help establish an inclusive society. Elderly and Pregnant Simulations (for Directors and Employees) ANA strives to improve our universal services by imple- menting hands-on experiences to encourage our directors and employees to make active efforts to deepen their per- sonal understanding of people who need special assistance. Employee Education We provide training for all ANA Group employees in line with the April 2024 Revision of the Act for Eliminating Discrimination against Persons with Disabilities. Developing Human Resources to Respect Customers Diversity (Intangible Initiatives) ANA Group Management Strategy People Materiality Universal Services 2 56 57 ANA established the ANA Group Procurement Policy in 2020 to promote more sustainable pro- curement activities throughout the supply chain. We request extensive and specific detailed infor- mation from suppliers in accordance with the Supplier Code of Conduct, especially in terms of human rights and the environment. In 2024, we introduced polo shirts as the uniform for ground handling staff at 11 airports in Japan. This was the first time in 20 years that the Company introduced new uniform items. The decision to introduce polo shirts was based on a vote of 1,500 employees after conducting inter- views with actual working staff regarding their desired functions and designs. These shirts are made using recycled polyester with the raw material derived 100% from fibers of used uniforms and clothing. ANA is committed to responsible procurement activities that consider the environment and human rights. We reflect the ANA Group Procurement Policy in our contracts with suppliers. We also conduct pre-production audits, focusing on not only quality but also labor standards, health and safety, and other aspects. Responsible Procurement Activities Basic Approach The ANA Group has a wide range of business operations which have the potential to impact the human rights of our stakeholders. The ANA Group established a management system (cycle) for human rights in accordance with the global standards provided in the United Nations Guiding Principles on Business and Human Rights. The FY2023-25 ANA Group Corporate Strategy also includes a commitment to respecting human rights in the supply chain. We believe it is important to listen to the voices of rights-holders* through the human rights due diligence process and the griev- ance mechanism and take appropriate response measures. We are committed to furthering our efforts to respect human rights based on engagement with rights holders. * Rights-holders are individuals or social groups that have particular entitlements in relation to duty-bearers (state or non-state including enterprises), and they may be affected by enterprises’ activities (e.g., employees, business partners, customers, and communities). Visit the following website for information on all our initiatives: Human Rights Report 2023 https://www.ana.co.jp/group/en/csr/effort/pdf/Human_Rights_Report_2023_e.pdf Case Study on Priority Human Rights Theme 1: Respect the Human Rights of Migrant Workers Working at Contractors and Vendors in Japan and Overseas The ANA Group works to prevent risks related to the major human rights themes we identified. We work with CRT Japan, a third-party organization, on Theme 1 through the following cycle. We also hold dialogues with sending organizations to establish safe and secure employment channels. 1 Survey on the employment status of foreign workers working at group companies and partner companies to which we outsource work We leverage the system to confirm the employment status of foreign workers (e.g., number of persons, nationality, and status of residence). 2 Conduct direct questionnaire surveys of foreign workers Based on the results of the employment status survey, we gather vocal feedback through questionnaires targeting specified skilled and techni- cal intern trainees, who face a generally higher latent risk among foreign workers. Surveys are conducted online based on the Dhaka Principles for Migration with Dignity (Dhaka Principles), which are international norms for protecting the human rights of foreign workers. 3 Face-to-face interviews of foreign workers Should survey results raise any concerns, we speak with company managers and hold face-to-face interviews with workers to confirm the situation. We then work with contractors to improve issues identified during the process and conduct follow-up evaluations. Integrate & Act upon the Findings | Track Responses 2 3 • ANA published the Human Rights Report in fiscal 2023 detailing our efforts to date. Human Rights Report 2023 https://www.ana.co.jp/group/en/csr/effort/pdf/Human_Rights_Report_2023_e.pdf • Our statement is based on the UK Modern Slavery Act 2015 and the Australia Modern Slavery Act 2018. • Our CSO participated in a session of the 12th United Nations Forum on Business and Human Rights held in November 2023 and introduced the initiatives of the ANA Group. • Our active engagement with rights-holders was highlighted as a good practical example of company efforts on the UN Global Compact Business & Human Rights Navigator (a website that showcases efforts by companies around the world to better understand and address the human rights impacts of their operations and supply chains). UN Global Compact Business & Human Rights Navigator https://bhr-navigator.unglobalcompact.org/ Remediation (Access to Remedy) Ninja, a grievance mechanism that commenced operation in November 2020, is a contact point for receiving complaints. Ninja receives a wide range of reports from workers regarding not only violations of human rights but also various complaints and con- cerns. To date, we have received 18 complaints, and responded to each within two weeks. In our response, we stated whether there was an existing policy concerning the matter and who the person in charge was, and we took necessary actions for each case. Human Rights Report 2023 cover Disclose Information to External Parties 4 Operations at an audit of a local sewing factory Commitment and Raising Awareness through Policies We established the ANA Group Human Rights Policy in April 2016 and revised the policy in July 2023. ANA Group Policy on Human Rights https://www.ana.co.jp/group/en/csr/effort/pdf/humanrights_e.pdf Assess Actual and Potential HR Impacts 1 In 2016, the ANA Group conducted a human rights impact assessment of the potential human rights risks posed by the ANA Group’s business activities in all its business areas and countries where it flies. In light of changes in the international environment surrounding business and human rights as well as changes in the ANA Group’s business environment and business portfolio, we believed it was necessary to reconsider our priority human rights themes and conducted a human rights impact assessment in 2022. Our efforts included holding the Human Rights and Environmental Due Diligence Workshop to discuss and confirm themes throughout the Company. We took into account new human rights risks and established five new human rights topics based on the potential issues identified in the workshop. Priority Human Rights Themes Theme 1: Respect the Human Rights of Migrant Workers Working at Contractors and Vendors in Japan and Overseas Theme 2: Identify Human Rights Issues and Environmental Burdens in the Supply Chain Theme 3: Prevent the Use of Airplanes in Human Trafficking Theme 4: Protect Customer Information and Give Consideration to Privacy Theme 5: Respect Human Rights When Providing AI, Metaverse and Other Services Human rights impact assessment discussion conducted in 2022 ANA Group Management Strategy People Materiality 58 59 Human Rights Human Rights Due Diligence Stakeholder Engagement Remediation (Grievance mechanism) 1 4 2 3 Assess actual and potential HR impacts Communicate how impacts are addressed Integrate & act upon the findings Track responses Policy commitment Basic Approach The ANA Group contributes to the creation of prosperous and sustainable societies while sharing our concern for the Earth with people around the world. Ensuring the sustainability of the Earth is essential to the security of humankind. Natural capital is said to be the root of this security. Today, this natural capital is threatened by two major crises: climate change and the loss of biodiversity. We who live on Earth must ensure the sustainability of the planet. In the fight against climate change, we recognize that reducing greenhouse gas emissions is an urgent and important issue for sustainable business growth and social contribution. Equally important are the efforts to protect the global environment, including biodiversity conservation and the effective use of resources. With this understanding, the ANA Group formulated the ANA Group Environmental Policies, the ANA Group Biodiversity Policy, and the 2050 Environmental Goals. As we balance medium- to long-term corporate aspirations with short-term business growth, we work strategically to achieve environmental goals under these policies, aiming for sustainable corporate value enhancement. To ensure the enjoyment of air travel for future generations, the ANA Group will evolve into an entity that helps preserve the global environment. We continue to face environmental challenges and engage in transparent information disclosure regarding the environ- mental impact of our operations and the progress of our efforts to preserve natural capital. And we will continue to deliver a world of wonder in air travel by creating prosperous, sustainable societies, providing value that exceeds customer expectations. ANA Group Environmental Policies The ANA Group believes that sustainable business stands on a healthy global environment. We recognize that responding to climate change, the effective use of limited resources, biodiversity conservation, and other efforts to preserve the global environment are seri- ous management concerns. Accordingly, we aim to be the environmental leading airline group, serving as an example through all ANA Group business activities. ANA Group Environmental Policies https://www.ana.co.jp/group/en/csr/environment/policy/ ANA Group Biodiversity Policy As we state in our Environmental Policies, the ANA Group considers the achievement of environmental goals to resolve environmental issues and biodiversity conservation to be serious management concerns. We are committed to avoiding or minimizing negative impacts of our business activities on the natural environment and human rights, endeavoring to conserve and restore the natural environment (nature positive). ANA Group Management Strategy Initiatives Targets FY2030 FY2050 FY2023 Results Reduce CO2 Emissions Aircraft • Improve flight operations • Adopt new aircraft technologies • Decarbonize aircraft fuel by using SAF*1 • Use negative emissions technologies (NETs) • Use emission trading schemes Net 10%+ reduction vs. FY2019 (Net emissions: 11.1 million tons or less) Replace 10% or more of fuel used with SAF Net zero*2 15.1% reduction*3 (Emissions: 10.47 million tons) Less than 0.1% External Environment Necessary for Achieving Goals • Stable supply of SAF (volume and price) • Adopt new aircraft technologies (development of electric and hydrogen airplanes, etc.) • Establish an environment for the emissions trading market Non- Aircraft • Enhance energy efficiency and upgrade aging facilities and equipment • Use renewable energy • Procure electric vehicles (EVs) and fuel cell vehicles (FCVs) when upgrading airport vehicles 33%+ reduction vs. FY2019 Net zero 21.4% reduction External Environment Necessary for Achieving Goals • Expansion of renewable energy supply • Development of airport infrastructure to convert to EVs/FCVs Reduce Resource Waste Ratio (Plastics, Paper, etc.) • Switch from single-use plastics to paper and reusable materials for in-flight meal containers • Establish an in-house recycling scheme for plastic film used in cargo transportation 70%+ reduction (Waste generated vs. FY2019) Zero waste ratio 49.0% reduction Reduce Food Waste Ratio (Including In-Flight Meals, etc.) • Monitor the disposal of in-flight and domestic airport lounge meals and optimize the number of meals loaded using in-flight pre-order service, etc. Less than 3.8% waste ratio (FY2019: 4.6%) Less than 2.3% waste ratio (50% reduction vs. FY2019) 4.3% Conserve Biodiversity • Conduct educational activities aimed at eradicating illegal wildlife trade in air transportation • Engage in environmental conservation activities aimed at biodiversity conservation, etc. Progress in Medium- and Long-Term Environmental Targets and Fiscal 2023 Results The ANA Group strives to reduce the environmental impact of our operations by setting the ANA Group 2050 Environmental Goals (including net zero CO2 emissions) and 2030 Environmental Targets, which serve as milestones toward fiscal 2050. We manage progress in comparison with fiscal 2019 results to achieve these medium- and long-term environmental targets. Non-Financial Information Disclosure Environment Materiality CDP We disclose information on corporate strategies for CO2 emissions and climate change. In 2023, ANA HOLDINGS was the only airline group to be selected as a CDP Climate Change A List Company for two consecutive years. Science Based Targets Initiative (SBTi) Science based targets are greenhouse gas reduction targets based on scientific evidence consistent with the Paris Agreement. In November 2022, we became the first airline in Asia to receive SBTi certification for our greenhouse gas emission reduction targets. Disclosures Based on TCFD and TNFD Recommendations We analyze risks and opportunities that climate change poses to the ANA Group businesses. Based on these analyses, we identify the nature-related impacts, dependencies, risks, and opportunities in connection with ANA Group businesses, disclosing this information in line with the TCFD and TNFD frameworks. (See P.70 for more details) For more details about medium- and long-term environmental targets, please visit: https://www.ana.co.jp/group/en/csr/environment/goal/ *1 SAF (sustainable aviation fuel): Aviation fuel that is not produced from fossil fuels but from sustainable sources such as vegetable oils and animal fats *2 The balance of CO2 emissions that cannot be reduced over the entire life cycle will be eliminated through technologies, etc., that physically remove CO2 from the atmosphere *3 Includes reductions due to flight suspensions and lower frequency caused by COVID-19 ANA Group Biodiversity Policy https://www.ana.co.jp/group/en/csr/regional_creation/biodiversity/ 60 61 We have developed transition scenarios to achieve ANA Group environmental targets for fiscal 2050. To achieve our medium- to long- term environmental targets for 2030 and 2050, we crafted a strategy involving exploring new technologies and balancing economic rationalities. The first phase of ICAO’s CORSIA (voluntary participation) began in January 2024, and we are working diligently to comply with regulations on the international aviation sector. In the domestic airlines market, ANA HOLDINGS began participating in the GX League in fiscal 2024. Not only are we taking on the challenge of reducing our own emissions but we are also creating value in the broader market by contributing to supply chain-wide initiatives. *1 GX League: A gathering of companies, working together with government and academic institutions, aiming to achieve sustainable growth in the present and future by taking on the challenge of green transformation (GX) through joint initiatives. The goal of the GX League is to achieve carbon neutrality and social change by 2050. 1 Reduce CO2 Emissions Reduce CO2 Emissions from Aircraft Operations Transition Strategies to Achieve Long-Term Environmental Goals for FY2050 (Ten thousands of t-CO2) –1% FY2030 Medium-Term and FY2050 Long-Term Targets 1 Operational Improvements and New Aircraft Technologies 2 Use of SAF and Other Low-Carbon Aviation Fuels 3 Use of Emission Trading Schemes 4 Use of Negative Emissions Technologies*3 CO2 Reduction CO2 Offset CO2 Removal Effective CO2 emissions 2019 （FY） 2030 2050 100% 15% 6.5% 11.5% 20% 70% –10% *2 Air Transport Action Group: A research group on sustainability in the airline industry, with involvement from the International Air Transport Association (IATA), aircraft manufacturers, and others *3 Negative emissions technologies (NETs) Net zero Carbon negative by use of NETs FY2050 By FY2050 Accelerate the use of SAF further and strive to decarbonize most, if not all, fuels. Use NETs to offset and achieve net zero for residual CO2 emissions in the life cycle. Net 10%+ reduction Net 10% Reduction vs. FY2019 Replace at least 10% of fuel with SAF FY2030 By FY2030 Upgrade to more fuel-efficient aircraft and use SAF to meet FY2030 targets, while accounting for economic rationality and using emissions trading to cover any shortfalls. 0 500 –500 1,000 1,500 2,000 2050 2045 2040 2035 2030 2025 2020 Effective CO2 emissions after implementation of measures 1), 2), and 3) Effective CO2 emissions after implementation of all measures, including 4) CO2 emissions in the business-as-usual scenario The ANA Group Plan, Support for the Japanese Government’s Target of 60 Million Inbound Visitors, Air Transport Action Group*2 Growth Forecast for International Travel Demand (FY) Transition Strategy Transition Strategy ANA Group Management Strategy 62 63 Improving Flight Operations Based on our transition strategy, we defined set fuel savings through improved flight operations as a management objec- tive. In fiscal 2023, we built a new system and mechanisms to encourage fuel optimization, mainly in flight operations and flight crew divisions. We identified climbing with early accel- eration and flap retraction during takeoff, reducing thrust reverser usage after landing, and single-engine taxiing-in as particularly effective efforts among flight operation measures. Engine washing, reducing total aircraft weight, and prioritiz- ing fuel-efficient aircraft are also priorities among the more than 10 daily efforts we implement. We manage, analyze, and verify the results of each initiative to visualize our CO2 emission reductions. Following the PDCA cycle allows us to reduce CO2 emissions further through information sharing with on-site departments (flight operation and flight crew divi- sions), in reports at officer meetings, via promotion projects, and through other organizational activities. Every initiative reflects the accumulation of our efforts to reduce environ- mental impact while adhering to on-time performance and safety. In fiscal 2023, we reduced our environmental impact by an equivalent of 30 round-the-world flights (21,912 t-CO2, assuming a Boeing 787-9). This new systematic collabora- tion among group employees plays an important role in our transition strategy. In the midst of recovery and expansion, we are upgrading our fleet to more fuel-efficient aircraft. By fiscal 2030, we will have more than 100 Boeing 787 series aircraft in operation, repre- senting more than 35% of our fleet. We plan to raise this ratio of fuel-efficient aircraft as early as possible. In addition, we participate in a Public–Private Committee on New Technologies toward Decarbonization of Aircraft, spon- sored by the Ministry of Economy, Trade and Industry. Through participation in the Aircraft Industry Subcommittee, we work to grow Japan’s aircraft industry and reduce the industry’s envi- ronmental impact. We are also part of a joint research project with an aircraft manufacturer on the development of technol- ogy to fly on hydrogen and electric power. Working with Airbus on a joint research project to develop hydrogen aircraft and infrastructure, we share information on advanced technologies and tackle issues related to the adoption of hydrogen aircraft. At the same time, we collaborate with Boeing on research into electric, hybrid, hydrogen, and other new propulsion systems. All departments involved in safe flight operations work together on measures to reduce CO2 emissions in daily operations. In parallel, we are making progress in decarbonization and fuel efficiency improvements, upgrading to more fuel-efficient aircraft as part of the ANA Group Corporate Strategy. The core of the ANA Group strategy to achieve decarbonization is the use of low-carbonization aviation fuels, including SAF. As we must accelerate efforts through public–private partnerships and throughout our entire supply chain, we work with stakeholders even more closely to establish a supply chain and ensure a stable supply of SAF. Operational Improvements and New Aircraft Technologies Use of SAF and Other Low-Carbon Aviation Fuels Fuel-Efficient Aircraft Ratio End of FY2023 End of FY2030 80.3% 90% 1 2 Adopting New Aircraft Technologies Ensuring a Stable Supply of SAF and Promoting Wider Adoption Public–Private Councils for the Promotion of SAF Deployment The ANA Group 2030 Medium-Term Environmental Targets include reducing CO2 emissions by 10% compared to fiscal 2019. To achieve this goal, we must create a business environment for SAF refueling in Japan. Through public–private con- sultations, including relevant ministries and agencies and supply-side entities (e.g., oil wholesalers), the decision was made for supply-side entities to ensure sufficient SAF production capacity and a supply chain for raw materials. Budgetary mea- sures were passed to provide investment support for SAF production facilities by the government and tax credits based on production volume. The legal system design is under study toward establishing a system for the stable supply of SAF at internationally competitive prices. Tokyo Metropolitan Government Support Project for Commercialization of Biofuel Utilization Project to Reduce CO2 Emissions on the Haneda–Hachijojima Route through the Use of SAF The ANA Project to Reduce CO2 emissions on the Haneda–Hachijojima Route through the use of SAF was selected by the Tokyo Metropolitan Government as an official project to Promote Business Development through the Use of Biofuels. We began using SAF on the route in December 2023. By reducing CO2 emissions on routes traveling through the Tokyo metropolitan area (Haneda–Hachijojima route) through the use of SAF, we promote SAF usage and contrib- ute to decarbonization in connection with the Tokyo metropolitan government’s goal to halve carbon emissions by fiscal 2030. ACT FOR SKY, an Inter-Industry Collaboration to Promote Domestic SAF ACT FOR SKY aims to create an industry–academia–government movement of collaboration and action, transcending industry bound- aries to commercialize, promote, and expand domestically produced SAF. Since its launch on March 2, 2022, the initiative has expanded to include not only companies building the domestic SAF supply chain but also government agencies and academic institu- tions. As of July 2024, the total number of participants has grown to 44 organizations. For more details regarding ACT FOR SKY (in Japanese only), please visit: https://actforsky.jp Expanding SAF Procurement Options Overseas Strengthening Partnerships • In fiscal 2020, ANA began a strategic alliance with Finland‐based SAF manufacturer NESTE for medium- to long-term SAF supply, purchasing, and importing on a commercial scale for use on scheduled flights departing from Haneda and Narita airports. • In December 2022, the ANA Group and the Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development (JOIN) signed a memorandum of understanding (MOU) to collaborate on a project that aims to manufacture and pro- cure SAF overseas. Under this MOU, JOIN will expand opportunities to invest in SAF-related projects overseas while ANA will expand SAF procurement options. • In January 2023, the ANA Group signed an MOU with Raven SR of the United States and ITOCHU Corporation for SAF procurement. Raven SR manufactures SAF from municipal solid waste and other waste materials, which means a stable supply of SAF should be possible in the future. • During fiscal 2024 and beyond, ANA will consider procuring ethanol-based SAF produced by LanzaJet in the U.S. for use on flights departing from the U.S. Transition Strategy ANA Group Management Strategy Approximately For airlines, countermeasures against natural phenom- ena are inseparable from safe aircraft operations. For example, accurately forecasting the impact of typhoons on operations at each airport prior to making decisions on operational policies is a challenge. Calculations depend on the skills (tacit knowledge and experience) of the individual and the topographical characteristics of the area in question, and such analyses take time. In response to these challenges, the operation department compiled and analyzed past weather analysis data, quantifying tacit knowledge into formal organizational knowledge. By incorporating these figures into our flight operation system and improving the accuracy of our forecasts, we reduced the number of flight cancellations caused by typhoons in fiscal 2023 when compared to the conventional process. Operating necessary flights safely during available time slots, we minimized irregular operations (diversions or returning to the airport of departure due to bad weather). Our efforts not only reduced the burden on customers but also reduced fuel consumption (estimated 9.2 tons versus fiscal 2019) and CO2 emissions (estimated 28 t-CO2). This series of initiatives was recognized with the Group CEO Award in the ANA’s Way AWARDS held by the ANA Group. We will continue with measures to deal with natu- ral phenomena in our pursuit of even safer operations and answers to environmental issues. Natural Phenomena and Airlines 64 65 In September 2023, the Cargo Program for cargo transport was expanded to shippers, facilitating the allocation of Scope 3 emis- sions reductions to shippers based on actual transportation results (weight, distance, etc.) from freight forwarders to shippers. With the growing social momentum to reduce Scope 3 emissions, we began issuing CO2 reduction certificates in response to requests from shippers who use air cargo. We intend to reduce CO2 emissions from flight operations through operational improvements, technological aircraft innovations, and low-carbon aviation fuels such as SAF. In the short to medium term, we are looking into the use of CO2 emissions trading schemes in consideration of business continuity. We plan to use high-quality carbon credits that not only address climate change but also miti- gate negative impacts on biodiversity and human rights, while also offering benefits such as economic contributions to local commu- nities. During the first phase of CORSIA, which began in January 2024, we plan to purchase emissions credits that meet ICAO standards to fulfill our obligation to offset CO2 emissions from international flights. Use of Emission Trading Schemes 3 For the remaining emissions not covered by SAF and other fuel reductions, we intend to achieve net zero emissions by 2050 through NETs. These technologies include direct air capture (DAC), which captures and removes CO2 directly from the atmosphere. In March 2022, ANA signed a basic agreement with Climeworks, a Swiss start-up working on DAC. Under this agreement, we began researching high-quality, permanent CO2 removal technology. In August 2023, we became the first airline in the world to sign a procurement contract with 1PointFive of the United States. 1PointFive is building a DAC plant in Texas, U.S.A., which is expected to begin commercial operations by the end of 2025. ANA plans to procure more than 30,000 tons of carbon dioxide removal (CDR) credits over three years beginning 2025. Use of Negative Emissions Technologies (NETs) 4 Efforts to Form a Market Promoting the Use of SAF 1PointFive’s DAC Plant (Courtesy of 1PointFive) Underground Storage and Semi-Permanent CO2 Solidification Use as a Raw Material for Synthetic Fuel (SAF) Atmosphere Air CO2 Absorption via Solution, Etc. Adsorption via Porous Materials Membrane Separation DAC Facility DAC Conceptual Diagram 1PointFive is committed to reducing global tempera- ture rise by 1.5 °C by 2050 through decarbonization solutions, including Carbon Engineering’s DAC tech- nology, AIR TO FUELS™ technology, and geological storage hubs. AIR TO FUELS™ is a registered trademark of Carbon Engineering Ltd. Presenting at U.S.–Japan Civil Aviation Symposium 2023 MATSUSHITA Tadashi addressed U.S.–Japan Civil Aviation Symposium 2023, sponsored by the Japan Transport and Tourism Research Institute in Washington, D.C. Mr. Matsushita, executive vice president (Industrial & Government Relations, GX), highlighted the ANA Group’s proactive approach to avia- tion decarbonization in the U.S. In his presentation, Mr. Matsushita emphasized that achiev- ing sustainability in the airline industry requires all stakehold- ers—including airlines, fuel suppliers, airports, governments, and customers—recognize and address sustainability issues. He also indicated that ANA looks forward to government cooperation on aviation decarbonization to ensure a level play- ing field for all airlines. For more details about U.S.–Japan Civil Aviation Symposium 2023, please visit: https://www.jttri.or.jp/english/events/2023/symposium231005.html Historically New Service Air Cargo ANA (Airline) ANA (Airline) Freight Forwarder Freight Forwarder Shipper Shipper Transport Transport CO2 Reduction Certificate CO2 reduction certificate issued to freight forwarder CO2 reduction certificates issued jointly to freight forwarders and shipper CO2 Reduction Certificate New Air Cargo Air Cargo Air Cargo Historically, CO2 reduction certificates have been issued to freight forwarders who deal directly with airlines. With the growing social momentum to reduce Scope 3, we have been receiving requests for CO2 reduction certificates from the cargo owners who entrust their air cargo to freight forwarders. In response to requests, we will also issue new CO2 reduction certificates to shippers based on transportation records from freight agents to shippers. Our efforts help ship- pers reduce their Scope 3 emissions, achieve their environmental goals, and enhance their corporate value by boosting their products’ value. SAF Utilization Visualization Guideline Summary The air transportation industry had no accepted method for assessing Scope 3 emissions. Parties have been calling for unified guidelines, since the air transportation and SAF supply chain is unique in its involvement of numerous companies across industries. ANA participates in the new SAF Usage Assessment Task Group established by the SAF Logistics Working Group overseen by the Ministry of Land, Infrastructure, Transport and Tourism. Through discussions with related industries, the SAF Usage Visualization Guideline Framework was established in March 2024 to summarize the principles (scope, applicable conditions, etc.), calculation methods, certifications, and other basic matters related to Scope 3 assessment in air transportation. SAF Flight Initiative In September 2021, ANA, together with companies that use airplanes for busi- ness trips and cargo transportation, launched the SAF Flight Initiative. This partnership is a program aiming for a sustain- able future by visualizing CO2 emissions (Scope 3) throughout the supply chain and promoting the widespread use of SAF. ANA issues certificates to companies that participate in this program, certifying CO2 reductions achieved on ANA-operated flights. As of March 2024, 20 companies have participated in the program, and we continue to invite new companies to join. Transition Strategy ANA Group Management Strategy 66 67 Initiatives to Reduce Environmental Impact Carbon Offset Program Since fiscal 2019, the ANA Group offers the ANA Carbon Offset Program for each class on domestic and international routes. This program is a mechanism that provides customers with opportunities to offset the amount of CO2 emitted by their aircraft. Our selection of offset programs are based on global certification standards. For more details, please visit: https://www.ana.bluedotgreen.co.jp/en/home Eco-First Certified Company 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 initiatives and corporate stance that emphasizes social responsibility, and we continue to work toward the creation of sustainable societies. For the Eco-First Promise (in Japanese only), please visit: https://www.ana.co.jp/group/csr/environment/pdf/eco_first_2203.pdf ANA Future Promise The ANA Group’s ANA Future Promise is a movement toward continued corporate growth to contribute to the achievement of the SDGs together with our customers and society (Promise), aiming for sustainable growth (Future). In recognition of our efforts, we received the Minister of Land, Infrastructure, Transport and Tourism Award at the 31st Grand Prize for the Global Environment Awards. In addition to the ANA Future Promise Jet (special livery), we introduced the ANA Future Promise Prop (DHC-8-400) in October 2023, which also features the ANA Future Promise special livery. We pursue ESG management under the ANA Group Corporate Strategy, supporting regional revitalization, using renewable in-flight service items, improving flight operations, and engaging in other measures. ANA Group Management Strategy Reduce Resource Waste Ratio (Plastics, Paper, etc.) The ANA Group pursues the 3Rs (Reduce, Reuse, Recycle) + R (Renewable) to reduce our resource waste ratio. Reduce the Use of Plastics We continue to replace plastic products used in airport lounges and on flights with renewable materials. ANA changed the containers for entrees on international flights to plant-derived materials, and now uses paper straws, wooden cutlery, and wooden stir sticks, reducing the amount of disposable plastic used on board by about 40%, or about 475 tons (fiscal 2023). Reduce Paper Resources In May 2023, we began renovations of security checkpoints and boarding gate turnstiles for domestic flights to phase out paper- based security certificates, boarding information. We are also reducing the use of paper resources through digital publishing and other services for passengers to view magazines and newspapers on their own mobile devices. For more about paper resource reduction at airports, security checkpoints, and boarding gates, please visit: https://www.ana.co.jp/en/jp/guide/boarding-procedures/checkin/domestic/boarding_2023/?tabitem=asw-tab__item-box-2 For more about the TSUBASA -GLOBAL WINGS in-flight magazine, please visit: https://tsubasa.ana.co.jp/ 2 Environmentally Friendly Amenity Kits In January 2024, we began offering amenity pouches in collaboration with ETTINGER, a British royal warrant. We eliminated the plastic package used in packaging amenity kits in favor of paper strips made of FSC-certified paper. This move reduced single-use plastics by approximately 1.7 tons per year (compared to fiscal 2019). In addition, the plastic cover used to package cosmetics inside the pouch contains biomass materials. For more details, please visit our official website: https://www.ana.co.jp/en/jp/brand/ana-future-promise/ Reduce Food Waste Ratios (In-Flight, Airport Lounge Meals, etc.) We reduce food waste ratios in in-flight meals and other channels. 3 Major Initiatives Pre-Order Meal Service ANA offers a service to passengers on international flights to pre-order preferred menu options, a lighter meal service, or no meal service for more freedom and comfort in-flight. In March 2024, we redesigned our menu under the supervision of the chef of THE CONNOISSEURS. This new menu is included in the pre-order menu in business class on some Southeast Asian routes departing from Japan. We will continue to offer options to meet customer needs and reduce food waste ratios. For more about the first class meal pre-order service, please visit: https://www.ana.co.jp/en/jp/guide/flight_service_info/int-service/f/meal-pre-order/ For more about the business class in-flight meal pre-order service, please visit: https://www.ana.co.jp/en/jp/guide/flight_service_info/int-service/c/meal-pre-order/ Major Initiatives Reduce Non-Aircraft CO2 Emissions The ANA Group implements appropriate energy management using our energy management system, ANA Eiims, based on our own Energy Management Standard. ANA and ANA Foods (specified business operators under the Act on the Rational Use of Energy) received the Excellence in Energy Efficiency Award (S Class) certification under the Act on the Rational Use of Energy from the Ministry of Trade, Economy and Industry. ANA has received S Class certification for nine consecutive years since the establishment of the classification system. To achieve net zero CO2 non-aircraft emissions by fiscal 2050, we will work to reduce fiscal 2030 energy consumption from main sources by 33% compared with fiscal 2019, focusing on the use of electricity and vehicle fuel (gasoline and diesel fuel), which accounts for the majority of our total emissions. Since 2009, the Japan Aerospace Exploration Agency (JAXA) has recorded global greenhouse gas increases using the greenhouse gases observing satellite (GOSAT), dubbed IBUKI. On the other hand, aircraft flying at lower altitude than satellites can obtain more detailed data than satellites. In 2020, ANA and JAXA began collaborating on the GOBLEU Project to use aircraft for remote observations on the distribution of atmospheric components on the Earth’s surface, expanding the scope of greenhouse gas observations. In addition to measuring greenhouse gas emis- sions, observations also measure photosynthesis, or the absorption of CO2 by plants. The new observation method devel- oped for this purpose was reported at the Global Stocktake at COP28, and is expected to contribute to outcomes under the Paris Agreement. The ANA Group will continue to cooperate in this initiative, believing that understanding greenhouse gases will play a major role in protecting the future of the Earth. GOBLEU Project: ANA and JAXA Collaborate to Expand Greenhouse Gas Observations Low-Carbon Airport Vehicles In addition to replacing airport vehicles with electric (EV), fuel cell (FCV), and hybrid (HV) vehicles, we pursue low-carbon initiatives, including vehicle fuel conversion to biodiesel fuel. In fiscal 2019, the ANA Group introduced Japan’s first remote-controlled EVs (manu- factured by Mototok of Germany) for towing passenger aircraft. The vehicles were first put in use at Saga Airport and several other air- ports, including Osaka International Airport and Central Japan International Airport. In fiscal 2023, the ANA Group installed the group’s first rapid charger at Haneda Airport in the restricted zone of the domestic service area. We began proof-of-concept tests to identify operational issues in the conversion of aircraft ground support equipment (GSE) vehicles to EVs. Our tests focus on towbarless tow tractors and EV towing tractors (luggage and cargo container transportation), which we adopted in fiscal 2023. In the future, we plan to introduce EVs for belt loaders (loading lug- gage into cargo holds) and high-lift loaders (loading and unloading containers). We also began proof-of-concept tests at Haneda Airport for renewable diesel fuel in fiscal 2024. We expect biodiesel to be an alternative fuel for renewable diesel vehicles. The ANA Group will accelerate efforts through these tests to decarbonize airports, aiming for the best mix of EVs and biofuel use in the low-carbonization of our fleet. Major Initiatives Proof-of-concept EV towing tractor test For more details about the GOBLEU Project, please visit: https://en.ana-spaceproject.com/ Environment Materiality 68 69 ANA Future Promise Jet & Prop Governance The Group ESG Management Promotion Committee con- venes four times a year to discuss important policies and measures related to environmental issues such as climate change and biodiversity. The Committee is overseen by the President & Chief Executive Officer and chaired by the Chief ESG Promotion Officer, the director in charge of group ESG management. Important matters related to corporate strategy are discussed at the Group Management Committee and submitted to the Board of Directors. The Board of Directors sets groupwide man- agement policies and goals, including those related to environmental issues, while supervising the management and business execution of each group company. The ANA Group Procurement Policy includes our response to climate change and biodiversity. The ANA Group Procurement Policy consists of the Basic Procurement Policy and the Supplier Code of Conduct, and refers to the UN Guiding Principles on Business and Human Rights, the International Bill of Human Rights (Universal Declaration of Human Rights), and other international norms related to human rights and labor. We actively encourage the understanding and cooperation of all related companies by emphasizing these policies in decisions to hire and monitor suppliers subsequent to engagement. Furthermore, ESG management promotion status is objectively and multilaterally monitored to achieve sustain- able growth as a company and enhance corporate value over the medium to long term. Here, we employ evalua- tion indicators such as CO2 emissions volume and exter- nal ESG evaluation, which are also reflected in officer remuneration. Risk Management The ANA Group Total Risk Management Regulations pro- vide the basic terms of the group’s risk management system in line with the basic policies determined by the Board of Directors. Under these regulations, the Group ESG Management Promotion Committee develops, imple- ments, and monitors the progress of basic policies. Risks related to environmental issues, including climate change and biodiversity, are also handled as key issues within the overall risk management framework. Strategy (TCFD) We analyzed scenarios based on the 4°C and 1.5°C sce- narios provided by the United Nations Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency (IEA). Through this, we identify the risks and opportunities of climate change on our group, assess their financial impact, and explore responses. In fiscal 2023, we calculated the single-year financial impact for the medium term (fiscal 2030) and long term (fiscal 2050) related to the risks and opportunities identi- fied as having a large financial impact. The calculation method is disclosed on our corporate website. 4°C Scenario: A scenario in which, by not taking measures to combat global warming beyond the status quo, temperatures rise about 4°C above pre-industrial levels, and risks related to physical changes caused by climate change become apparent 1.5°C Scenario: A scenario in which a fundamental system transition is achieved, resulting in a temperature increase of less than 1.5°C above pre- industrial levels, and risks related to the transition to a low-carbon economy become apparent For more on disclosures based on TCFD recommendations, please visit: https://www.ana.co.jp/group/en/csr/environment/goal/ In March 2019, the ANA Group became the first Japanese airline to endorse the recommendations of the Task Force on Climate- related Financial Disclosures (TCFD). In December 2023, the ANA Group endorsed the recommendations of the Taskforce on Nature-related Financial Disclosures (TNFD), registering as an early adopter. We disclose information on the risks and opportunities that climate change poses to group business, as well as nature-related impacts, dependencies, risks, and opportunities related to group businesses. Our disclosures conform with the four categories recommended by the TCFD/TNFD recommendations: governance, strategy, risk management*, and metrics and targets. Moving forward, we will strive to enhance disclosures, aiming to integrate climate-related and nature-related information while referencing international sustainability disclosure standards. * Since the TNFD also emphasizes nature-related impacts, the recommended disclosure is “risk and impact management.” Disclosures Based on TCFD and TNFD Recommendations Examples of Climate Change and Biodiversity Issues Brought Before/Reported to the Board of Directors • Establishment of various environmental policies and medium- to long-term environmental targets, as well as their annual results • Disclosures based on TCFD and TNFD recommendations • Formulation of a transition scenario to achieve medium- to long-term environmental targets • Incorporation of climate change response into the FY2023-25 ANA Group Corporate Strategy • Progress on climate change initiatives Description of Opportunities / Risks Financial Impact*1 Action Plans Medium Term Long Term Increasing Severity and Frequency of Extreme Weather • Lost income resulting from flight cancellations due to severe natural disasters • Increased operational costs and cost of restoration from damage to aircraft and facilities due to disasters • Development of data observation through aircraft • Decreased revenues due to difficulty in maintaining flight operations to affected areas Large Large • Establishing a more advanced BCP • Upgrading to disaster-resistant facilities, equipment, etc. • Collaborating in research with JAXA • Determining destinations, number of flights, etc., and appropriate reflection in business plans Changes in Rainfall and Weather Patterns Medium Actions to Reduce CO2 Emissions (Aircraft) —SAF • Concern about increased costs due to higher SAF prices until around 2040 and decreased revenues due to restricted flight operations as a result of insufficient procurement • Differentiating through strategic purchases, contracts, and investments to benefit from priority procurement and stable supply Large Small to Large • Making strategic purchase agreements • Strategically investing in the establishment of a system for domestic mass production of SAF, and strengthening public–private and inter-industry collaboration to establish the supply chain • Partially compensating for SAF purchase costs through development of schemes such as the SAF Flight Initiative —New Technology • Increased cost of introducing next-generation aircraft (hydrogen, electricity, etc.) Calculating • Engaging with policymakers and other relevant parties to improve airport infrastructure • Participating in joint research projects with aircraft manufacturers to develop aircraft incorporating new technologies • Strategically investing in the introduction of high quality, permanent CO2 removal technology • Reduced fuel costs due to fuel efficiency improvements over the medium to long term, and creation of opportunities for technological innovation and priority procurement by investing in DAC*2 CO2 removal technologies Large Large —Credit • Increased costs due to the use of credits (price increases due to excess demand for emission credits / increased offsetting) Small to Large Medium to Large • Procuring CORSIA eligible and high-quality credits • Minimizing cost impact through an optimum combination of SAF and credits Actions to Reduce CO2 Emissions (Non-Aircraft) —Vehicle*3 Fuel (Diesel oil) • Increased costs due to replacement with ZEVs*4 • Reduction in fuel costs and offset costs and labor savings in airport operations due to the development of new technologies such as unmanned autonomous driving Medium • Continuously engaging in and collaborating with policymakers and other relevant business operators to promote the shift to ZEVs and improve airport infrastructure • Procurement and construction of a supply chain for alternative fuels such as next-generation biofuels • Introduction of experimental tests and remote-controlled EVs to switch airport vehicles to EVs Litigation / Fines / Taxation • Penalties and fines for failure to comply with laws and regulations in each country • Pressure from stakeholders to delay climate action • Increased costs as a result of higher prices due to the intro- duction of carbon pricing (carbon taxes, emissions trading) Medium • Appropriately responding to and disclosing information for climate change • Engaging with national governments continuously, in collaboration with industries and other organizations, for relaxation of regulations and tax systems Changes in Consumer Awareness and Preferences • Securing talent from a younger environmentally sensitive generation and increasing sales due to securing customer trust as a result of proactively addressing climate change to improve brand value • Growing new businesses that do not require physical travel • Increased demand for the reduction of corporate Scope 3 emissions business trips and cargo transportation) Medium • Appropriately responding to and disclosing information for climate change • Identifying needs through ongoing dialogue with society and reflecting these needs in strategies • Developing measures that move forward while acquiring the understanding and cooperation of customers • Diversifying business portfolio • Collaborating with various stakeholders and strategically investing in new business growth (avatars, electric air taxi, drone logistics services) Financing • Successfully financing through loans and incorporating ESG investment through proactively responding to climate change ahead of the market Medium • Identifying needs through ongoing dialogue with investors and responding appropriately • Information disclosure in accordance with international frameworks Risks Risks Opportunities Opportunities *1 Large: ¥10 billion or more per year; Medium: ¥1 billion to ¥10 billion per year; Small: less than ¥1 billion per year *2 Direct Air Capture (DAC): Technology to capture CO2 directly from the atmosphere *3 Airport ground handling vehicles *4 Zero Emission Vehicles: Vehicles that do not emit CO2 or other emissions during operation (EVs, FCVs) Transition Physical ANA Group Management Strategy Environment Materiality Refer to P.63 for more details on transition strategy. Refer to P.102 for more on the risk management structure. 70 71 ESG Promotion Leader (EPL) Group ESG Management Promotion Committee Chairman: Chief ESG Promotion Officer (CEPO) Committee Members: General managers of each business and corporate division, ESG Promotion Officer (EPO), etc. Secretariat: Corporate Sustainability, General Administration, General Administration, Legal & Insurance Environment Officer Board of Directors Instruction Instruction / Supervision Collaborations Group Companies and Departments Eco-First Subcommittee Ground Energy Subcommittee Chairman: Chief Sustainability Officer (CSO) Participants: Managers from each related division Secretariat: Corporate Sustainability ESG Promotion Officer (EPO) (Group company directors and executive officers overseeing ESG management) Submit agenda / Report Submit agenda / Report Report Overall management Proposal / Report Group Management Committee ANA HOLDINGS INC. President & Chief Executive Officer Supervision Strategy (TNFD) Disclosure Overview and Initiatives The TNFD recommendations discuss identifying priority locations and analyzing nature-related dependencies and impacts in business operations. With our latest disclo- sures, we sought to understand the dependencies and impacts of ANA Group operations on nature. We continue to identify priority locations in line with TNFD recommendations regarding nature-related depen- dencies, impacts, risks, and opportunities in direct opera- tions and the upstream/downstream value chains of the group’s businesses. Overview of Dependencies and Impacts We found that ANA Group businesses depend on the gifts of nature (ecosystem services) from a number of dif- ferent perspectives. For example, stable aircraft opera- tions depend on a stable climate (regulating services), while certain SAF raw materials and food ingredients for in-flight meals benefit directly from the gifts of nature (pro- visioning services). Certain routes and regional revitaliza- tion projects benefit from the rich biodiversity of the area’s food, culture, and other tourism resources, as well as rec- reational functions (cultural services). We also learned that while the ANA Group’s operations are dependent on the gifts of nature, operations may also have an impact on nature. For example, CO2 emissions from aircraft operations, as well as noise and light emitted from aircraft and airports, impact the surrounding ecosys- tem. The disposal of food, plastics, and paper, uninten- tional involvement in illegal wildlife trade conducted via air transportation, and the accidental introduction and spread of invasive alien species have various impacts on ecosystems. Overview of Risks Nature-related dependencies and impacts can lead to risks in many aspects related to the continuity of ANA Group businesses. Just a few of these aspects include SAF and carbon credits, increased costs in the event of difficulties in procuring food ingredients for in-flight meals or stricter regulations on contaminants, decreased reve- nues due to fewer passengers traveling for tourism to rich natural environments (a distant cause of loss of biodiver- sity), reputation risk due to lack of action on invasive alien species and illegal wildlife trade, and divestment due to inadequate environmental considerations in water use and wastewater discharge. Overview of Opportunities We also analyzed nature-related opportunities in ANA Group businesses. TNFD opportunity categories are split into those related to business performance and those related to sustainabil- ity performance. As opportunities to help restore nature, the ANA Group has held seminars on eradicating illegal wildlife trade, conducts activities to control invasive alien species (e.g., bitter vine in Okinawa), holds an activity to plant coral (Team Chura Sango), and undertakes projects to protect the future of mandarin orange orchards in Ehime, among others. As opportunities in our own business, we continue to expand route revenues by creating demand through sus- tainable tourism projects. These sustainable tourism proj- ects also have the effect of contributing to local communities. Action Plans This disclosure summarizes current efforts related to nature-related dependencies, impacts, risks, and opportunities identified to date. After assessing the significance of nature-related dependencies, impacts, risks, and opportunities identified in this report, we will consider stepping up response mea- sures for those deemed most important, utilizing the AR3T Framework* and other relevant frameworks. * A framework for targeted actions as recommended by SBTs for Nature. The framework consists of four steps: (1) Avoid, (2) Reduce, (3) Restore & Regenerate, and (4) Transform. Metrics and Targets The ANA Group formulated the Mid-Term Environmental Targets, working to reduce our environmental impact. We are currently strengthening our efforts to achieve our goal of net zero CO2 emissions by fiscal 2050. We strive to mitigate our impact on biodiversity through our business activities while conserving biodiversity through business and social contribution activities. Please refer to P.63 for more on fiscal 2023 results. | Avoid, Reduce | Preventing Illegal Wildlife Trade In March 2018, ANA became the first Japanese airline to sign the Buckingham Palace Declaration, which aims to eradicate illegal wildlife trade. Since then, we have conducted annual seminars on border control measures to prevent illegal wildlife trade in collaboration with the international NGO, TRAFFIC*. To date, seminars have been attended by approximately 940 people, including airport officials and ANA Group employees in Japan and overseas. * TRAFFIC: An international NGO that surveys and monitors wildlife trade. This NGO was established as a joint project of the World Wildlife Fund and International Union for Conservation of Nature, and the group operates through a worldwide network of bases in ten regions. | Reduce | Food Residue Recycling System The Narita plant of ANA Catering Service Co., Ltd., which produces in-flight meals for ANA, recycles 100% of food residue from the preparation of in-flight meals for use as compost and feed. The recycling mechanism using vegetables (soft kale) grown with compost from food residue for in-flight meal ingredients received approval as a recycling business plan under the Act on Promotion of Recycling and Related Activities for Treatment of Cyclical Food Resources. This system, which uses compost derived from food residues to produce safe and secure vegetables, provides vegetables for in-flight meals and contributes to biodiversity conservation through the recycling and reuse of food recycling resources. | Restore & Regenerate | Restoration of Farmland through the Farm Project The ANA Akindo ANA Farm Project in Ehime Prefecture supports the production, processing, distribution, and sales of mandarin oranges by rehabilitating abandoned mandarin orchards. This project addresses various issues caused by aban- doned farmland, including weed growth, pest infestation, and invasion of wild animals, which have a negative impact on surrounding farmland. The project also addresses the issue of potential landslides surrounding farmland. In cooperation with local authorities and farmers, the project promotes green tourism (travelers stay in rural areas and enjoy nature, culture, and interactions with locals) through the planning and management of monitor tours, workcations, agricultural experiences, etc. In addition, biodiversity conservation efforts to regenerate farmland include the planting of iyokan orange seedlings. Initiatives through Business Activities We participate in the TNFD Forum to gain deeper knowledge and enhance disclosures related to the interna- tional framework for nat- ural capital-related information disclosure. The ANA Group partici- pates in the 30by30 Alliance for Biodiversity, which pursues efforts to achieve the 30by30 targets. Team Chura Sango (Coral Reef Conservation Project to Preserve Tourism Resources) In 2004, ANA and other companies in and outside Okinawa launched Team Chura Sango to support the coral conserva- tion activities of the Onna Village Fisheries Cooperative in Manza Bay, Okinawa Prefecture. In 2024, the team will observe its 20th anniversary. The project protects coral from bleaching caused by rising sea temperatures, feeding damage caused by massive outbreaks of crown-of-thorns starfish, and pollution from red clay runoff, thereby preserving the ecosystem of Manza Bay. With the support of the Ministry of the Environment, Okinawa Prefecture, Onna Village, and other government agencies, the team participates in coral seedling production and planting programs held five times a year. As of fiscal 2023, 19,439 coral seedlings have been planted thanks to the participation of 4,433 people. In recognition of these activities, Team Chura Sango received the Fisheries Agency Director’s Award in the 2023 National Convention for the Development of an Abundantly Productive Sea. We also participate in the Keidanren Initiative for Biodiversity Conservation, and we serve as a standing member company of the Keidanren Nature Conservation Council. For more details regarding biodiversity conservation, please visit: https://www.ana.co.jp/group/en/csr/regional_creation/biodiversity/ For more details about disclosures based on TNFD recommendations, please visit: https://www.ana.co.jp/group/en/csr/regional_creation/biodiversity/ ANA Group Management Strategy Environment Materiality 4 Conserve Biodiversity The 23 action targets included in the 2030 global targets of the Kunming-Montreal Global Biodiversity Framework (GBF) include items in particular where the aviation industry can contribute, including preventing illegal wildlife trade, minimizing the impact of climate change on biodiversity, and reducing food waste. The ANA Group will contribute to the conservation of biodiversity by focusing on these items and working to mitigate negative impacts on natural capital through our business activities. 72 73 Basic Approach Regional revitalization is an initiative to overcome regional issues such as declining populations, low birthrates, aging demographics, and shrinking economies, as well as to ensure the revitalization of regions going forward. Beyond air transportation, the ANA Group aims to resolve regional issues while creating new encounters among people, goods, and experiences. We are committed to growing regional fan bases and expanding the number of people with whom we interact and build relationships. Working in unison with local communities is crucial to resolving issues. We create deeper ties with local communities by coordinating with regional representative branches nationwide and building close relationships with local governments and busi- nesses throughout Japan. Based on the relationships of trust we build with local communities through our Air Transportation and Travel Services businesses, we work to revitalize regions by leveraging the strengths and assets of the ANA Group while making the most of the charms of each region. Implementation Structure ANA Akindo leads in regional revitalization, collaborating with group companies and working together with local communities to solve regional issues based on its 33 branches nationwide engaged in community-based activities. The company continues to hold the ANA Group Regional Revitalization Meeting with ANA Group companies, aiming to create an organization that encourages new value creation through group company collaboration. To this end, ANA Akindo also established the Group Regional Revitalization Steering Committee, which consists of executives in charge of each group company, in fiscal 2023. 1 Expanding Regional Development in Cooperation with Local Governments 2 Resolving Regional Issues Through Innovation ANA pursues regional revitalization through Universal MaaS: Toward the realization of universal and seamless mobility. This project aims to provides door-to-door transportation, based on the concept of universal design, to create a society in which every person, regardless of disability or age, can move around comfortably. In 2023, the proj- ect began implementing full-scale batch support arrangements, as well as universal maps and navigation. These efforts introduce universal services unique to an airline company. For more information on Universal MaaS, please visit: https://www.universal-maas.org/en/en 74 75 Solution Methods • MRO Japan* began conducting tours of its aircraft maintenance shop at Naha Airport in May 2022 to increase awareness of Naha Airport and communicate its appeal as a new tourist resource • The company will continue to refine its content offerings to expand the number of interactions and relationships * MRO Japan Co., Ltd.: Japan’s only company specializing in aircraft maintenance. The company operates in cooperation with Okinawa Prefecture and local businesses to promote local industry. Regional Issues Addressed • Lack of recognition of secondary industries (airline-related industries) in the prefecture • Lack of employment opportunities for local workers Solution Methods Regional Issues Addressed • Insufficient financial resources due to declining birthrates, aging populations, and declining local economies • Create opportunities to communicate the attraction of local products, etc., to outside consumers • Support local governments in securing new financial resources through donations made through the ANA Hometown Tax Donation website • Communicate information and distribute local products, etc., through hometown tax donations • Use hometown tax donations to encourage more visitors through fostering interest and the desire to visit • Expand the number of people with whom we interact and build relationships CASE 1 1Expanding ANA Hometown Tax Donation Solution Methods • Promote programs to resolve community issues and programs for parents and children • Improve reception facilities and environments Regional Issues Addressed • Declining population • Decrease in tourist consumption with fewer tourists • Worker and laborer shortage • Decrease in travelers staying overnight CASE 2 Expanding the Number of People Involved in the Community through Workcations CASE 2 Tour of MRO Japan’s Aircraft Maintenance Plant (Okinawa, Japan) Community-Based Initiatives Solution Methods • Support regional revitalization through the creation of exhibition businesses, storefront busi- nesses, and logistics • Collaborate with local businesses in the ANA Specialty Products Development Project to develop new specialty goods • Introduce local products at ANA antenna shop Tochi-Dochi • Sell local products online through the MeGourmet e-commerce store Regional Issues Addressed • Create opportunities to communicate the attraction of local products, etc., to outside consumers • Expand the number of people with whom we interact and build relationships CASE 3 Leveraging ANA Group Assets to Expand Sales Channels and Increase Product Awareness Regional Revitalization ANA Group Management Strategy Regional Governments / DMO / Regional Businesses Government Agencies 33 Branches Nationwide • Regional Group General Information Desk ANA Akindo Regional Revitalization Department •Core Regional Revitalization Organization •ANA Group Facilitation and Coordination ANA Holdings, Inc. (Regional Revitalization Officer) Travel package planning and sale, tourist promotions through apps, digital promotions, crowdfunding Sales of goods through airport shops and expansion of sales channels for locally themed products, etc. Provide ANA Group expertise (education, training, etc.) Human resources development, consulting, surveys Expand exports of regional, local products Promotions to attract customers to areas throughout Japan and promotions overseas to attract visitors to Japan Integrated regional revitalization Deployment across the Group 3 Regional Revitalization through Social Contribution and Resolving Social Issues • Work with local farmers, governments, and regional banks, etc., to turn abandoned farmland (abandoned fields and rice paddies) into ANA-operated farms • Support the Production Processing Distribution Sales chain • Expand sales channels and branding for prefectural products utilizing ANA resources; food processing utilizing the resources and expertise of ANA Catering Service Co., Ltd., etc. • Contribute to the revitalization of primary industries, expand interchange. and build structures to prevent farm- land from being abandoned Solution Methods Regional Issues Addressed • Growing amount of abandoned land due to the aging of farmers and lack of successors • Gaining recognition of and expanding sales channels for products of the prefecture CASE 1 ANA Farm Project Expanding Tangerine Orchards in Ehime Prefecture and New Lemon Orchards in Hiroshima Prefecture Materiality ANA X ALL NIPPON AIRWAYS TRADING ANA Business Solutions ANA Strategic Research Institute ANA Cargo ANA Department Overseas HQs, Offices Other Group Companies • Make appropriate appeals to urban residents, etc. • Establish the brand value of products, developing and raising awareness of this value throughout Japan Please visit our corporate website for more: https://www.ana.co.jp/group/en/csr/regional_creation/regional_revitalization/ ANA Group Management Strategy ANA Group ESG Management The ANA Group pursues ESG management that considers the environment, society, and governance from a global and long-term perspective transcending the boundaries of the group. In this way, we contribute to resolving environmental and social issues through our businesses and continue to create value that will be an indispensable part of society in the future. ESG Management Implementation Structure We established the Group ESG Management Promotion Committee to address various ESG management issues. The committee is overseen by the President & Chief Executive Officer of ANA HOLDINGS INC., and chaired by the Chief ESG Promotion Officer (CEPO), the director in charge of group ESG management. Members include group company directors and executive officers, as well as the full-time Audit & Supervisory Board members. The ESG Management Promotion Committee convenes four times a year to discuss important policies and measures and monitor target progress. Materiality Matrix See the following for more information on our ESG management promotion system. https://www.ana.co.jp/group/en/csr/basic_approach/ Identification of Materiality We will aim to resolve group materiality and achieve the simultaneous creation of social and economic value by identifying and incorporating those issues into our business strategies and plans. We identify materiality through the following process. (1) Identify long-term issues facing global society and determine whether these issues are sustainable and consistent with our Mission Statement and corporate strategies (2) Analyze whether we can contribute to the resolu- tion of these issues through our business activi- ties from the perspectives of our Mission Statement, corporate strategy, ANA Group strengths, and social trends (3) Determine degree of importance and identify materiality by mapping issues on two axes: one representing the impact on group business (man- agement axis), and the other representing the impact on society and the environment, or stake- holder interest (society axis). For more information, please visit: https://www.ana.co.jp/group/en/csr/materiality/ Identified Material Issues and Specific Initiatives Materiality Environment Human Resources Diversity, Equity, and Inclusion (DEI) Human Rights • Reduce CO2 emissions • Reduce resource waste ratio • Reduce food waste ratio • Conserve biodiversity • Respond to labor shortages • Cultivate human resources and organizations to achieve transformation • Enhance human capital productivity • Develop human resources for sustainable growth • Promotion of universal services • Respect human rights • Engage in responsible procurement • Achieve ANA Group 2030 medium-term targets and 2050 long-term environmental goals • Disclose information in line with the TCFD recommendations • Contribute to biodiversity conservation through initiatives such as those aimed at prevent- ing wildlife trafficking • Enhance ease of work • Enhance job satisfaction • Succeed and evolve corporate culture • Gender equality, supporting diverse work styles, respecting diversity • Respect the diversity of customers by promoting univer- sal services • Ensure respect for human rights based on the United Nations Guiding Principles on Business and Human Rights • Thoroughly implement environ- ment and human rights- conscious procurement and build a transparent supply chain Strengthen Governance Structures 2030 2050 2030 2030 2030 Regional Revitalization • Innovate to resolve social issues • Regional revitalization through social contribution and resolving social issues • New value creation through the use of avatars, drones, MaaS, etc., and cross-industry collaboration • Contribute to regional revitaliza- tion through social contribution activities and resolving social issues 2030 Specific Initiatives Relevant SDGs Ensure appropriate information disclosure and transparency Increase diversity in Board membership Disclose commitments of top management People Extremely important Extremely important Regional Revitalization • Decline of Japanese regions • Income/education disparity in emerging countries Environment • Climate change • Environmental pollution Management Axis Society Axis Impact on the operations of the ANA Group (Mission Statement, Management Vision, direction of corporate strategy, business opportunities and risks) People Human Resources • Investment in human capital DEI • Diversity of customers and employees Human Rights • Human rights violations across the supply chain Consideration for stakeholders / Impact on the environment and society ESG Management Implementation Structure Board of Directors Proposal / Report Supervision Overall management Proposal / Report Report Proposal / Report Instruction / Supervision Report Instruct President and CEO, ANA HOLDINGS, Inc. Group Management Committee Group Companies and Departments Group ESG Management Promotion Committee Chairman: Chief ESG Promotion Officer (CEPO) Members: CSO (director in charge of ANA HOLDINGS INC. Corporate Sustainability) ANA HOLDINGS, Inc. directors (excluding outside directors), executive officers, and full-time members of the Audit & Supervisory Board ANA Group company directors and executive officers nominated by the chair All EPOs (officers responsible for ESG management in each ANA Group company) Observer: ANA HOLDINGS, Inc. Internal Audit director Secretariat: Corporate Sustainability, General Administration, General Administration, Legal & Insurance EPL Meeting 76 77 The ANA Group works with all stakeholders to strengthen our foundation, aiming to share a variety of values that lead to Uniting the World in Wonder. Safety is not only an absolute value and mission of the ANA Group; it is a major premise in all of our corporate activities. We reflect on dialogues with stakeholders, allocate management resources appropriately, make nimble decisions, and communicate our management directions and results. Linking these efforts to further dialogues, we foster trust in the ANA Group. While our three management foundations work independently, they also intertwine and draw strength from each other. Management Foundations Safety is the absolute value underlying every ANA Group corporate activity. We are committed to maintaining safety in both aircraft operations as well as in business as a whole to enhance public trust in our group. Safety The ANA Group aims to practice management that contributes to value creation for our various stakeholders, promote sustainable growth, and enhance corporate value over the long term. Corporate Governance We build relationships of trust between the ANA Group and society by incorporating information obtained through dialogues with external and internal stakeholders into our management strategies. Co-Creation with Stakeholders Safety Co-Creation with Stakeholders Corporate Governance 78 79 79 ANA Group Medium-Term Policy for Aviation Safety and Security We formulated the ANA Group Medium-Term Policy for Aviation Safety and Security in advance of 2030, describing five impor- tant initiatives to address between fiscal 2023 and fiscal 2025. The purpose of this policy is to maintain basic quality and safety for growth, even during this period of recovering air travel demand and changes in the environment. In fiscal 2024, we conducted a review of the previous fiscal year’s activities and changes in the environment. Based on this review, we are clarifying how to move forward with key concepts and evolve safety risk management. To this end, we have updated our approach and we will strive to achieve our ideal state in the year 2030. ANA Group Safety The picture on the left is an image of the ANA Group Safety. The sunflower represents aviation safety, and the fence represents aviation security to protect the sunflowers from outside agents. The sunflower and fence stand on the soil that represents our culture of safety and security. We believe that the most important nutrients are the following four cultures. • Just Culture • Reporting Culture • Learning Culture • Flexible Culture The ANA Group will strive as one in our unending pursuit of safety and security. The ANA Group engages in ongoing education and training programs to preserve the memory of past accidents and hijackings in our pursuit of safety. While emphasizing dialogue between top management and employees and communication among employees, we strive to continue a culture of safety at a broader and more profound level, ensuring every member of our organization to think and act regarding safety from a sense of personal responsibility. Education Initiatives ANA Group Safety Education Center (ASEC) ASEC, located in the ANA Blue Base, provides safety education in which participants learn actively. The experience helps participants practice safe behavior learned at ASEC in the workplace specifically. Course of ANA Group Safety Action (1) Strictly observe rules & regulations, and all actions will be grounded on safety. (2) As a professional, place safety as the #1 priority while keeping your health in mind. (3) Address any questions and sincerely accept the opinions of others. (4) Information will be accurately reported and shared in a timely manner. (5) Continuous self-improvement for prevention and avoiding reoccurrence. (6) Lessons learned from experiences and increased skills for risk awareness. 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. Key Concepts 1. Foster a positive safety and security culture 2. Develop and maintain skills to support safety 3. Strengthen change management 4. Evolve safety risk management 5. Structure our aviation security management system Safety Management Foundations Fostering Integrated Management Systems and Safety, Always Holding Safety as the Foundation of Management 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 corporate activity and the foundation of everything we do. Our dedica- tion to safety extends to every part of our group businesses, even beyond our aircraft operations, including cargo, food ser- vices, and information. Our everyday efforts to improve safety and our conscientious response to customer expectations build confidence and trust with society. An environment of mutual understanding and trust forms relationships among employees across various job descriptions to support safe aircraft operations and other aspects of the ANA Group business. In every workplace, we post the ANA Group Safety Principles and Course of ANA Group Safety Action, which are pledges shared by all ANA Group employees. Revised Safety Education and Enlightenment Activities The ANA Group provides education and training to raise employee safety awareness and to help employees exercise behavior in line with the Course of ANA Group Safety Action. In fiscal 2023, we redesigned the entire safety education program to foster a positive safety culture. In fiscal 2024, we began education and training under this new pro- gram. This new program fosters safety culture by helping employees understand the concepts behind safety management systems and gain the ability to think and act independently based on discussions designed to imagine daily operations and act in accordance with safety guidelines. We also designed the content of the education and training to differ according to the position of the learner. Number of Participants 65,738 (cumulative, past five years) Continuing the Culture of Safety July is Aviation Safety and Security Promotion Month for the ANA Group. We use this month as an opportunity to reconfirm the importance of safety and security by, for example, revisiting past accidents and incidents. We also strive to improve safety and quality throughout the ANA Group through initiatives to foster a culture of safety and security while reinforcing the skills supporting safety and security. Initiatives for Aviation Safety and Security Promotion Month Emergency Aircraft Evacuation Training This repeated emergency evacu- ation training is mandatory for all group employees to support cabin attendants in assisting and guiding passengers in the event of an aircraft emergency. In addition, participants discuss actions in emergency situa- tions and reflect on their behavior as ANA Group employees to enhance safety awareness. Safety and Security Dialogue between Top Management and Employees Lectures by senior management on learning from past accidents and hijacking incidents, as well as direct dialogue with ANA Group employees, provide opportunities to share thoughts and safety and security, examples of best practices in each division, and expanded initiatives in the workplace. ESG Aviation Security Security Risks Management Number of Participants 30,065 (cumulative, past five years) Number of Participants 6,447 (cumulative, past three years) Reporting Learning Flexible Just Culture Safety Safety Risk Management Safety Risk Management Flight Flight operations operations Customers Customers Employees Employees (Workers) (Workers) Safety Policy Safety Policy and and Targets Targets Safety Safety and and Security Security Communication Sense of Safety 80 81 Positive Safety Culture Human Resources Development Food Safety The ANA Group introduced the ANA Catering Quality Program (ACQP), from the three aspects of food safety for hygienic in-flight and ANA Lounge meals, the pursuit of delicious quality, and the safe and correct loading and unloading of goods on and off aircraft. Qualified auditors and chefs make regular visits to our catering contractors in Japan and around the world, offering guidance on improvements based on ANA’s own strict hygiene standards. We also engage in regular external hygiene audits from third parties based on international standards. Results are reported to the group to maintain and improve quality. The Board of Directors is regularly informed of on issues related to food safety and measures to address food safety. Information Security The ANA Group works continuously to ensure the secure handling of information, including personal customer information, as a management issue equally important to flight operations. We designate information to be protected and develop information management rules according to the degree of importance assigned to each type, enhancing safety in the office and other facility environments. System security measures include data encryption, perimeter defense, anti-virus, and endpoint security to achieve defense in depth. We have strengthened countermeasures against phishing, including fake emails pretending to be from ANA domains. Additionally, we have introduced Attack Surface Management (ASM) considering the shift to a cloud envi- ronment, and we are monitoring it 24/7. In addition, we created the ANA Group Information Security Management Manual for employees for use across the entire group. We also use handbooks, e-learning, training, and email newsletters to ensure this manual is widely understood throughout the group, and conduct audits to check compliance. Executive personnel attend Cyber Security Response Training on a regular basis. In this way, we are strength- ening our information management system and reducing the risk of information leaks from both tangible and intangible perspectives. Further, we comply with Japan’s Act on the Protection of Personal Information, the EU General Data Protection Regulation (GDPR), and other laws and regulations enacted or revised in various countries regarding the protection of personal infor- mation. We publish our privacy policy on our corporate website as appropriate. These initiatives are regularly reported to the management of the entire group through the Group ESG Management Promotion Committee to raise awareness. The risk of turbulence will only increase in the future with extreme weather and environmental changes. For this reason, the ANA Group considers turbulence countermeasures a priority issue, in safety operations to prevent serious accidents. The departments that support operations must coordinate efforts, using weather and operational data analysis to pursue even greater reductions in cabin injury risk. In addition, flight crew and cabin crew must work together to ensure the best possible response. Every employee takes independent action appropri- ate to their position to prevent or eliminate the recurrence of issues in this area. Safety In-flight meal production Hygiene training In-flight passenger safety video Cyber Security Response Training for executive personnel Flight Path Selection to Avoid Turbulence We obtain more accurate and detailed turbulence data to help flight crews select appropriate flight paths en route. In addition to information provided traditionally by flight crews via radio, we use mea- sured turbulence data (EDR: a quantitative indicator of air turbulence) observed by air- craft in flight. In 2023, we were the first Japanese airline to participate in the IATA* Turbulence Aware platform, which shares EDR data. In this way, we share data in real time and access data from participating airlines to ensure safe operations. Decision-Making and Information Sharing to Prepare for Turbulence We create environments to prepare for turbulence, with flight crew and flight attendants capable of making decisions that prioritize safety. We also use in-flight announcements to share information with passengers in a timely and accurate manner. Creating Environments to Avoid Injuries To reinforce safety awareness, we show passengers a safety video in the aircraft to ensure safe behavior when encountering turbulence. Flight attendants familiarize themselves with the location of handrails, handles, etc., and correct positions for each aircraft type to protect themselves by minimizing the pos- sibility of becoming airborne due to turbulence. In addition, new employee training uses motion mockups (turbulence simulators) to experience the feeling of turbulence and to ensure employees are ready to take immediate action to protect themselves. To prevent turbulence from injuring passengers and flight attendants, the ANA Group steps up efforts through a coordinated effort among all parties involved in flight operations. Our efforts focus on three key ideas: avoid turbulence, prepare for turbu- lence, and avoid injuries. Ensuring Safety in Non-Air Operations EDR data screen * International Air Transportation Association Preventing Injuries Caused by Turbulence Seatbelt sign on/off • We strive to make quick decisions when to turn on or off the seatbelt sign, taking into consid- eration not only turbulence in the cabin but also experience from the cockpit. In-cabin safety • Even when the seatbelt sign is off, we may employ safety measures (e.g., instructing passen- gers to wear their seatbelts) if we determine that passengers or cabin crew are in danger due to turbulence. Flight attendants report such situations immediately to the flight crew. • When not serving or responding to passengers, flight attendants stays seated on CA seats and wear seatbelts when observing the cabin in case of unanticipated turbulence. In-flight announcements • In-flight announcements provide passengers with an idea of expected turbulence (e.g., timing, duration of turbulence). • When the seatbelt sign is on, we inform passengers as quickly as possible to encourage them to pay attention. NAKAMURA Soichi Corporate Safety, ALL NIPPON AIRWAYS CO., LTD. Take Measures through Continuous Coordination between Departments to Prevent Problems Reactively and Proactively. Individual points represent observed values: Intensity of the turbulence is identified by EDR value and color. The turbulence becomes more intense when the color is closer to red. Management Foundations 82 83 Corporate Governance 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 corpo- rate governance system and work continuously to enhance gover- nance within the ANA Group. 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. ESG Promotion Officers / Leaders Responsible for ESG promotion in each company / department Appointment / Dismissal Supervision Proposal / Report Proposal / Report Proposal / Report Appointment / Dismissal Appointment / Dismissal Appointment / Dismissal Internal auditing Account auditing Instruction / Supervision Instruction / Supervision Auditing Reporting Advice Reporting Internal Audit Division Chief ESG Promotion Officer Director in charge of Group Risk and Compliance Secretariat Corporate Sustainability General Administration Legal & Insurance President & Chief Executive Officer Overall management Reporting Reporting Audit & Supervisory Board Members Office Group Companies and Divisions Group Management Committee Accounting Auditors Board of Directors Personnel Advisory Committee Remuneration Advisory Committee Group ESG Management Promotion Committee Audit & Supervisory Board ANA HOLDINGS Corporate Governance System Holding Company Structure The ANA Group has adopted a holding com- pany 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 out- side 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 execu- tive 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 management decision- making and the execution of duties, while corporate executive officers conduct day-to- day business. Corporate Governance System (As of July 31, 2024) * The number of meetings held in fiscal 2023 Audit & Supervisory Board To ensure healthy development and to earn greater levels of trust from soci- ety 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. Advisory Committees Personnel Advisory Committee Remuneration Advisory Committee Chairman YAMAMOTO Ado Number of Members Audit & Supervisory Board members 5 (including 3 independent outside Audit & Supervisory Board members) Chairman YAMAMOTO Ado Number of Members 5 Term of Office 4 years (also applies to outside Audit & Supervisory Board members) Number of Members 7 Number of Meetings* 4 Number of Meetings* 13 Number of Meetings* 3 Board of Directors Group Management Committee The Board of Directors of ANA HOLDINGS INC. sets groupwide management policies and goals, makes important decisions for group management, and oversees the management and business execution of each group company. The Board of Directors is chaired by the chairman of the board. All directors, including out- side directors, and all members of the Audit & Supervisory Board, including outside members, participate in Board meetings. The Personnel Advisory Committee discusses the selection of director candidates and the dismissal of directors, and reports to the Board of Directors. The committee, chaired by an outside direc- tor, consists of four outside directors and one inside director to ensure transparency and fairness in the selection process of directors. Chaired by the President & Chief Executive Officer, the Group Management Committee consists of full-time directors, full-time Audit & Supervisory Board members, 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. 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 outside experts and reports to the Board of Directors. Number of Board Members Directors 11 (including 4 independent outside directors and 2 female directors) Term of Office 1year (also applies to outside directors) Number of Meetings* 13 Number of Meetings* 56 General Meeting of Shareholders Audit & Supervisory Board members 5 Management Foundations 84 85 Outside Director Roundtable Discussion Achieving Sustainable Corporate Value Enhancement while Exercising Stronger Governance KATSU Eijiro Independent Outside Director YAMAMOTO Ado Independent Outside Director KATANOZAKA Shinya Chairman of the Board Chairman of the Board of Directors KOBAYASHI Izumi Independent Outside Director MINEGISHI Masumi Independent Outside Director KATANOZAKA: When I took over as president in 2015, the Tokyo Stock Exchange had just published the Corporate Governance Code. At that time, we formulated a basic policy, and we incorporated that policy in our Corporate Governance Report after internal discussions. Since that time, we have continued to step up governance to ensure sustainable growth and increase cor- porate value, responding appropriately to the 2018 and 2021 code revisions. In addition, we strive to strengthen the supervisory func- tion of the Board of Directors by evaluating the effectiveness of the Board on an annual basis, identifying and improving issues. We ask our outside directors to cooperate in this evaluation process to fur- ther enhance the soundness and transparency of our management, benefiting from objective supervision and advice. In this roundtable discussion, we invite our outside directors to offer their candid opin- ions regarding our efforts to strengthen corporate governance and future measures to enhance corporate value further. Improving the Effectiveness of the Board of Directors KATANOZAKA: The Board of Directors must play an increas- ingly important role in strengthening governance to support the enhancement of corporate value. In terms of Board effectiveness, what improvements did you see over the last fiscal year? YAMAMOTO: In the past, preliminary Board meeting materi- als were sometimes provided only at the last minute. Last year, we saw significant improvements in how the materials are shared, and we now use iPads to receive information in a timely manner. This method provides time for preparation and more meaningful discussions. I was also impressed by the seriousness with which the chair- person and the executive side took the opinions and requests of the outside directors. Last year, the outside directors offered numerous comments and made requests regarding new businesses, which led to very active discussions at Board meetings. In that context, things improved significantly. KATANOZAKA: We received a variety of comments regarding new businesses related to the management of operating companies and matters not previously recognized. Through this experience, we reaffirmed the importance of objective viewpoints. I feel the tremen- dous significance of insights from outside directors on the perspec- tives of executive officer business decisions. Efforts to Strengthen Governance KATANOZAKA: For outside directors to gain a better under- standing of the ANA Group, we provide regular opportunities to visit our front lines, including on-site tours and roundtable discussions with employees. Last fiscal year, outside directors visited the cargo area at Narita Airport. What issues did you notice on-site? KOBAYASHI: First, I wanted to express my gratitude directly to everyone in the cargo business for their hard work during the COVID-19 pandemic, so the visit was a terrific opportunity. We heard firsthand what it was like to overcome the challenges during that time. The experience was very effective in terms of incorporat- ing the feedback and issues in Board meeting discussions. After observing everyone in their day-to-day work, I felt the Company needed to invest more in improving the working environ- ment. It was also an excellent opportunity to understand the com- plexity involved in the cargo loading process. I was reminded of the importance of human resources development and improved work- ing environments, balanced by the Company’s budget allocation. Being able to offer specific recommendations based on the site visit was very useful. KATANOZAKA: I am pleased that our outside directors took the opportunity to express their praise and appreciation for the hard work conducted during the pandemic. Feedback from employees also indicated that they appreciated the willingness of our directors to listen to their concerns. As pointed out, we reconfirmed issues such as the current state of several old facilities, the need to improve facilities in light of the increasing number of female employees, the slow pace of IT adop- tion, and the large number of documents. I was reminded of the importance of receiving feedback from the field and making improvements. As for the cargo area at Narita Airport, we plan to open a new cargo warehouse by the end of this fiscal year. And we hope to make further improvements in operational efficiencies and the work environment. Toward Stronger Governance Functions KATANOZAKA: Next, I want to discuss issues we must address to strengthen our governance function. What is your opinion on the overall governance of the Company, including management of Board meetings. MINEGISHI: Board meetings consist of resolutions, reports, and, most importantly, discussions on strategy. I think the time allocation and agenda-setting for strategy discussions have improved greatly over the past two years. To evolve this process further, the Board of Directors and the secretariat of the Group Management Committee must work together closely to ensure executive officers receive and reflect the perspective of the Board in management strategy. After all, execution is what drives business that enhances corporate value directly. This is why it is essential to establish points of discussion from an external perspective—the Board’s perspective, in other words—to address in Management Committee meetings to improve the quality of discussions in these meetings. Doing so will expand the vision at lower layers, instilling a management perspective and resulting in strong governance over the Company as a whole. This approach will also strengthen the quality of Board discussions related to strategy. As outside directors, we want to contribute more to this process. Corporate Governance Management Foundations 86 87 KATANOZAKA: Thank you. Currently, we give feedback from Board meeting discussions for use in the next Management Committee meeting. The members of the Management Committee include directors from ANA, our operating company, who are also candidates for future directors and executive officers of the holding company, so this is a very important learning opportunity for them. We are working to strengthen communications and collaboration between the secretariats of the two groups. ANA Group Strengths KATANOZAKA: Each of you have important positions outside the Company. What do you see objectively as the unique strengths of the ANA Group in comparison to other companies? YAMAMOTO: I think the ANA Group is a very flat organization internally. I once boarded a jumpseat (an auxiliary seat in the cock- pit) on a passenger flight, and I got that impression listening to the conversation between the captain and the co-pilot. Even in back-office departments, for example, co-workers call each other by name, rather than title, in meetings and emails. This type of atmosphere creates a flat corporate culture naturally. We also have mid-career hires working in a diverse range of workplaces. It’s also good to see numerous mid-career hires in key positions. Something else I want to address is the response to the COVID-19 pandemic. Amid what is regarded as a once-in-a-century crisis, the Company secured funds quickly to ensure survival, and then proceeded to cut costs. Many employees responded positively to external secondments to other companies, municipalities, and orga- nizations, which helped particularly with personnel expenses. Our secondment partners were very willing to take on anyone who was an ANA Group employee. This attitude was the result of the ANA Group’s day-to-day relationships with local communities. KATANOZAKA: That the president and chair of ANA Holdings also conducts on-site visits reflects the flat culture within the Company. President Shibata places great importance on the front lines of the Company, even visiting the night shift of the mainte- nance shop, for example. Many of our employees have responded very positively to requests for external secondments. These secondments have had a very positive effect on the employees, who acquire a variety of work experiences and values outside the Company. When they return, these employees bring and utilize these new skills in our company. KATSU: The ANA Group is an unusual organization. First, as Mr. Yamamoto mentioned, the Company has a very flat and frank cul- ture. At the same time, all operations on the front lines relate directly to customer safety, in another sense, the culture is very controlled. The hallmark of a well-disciplined company is the presence of many outstanding leaders. The entire company rallied around the strong leadership of top management in dealing with the pandemic, work- ing together to implement an excellent strategy to overcome the challenges. It is rare to find a company that exercises both control and frankness in this way. The ANA Group also combines frank and disciplined safety management. This is one of the ANA Group’s greatest strengths. KATANOZAKA: As an example of safety measures, in particular, we instituted strict measures to address the issue of pilot alcohol use by expanding the scope to include other work sites and admin- istrative departments across the entire company, inviting experts in to lead study sessions and so forth. This campaign to moderate drinking was well received by parties both inside and outside the Company. Enhancing Corporate Value over the Medium to Long Term KATANOZAKA: For my last question, what issues should the Board of Directors discuss in the future to respond appropriately to the various changes in the business environment since the pan- demic? What must the Board address to help the Company achieve medium- to long-term growth and enhance corporate value? KOBAYASHI: The airline industry faced a very difficult situation during the COVID-19 pandemic. Over the past year or two, we have spent considerable time discussing businesses other than the airline business. Since ANA is still an airline group after all, I think the most important issue is how to develop the airline business in the future. It’s especially important to clearly stake out the Company’s position in Asia and to expand business in that region. The next group cor- porate strategy should include in-depth discussions and address this issue in detail. Next, is the Cargo Business. From the perspective of portfolio strategy, it is very important to determine the strategy that will advance the business with an eye to future market needs, including the current acquisition of Nippon Cargo Airlines. Last, is ESG compliance, including SAF*. We must accelerate discussions on meeting the challenge based on specific milestones. Of course, we must also reference case studies from advanced ESG countries. * SAF: Sustainable Aviation Fuel KATANOZAKA: Yes, I understand. We plan to deepen medium- to long-term discussions about our Air Transportation Business from the customer’s perspective, including systems modifications based on future global strategies. SAF is also a very important topic. With your knowledge on the subject, I look forward to dis- cussing more about how we can achieve our environmental goals for 2030. KATSU: The choice of topics covered at Board meetings is important. Since the core of the ANA Group is the airline, we must dig deep into discussions of the Air Transportation Business. We must also pursue deeper discussions on safety, which is an impor- tant foundation for aircraft investment and management toward future growth. KATANOZAKA: I hope to provide timely information and have discussions on safety, including engine issues, with our outside directors. Aircraft investment is a very important decision. I believe we should incorporate the opinions of outside directors after fur- nishing them with detailed information on safety and technical capabilities. MINEGISHI: A global strategy is imperative for the mainstay Air Transportation Business. The Board should discuss the scale of resources to invest and where to position the business in Japan, in Asia, and worldwide. As a leading airline, ANA must also aim for the world’s highest level of productivity. Currently, the airline plans to develop systems for digital transformation, but it is important to ensure that new systems do not cause conflicts with on-site opera- tions. For the Non-Air Business, Board discussions must address strategies to grow around the ANA Economic Zone based on the use of ANA Mileage. Management must decide how to allocate resources to the positioning of each business to optimize the port- folio of the Air Transportation and Non-Air businesses for medium- to long-term growth. KATANOZAKA: I think the ANA Economic Zone must be defined more clearly in terms of Air Transportation and Non-Air businesses and the migration path to the ANA Economic Zone, including the scale of businesses planned. We should also engage in deeper dis- cussions of potential collaborations with partners to strengthen the base of ANA Mileage Club members, referring to case studies from other companies. We defined value-added productivity as a new KGI to emphasize value creation throughout the group. I think it is very important for every ANA Group employee to create added value, thereby improv- ing the productivity of the group as a whole. The Board of Directors should review progress in light of these points. KATANOZAKA: Today, we received specific and valuable opin- ions about strengthening corporate governance and improving the medium- to long-term value of the ANA Group. We will continue to incorporate the objective opinions and, sometimes, brutally honest perspectives of our outside directors in strategies as we strive for sustainable corporate value enhancement. Thank you for your par- ticipation today. Corporate Governance Management Foundations 88 89 Name Position at ANA HOLDINGS Independent Director Executive Officer Assignments Personnel Advisory Committee Remuneration Advisory Committee 1 KATANOZAKA Shinya Representative Director, Chairman Chairman of the Board of Directors 2 SHIBATA Koji Representative Director, President & Chief Executive Officer Chairman of the ANA Group Management Committee, Head of Group ESG Management Promotion Committee, In charge of the Internal Audit Division Chairman, ALL NIPPON AIRWAYS CO., LTD. 3 HIRASAWA Juichi Representative Director, Executive Vice President In charge of Government & Industrial Affairs, Executive Secretariat, Economic Security, Group Procurement 4 NAOKI Yoshiharu Representative Director, Executive Vice President Group CHO (Chief Human Resource Officer, Human Resources, and Employee Relations), and Corporate Strategy 5 INOUE Shinichi Member of the Board President & Chief Executive Officer, ALL NIPPON AIRWAYS CO., LTD. 6 NAKAHORI Kimihiro Member of the Board, Executive Vice President Group CFO (Chief Financial Officer, Finance, Accounting, and Investor Relations & Business Management) 7 TANEIE Jun Member of the Board, Executive Vice President Chairman of Group ESG Management Promotion Committee; In charge of Group Risk and Compliance, Legal & Insurance, General Administration 8 YAMAMOTO Ado Independent Outside Director Chairman Chairman 9 KOBAYASHI Izumi Independent Outside Director 10 KATSU Eijiro Independent Outside Director 11 MINEGISHI Masumi Independent Outside Director Corporate Governance Name Special Knowledge, Experience, and Skills Corporate Management and Long-Term Strategy Airlines Business and Safety Human Capital Development and Diversity Finance and Accounting Legal and Risk Management Sustainability Technology and Innovation Global Management 1 KATANOZAKA Shinya 2 SHIBATA Koji 3 HIRASAWA Juichi 4 NAOKI Yoshiharu 5 INOUE Shinichi 6 NAKAHORI Kimihiro 7 TANEIE Jun 8 YAMAMOTO Ado 9 KOBAYASHI Izumi 10 KATSU Eijiro 11 MINEGISHI Masumi See P.95 for more information on the reasons behind the selection of the skill sets that we expect directors to possess. Management Members: Directors (As of July 31, 2024) Management Foundations 91 90 3 1 2 6 5 8 9 10 4 11 7 Brief Personal History / Major Concurrent Positions Reasons for Appointment Brief Personal History / Major Concurrent Positions Reasons for Appointment Reasons for Appointment of Board Directors • • The following director candidates were selected based on the judgment that their abundant experience, performance, and insight would be crucial to achieving sustainable increases in the group’s corporate value. • • These director candidates assumed their positions after being appointed at the 79th Ordinary General Meeting of Shareholders. Approach to Selection of Director Candidates Internal 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 also made to ensure diversity in terms of gender, nationality, race, ethnicity, age, and other factors within the scope of the Civil Aeronautics Act and other relevant laws. Outside Directors In addition, 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. Internal Directors KATANOZAKA Shinya Chairman of the Board 2011: Executive Vice President 2015: President & Chief Executive Officer, Representative Director 2022: Representative Director, Chairman 2024: Chairman of the Board (present) Major Concurrent Positions Outside Director, Tokio Marine Holdings, inc. Outside Director, Kirin Holdings Company, Limited KATANOZAKA Shinya has extensive experience in sales, human resources, corporate planning, and other disciplines. He was appointed representative director and presi- dent & CEO in April 2015, and he has achieved profit growth for four consecutive years. In addition, he led measures to overcome the business crisis resulting from COVID-19. His efforts include quickly securing liquidity on hand as well as formulating and implementing our Business Structure Reform plan. Mr. Katanozaka served as chairman and chair of the Board of Directors since April 2022, endeavoring to strengthen the functions of the Board by leveraging his extensive experience and achievements over his career. He has continued these efforts as the chair of the Board of Directors since April 2024. SHIBATA Koji Representative Director, President & Chief Executive Officer 2020: Member of the Board of Directors 2021: Representative Director 2022: Representative Director, President and CEO (present) SHIBATA Koji has been involved in sales and international alliances for many years. As a corporate executive officer since June 2020, and as representative director and execu- tive vice president since April 2021, he has been in charge of the planning and execution of the Group Corporate Strategy. As representative director, president & CEO since April 2022, Mr. Shibata has been pursuing group management, always maintaining a global perspective and placing the highest priority on safety. He contributes to strengthening the functions of the Board of Directors by leveraging his extensive experience and achievements over his career. HIRASAWA Juichi Representative Director, Executive Vice President 2022: Member of the Board of Directors 2024: Representative Director (present) HIRASAWA Juichi has been involved with the business planning and planning divisions for many years. From April 2018, he served as an executive officer of ALL NIPPON AIRWAYS CO., LTD., a core subsidiary of the ANA Group, where he was in charge of creating and promoting innovations such as automated airport vehicle operation and MaaS in addition to formulating and implementing the company’s Corporate Strategy. Since June 2022, Mr. Hirasawa has served as a senior executive officer at the company, working primarily on industrial policy and other matters. He continues these efforts as the representative director and executive vice president as of April 2024. NAOKI Yoshiharu Representative Director, Executive Vice President 2024: Representative Director (present) NAOKI Yoshiharu has extensive experience in human resources and sales. In April 2019, he was appointed as the executive officer in charge of the human resources division of ALL NIPPON AIRWAYS CO., LTD., a core subsidiary of the ANA Group, where he reviewed the human resources system and worked to develop human capital and improve employee engagement. Mr. Naoki has been in charge of planning and executing the Group Corporate Strategy since April 2024, and has worked in group management as representative director of the Company since June 2024. Brief Personal History / Major Concurrent Positions Reasons for Appointment Internal Directors INOUE Shinichi Member of the Board 2022: Member of the Board of Directors (present) Major Concurrent Positions President & Chief Executive Officer, ALL NIPPON AIRWAYS CO., LTD. Chairman of All Japan Air Transport and Service Association Co., Ltd. INOUE Shinichi was involved in the establishment of Peach Aviation Limited, Japan’s first low cost carrier (LCC), and as representative director & CEO, he has achieved rapid growth for the company. In addition, since April 2020, he has overseen the sales division as representative director and executive vice president of ALL NIPPON AIRWAYS CO., LTD., a core subsidiary of the ANA Group. As representative director and president & CEO of the company from April 2022, Mr. Inoue has been pursuing the management of that company with safety as the top priority in order to put it back on a growth trajectory that will see it become a leading global airline. NAKAHORI Kimihiro Member of the Board Executive Vice President 2024: Member of the Board of Directors (present) NAKAHORI Kimihiro has extensive experience in accounting and finance. He has ensured liquidity on hand during the COVID-19 pandemic and has worked to secure a stable financial base as executive officer since April 2020 and as chief financial officer from April 2022. TANEIE Jun Member of the Board, Executive Vice President 2024: Member of the Board of Directors (present) TANEIE Jun has extensive experience in marketing. As an executive officer since April 2021 and as a senior executive officer since April 2023, she has been working to raise awareness and promote DEI in the Group, making active efforts to commu- nicate initiative progress at conferences in Japan and overseas. Ms. Taneie has also been working on ESG and risk management since April 2024. Outside Directors YAMAMOTO Ado Independent Outside Director 2013: Member of the Board of Directors (present) YAMAMOTO Ado has a wealth of experience and wide-ranging expertise in transpor- tation industry management and as a top executive in an economic organization. At meetings of the Board of Directors, he offers opinions and advice on safety and quality in public transportation organizations, organizational management, human capital strategies, and other matters. Mr. Yamamoto was appointed as a member of the Remuneration Advisory Committee and the Personnel Advisory Committee in June 2016. In June 2020, he was appointed chair of the Remuneration Advisory Committee and Personnel Advisory Committee. KOBAYASHI Izumi Independent Outside Director 2013: Member of the Board of Directors (present) Major Concurrent Positions Outside Director, Mizuho Financial Group, Inc. Outside Director, OMRON Corporation KOBAYASHI Izumi has a wealth of experience and expertise as a representative for pri- vate financial institutions and international development and finance institutions, as well as an outside director for other operating companies. At meetings of the Board of Directors, she leverages her background to provide opinions and advice on sustainabil- ity, corporate governance, risk management, and other matters. Ms. Kobayashi was appointed as a member of the Remuneration Advisory Committee in July 2013 and a member of the Personnel Advisory Committee in June 2016. KATSU Eijiro Independent Outside Director 2020: Member of the Board of Directors (present) Major Concurrent Positions President, Representative Director and Executive Officer, Internet Initiative Japan Inc. Outside Director, Nippon Television Holdings, Inc. KATSU Eijiro has a wealth of experience and expertise as a government official, includ- ing his tenure as Vice Minister of Finance and his extensive experience in ICT company management. He leverages this experience to provide opinions and advice on corpo- rate strategies, investment management, and risk management. Mr. Katsu was appointed as a member of the Remuneration Advisory Committee and the Personnel Advisory Committee in June 2020. MINEGISHI Masumi Independent Outside Director 2020: Member of the Board of Directors (present) Major Concurrent Positions President, CEO and Representative Director of the Board, Recruit Holdings Co., Ltd. Outside Director, Konica Minolta, Inc. MINEGISHI Masumi has led numerous new businesses to success at Recruit Co., Ltd. (now Recruit Holdings Co., Ltd.). Since April 2012, he has contributed to a significant increase in the corporate value of the same company as representative director and president & CEO through mergers and acquisitions of overseas companies. He lever- ages his extensive experience as a company manager in consumer and service indus- tries to provide opinions and advice on business portfolios, new business development, investment management, and other matters. Mr. Minegishi was appointed as a member of the Remuneration Advisory Committee and the Personnel Advisory Committee in June 2022. Corporate Governance Appointment of Directors Management Foundations 92 93 Approach to Selection of Candidates for Audit & Supervisory Board Member 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 possess 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 individ- ual 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 economic trends, and candidates who have advanced knowledge in finance, accounting, or legal matters. Reasons for Appointment of Audit & Supervisory Board Members FUKUZAWA Ichiro and KAJITA Emiko were elected at the 79th General Meeting of Shareholders. Reasons for Skill Set Selection The following are the reasons behind the selection of the skill sets that we expect directors and Audit & Supervisory Board members to possess. Skills Reasons for Selection Corporate Management and Long-Term Strategy In order to enhance corporate value through sustainable growth of the group, members of the Board who have abun- dant experience and knowledge on corporate management as well as creation and performance of long-term corpo- rate strategies are necessary. Airlines Business and Safety In order to enhance corporate value through the growth of the Air Transportation Business, which is the core business of the group, members of the Board who have knowledge and experience in the relevant business and who are equipped with skills and expertise to promote deep understanding in safety, i.e. the core foundation of management, and wide acceptance of safety in corporate culture. Human Capital Development and Diversity In order to enhance corporate value through an increase in competitive power of the group, members of the Board who have skills and expertise to maximize individual capacities through training of human capital and to improve the engagement of employees as well as those who are capable of management of various human capital are necessary. Finance and Accounting In order to enhance corporate value through efficient fund management of the group, members of the Board who have skills and expertise to achieve accurate financial reports and build-up of strong financial basis and to make well- balanced decisions based on growth investment and shareholder returns are necessary. Legal and Risk Management In order to enhance corporate value through stable business operation of the group, members of the Board who have in-depth knowledge of relevant laws and regulations, skills and expertise for proper corporate governance system, and risk management capabilities are necessary. Sustainability In order to enhance corporate value by way of attaining sustainable society through the group business, members of the Board who are knowledgeable in environmental issues, human rights issues, and other social issues, and who also have skills and expertise to promote resolution of the same are necessary. Technology and Innovation In order to enhance corporate value through technical innovation of the group, members of the Board who are knowl- edgeable in up-to-date air transportation technology concerning maintenance and flight operations, and those who have skills and expertise to promote efficient business operation using digital technology as well as innovation and new business are necessary. Global Management In order to enhance corporate value through global business development of the group, members of the Board who have in-depth understanding in global markets and who have abundant experience and expertise in ways of living, culture and business at overseas are necessary. Succession Plan We recognize the importance of succession plans for the president, directors, and other senior management for the survival of the company and the sustainable enhancement of corporate value. We select candidates for senior management and train these employees based on the knowledge, skills, and other areas required for such positions. We established the Personnel Advisory Committee to guarantee transparency and fairness in the selection of candidates. The committee is chaired by an outside director and consists of four outside directors and one internal director. The committee discusses the succession plan for the president and representative director, the knowledge, skills, experience, and other requirements of senior management, and the appointment and assignment of officers. The committee also reports to the Board of Directors for the board to make final decisions on representative directors. Candidates and succession plans for executive officers and certain department heads are also reported and shared with the Personnel Advisory Committee. Audit & Supervisory Board Members Reasons for Appointment Audit & Supervisory Board Members FUKUZAWA Ichiro Audit & Supervisory Board Member FUKUZAWA Ichiro has extensive experience in accounting, finance, and investor relations. He has served as chief financial officer since April 2017, working to secure a stable financial base for the group and for implementing efficient capital restruc- turing and other financial strategies. Mr. Fukuzawa also took prompt measures to secure liquidity on hand during the COVID- 19 pandemic. Since April 2022, he has served as representative director and senior executive vice president and has been in charge of planning and executing the Group Corporate Strategy and other matters. Mr. Fukuzawa has a wealth of experience and knowledge in finance, accounting, and group management. KAJITA Emiko Audit & Supervisory Board Member KAJITA Emiko has extensive experience in in-flight services and customer departments. Ms. Kajita has extensive knowledge and experience in the Air Transportation Business, safety, operational quality, and services. She has also been involved in ESG management, enhancement of risk management, and other matters as director and executive vice president since June 2023. Mr. OGAWA Eiji was elected at the 77th General Meeting of Shareholders. Mr. KANO Nozomu and Ms. MITSUHASHI Yukiko were elected at the 78th General Meeting of Shareholders. KANO Nozomu* Outside Audit & Supervisory Board Member FUKUZAWA Ichiro Audit & Supervisory Board Member KAJITA Emiko Audit & Supervisory Board Member * Independent Audit & Supervisory Board members MITSUHASHI Yukiko* Outside Audit & Supervisory Board Member OGAWA Eiji* Outside Audit & Supervisory Board Member Name Independent Directors Remuneration Advisory Committee Special Knowledge, Experience, and Skills Airlines Business and Safety Finance and Accounting Legal and Risk Management Sustainability KANO Nozomu FUKUZAWA Ichiro KAJITA Emiko OGAWA Eiji MITSUHASHI Yukiko Selection and Dismissal of Director and Audit & Supervisory Board Member Candidates Corporate Governance Management Members: Audit & Supervisory Board Members As of July 31, 2024 Management Foundations 94 95 Matters related to financial results Other 4.4% Major Agenda Items for the Board of Directors (Fiscal 2023) 1. Items Related to General Meetings of Shareholders • Proposals to be submitted to General Meetings of Shareholders for approval 2. Items Related to Directors, Corporate Executive Officers, the Board of Directors, etc. • Selection of director candidates and corporate executive officers • Results of the evaluation of the effectiveness of the Board of Directors • Policies for officer remuneration 3. Items Related to Financial Results • Financial results and earnings forecasts • Reports from group companies • Evaluations in the capital markets 4. Items Related to Shares and Capital • Disposal of treasury stock 5. Items Related to Organizational Restructuring 6. Items Related to Personnel and Organizations 7. Items Related to the Company and Important Subsidiaries • Discussions regarding business and other risks and risk • ANA brand / Peach / AirJapan business plans • Current status and issues at domestic partner airlines • Discussions on management resource allocation • Review of marketing and sales function reorganization 8. Items Related to Disposal and Receipt of Important Assets • Aircraft procurement, sales, and leases • System investment and capital investment 9. Investment-Related Matters • Acquisition of shares of Nippon Cargo Airlines 10. Items Related to Major Debts • Financing plans • Bond issuances 11. Items Related to Corporate Governance • Changes in medium-term environmental targets due to updated transi- tion scenarios • Compliance with the Modern Slavery Act of the UK and Australia • Internal audit plans and results reports • Group ESG Management Promotion Committee report • Valuation of cross-shareholdings 12. Other Items • Discussions on new business creation • Progress of metaverse business • Status report on strategic investments • Net Promoter Score (NPS) survey results • ANA’s Way Survey (employee awareness survey) results • Personnel Advisory Committee report • Remuneration Advisory Committee report Changes in Board Meeting Length Since we began encouraging more substantial discussions in Board meetings, the annual total time devoted to Board meetings has increased over the last several years. Discussion by Agenda Topic (Fiscal 2023) We encourage active discussions of corporate strategy at Board meetings, selecting major related topics about which to exchange opinions from medium- to long-term perspectives. 2023 (FY) 35.2 hours Important matters, including corporate strategy and business plans Matters related to fleet plan, investments, asset sales, etc. 10.1% Matters related to general meetings of shareholders, board of directors, etc. 2.8% 68.5% 14.2% 28.9 27.7 2019 2020 2021 2022 34.4 35.4 Before FY2013 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Before transitioning to the holding company structure (–March 2013) After transitioning to a holding company (April 2013-) Corporate Governance Code trends Corporate Governance Code formulation Corporate Governance Code revision Corporate Governance Code revision Fundamental Policy on Corporate Governance Fundamental Policy on Corporate Governance enactment Fundamental Policy on Corporate Governance revision Fundamental Policy on Corporate Governance revision Board of Directors’ composition Directors 2001 Introduced executive officer system 2003 Shortened the term of office of directors (from two years to one year) 2006 Reduced the number of directors in the Articles of Incorporation (from 40 to 20) 10 • 7 internal directors (7 male, 0 female) • 3 outside directors (2 male, 1 female) 11 • 7 internal directors (7 male, 0 female) • 4 outside directors (3 male, 1 female) 11 • 7 internal directors (6 male, 1 female) • 4 outside directors (3 male, 1 female) Audit & Supervisory Board Members 5 • 2 internal members (2 male, 0 female) • 3 outside members (3 male, 0 female) 5 • 2 internal members (2 male, 0 female) • 3 outside members (2 male, 1 female) 5 • 2 internal members (1 male, 1 female) • 3 outside members (2 male, 1 female) Organizational format 2005 Established the CSR Promotion Committee 2011 Renamed to the CSR Promotion Committee Established the Remuneration Advisory Committee Renamed to the Group CSR Promotion Committee Established the Personnel Advisory Committee Renamed to the Group CSR Risk Compliance Committee Renamed to the Group ESG Management Promotion Committee Improve the effectiveness of the Board of Directors Enhanced medium- and long- term discussions Began effectiveness evaluation Reorganized agenda items and reviewed operating rules and regulations Extended meeting time (from two to three hours) Established a special meeting for reports and Q&A separate from Board meetings for medium- to long-term management issues Established a strategy discussion category dedicated to medium- to long- term discussions Enhanced input opportunities for outside directors Explained all proposals to outside directors prior to the Board of Directors’ meetings as a general rule Conducted annual town meetings between employees and outside directors in the current business divisions Established forums to explain management issues at major group companies from directors in charge Held annual discussions among financial statement auditors and outside directors Officer remuneration 2004 Abolished retirement benefits Established the share remuneration plan Adopted non-financial indicators as KPIs for officer remuneration Corporate Governance Initiatives to Strengthen Governance Structure Management Foundations 96 97 The Company believes that it is important for directors themselves to enhance the effectiveness of the Board of Directors, while con- stantly considering the state of the Board of Directors and governance. At least once each year we analyze, evaluate, and discuss the overall effectiveness of the Board of Directors, and work to address issues identified during this process. Through the PDCA cycle, in which we again address and evaluate those issues at the end of each fiscal year, we work to improve the functions of the Board. We conducted an evaluation of the effectiveness of the Board of Directors in fiscal 2021 with the help of a third-party organi- zation to further enhance board objectivity and transparency. This evaluation confirmed the efficacy of the Board of Directors. In fiscal 2023, we decided to conduct another efficacy evaluation, following the fiscal 2022 evaluation. (We plan to continue third- party assessments of board effectiveness about once every three to five years.) Fiscal 2022 Fiscal 2023 Provision of Materials to Outside Directors Front Line Visits and Town Meetings We increased the number of written reports and reorganized the contents of regular reports to allow more time for discussion. We shared the estimated time frames for explanation with all directors and strengthened time management. Fiscal 2024 For matters of less importance, the Board of Directors will revise the Board of Directors Regulations and rearrange agendas to allow more time for discussion. The Board of Directors will work with the corporate planning divi- sion to select the necessary discussions on key management issues and topics by first discussing annual discussion topics among the Board at the beginning of the fiscal year. In doing so, the Board will work to further enhance discussions at Board meetings. We will enhance front-line visits based on font line needs and the interests of the outside directors. We will work with the corporate planning division to review the content of internal meeting materials and improve the materials for Board of Directors' meetings. We believe that it is essential to maintain and strengthen col- laborative relationships with our business partners for further growth and development of group businesses. The ANA Group, consisting mainly of our Air Transportation Business, engages in cross-shareholding when we deem such holdings to contribute to improved corporate value over the medium to long term from the viewpoint of continuing smooth business, maintaining business alliances, and growing profits through strengthening business relationships. Every year, the Board of Directors conducts a comprehen- sive review of individual cross-shareholdings. The Board Cross-Shareholdings (1) PAL HOLDINGS, INC. (Parent Company of Philippine Airlines) • Strengthen strategic partnership with PAL HOLDINGS, INC. through a wide range of business alliances, including code-share and mileage program alliances, the dispatch of directors, and outsourcing of airport operations. (2) Vietnam Airlines JSC • Strengthen strategic partnership with Vietnam Airlines through a wide range of business alliances, including code-share and mileage program alliances, the dispatch of directors, and outsourcing of airport operations. (3) Star Flyer Inc. • Pursue strategic partnership with Star Flyer through a wide range of business alliances, such as code-sharing, the dispatch of directors, and outsourcing of airport operations. (4) Skymark Airlines Inc. • Pursue strategic partnership with Skymark Airlines through a wider range of business alliances such as outsourcing maintenance work. Airlines 36.7% We worked with the corporate planning division to set aside time at Board meetings per topic to discuss each necessary key management issue and topic, further enhancing discussions at Board meetings. While we conventionally distribute materials to outside directors in advance of the Board of Directors' meetings, we decided to revise the rules and change the date of distribution. We aim to provide information at an earlier date, even if certain materials are incomplete or still being revised. In fiscal 2023, we observed the cargo division and held a town meet- ing with the department. evaluates the significance of holdings and the benefits and risks associated. If, as a result of a comprehensive review, ANA determines that the evaluation results will continue to be low for a certain period of time and further will not contribute to sustainable growth over the medium to long term, we will reduce our holdings in said stock. ANA HOLDINGS owns shares in 30 publicly traded compa- nies as cross-shareholdings for other than pure investment purposes. The total amount on the balance sheet of these shares as of the end of fiscal 2023 is ¥99,168 million. Equity Alliances with Airlines The total amount of shares of airlines owned by ANA HOLDINGS on our balance sheet is ¥36,396 million, which accounts for 36.7% of our cross-shareholdings. The purpose of these holdings is as described on the right. Details of Cross- Shareholdings We must further streamline Board meeting operations as there is insufficient time for discussions of important management strategies. On-site observations and town meetings are extremely effective in understanding the front lines. Some commented there are too many materials and it is difficult to understand the main points of these materials, urging us to examine the contents of the materials closely. Members expect us to narrow down medium- to long-term manage- ment issues and key management issues to enrich our discussions more than ever. We evaluated the improvements made to regular reporting and the enhanced time management to a certain degree. We received comments that suggest it may prove beneficial to entrust agendas to the executive side. (Ex. agendas involving aircraft) Distributing the materials at an earlier date was a good idea. Many respondents requested we reorganize information, improve the layout, clarify discussion points, and provide more outside director-oriented descriptions on the Board meeting materials. This meeting was extremely effective in helping us under- stand the front lines. We must also decide which departments to visit based on front-line needs and the interests of outside directors. We received various feedback regarding our strategy discus- sion. While certain feedback praised our efforts to set aside time for each topic of discussion, others suggested that we should spend more time discussing the bigger picture and more fundamental issues. (Ex. environmental awareness, Company characteristic and strength identification, long- term future vision, resource allocation, and human capital) A large amount of feedback commented that we devoted much time to the Non-Air Business in fiscal 2023, but we must discuss the Air Transportation Business more. We received feedback that suggested setting discussion topics after taking into account topics from the executive side, outside director requests, and investor perspectives. Management We must further streamline Board meeting operations as there is insufficient time for discussions of important management strategies. Some commented that the provision of information is slow, there are too many materials, and that it is difficult to under- stand the main points of the materials. As such, they urge us to closely examine the contents of the materials. Discussion Details Members demand that we focus on medium- to long-term management issues and key management issues to further enrich our discussions. We are urged to seek town meetings* with departments that have changed significantly since before and after COVID-19, such as the cargo division in particular. * Dialogue between officers and employees Corporate Governance Efforts to Improve the Effectiveness of the Board of Directors Action / Plan Define Issues Do Improvement Initiatives Check Evaluate Action / Plan Identify Issues Do Improvement Initiatives Management Foundations 98 99 Conceptual Diagram for the Officer Remuneration System Fixed Variable Remuneration limits Ratio 1 0.67*1 Remuneration (1) Basic remuneration (2) Bonus (short-term performance-linked) (3) Stock-based compensation (long-term incentive) Payment criteria Internal directors Payment according to title, etc. Measure for fiscal year results according to various criteria Evaluate contributions to corporate value over the medium to long term Annual total for (1) and (2) is limited to a maximum of ¥960 million Per resolution at the 66th Ordinary General Meeting of Shareholders, held on June 20, 2011 (3) Annual maximum of 40,000 shares*2 Per resolution at the 70th Ordinary General Meeting of Shareholders, held on June 29, 2015 Outside directors Uniform payment for all members — — Audit & Supervisory Board members Payment according to status as full-time or part-time — — Annual maximum of ¥180 million Per resolution at the 74th Ordinary General Meeting of Shareholders, held on June 21, 2019 Payment method Monthly (cash) Annually (cash) Multi-year evaluation*3 *1 The Company determined to pay within a range from 0.0 to 0.92 times according to the degree of achievement for annual performance targets. *2 It was resolved at the 70th Ordinary General Meeting of Shareholders of the Company, held on June 29, 2015, that the maximum amount of share remuneration per year would be 400,000 points per fiscal year (400,000 shares of Company common stock). However, the number of shares is based on before the reverse stock split on October 1, 2017, and includes 40,000 points (40,000 shares of Company common stock) after the reverse stock split. *3 Upon retirement, stock-based compensation is granted during a term of office will be delivered in the form of shares (or partly in cash equivalent to the amount when converted to market value) through the stock delivery trust. 1. Basic Policies for Director Remuneration The basic policies for director remuneration are as follows. • We set compensation at a level commensurate with the role and responsibility of each position. • This will contribute to the enhancement of medium- to long-term corporate value. • We will incorporate stock-based compensation that allows us to share profits with our shareholders. • A Remuneration Advisory Committee, chaired by an outside director and consisting of a majority of outside directors, will be established to ensure a fair and transparent decision-mak- ing process. 2. Procedures for Determining Remuneration The Board of Directors decides director remuneration after delib- eration of the details, taking into account reports by the Remuneration Advisory Committee. The total amount of director remuneration shall be within the scope of the amount approved at the Ordinary General Meeting of Shareholders. 3. Remuneration Advisory Committee P.85 4. Remuneration System (1) Internal directors In addition to a fixed basic remuneration, remuneration for direc- tors includes an annual variable performance-linked bonus and long-term incentive stock option plan as a means of providing healthy incentives for pursuing sustainable growth for the Company. The ratio of fixed basic remuneration and bonus / stock options for total remuneration is 1:0.67 fixed to variable if annual performance targets have been accomplished. The ratio of vari- able remuneration ranges from 0.0 to 0.92 times according to the degree of achievement for annual performance targets. a. Bonuses We use net income, safety, customer satisfaction, and employee satisfaction as indicators that reflect the perfor- mance and basic quality for a single fiscal year. Bonuses are determined based on the scores of each indicator. b. Stock-based Compensation We use ROE, Non-Airline Business and ANA Economic Zone indicators, ESG evaluation indicators, and a productivity indicator as indicators of improved corporate value over the medium to long term and of sustainable growth. Stock-based compensa- tion is determined based on the scores of each indicator. (2) Outside directors Remuneration for outside directors consists of fixed compensa- tion (monthly compensation) without a performance-linked por- tion. This compensation encourages outside directors to exercise their supervisory functions from an independent standpoint. (3) Audit & Supervisory Board members Remuneration for both inside and outside Audit & Supervisory Board members consists of fixed compensation (monthly com- pensation) without a performance-linked portion. This compen- sation encourages those members to exercise their supervisory functions from an independent standpoint. Remuneration levels for members of the Audit & Supervisory Board are determined in line with remuneration at other compa- nies and in consultation with outside experts. Net Income Return on Equity (ROE) Safety Customer Satisfaction Fiscal 2023 Director and Audit & Supervisory Board Member Remuneration Segment Number of persons eligible Total amount of remuneration, etc. (¥ millions) Total amount by type (remuneration, etc.) (¥ millions) Basic remuneration Bonuses Stock-based compensation Directors (Outside directors) 11 (4) 601 (60) 379 (60) 81 (–) 140 (–) Audit & Supervisory Board members (Outside Audit & Supervisory Board members) 6 (4) 144 (69) 144 (69) – (–) – (–) Total 17 745 523 81 140 Notes: 1. The table above includes one outside Audit & Supervisory Board member who resigned as of the end of the 78th Ordinary General Meeting of Shareholders, held on June 27, 2023. 2. We estimate and record share remuneration for directors during the period under review, with a three-year evaluation period from fiscal 2023 to fiscal 2025. 3. It was resolved at the 66th Ordinary General Meeting of Shareholders of the Company, held on June 20, 2011, that the maximum amount of remuneration of directors per year would be ¥960 million. There were 17 directors (including two outside directors) as of the close of this Ordinary General Meeting of Shareholders. It was resolved at the 70th Ordinary General Meeting of Shareholders of the Company, held on June 29, 2015, that the maximum amount of share remuneration per year would be 400,000 points per fiscal year (400,000 shares of Company common stock). However, the number of shares is based on before the reverse stock split on October 1, 2017, and includes 40,000 points (40,000 shares of Company common stock) after the reverse stock split. There were seven directors (excluding outside directors) as of the close of this Ordinary General Meeting of Shareholders. 4. It was resolved at the 74th Ordinary General Meeting of Shareholders of the Company, held on June 21, 2019, that the maximum amount of annual remuneration for Audit & Supervisory Board members per year would be ¥180 million. There were five Audit & Supervisory Board members as of the close of this Ordinary General Meeting of Shareholders (including three outside Audit & Supervisory Board members). 5. The amounts listed above are rounded down to the nearest million yen. Calculation Method Performance-linked remuneration for internal directors is calculated based on the following approach. Bonuses The payment coefficient is determined by combining the following four indicators. The figures in the graph show the percentage of each indicator related to the total bonus when a target is achieved (minimum 0%, maximum 150%). Net income target: Net income attributable to owners of the parent company indicated in the annual business plan Customer satisfaction target: Net Promoter Score (NPS) in the NPS survey indicated in the annual business plan Employee satisfaction target: Points scored in the ANA’s Way Survey (internal group survey) Safety target: Indicator for a reduction in payment as a result of a security or safety event that has a significant impact on society (to be con- firmed by the Remuneration Advisory Committee) We paid out 75% of the targeted bonus in fiscal 2023. Stock-Based Compensation The payment coefficient is determined by combining the following four indicators. The figures in the graph show the percentage of each indicator related to the total stock-based compensation when a target is achieved (minimum 0%, maximum 125%). Employee Satisfaction Non-Air Business and ANA Economic Zone indicators ESG indicator Productivity 50 20 30 92.5 20.0 37.5 Corporate Governance Director and Audit & Supervisory Board Member Remuneration Payment Concept: Bonus Minimum (0%) Target Achieved (100%) Maximum (150%) Net Income Customer Satisfaction Employee Satisfaction ROE target: ROE as of the end of fiscal 2023 in the medium-term business plan Non-Air Business and ANA Economic Zone: Target values at the end of fiscal 2025 indicated in the medium-term business plan (1) Non-Air operating revenues, (2) Non-Air operating income, and (3) Size of the ANA Economic Zone ESG target: Target values for the following three evaluation indicators as of the end of fiscal 2025 (1) Selection as a component of the Dow Jones Sustainability Index, (2) CDP A- rating, and (3) CO2 emissions Productivity: Target productivity improvement index at the end of fiscal 2025 25 25 25 25 25 50 25 25 Payment Concept: Stock-Based Compensation Minimum (0%) Target Achieved (100%) Maximum (125%) ROE Non-Air Business and ANA Economic Zone ESG indicator Productivity Management Foundations 100 101 Management Foundations 102 103 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 impact management severely. In addition, we have developed groupwide frame- works to minimize the impact of risks and prevent reoccurrence in case risks materialize. Major Initiatives Share Information with EPLs We provide newly appointed EPLs with organizational risk management training. During regular meetings, EPLs share case studies and provide instructions on measures that need to be strengthened. Under this system, EPLs provide instructions and responses within their respective companies. Business Continuity Plan (BCP) We formulated the ANA Group Basic Business Continuity Policy in preparation for responding to disasters. This policy ensures the safety of customers and all ANA Group directors and employees, minimizes the impact on management and on society as a whole, and resumes normal business operations as quickly as possible. This policy is an all-hazard type policy not restricted to specific disasters, and specific measures are being discussed at each group company. The Ministry of Land, Infrastructure, Transport and Tourism established guidelines that address building airports resis- tant to natural disasters. Under these guidelines, ANA conducts inspections and reinforcements of airport facilities and equipment for flooding and power outages. Additionally, we participate in emergency drills sponsored by the Civil Aviation Bureau or the air- port management company to prepare for disasters. In this way, we ensure prompt responses in the event of an emergency. Security Export Control* The ANA Group exports the parts, apparatuses, and other articles necessary for aircraft maintenance to overseas airports and aircraft maintenance centers. We recognize that certain articles have the potential to be used as weapons. Accordingly, we practice rigorous security export control of exported articles and their related technologies. We established regulations and structures regarding security export control, and strictly maintained them through annual audits and training. We not only target exporting divisions that work in direct export but also divisions that are involved with custom clearances and other export-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. Information Security Under the ANA Group Security Management Manual, we con- struct and maintain groupwide regulations, in addition to an information security control system. Through this system, we work to enhance system functionality and implement security measures in accordance with policy. More detail regarding the key issue of privacy governance (protection of personal information) follows on the next page. The Group ESG Management Promotion Committee monitors progress of measures in accordance with the ANA Group Total Risk Management Regulations, which stipulate the basic terms of the group’s risk management system. Under the Chief ESG Promotion Officer (CEPO), who is responsible for the promotion of ESG management (promotion of risk management and information security), each group company has established a risk management system by having in place an ESG Promotion Officer (EPO) as responsible for promoting it and an ESG Promotion Leader (EPL) to actively promote it. Each EPL assumes a role to conduct risk management (risk prevention) operations according to plans, and takes swift action while working with Group General Administration in the event of a crisis. Risk Management Structure Data & Privacy Governance The personal data entrusted to us is handled with the strictest care and is protected and managed in accordance with the laws and regulations of various countries, including Japan’s Personal Information Protection Act. Also, in the utilization of personal data for the expansion of the ANA Economic Zone, we are continuously strengthening our mechanisms and systems to protect privacy in consider- ation of ethical appropriateness. Major Initiatives in Privacy Governance Ensure the security of all personal data Ensuring thorough information security: The ANA Group strives to ensure confidentiality, integrity, and availability by improving information system functions, taking security measures through multilayered defenses and implementing thorough security measures to protect customers’ per- sonal data from external cyberattacks and other threats. Utilizing personal data in a privacy-conscious manner PIA (Privacy Impact Assessment): PIA is a system to evaluate how businesses and services that utilize customers’ personal data may affect their privacy. In order to identify and mitigate privacy risks, the ANA Group conducts PIAs at the planning stages of targeted businesses and services as well as prior to the release of systems. Ensure transparency We disclose our internal structure and initiatives regarding privacy governance on various reports such as the Annual Report and our corporate website. Furthermore, we are exploring ways to provide easy-to-understand explana- tions to our customers regarding the utilization of their personal data and mechanisms that enable customers to proactively control their own information. Education and awareness-raising We conduct education to ensure that each and every employee under- stands the importance of privacy protection and the proper handling of per- sonal data. We also engage in awareness-raising activities through providing up-to-date information and FAQs on privacy and data protection by our internal website to foster a culture of constantly being conscious of our pri- vacy protection principles and policies. Strengthening governance with a global perspective Compliance with laws and regulations in each country: We regularly revise our privacy policies and internal regulations and ensure appropriate compliance with the Amended Act on the Protection of Personal Information of Japan as well as changes in regulations in various countries such as the United States, Europe, China, and Thailand. Checks and audits: We conduct inspections of the handling of personal data and regular self-assessments by departments and companies con- cerned are also performed. Additionally, internal audits are conducted by the Audit Department, taking a fair and objective standpoint. Incorporating an external third-party perspective: We incorporate the perspectives of outside experts and continuously exchange opinions with other companies that have advanced privacy protection initiatives. Organizational Structure for Privacy Protection The Group ESG Management Promotion Committee discusses core policies and measures in accordance with the ANA Group Personal Information Protection Rules. The Chief ESG Promotion Officer (CEPO) is responsible for overseeing the personal information protection operations within ANA Group. Also, each group company has its own privacy protection system in place by appointing the ESG Promotion Officer (EPO) as a Chief Officer for Personal Information Protection, and the ESG Promotion Leader (EPL) as a Personal Information Protection Officer. Privacy Governance Fundamental Policy and Principles of Conduct The Fundamental Policy and Principles of Conduct are formulated with the intention that ANA Group employees all together sincerely respect our customers to maintain safety and security in the management and utilization of personal data entrusted to us, similarly in the operation of flights. The ANA Group respects the needs and rights of each individual customer and protects their privacy by handling the important personal data entrusted to us in a lawful and appropriate manner. • To achieve our vision of “Uniting the World in Wonder” through inspiration and empowerment: While creating a “World where people can live on miles = the ANA Economic Zone”, we act with sincerity and respect for our customers in the utilization of personal data, not simply by complying with laws and regulations, but by proactively aligning our approach to privacy with social demands and quickly evolving times. • To continue to uphold the ANA Group's promise of "Security and Trust": With the same philosophy of safety for flight operations, each and every employee always bears in mind the safety and security of our customer data when handling personal informa- tion, and the ANA Group as a whole continuously improves the mechanisms and systems in place to enhance privacy protection. Fundamental Policy Ensure the security of all personal data handled by the ANA Group. Create new value by utilizing personal data in a privacy-conscious manner to bring smiles and joy to our customers. Ensure transparency in data utilization and fulfill our social responsibility. Be aware of our philosophy and policies regarding privacy protection all the time and make every effort to pursue proper privacy governance. Be committed to protecting the privacy of our customers around the world. Principles of Conduct Board of Directors Group ESG Management Promotion Committee Identification of key risks for the ANA Group Chief ESG Promotion Officer (CEPO) Comprehensive understanding of Companywide risks General Administration Risk Management Team Group Company A Group Company B Monitor progress of measures Oversee risk management Identify risks Analyze and evaluate Consider and implement countermeasures Monitor Collect information Implement initial response Determine causes Formulate measures to prevent reoccurrence ESG Promotion Officer (EPO) ESG Promotion Leader (EPL) EPO EPL EPL EPO Group Company C Proposal / Report Instruction / Supervision Instruction / Supervision Report / Consultation General General Preventive Measures Crisis Response Details related to the Privacy Governance Fundamental Policy and Principles of Conduct https://www.ana.co.jp/group/en/csr/risk_management/privacy_governance/ Details related to the Organizational Structure for Privacy Protection https://www.ana.co.jp/group/en/csr/risk_management/privacy_governance/ Cybersecurity Measures ANA is designated as a critical infrastructure provider in Japan by the National Center of Incident Readiness and Strategy for Cybersecurity (NISC). We implement defense in depth in accordance with the guidelines formulated by related ministries. We monitor our security system 24 hours a day, 365 days a year. The use of intelligence (early warn- ing information on cyberattacks) is extremely effective against cyberattacks as they become more sophisticated and cunning. The ANA Group utilizes preventive measures such as the Aviation ISAC (Information Sharing and Analysis Center) and the Transportation ISAC JAPAN, as well as dark web research. We also introduced the Zero- Trust concept to defend against attacks and ensure reliabil- ity by checking with the person operating the system, the equipment generating the communication, and system processing. In light of recent cybersecurity incidents at other compa- nies, there is a growing need to strengthen not only the ANA Group security measures but also the defense of our entire supply chain. We will strengthen cooperation with related ministries, Keidanren (Japan Business Federation), and other related agencies to spread awareness of the need to strengthen security. Our top material issue is to address the visualization of the IT assets of each company in the ANA Group supply chain. We identify issues and vulnerabilities through man- aging attack surfaces, which are points of external attack at each group company. Any issues and vulnerabilities dis- covered are prioritized and kept closely informed, commu- nicated, and consulted so that each group company can take the necessary countermeasures. The ANA Group IT Chart (a management document uniquely created by the ANA Group to monitor the IT usage status of each group company (e.g. OS and other versions of systems used, whether or not security screening is carried out, software license expiry dates, etc.)) is used to strengthen gover- nance. Furthermore, as an organization above the ASY- CSIRT (ANA Systems-Computer Security Incident Response Team, a team that responds to security incidents when they occur), which handles security incidents on ANA systems, the ANA Group CSIRT has been established to handle security incidents that occur at each ANA Group company, and the system is being strengthened. Information security advisories and refresher training materials are regularly posted on our website for employ- ees to help develop security human resources, and we raise employee awareness of security through daily opera- tions and Plus Security training. The development of human resources specializing in security is an urgent issue. In addition to continuing to hire experienced personnel, we work to develop security supervisory personnel by recruit- ing transfers from other departments and having them attend specialized security training. As for our legal correspondence, we sequentially respond to privacy laws and regulations in each country. In Japan, we work closely with the national government, Keidanren, and other related organizations to promote the various IT systems and cybersecurity measures required by the Economic Security Promotion Act. Enhancing Measures for Increasingly Severe Natural Disasters In recent years, natural disasters have occurred across a wide range of regions, including such disasters as frequent earthquakes and damage caused by record-breaking rain- fall in linear rainbands. In response, the ANA Group engages in various measures to strengthen our disaster response capabilities. In terms of theoretical education, we conduct disaster prevention e-learning for employees throughout the ANA Group, teaching preparation in times of non-emergencies and how to act in the event of a disaster. In addition, we conduct practical training for BCP man- agers across the ANA Group using disaster simulations. In the more practical aspects of preparedness, we installed large storage batteries at major sites to prepare against the loss of commercial power. We continue to implement other measures to prevent the flooding of power supplies and terminal devices. Through theory and practice, we strive to raise the level of ANA Group disaster response capabilities, creating envi- ronments for business continuity even in the event of a nat- ural disaster. Disaster simulation training Maintain Corporate Value by Enhancing Internal Systems and Further Instill Our Mission Statement The ANA Group is taking steps to minimize exposure to legal risks and prevent incidents that could diminish corporate value. 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 regu- lations. We hold regular seminars on contract practices, labor practices, and laws and regulations related to air transportation, improving our familiarity with business-essential knowledge. Seminars on competition law and air transportation laws for group executives and employees working overseas are also available, focusing on minimizing legal risks globally. We also conduct seminars tailored to topics and contents that reflect the needs of each group company and/or department to foster a more legal-related competence. In addition to conducting online seminars, we maintain a global learning environment for group executives and employees to learn about various laws and regu- lations by posting educational materials and explanatory videos on our intranet. Information Dissemination Our compliance website, available on the corporate intranet, includes codes of conduct that outline the actions to be com- monly followed by all group executives and employees. In addi- tion, we specifically outline employee do’s and don’ts, and provide educational materials on our website for in-house train- ing and other purposes. We also post manuals and guidelines on various laws and reg- ulations to the appropriate website, providing an infrastructure where group executives and employees have access to such information at any time. In addition, we established a simple way for group executives and employees to ask questions from the website on legal issues of their business. This allows us to support them in making appro- priate decisions in compliance with said laws and regulations. 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 group (via a law firm) to collect compliance- related information and resolve any issues. The reporting system is available to all group executives, employees, and temporary personnel involved in the group’s business. ANA Group retirees and executives and employees of our business partners may also use the reporting system. We protect the privacy of the whistleblower and relevant parties, and assure that no punitive measures will be taken against those that seek consultation or cooperate in confirming facts. This enables us to obtain internal risk-related information promptly and aids in self-correction. A new report form allows employees to report directly from the whistleblower website on the intranet for improved convenience, and the number of reports is on the rise. In fiscal 2023, there were 273 reports within the group, and the system has spread throughout the group as a reliable and effective whistleblowing system. Compliance Survey of Group Companies This annual survey consists of self-evaluations on compliance with relevant laws and regulations to assess issues pertaining to each group company and to the entire group. We conduct fol- low-ups with each company based on survey results as neces- sary to resolve any issues. Compliance website Compliance Implementation Structure The ANA Group has developed a compliance structure based on the ANA Group Compliance Regulations to promote compliance with laws, regulations, and other standards related to business activities. Under the Group ESG Management Promotion Committee, an advisory entity to the Board of Directors, we strive to strengthen awareness of compliance throughout the entire group. We appointed an ESG Promotion Officer (EPO) as the person responsible for promoting compliance at each group company, and an ESG Promotion Leader (EPL) to drive compliance at each workplace. Compliance ANA Alert Poster Major Initiatives Management Foundations 104 105 Risk Management Management Foundations Highlighted Comments from External Experts Environment A movement is growing worldwide to legislate sustainability information disclosure. In moving forward with disclosures in accordance with ISSB and SSBJ requirements, a company must establish and explain its own targets. In addressing climate change, considerations of sustainability across the life cycle, or the entire value chain, and disclo- sures related to the same, will be a significant issue, and the efforts of companies in this context will be monitored closely. Decarbonization efforts in a nation such as Japan will require shared environmental values across the entirety of the social infrastructure, beyond just the aviation sector. Given that SAF accounts for a mere 0.24% of the aviation industry's fuel procurement at present, there are some doubts whether the industry will achieve net zero emissions by 2050. ANA can differentiate itself from other airlines by highlighting its efforts, including alternative measures to counteract doubtful voices. In addition to SAF, I commend the Company for their efforts in direct air capture (DAC), crew operational improvements, and other areas. Early adoption of and information disclosure related to TNFD recommendations will lead to enhanced corporate value. I think the ANA Group should address both direct and indirect impacts of its air transportation operations on biodiversity. It is also important to analyze and recognize issues that are difficult for the ANA Group to resolve alone. Human Rights It is important to ensure that initiatives with rights holders reach the level of engage- ment, rather than just a superficial effort in human rights due diligence. For example, procurement activities should consider that even buying from "certified" producers may not be sufficient if the certification body itself is not functioning properly. These types of cases require direct engagement with the producer. The ANA Group conducted a human rights impact assessment in 2022 and reconfirmed key human rights topics. It would be better to clarify whether human rights risks are reviewed on an ongoing annual basis. When disclosing progress, it is helpful when companies tell a story of how they identify rights holders and address issues in accor- dance with the human rights due diligence process. Specific examples of engagement are also helpful. General Comments I look forward to seeing how the ANA Group creates a story around its analysis of qualitative and quantitative scenarios that consider the ideal behavior of a company as required by society in the year 2050. The time frame will be 10 years or so to outline how efforts to resolve human rights and environmental issues will affect corporate financial statements. If companies are to achieve their ESG strategies, they must not only work on ESG strategies independently but also demonstrate initiative by lobbying industry and government. Internal Dialogue Dialogue with Overseas Branch Employees to Promote ESG Management We shared information with local employees in Asia, North America, and Europe about our various ESG management-related initiatives in face-to-face settings to raise individual awareness. Specifically, we fostered a deeper understanding of the importance of non-financial requirements for companies, our efforts to decarbonize by 2050, respect for human rights in the supply chain, and the role each department should play in ESG management. We believe these dialogues created environ- ments in which each individual will participate with a sense of ownership. We continue to provide opportunities for internal and external employee education on the importance of ESG management. ANA Group DEI Forum and DEI Month 2023 The DEI Forum was held for the 9th time since its establishment in 2015. The forum aims to acceler- ate DEI promotion in the workplace from a management perspective and strengthen organizational capabilities by improving engagement and productivity. The theme for 2023 was “Walk the Walk.” This theme expressed our desire that every employee take a step forward with action toward achiev- ing our new management vision, Uniting the World in Wonder. On the day of the event, we held dis- cussions with guests from outside the Company and employee panelists on topics including how management can utilize diversity and balancing work and nursing care. Discussions focused on what each individual can do to walk (take one step forward) toward creating workplaces that embrace DEI. Beginning in fiscal 2023, the month before the forum has been designated as DEI Month. We conducted programs including seminars on nursing care, LGBTQ+ issues, and experiencing different cultures by serving food from various countries in the Company cafeteria so that participants can casually experience DEI. A total of approximately 3,800 ANA Group executives and employees participated in the DEI Forum and DEI Month. Dialogue with employees Scene from the ANA Group DEI Forum Dialogue with UNDP and World Benchmarking Alliance Dialogue with Prof. Yukari Takamura Major Dialogues during Fiscal 2023 The ANA Group regularly engages in dialogue with external experts on ESG issues to understand social trends in a timely manner and make flexible management decisions. In addition to compliance with global laws and norms, we enhance the effectiveness of our activities by incorporating the latest information and findings from these discussions into our strategies. In addition, we hold a variety of internal discussions to help each employee understand the importance of promoting ESG management and put it into practice in their daily work. Our relationships with internal and external stakeholders help build trusted relationships throughout the ANA Group. External Dialogue United Nations Development Programme (UNDP) Sean Christopher Lees, Bangkok Regional Hub Business and Human Rights Specialist World Benchmarking Alliance Jill van de Wall, Research Analyst November 29, 2023 UBS Antonia Sariyska, UBS CIO Sustainable Investing Analyst, Executive Director Mineko Ikehashi, Senior Client Advisor, Executive Director EIRIS Foundation Peter Webster, CEO of EIRIS Foundation Church Commissioners for England Daniel Neale, Responsible Investment-Social Themes Lead, Church of Commissioners for England Angus Sargent HSBC Sachi Suzuki, HSBC Investment Stewardship Amundi Asset Management Patrick Haustant, ESG Analyst, Amundi Asset Management in Paris December 6, 2023 Federated Hermes Haonan Wu, Manager-Engagement, Federated Hermes Limited. ERM Japan Ltd. Yasushi Hibi, Consulting Partner Shiori Saeki, Consulting Associate March 22, 2024 Yukari Takamura, Professor, Institute for Future Initiatives, The University of Tokyo December 4, 2023 December 5, 2023 February 27, 2024 October 19, 2023 Management Foundations 106 107 Co-Creation with Stakeholders Automation and Digital Transformation (DX) Challenges • Is most cargo loading and unloading handled with manual labor? • Loading and unloading is manual labor, even overseas. We use AI to automate loading plans; however, loading processes are still performed using manual labor. This bottleneck in automation is due to the fact that the cargo itself is not uniform. We will closely monitor future trends in technological development. • We will introduce automated guided vehicles (AGVs) at the New Cargo Building No. 8. We plan to use AGVs to move cargo to storage areas after unloading with forklifts. This use of AGVs will automate the process of locating and moving cargo. • It is my understanding that cargo airwaybills and accompanying documents are paper-based and use human resources exten- sively. Do you have room to systematize and improve workflow going forward? • We strive to digitize this system, but it requires cooperation with forwarders and customs, making it difficult for individual compa- nies to handle alone. We will make preparations on our end, but this is an issue we must face in the industry as a whole. • It is better to backcast customer needs for automation and DX. Competitiveness of Customer Value • What do you hope to accomplish with the SmartCargo Model? And how will you provide new value to customers? • We must enhance company competitiveness of high unit cost special cargo transportation. One example of such transportation is the transport of COVID-19 vaccines. Public trust in our company to transport pharmaceuticals has increased. • We will build efficient operations through DX. In special cargo, we will also form a professional unit with employees with various skills and experience to capture cargo demand by providing customers with quality and time-saving value. • We should view improving time and cost from the customer’s point of view. Improvements of about 10% will not exceed customer switching costs. • Many trucks line up at the entrances and exits of cargo buildings. Wouldn’t it benefit customers if increased efficiency at the Company led to reduced numbers of trucks, shortened wait times, and other benefits? • I think it would be beneficial to concentrate on high unit price spe- cial cargo. Quality can be a competitive advantage, but focusing on quality can be viewed as egotistic of the Company and makes it extremely difficult to gain customer appreciation. It would benefit Initiatives in the Cargo Division during the COVID-19 Pandemic Challenges in the Cargo Business Future Cargo Strategies Topic 1 Topic 2 Topic 3 Human Capital Challenges • The industry as a whole is facing difficulties in recruitment and securing human capital is a challenge. We support skill develop- ment and personal growth to prevent turnover, but what can we do to make the Company more attractive? • ANA should establish a system that rewards those who produced results. In addition to creating a culture that recognizes individuals who take the right action, we should also offer those individuals some type of compensation. • I feel the Company (including the sites and head office departments that handle cargo) lacks knowledge and experience in semiconduc- tor manufacturing equipment and other special cargo, compared to other companies. It is important to enhance human capital develop- ment and placement to compete with competitors going forward. • We lack DX human capital who understand the business and systems, and can define business requirements. We must consider whether to hire these resources or train them in-house going forward. the company if DX created services and reproducible models that improve productivity for customers. Nippon Cargo (NCA) as a New Group Member • What are the expectations and challenges that NCA faces in becoming a member of the group? • Our freighters operate mainly between Asia, China, and Japan, but mainstream logistics are from Asia and China to Europe and the United States. Rather than procuring wide-body aircraft internally to fly to Europe and the U.S., we decided that it would be better that NCA become a member of the group, complementing each other’s strengths and weaknesses. We expect to face various challenges in our future work together, but we will strive to over- come such obstacles by working together toward the big targets. • NCA has a high level technology for handling large amounts of cargo with forklifts, and we plan to utilize this technology in our special cargo handling. We must consider how to improve opera- tional efficiency going forward, as the ANA and NCA cargo build- ings at Narita Airport are far apart. How was the business environment? • How did the group respond to the rapid increase in cargo demand facing a shortage of laborers and other such issues? • Passenger flights declined resulting in redundant staff in the pas- senger division. Therefore, we deployed airport staff to the cargo division to handle import operations and administrative procedures. • We also changed our sales approach. The airport division collabo- rated with the sales division to load cargo at each point in trilateral transportation. This eliminated the need for re-sorting at the Narita Airport transit point and improved operational efficiency. • While employees in the passenger division were unable to work and faced temporary leave or external secondments, the employ- ees in the cargo division were too busy to take time off. • Did the department receive any words of encouragement or mes- sages from upper management? • Management sent messages throughout the entire Company saying, “The cargo division powers the ANA Group.” Our division also received a lot of encouragement from inside and outside the Company, motivating us to continue. What changed after the pandemic? • Demand in the cargo division is more volatile than the passenger division. Demand soars every few years, making it crucial for the division to stay alert and communicate strategically with customers. • Flight operations, maintenance, pilots, and other divisions became extremely cooperative during the pandemic, working with a better understanding of the cargo business. Building relationships and collaborating with other divisions is an asset to the cargo division. • Emergencies such as the COVID-19 pandemic can occur at any time, so having a portfolio of businesses that support each other (e.g., a portfolio for the passenger and cargo divisions) would be a good idea. Remember, cargo is a crucial business that keeps moving when the movement of people stops. What do you think of the current challenges? How will you work to establish the SmartCargo Model medium-term cargo strategy? Outside Director Town Meeting Initiatives Fiscal 2023 Topics Changes Stemming From Cargo Division Initiatives during the COVID-19 Pandemic and Challenges / Future Strategies Since fiscal 2018, the ANA Group has been providing opportunities for town meetings in which outside directors can engage in direct dialogue with managers across various group departments. The purpose of these meetings is to gain a deeper understanding of the group’s business and corporate culture, and to assist in the future management of the Board of Directors. We held dialogues in fiscal 2023 between the cargo division, the department responsible for our Cargo Business, and outside directors. We shared the efforts of the cargo division in supporting our business performance despite the decline in passenger demand due to the COVID-19 pandemic. We also share current challenges and future strategies. Fiscal Year Division Department Name Fiscal 2018 Maintenance The Engineering & Maintenance Center, Each Group Maintenance Company Fiscal 2019 Flight Operations Flight Operations Center Fiscal 2020 Marketing CX Management Office Fiscal 2021 Human Resources Group Human Resources Strategy Department Fiscal 2022 Cabin Inflight Services Center Fiscal 2023 Cargo Cargo Marketing & Services How did the group respond to the plummeting passenger demand, strong cargo movements in the cargo business for semiconductors and other products, the ocean transport congestion, and increased air cargo demand? Q Q Q Our Initiatives Management Foundations 108 109 Co-Creation with Stakeholders Internal Dialogue The 79th Ordinary General Meeting of Shareholders (held on June 27, 2024) No. of attendees 1,067people Voting rights exercise ratio 62.7% Financial Results Presentations, Corporate Strategy Briefing Sessions, Small Meetings (for institutional investors, analysts) 9 times Dialogues with institutional investors, and analysts 284 times (131 in Japan, 153 overseas) Environment 2 times Human rights 1 time ESG evaluation organizations 6 times Town Meetings First half No. of sessions 581 Participants 7,917 people Second half No. of sessions 522 Participants 9,991 people Major Dialogues during Fiscal 2023 ANA Aviation Classes No. of classes 10 Total participants: 632 people The ANA Aviation Class is a program for local residents to learn more about ANA Group jobs (pilots, cabin attendants, ground staff, etc.) through easy-to-understand presentations and dialogue with employees representing various job descriptions. Contract food production suppliers 35 companies We inspected, audited, and observed contract food production supplier facilities. These suppliers mainly produce in-flight meals and airport lounge meals. 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. External Recognition Dialogue with Shareholders and Investors Communication with Our Employees Dialogue with Experts Dialogue with Business Partners Dialogue with Communities Inclusion in ESG Indexes, etc. As of July 2024 • CDP Climate Change A • Dow Jones Sustainability World Index • Dow Jones Sustainability Asia Pacific Index • FTSE4Good Index • FTSE Blossom Japan Index • FTSE Blossom Japan Sector Relative Index • MSCI Japan Empowering Women Index (WIN) • MSCI Japan ESG Select Leaders Index • MSCI Japan ESG Leaders Indexes • The S&P Global Sustainability Yearbook 2024 - Top 5% S&P Global CSA Scores • EcoVadis Sustainability Rating - BRONZE Note: 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 Management Strategy • Ministry of Economy, Trade and Industry - DX Certification • Job Rainbow (ANA) D&I AWARD - BEST Workplace 2023 • work with Pride (37 group companies) - PRIDE Index 2023 Gold Award • Ministry of Health, Labour and Welfare - “Platinum Kurumin” Certified by the Ministry in Recognition of Providing Superior Childcare Support (ANA, ANA AIRPORT SERVICES Co., Ltd.) - “Kurumin” Certified by the Ministry (Overseas Courier Service Co., Ltd., ANA CHUBU AIRPORT CO., LTD., ANA Akindo Co., Ltd., ANA TELEMART CO., LTD., ANA Systems Co., Ltd., ANA FACILITIES CO., LTD., ANA X Inc., ANA NARITA AIRPORT SERVICES CO., LTD.) • Ministry of Health, Labour and Welfare Company Promoting Women’s Participation and Advancement in the Workplace - “Eruboshi” Certification (ANA, ANA Systems Co., Ltd., Overseas Courier Service Co., Ltd., ANA TELEMART CO., LTD., ANA X Inc., ANA KANSAI AIRPORT CO., LTD., ALL NIPPON AIRWAYS TRADING CO., LTD., ANA Aero Supply Systems Co., Ltd., Air Japan Co., Ltd., ANA Akindo Co., Ltd., ANA Cargo Inc., ANA NARITA AIRPORT SERVICES CO., LTD.) • Nippon Kenko Kaigi, Ministry of Economy, Trade and Industry - Certified Health and Productivity Management Recognition Program 2024 (ANA HOLDINGS INC.) - Certified Health and Productivity Management Organization Recognition Program 2024 (23 group companies, of which 10 companies are White 500, 1 company is Bright 500) Responsible Dialogue with Stakeholders Discussions with food production suppliers for private-brand production 9 companies We held discussions with private-brand food production suppliers to improve quality. ANA Catering Service Co., Ltd. Presentations (for private investors) 4 times ANA BLUE BASE (training center) ANA Blue Hangar (aircraft maintenance center) Tours for private shareholders 3 times 5 times Management Foundations 110 111 Quality • SKYTRAX World Airline Star Rating (ANA Group, 2023) - Awarded 5-Star for the 11th consecutive year • SKYTRAX World Airline Awards (ANA Group, 2023) - World’s Best Airport Services - World’s Cleanest Airline - Best Airline Staff Service in Asia • CIRIUM The On-Time Performance Awards (ANA Group, 2023) - Asia-Pacific: No. 1 Yen (Millions) U.S. dollars (Thousands) (Note 3) (FY) (Note 2) 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2023 For the Year Operating revenues (Note 4) 2,055,928 1,707,484 1,020,324 728,683 1,974,216 2,058,312 1,971,799 1,765,259 1,791,187 1,713,457 1,601,013 13,578,548 Operating expenses 1,848,017 1,587,454 1,193,451 1,193,457 1,913,410 1,893,293 1,807,283 1,619,720 1,654,724 1,621,916 1,535,027 12,205,382 Operating income (loss) 207,911 120,030 (173,127) (464,774) 60,806 165,019 164,516 145,539 136,463 91,541 65,986 1,373,165 Income (loss) before income taxes 204,838 114,342 (175,374) (545,372) 51,501 154,023 196,641 139,462 131,064 77,983 36,391 1,352,869 Net income (loss) attributable to owners of the parent 157,097 89,477 (143,628) (404,624) 27,655 110,777 143,887 98,827 78,169 39,239 18,886 1,037,560 Cash flows from operating activities 420,622 449,822 (76,413) (270,441) 130,169 296,148 316,014 237,084 263,878 206,879 200,124 2,778,033 Cash flows from investing activities (Note 5) (399,525) (78,300) 230,019 (595,759) (230,218) (308,671) (324,494) (194,651) (74,443) (210,749) (64,915) (2,638,696) Cash flows from financing activities (136,045) (142,909) 93,646 1,098,172 23,869 (46,480) (29,989) 3,349 (133,257) (30,424) (85,569) (898,520) Free cash flow (Note 5) 21,097 371,522 153,606 (866,200) (100,049) (12,523) (8,480) 42,433 189,435 (3,870) 135,209 139,336 Substantial free cash flow (Notes 5, 6) 206,148 373,104 (111,948) (373,464) (79,149) (18,028) 61,410 39,655 88,035 (22,350) 38,929 1,361,521 Depreciation and amortization 142,315 144,313 147,328 176,352 175,739 159,541 150,408 140,354 138,830 131,329 136,180 939,931 EBITDA (Note 7) 350,226 264,343 (25,799) (288,422) 236,545 324,560 314,924 285,893 275,293 222,870 202,166 2,313,096 Capital expenditures 240,469 116,892 133,364 156,710 351,361 375,864 304,707 254,425 281,416 274,702 183,739 1,588,197 At Year-End Total assets 3,569,530 3,366,724 3,218,433 3,207,883 2,560,153 2,687,122 2,562,462 2,314,410 2,228,808 2,302,437 2,173,607 23,575,259 Interest-bearing debt 1,484,036 1,607,918 1,750,108 1,655,452 842,862 788,649 798,393 729,877 703,886 819,831 834,768 9,801,439 Shareholders’ equity (Note 8) 1,044,508 862,419 797,249 1,007,233 1,061,028 1,099,413 988,661 919,157 789,896 798,280 746,070 6,898,540 Per Share Data (Yen, U.S. dollars) (Note 9) Earnings (loss) per share 335.09 190.24 (305.37) (1,082.04) 82.66 331.04 417.82 28.23 22.36 11.24 5.41 2.21 Book value per share 2,222.03 1,833.64 1,695.06 2,141.49 3,171.80 3,285.46 2,954.47 262.44 225.87 228.45 213.82 14.67 Cash dividends 50.00 — — — — 75.00 60.00 6.00 5.00 4.00 3.00 0.33 Average number of shares during the year (Thousand shares) 468,822 470,334 470,339 373,945 334,559 334,632 344,372 3,500,205 3,496,561 3,492,380 3,493,860 Management Indexes Operating income margin (%) 10.1 7.0 (17.0) (63.8) 3.1 8.0 8.3 8.2 7.6 5.3 4.1 Net income margin (%) 7.7 5.2 (14.1) (55.5) 1.4 5.4 7.3 5.6 4.4 2.3 1.2 ROA (%) (Note 10) 6.1 3.7 (5.3) (16.0) 2.4 6.4 6.8 6.5 6.1 4.2 3.2 ROE (%) (Note 11) 16.5 10.8 (15.9) (39.1) 2.6 10.6 15.1 11.6 9.8 5.1 2.5 Shareholders’ equity ratio (%) 29.3 25.6 24.8 31.4 41.4 40.9 38.6 39.7 35.4 34.7 34.3 Debt/equity ratio (Times) (Note 12) 1.4 1.9 2.2 1.6 0.8 0.7 0.8 0.8 0.9 1.0 1.1 Asset turnover (Times) (Note 13) 0.6 0.5 0.3 0.3 0.8 0.8 0.8 0.8 0.8 0.8 0.7 Payout ratio (%) 14.9 — — — — 22.7 14.4 21.3 22.4 35.6 55.5 Number of employees 41,225 40,507 42,196 46,580 45,849 43,466 41,930 39,243 36,273 34,919 33,719 Operating Data International Passenger Operations Passenger revenues 728,168 433,470 70,151 44,726 613,908 651,587 597,446 516,789 515,696 468,321 395,340 4,809,246 Available seat-km (Millions) 53,281 35,875 20,524 14,465 68,885 65,976 64,376 60,148 54,710 49,487 41,451 Revenue passenger-km (Millions) 41,192 26,408 5,550 2,840 50,219 50,776 49,132 45,602 40,635 35,639 30,613 Number of passengers (Thousands) 7,134 4,212 825 427 9,416 10,093 9,740 9,119 8,167 7,208 6,336 Load factor (%) 77.3 73.6 27.0 19.6 72.9 77.0 76.3 75.8 74.3 72.0 73.9 Unit revenues (¥) 13.7 12.1 3.4 3.1 8.9 9.9 9.3 8.6 9.4 9.5 9.5 Yield (¥) 17.7 16.4 12.6 15.7 12.2 12.8 12.2 11.3 12.7 13.1 12.9 Domestic Passenger Operations Passenger revenues 644,902 529,593 279,877 203,119 679,962 696,617 689,760 678,326 685,638 683,369 675,153 4,259,309 Available seat-km (Millions) 54,225 49,901 34,288 26,896 58,552 58,475 58,426 59,080 59,421 60,213 61,046 Revenue passenger-km (Millions) 38,060 32,201 16,382 11,567 39,502 40,704 40,271 38,990 38,470 38,582 37,861 Number of passengers (Thousands) 40,763 34,534 17,959 12,660 42,916 44,325 44,150 42,967 42,664 43,203 42,668 Load factor (%) 70.2 64.5 47.8 43.0 67.5 69.6 68.9 66.0 64.7 64.1 62.0 Unit revenues (¥) 11.9 10.6 8.2 7.6 11.6 11.9 11.8 11.5 11.5 11.3 11.1 Yield (¥) 16.9 16.4 17.1 17.6 17.2 17.1 17.1 17.4 17.8 17.7 17.8 LCC Passenger Operations (Note 14) Revenues 138,030 90,265 37,813 22,071 81,953 93,611 87,555 — — — — 911,630 Available seat-km (Millions) 13,461 12,232 7,863 4,932 11,076 12,052 11,832 — — — — Revenue passenger-km (Millions) 11,677 8,991 4,846 2,403 9,202 10,394 10,212 — — — — Number of passengers (Thousands) 9,343 7,775 4,267 2,080 7,288 8,153 7,797 — — — — Load factor (%) 86.7 73.5 61.6 48.7 83.1 86.2 86.3 — — — — Unit revenues (¥) 10.3 7.4 4.8 4.5 7.4 7.8 7.4 — — — — Yield (¥) 11.8 10.0 7.8 9.2 8.9 9.0 8.6 — — — — International Cargo Operations Cargo revenues 155,503 308,088 328,750 160,503 102,697 125,015 118,002 93,301 113,309 124,772 104,736 1,027,032 Cargo volume (Tons) 679,797 805,799 976,644 655,019 866,821 913,915 994,593 954,027 810,628 841,765 710,610 Domestic Cargo Operations Cargo revenues 22,485 24,119 24,932 20,881 25,533 27,454 30,710 30,860 31,740 32,584 32,116 148,504 Cargo volume (Tons) 253,083 253,661 251,332 218,032 373,176 393,773 436,790 451,266 466,979 475,462 477,081 Consolidated 11-Year Summary ANA HOLDINGS INC. and its consolidated subsidiaries (Note 1) Notes: 1. As of March 31, 2024, there were 55 consolidated subsidiaries and 13 equity-method subsidiaries and affiliates. 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 ¥151.41 = US$1, the approximate exchange rate as of March 31, 2024. 4. Effective from fiscal 2014, 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. Figures prior to fiscal 2023 do not include time deposits with a deposit period longer than three months in the scope of funds while figures following fiscal 2023 include time deposits with a deposit period of six months or less. (Fiscal 2022 also reflects such changes) 6. Substantial free cash flow after excluding payments into and proceeds from withdrawals of time deposits and payments for purchases and proceeds from redemptions of marketable securities (including negotiable deposits with maturities exceeding three months) 7. EBITDA = Operating income + Depreciation and amortization 8. Total shareholders’ equity = Shareholders’ equity + Accumulated other comprehensive income 9. The group conducted a 1-for-10 reverse stock split effective October 1, 2017. Calculations have been made assuming a reverse stock split at beginning of fiscal 2017. 10. ROA = (Operating income + Interest and dividend income) / Simple average of total assets 11. ROE = Net income (loss) attributable to owners of the parent / Simple average of shareholders’ equity 12. Debt/equity ratio = Interest-bearing debt / Shareholders’ equity 13. Asset turnover = Operating revenues / Simple average of total assets 14. 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. * We applied the Accounting Standard for Revenue Recognition as of the beginning of fiscal 2021. 112 113 Financial Results and Other Information Economic Conditions General Economic Overview Despite some signs of a standstill, the Japanese economy experi- enced a gradual recovery during the fiscal year, as corporate earn- ings and the employment environment continued to improve. Looking ahead, the Japanese economy should continue to recover gradually with an improving employment and income environment. Meanwhile, the global economy faces an expected downside risk reflecting international monetary tightening and concerns regarding the outlook for the Chinese economy, among other factors. The airline industry in Japan expects the recovery to continue in leisure demand for domestic routes and inbound travel and business demand on international routes. However, developments in geopo litical risk, including the situation in Ukraine and the Middle East, warrant close monitoring. Fuel Price Trends Crude oil prices fluctuated widely throughout the year due to produc- tion cuts by OPEC Plus member countries and escalating tensions in the Middle East. At the beginning of the fiscal year, prices declined temporarily due to the risk of a global economic slowdown caused by the collapse of U.S. financial institutions and other factors. Prices rose subsequently to nearly $100 per barrel in September 2023 due to concerns over production cuts by Russia and Saudi Arabia, etc. The average crude oil price was $82.45 per barrel for the fiscal year under review and $86.8 per barrel on March 31, 2024. The market price of Singapore kerosene tracked the price of crude oil. The average price for the fiscal year was $104.0 per barrel, ending at $100.7 per barrel on March 31, 2024. Foreign Exchange Market The yen weakened with respect to the U.S. dollar, falling to nearly ¥152 in November 2023 and March 2024 against a backdrop of wid- ening interest rate differentials between Japan and the U.S. These interest rate gaps were mainly due to monetary tightening in the U.S. and ongoing monetary easing in Japan. As a result of weakness throughout the year, the Japanese yen averaged ¥144.59 per U.S. dollar over the fiscal year and ¥151.35 per U.S. dollar on March 31, 2024. Air Transport Traffic Trends International Air Transportation Association (IATA) member airlines reported a 41.4% year-on-year increase in RPK for scheduled inter- national flights in 2023. RPK for scheduled domestic flights rose 30.2% for the year. At the same time, RTK in connection with sched- uled global air cargo increased 25.0%. (Source: IATA World Air Transport Statistics, 2024) In Japan, passengers on trunk routes* increased 13.8% year on year to 44.85 million. The number of passengers on local routes* increased 17.0% to 59.95 million. In total, passengers on scheduled domestic flights increased 15.6% to 104.81 million. Cargo volume increased 1.0% to 0.55 million tons. The number of passengers car- ried by Japanese airlines on international flights increased 85.7% to 17.66 million, while the volume of international cargo handled by Japanese airlines decreased 6.7% to 1.37 million tons. (Source: Ministry of Land, Infrastructure, Transport and Tourism Annual Summary of Air Transportation Statistics) * Trunk routes refer to routes connecting Sapporo (New Chitose), Tokyo (Haneda), Tokyo (Narita), Osaka (Itami), Osaka (Kansai), Fukuoka, and Okinawa (Naha) airports with one another. Local routes refer to all other routes. Performance for Fiscal 2023 Overview of the ANA Group The ANA Group (“the group”), led by holding company ANA HOLDINGS INC., consists of 136 subsidiaries (including ALL NIPPON AIRWAYS CO., LTD.) and 36 affiliates. A total of 55 companies are treated as consolidated subsidiaries, with another 13 treated as equity-method subsidiaries and affiliates. Group employees numbered 41,225 individuals, an increase of 718 compared to the previous fiscal year-end. The environment surrounding the airline industry was favorable for both international and domestic passenger operations. Strong inbound travel demand to Japan and domestic leisure demand reflected the reclassification of COVID-19 to a Category 5 infectious disease. In terms of business performance, operating revenues rose significantly year on year, supported by performance gains in the Air Transportation Business amid the economic conditions described above. In addition to certain other costs, variable costs increased, mainly due to the growing scale of operations. However, we posted record profits due to ongoing strict cost management and other factors. On the balance sheet, we swung to a positive balance in retained earnings, mainly due to the increase in operating revenues. Cash and deposits together with marketable securities amounted to ¥1,257.8 billion in liquidity on hand. Expenses and Operating Income (Loss) In fiscal 2023, we steadily captured inbound travel demand and domestic leisure demand, resulting in consolidated operating reve- nues of ¥2,055.9 billion, an increase of ¥348.4 billion (20.4%) year on year. Operating income amounted to ¥207.9 billion compared with operating income of ¥120.0 billion in the previous fiscal year. Despite an increase in flight operation-linked expenses stemming from expanded flight operations, we continued with strict cost manage- ment measures to achieve this result. Review by Segment The group operates four reportable segments: Air Transportation, Airline Related, Travel Services, and Trade and Retail. Segment Information (¥ Millions) Operating Revenues Operating Income (Loss) EBITDA (Fiscal Year) 2023 2022 Change 2023 2022 Change 2023 2022 Change Air Transportation ¥1,869,552 ¥1,539,443 ¥330,109 ¥207,975 ¥124,158 ¥83,817 ¥344,583 ¥262,611 ¥81,972 Airline Related 298,820 247,129 51,691 6,769 2,332 4,437 10,820 6,685 4,135 Travel Services 78,541 73,815 4,726 1,371 (277) 1,648 1,880 (89) 1,969 Trade and Retail 117,919 103,252 14,667 4,574 3,511 1,063 5,556 4,442 1,114 Subtotal 2,364,832 1,963,639 401,193 220,689 129,724 90,965 362,839 273,649 89,190 Other 41,244 38,066 3,178 546 599 (53) 711 987 (276) Adjustments (350,148) (294,221) (55,927) (13,324) (10,293) (3,031) (13,324) (10,293) (3,031) Total (Consolidated) ¥2,055,928 ¥1,707,484 ¥348,444 ¥207,911 ¥120,030 ¥87,881 ¥350,226 ¥264,343 ¥85,883 Notes: 1. “Other” represents all operating segments that are not included in reportable segments, including facility management, business support, and other operations 2. Adjustments to segment operating income (loss) represent the elimination of intersegment transactions, group management expenses of ANA HOLDINGS INC., and other certain items. 3. Segment operating income (loss) is reconciled with operating income (loss) in the consolidated financial statements. 4. EBITDA = Operating income (loss) + Depreciation and amortization Global Air Transportation Passenger Volume by Region RPK (Billions) (Left) Total (Right) Asia-Pacific North America Europe Middle East Latin America Africa 2,214 1,978 446 173 2018 2017 2019 2020 2021 2022 2023 8,167 0 3,000 6,000 9,000 0 1,000 2,000 3,000 2,583 771 Source: International Air Transport Association (IATA) Monthly Yen–Dollar Exchange Rate (Yen/U.S. dollars) 100 120 110 130 140 150 3 2 24/1 12 11 10 9 8 7 6 5 4 3 2 23/1 12 11 10 9 8 7 6 5 22/4 Source: Bloomberg Monthly Prices for Dubai Crude Oil and Singapore Kerosene (U.S. dollars per barrel) Dubai Crude Oil Singapore Kerosene 160 140 120 80 60 100 3 2 24/1 12 11 10 9 8 7 6 5 4 3 2 23/1 12 11 10 9 8 7 6 5 22/4 Source: Bloomberg (Year/ Month) Management’s Discussion and Analysis (Year/ Month) (CY) 114 115 Financial Results and Other Information Changes in Operating Income (Loss) (Fiscal 2023 vs. Fiscal 2022) FY2023 Operating Income Other Expenses Operation- Linked Fuel & Fuel Tax Sales-Linked ANA Other Revenues ANA Cargo & Mail ANA Domestic Passenger ANA International Passenger FY2022 Operating Income Landing and navigation fees, code- share costs, travel expenses for crew Sales commissions and promotion expenses, in-flight services, ground services Revenues from contracted maintenance and handling, Mileage and Card, etc. +207.9 +143.5 +33.2 +43.6 +25.8 +26.6 +49.0 Peach, AirJapan (155.6) +294.6 +124.1 Depreciation and amortization, maintenance, personnel, contracts, aircraft leasing fees excluding code-share, others +115.3 Operating revenues +330.1 Operating expenses +246.2 Operating Income +83.8 (¥ Billions) 2023 2022 Change YoY (%) Operating revenues 1,869.5 1,539.4 +330.1 +21.4 Operating expenses 1,661.5 1,415.2 +246.2 +17.4 Operating income 207.9 124.1 +83.8 +67.5 (¥ Billions) Management’s Discussion and Analysis Air Transportation Business Air Transportation Business operating revenues amounted to ¥1,869.5 billion, a year-on-year increase of 21.4%. This result was mainly due to strong international and domestic passenger demand, supported in part by the reclassification of COVID-19 to Category 5 under the Act on the Prevention of Infectious Diseases. Operating income amounted to ¥207.9 billion compared to operating income of ¥124.1 billion in the previous fiscal year. This result was mainly due to efforts to control expenses through cost management and other measures, despite an increase in flight operation-linked expenses associated with the expanding scale of our business. The ANA Group was recognized by SKYTRAX of the U.K. as a 5-Star airline for the 11th consecutive year, the highest rating for customer satisfaction. We were also named the best airline in two categories, including overall airport services, for a second consecu- tive year in the 2024 World Airline Awards. In February 2024, we commenced operations under the new AirJapan brand, offering Narita–Bangkok and Narita–Incheon routes. The ANA Group will continue maximizing the strengths of our three brands to improve customer convenience and increase Air Transportation Business profits. Results by business were as follows. ANA International Passenger Business Delivered Expanding Business Operations and Maximized Revenues as a Pillar of Medium-Term Profit Growth, Supported by Favorable Demand Trends Fiscal 2023 in Review The ANA International Passenger Business saw strong inbound travel demand to Japan throughout the fiscal year, while leisure and busi- ness demand from Japan continued to recover. The supply–demand balance remained tight in all regions, particularly connection demand between North America and China. We took advantage of this envi- ronment to capture recovering demand by expanding operations throughout the year. In April 2023, we resumed the Haneda–Beijing and Haneda–Shanghai (Pudong and Hongqiao) routes and the Narita–Perth route in October, followed by other routes. Beginning in December, we operated twice-daily round-trip flights on the Narita– Honolulu route, featuring the Airbus A380 FLYING HONU. Sales and service efforts reflected improved convenience for domestic and international connections after the July 2023 reopening of the international route facilities at Haneda Airport Terminal 2, which had been closed for the previous three years. In addition to reopen- ing ANA lounges at Kansai Airport and the Haneda Airport Terminal 2 international facilities, we enhanced customer comfort through a redesigned collaboration menu for international in-flight meals, intro- duced in March 2024. As a result, available seat-kilometers (ASK) and revenue passenger-kilometers (RPK) increased 48.5% and 56.0%, respectively, while load factor increased 3.7 points to 77.3%. Passenger numbers increased 69.4% to 7.13 million, while unit price decreased 0.8% to ¥102,058. Operating revenues increased 68.0% to ¥728.1 billion. Both passenger volume and revenues were signifi- cantly higher year on year. International Passenger Business reve- nues exceeded Domestic Passenger Business revenues for the first time ever, becoming the ANA Group’s largest source of revenue. Fiscal 2024 Business Policies We expect fiscal 2024 seat supply on routes to and from Japan to increase on all routes. We will continue to strengthen efforts to cap- ture strong demand for inbound travel to Japan and steadily growing business demand originating from Japan, improving revenues and profitability. In July 2024, we added flights to the Haneda–Munich and Haneda–Paris routes while resuming the Haneda–Vienna route in August. We also plan to open Haneda–Milan, Haneda–Stockholm, and Haneda–Istanbul routes in the second half of fiscal 2024 as we expand capacity in the strong European routes and extend our inter- national route network further. *1 Figures for ASK, RPK, and yield are indexed using the figures for fiscal 2019 as 100. *2 Figures prior to fiscal 2020 are adjusted based on the Accounting Standard for Revenue Recognition (including award ticket passengers). (¥ Billions) (Left) Passenger Revenues (Right) ASK RPK Yield 2023 2022 2021 2020 2019 0 50 100 150 0 250 500 750 (Fiscal Year) 2023 2022 YoY (%) ASK (Millions) 53,281 35,875 +48.5 RPK (Millions) 41,192 26,408 +56.0 Number of passengers (Thousands) 7,134 4,212 +69.4 Load factor (%) 77.3 73.6 +3.7pt * Passenger revenues (¥ Billions) 728.1 433.4 +68.0 Unit revenues (¥) 13.7 12.1 +13.1 Yield (¥) 17.7 16.4 +7.7 Unit price (¥) 102,058 102,899 (0.8) * Load factors are year-on-year differences. Narita–Perth flights resumed The third Airbus A380 FLYING HONU ANA International Passenger Business Results (FY) 116 117 Financial Results and Other Information Management’s Discussion and Analysis ANA Domestic Passenger Business Pursuing Profitability through Aircraft and Network Supply– Demand Matching Fiscal 2023 in Review A slower-than-expected recovery in business travel demand and reduced flights in connection with inspections and maintenance on Pratt & Whitney engines were a drag on performance. However, lei- sure travel demand continued to be strong for a second consecutive year, supported in part by the reclassification of COVID-19 to a Category 5 infectious disease. We captured robust leisure travel demand in a steady manner by using wide-body aircraft on week- ends and holidays. We also leveraged ANA SUPER VALUE SALES and other means to capture demand. Passenger numbers and reve- nues increased year on year as a result of improved unit price levels. This unit price improvement reflected efforts including setting fares in line with demand trends for each route and flight, even during the course of promotional campaigns. In terms of sales and services, we endeavored to improve conve- nience and comfort by adding more seats and new soundproof pri- vate booths at the Haneda Airport ANA SUITE LOUNGE (domestic lounge) in July 2023 in conjunction with the lounge renovation. We also began regular operations of aircraft featuring the ANA Future Promise Prop livery in October 2023. Environmentally friendly initia- tives we performed included the use of in-flight service items made from recycled materials and flight operations designed to reduce CO2 emissions. As a result, ASK and RPK increased 8.7% and 18.2%, respec- tively, while load factor increased 5.7 points to 70.2%. Passenger numbers increased 18.0% to 40.76 million, while unit price increased 3.2% to ¥15,820. Operating revenues increased 21.8% to ¥644.9 billion. Fiscal 2024 Business Policies In addition to continued strong leisure demand, we anticipate further increases in business travel and inbound travel demand. Meanwhile, we plan to improve profitability through a number of measures. We will continue efforts to improve customer convenience and business efficiencies through the use of ANA Smart Travel and other digital technologies. We also expect to introduce the new wide-body Boeing 787-10 aircraft on the Haneda–New Chitose and other routes to meet strong demand. Further sophistication in supply–demand matching for each route by leveraging a diverse fleet of aircraft and stronger coordination between ANA and Peach will also contribute to improved profitability. ANA Cargo and Mail Business Adjusting Supply Flexibly Based on Demand Trends and Continuing Efforts to Secure Profitability Fiscal 2023 in Review The International Cargo Business began to see normalization in air cargo supply–demand balance, which had been tight due to the COVID-19 pandemic. Demand continued to decline for major com- modities such as semiconductors and electronic components, auto- mobile-related parts, etc., while air cargo space increased with the recovery in passenger flights. In response to this environment, the business secured profitability and captured demand by adjusting freighter capacity according to market conditions. In the second half of the fiscal year, we began working to maximize earnings by steadily capturing robust demand for trilateral cargo from China to North America. In September 2023, we launched a service to issue CO2 reduction certificates to cargo agents and shippers to encourage efforts toward achieving environmental targets. This initiative is part of the SAF Flight Initiative, a program supporting decarbonization among companies that use air transportation. As a result, ANA International Cargo volume amounted to 679 thousand tons (down 15.6% year on year), while operating revenues amounted to ¥155.5 billion (down 49.5%). Available ton-kilometers (ATK) decreased 4.4% year on year and revenue ton-kilometers (RTK) decreased 16.5%. ANA Domestic Cargo experienced a sluggish recovery in air trans- portation demand throughout the year. ATK was higher 19.4% year on year, while cargo volume was down 0.2% at 253 thousand tons. Operating revenues amounted to ¥22.4 billion, down 6.8% year on year. As a result, the ANA Cargo and Mail Business recorded fiscal 2023 operating revenues of ¥185.7 billion, a year-on-year decrease of 45.6%. Fiscal 2024 Business Policies In ANA International Cargo, we expect a gradual recovery in demand for major commodities, particularly for automobile parts and semi- conductors. We intend to maximize revenues by continuing to adjust capacity flexibly and opportunistically in response to demand. In addition, we intend to capture special cargo through the use of wide-body freighters and secure high-unit-price commercial goods through more competitive products. In Domestic Cargo, we intend to address the 2024 Problem facing the logistics industry through new daytime-only fares beginning in April 2024, making effective use of available cargo space on domestic passenger flights and expanding the use of air transportation. Further, we changed the effective date of the share acquisition of Nippon Cargo Airlines to March 31, 2025. Domestic-spec Boeing 787-10 aircraft Boeing 777F aircraft Renovated Haneda Airport ANA SUITE LOUNGE (domestic lounge) SAF Flight Initiative Cargo Program launching a new service ANA Cargo and Mail Business Results (Fiscal Year) 2023 2022 YoY (%) Cargo and mail services revenues (¥ Billions) 185.7 341.3 (45.6) International cargo ATK (Millions) 6,316 6,605 (4.4) RTK (Millions) 3,464 4,147 (16.5) Cargo volume (Thousand tons) 679 805 (15.6) Cargo revenues (¥ Billions) 155.5 308.0 (49.5) Unit price (¥/kg) 229 382 (40.2) Mail revenues (¥ Billions) 5.0 6.2 (19.5) Domestic cargo ATK (Millions) 1,687 1,413 +19.4 RTK (Millions) 280 281 (0.4) Cargo volume (Thousand tons) 253 253 (0.2) Cargo revenues (¥ Billions) 22.4 24.1 (6.8) Unit price (¥/kg) 89 95 (6.6) Mail revenues (¥ Billions) 2.7 2.8 (5.9) International Cargo Business Results ※ 有効貨物トンキロ、有償貨物トンキロ、重量当たり単価は2019年度を100とした指数 * Figures for ASK, RTK, and unit price are indexed using the figures for fiscal 2019 as 100. (¥ Billions) (Left) International cargo revenues (Right) ATK RTK Unit price 2023 2022 2021 2020 2019 0 100 200 300 400 0 100 200 300 400 ANA Domestic Passenger Business Results *1 Figures for ASK, RPK, and unit price are indexed using the figures for fiscal 2019 as 100. *2 Figures prior to fiscal 2020 are adjusted based on the Accounting Standard for Revenue Recognition (including award ticket passengers). 2013 2014 2015 2016 2017 1,600 1,200 800 400 0 200 50 150 100 0 (¥ Billions) (Left) Passenger revenues (Right) ASK RPK Unit price 2023 2022 2021 2020 2019 0 300 600 900 0 50 100 150 (Fiscal Year) 2023 2022 YoY (%) ASK (Millions) 54,225 49,901 +8.7 RPK (Millions) 38,060 32,201 +18.2 Number of passengers (Thousands) 40,763 34,534 +18.0 Load factor (%) 70.2 64.5 +5.7pt* Passenger revenues (¥ Billions) 644.9 529.5 +21.8 Unit revenues (¥) 11.9 10.6 +12.1 Yield (¥) 16.9 16.4 +3.0 Unit price (¥) 15,820 15,335 +3.2 * Load factors are year-on-year differences (FY) (FY) 118 119 Financial Results and Other Information Management’s Discussion and Analysis Peach / AirJapan Optimizing Multi-brand to Increase Market Share and Revenues Peach: Fiscal 2023 in Review Peach resumed Kansai–Shanghai (Pudong) and Haneda–Shanghai (Pudong) routes in May 2023, and the Kansai–Kaohsiung route in August 2023, bringing back all international routes to and from Haneda Airport and Kansai Airport formerly suspended under the COVID-19 pandemic. Peach added the Kansai–Hong Kong route and the Kansai–Taipei route in September. Meanwhile, the Okinawa– Taipei route celebrated its 10th anniversary. By increasing interna- tional routes gradually over time, the brand tapped into robust demand for inbound travel to Japan. On domestic routes, the brand captured strong leisure demand, resulting in a full-year operating profit for the first time in five fiscal years. In terms of sales and services, Peach endeavored to stimulate lei- sure demand further and attract new customers through Secret Sale promotions (routes eligible for discounts change every month), the Peach Point Present campaign, conducted jointly with ANA, and other measures. As a result, ASK and RPK increased 10.0% and 29.9%, respec- tively, while load factor increased 13.2 points to 86.7%. Passenger numbers increased 20.2% to 9.34 million, while unit price increased 27.2% to ¥14,772. Operating revenues increased 52.9% to ¥138.0 billion. Peach: Fiscal 2024 Business Policies Peach will continue to cultivate domestic leisure travel and other demand and improve profitability by increasing the number of flights on the Kansai–New Chitose and Narita–Naha routes, among other efforts. The brand intends to expand the ASK composition of interna- tional flights by opening new routes and increasing the number of flights, etc., while securing strong demand for inbound travel to Japan, contributing to ANA Group profits. Others Air Transportation Business other operating revenues amounted to ¥172.6 billion, up 19.3% year on year. Operating revenues include incidental mileage members revenues, in-flight sales, contracted maintenance revenues, and revenues from the AirJapan brand, which began operations in February 2024. Operating Expenses Air Transportation Business operating expenses increased ¥246.2 billion year on year to ¥1,661.5 billion. Specific expense amounts and explanations of year-on-year changes are described below. Breakdown of Operating Revenues and Expenses (¥ Millions) (Fiscal Year) 2023 2022 Change Segment operating revenues ¥1,869,552 ¥1,539,443 ¥ 330,109 International Passenger 728,168 433,470 294,698 Cargo 155,503 308,088 (152,585) Mail 5,048 6,268 (1,220) Domestic Passenger 644,902 529,593 115,309 Cargo 22,485 24,119 (1,634) Mail 2,728 2,898 (170) LCC revenues 138,030 90,265 47,765 Other revenues 172,688 144,742 27,946 Segment operating expenses 1,661,577 1,415,285 246,292 Fuel and fuel tax 391,382 347,729 43,653 Landing and navigation fees 86,593 60,540 26,053 Aircraft leasing fees 147,902 133,388 14,514 Depreciation and amortization 136,608 138,453 (1,845) Aircraft maintenance 186,065 138,049 48,016 Personnel 216,308 193,416 22,892 Sales commissions and promotion 55,732 47,630 8,102 Contracts 257,142 207,023 50,119 Others 183,845 149,057 34,788 Segment operating income ¥ 207,975 ¥ 124,158 ¥ 83,817Fuel and fuel tax expenses amounted to ¥391.3 billion, a ¥43.6 billion (12.6%) increase year on year. This expense accounted for 23.6% of Air Transportation Business operating expenses, compared with 24.6% in the previous fiscal year. This ¥43.6 billion increase was mainly due to an increase in ANA consumption volume factors of ¥51.0 billion, approximately ¥5.0 bil- lion for LCC, and ANA unit price factors (including hedging effective- ness) of approximately ¥12.0 billion. (Fiscal Year) 2023 2022 YoY (%) ASK (Millions) 13,461 12,232 +10.0 RPK (Millions) 11,677 8,991 +29.9 Number of passengers (Thousands) 9,343 7,775 +20.2 Load factor (%) 86.7 73.5 +13.2pt* Passenger revenues (¥ Billions) 138.0 90.2 +52.9 Unit revenues (¥) 10.3 7.4 +39.0 Yield (¥) 11.8 10.0 +17.7 Unit price (¥) 14,772 11,610 +27.2 * Load factor figures are year-on-year differences. AirJapan AirJapan began as a new brand on February 9, 2024, with the launch of the Narita–Bangkok and Narita–Incheon routes. In April 2024, the brand introduced a second aircraft to expand business through a new Narita–Singapore route and by increasing the number of flights on the Narita–Bangkok and Narita–Incheon routes. As a hybrid airline that offers both comfort and reasonable fares, AirJapan continues to grow revenues and expand operations to capture demand for inbound travel to Japan and travel to other destinations. Taipei–Okinawa flights celebrate 10th anniversary Newly launched routes from Narita to Bangkok Domestic and international passenger flights increased 1.6% and 16.4%, respectively (excluding Peach Aviation flights). Freighter flights decreased 43.0%. Passenger route landing and navigation fees amounted to ¥86.5 billion, up ¥26.0 billion (43.0%) year on year due to measures to reduce landing fees and other costs, despite the increased number of flights. Aircraft leasing fees amounted to ¥147.9 billion, up ¥14.5 billion (10.9%) year on year, mainly due to an increase in engine leases designed to minimize the impact of engine inspection and maintenance. Depreciation and amortization expenses decreased ¥1.8 billion (1.3%) to ¥136.6 billion. This result was mainly due to fully amortized aircraft and intangible assets. Aircraft maintenance expenses increased ¥48.0 billion (34.8%) to ¥186.0 billion. This increase was due to an increase in maintenance frequency stemming from the increase in aircraft flights, as well as the impact of engine inspection and maintenance. Personnel expenses increased ¥22.8 billion (11.8%) year on year to ¥216.3 billion, mainly due to monthly wage base increases, provision for bonuses, and crew travel expenses in connection with the recov- ery in ASK. Sales commissions and promotion expenses increased ¥8.1 billion (17.0%) year on year to ¥55.7 billion, stemming from an increase in sales commissions in connection with higher passenger revenues, particularly on international routes. Outsourcing expenses increased ¥50.1 billion (24.2%) to ¥257.1 bil- lion due to an increase in the number of passenger flights and an increase in contract expenses resulting from contract renewals. Other expenses increased ¥34.7 billion year on year (23.3%) to ¥183.8 billion. The most significant factor behind this increase was an increase in in-flight service expenses due to higher passenger numbers, mainly on international routes. Peach Aviation Results *1 Figures for ASK, RPK, and unit price are indexed using the figures for fiscal 2019 as 100. *2 The graph above includes ancillary revenues. *3 Fiscal 2019 includes Vanilla Air results. 2013 2014 2015 2016 2017 1,600 1,200 800 400 0 200 50 150 100 0 (¥ Billions) (Left) Passenger revenues (Right) ASK RPK Unit price 0 50 100 150 2023 2022 2021 2020 2019 0 50 100 150 (FY) 120 121 Financial Results and Other Information Management’s Discussion and Analysis Airline Related Business Airline Related Business operating revenues rose ¥51.6 billion (20.9%) year on year to ¥298.8 billion. Operating income amounted to ¥6.7 billion, compared with ¥2.3 billion in the previous fiscal year. The increase in operating revenues was mainly due to an increase in ground handling services in connection with boarding and baggage loading from foreign airlines, as well as an increase in in-flight meal production associated with the recovery in passenger demand. Performance in the Airline Related Segment (¥ Millions) (Fiscal Year) 2023 2022 Change Segment operating revenues ¥298,820 ¥247,129 ¥51,691 Segment operating expenses 292,051 244,797 47,254 Segment operating income ¥ 6,769 ¥ 2,332 ¥ 4,437 Travel Services Domestic travel revenues were lower year on year, mainly due to a decrease in dynamic travel package sales compared to the previ- ous fiscal year, when the Nationwide Travel Support program was in place. Overseas travel revenues rose year on year, mainly due to active efforts to capture demand from individual travelers to our mainstay Hawaii and Asian destinations focused on South Korea and Taiwan. As a result, Travel Services recorded operating revenues of ¥78.5 billion, up ¥4.7 billion (6.4%) year on year. Operating income amounted to ¥1.3 billion (operating loss of ¥0.2 billion in the previous fiscal year). In November 2023, the Group launched ANA Moment Ads, a digi- tal advertising distribution service that provides information tailored to customer behavior based on airline reservation data. In addition, we upgraded the ANA Pay mobile payment service to allow recharging beginning with just one mile in May 2023. We upgraded the app again in November 2023 to support code payments. We will continue to offer higher levels of convenience for our customers, seeking to create a world in which people live in a mileage-based ecosystem. Performance in the Travel Services Segment (¥ Millions) (Fiscal Year) 2023 2022 Change Segment operating revenues ¥78,541 ¥73,815 ¥ 4,726 Domestic package products 44,888 45,954 (1,066) International package products 3,947 1,512 2,435 Other revenues 29,706 26,349 3,357 Segment operating expenses 77,170 74,092 3,078 Segment operating income (loss) ¥ 1,371 ¥ (277) ¥ 1,648 Trade and Retail In conjunction with higher passenger demand, operating income increased year on year with strong sales at ANA FESTA airport mer- chandise stores, ANA DUTY FREE SHOP locations, and the FUJISEY souvenir wholesale outlets. The food business saw higher sales volume for bananas, a core product. As a result, Trade and Retail business operating revenues rose ¥14.6 billion (14.2%) year on year to ¥117.9 billion. Operating income increased ¥1.0 billion (30.3%) to ¥4.5 billion. Performance in the Trade and Retail Segment (¥ Millions) (Fiscal Year) 2023 2022 Change Segment operating revenues ¥117,919 ¥103,252 ¥14,667 Segment operating expenses 113,345 99,741 13,604 Segment operating income ¥ 4,574 ¥ 3,511 ¥ 1,063 Others Although operating revenues increased year on year due to an increase in transaction volume in the real estate business and the airport facilities maintenance and management business, operating income decreased due to an increase in personnel expenses. As a result, Others operating revenues rose ¥3.1 billion (8.3%) year on year to ¥41.2 billion. Operating income was essentially level at ¥0.5 billion (8.8% decrease). Performance in the Others Segment (¥ Millions) (Fiscal Year) 2023 2022 Change Segment operating revenues ¥41,244 ¥38,066 ¥3,178 Segment operating expenses 40,698 37,467 3,231 Segment operating income ¥ 546 ¥ 599 ¥ (53) Non-Operating Income / Expenses, Special Income / Expenses Non-operating income and special income amounted to a loss of ¥3.0 billion. Impairment losses on marketable securities contributed somewhat to this result. Non-Operating Income / Expenses, Special Income / Expenses (¥ Millions) (Fiscal Year) 2023 2022 Change Non-Operating Income ¥ 30,774 ¥ 28,589 ¥ 2,185 Interest income 1,294 838 456 Dividend income 1,311 1,092 219 Equity in earnings of unconsoli- dated subsidiaries and affiliates 1,060 801 259 Foreign exchange gain, net 4,459 2,306 2,153 Gain on sales of assets 2,265 7,854 (5,589) Gain on donation of non-current assets 367 1,060 (693) Subsidies for employment adjustment — 5,043 (5,043) Compensation payments 14,404 — 14,404 Other, net 5,614 9,595 (3,981) Non-Operating Expenses (31,029) (36,809) 5,780 Interest expenses (23,324) (24,845) 1,521 Loss on sales of assets 50 (85) 135 Loss on disposal of assets (4,866) (3,233) (1,633) Grounded aircraft expenses — (4,638) 4,638 Other, net (2,789) (4,008) 1,219 Special Income 0 3,574 (3,574) Gain on sales of property and equipment — 1,587 (1,587) Gain on reversal of foreign currency translation adjustments — 1,987 (1,987) Special Expenses (2,818) (1,042) (1,776) Loss on valuation of investment securities (2,818) (1,042) (1,776) Total ¥ (3,073) ¥ (5,688) ¥ 2,615 Net Income Attributable to Owners of the Parent As a result of the preceding, income before income taxes amounted to ¥204.8 billion, compared with ¥114.3 billion in the previous fiscal year. After income taxes, municipal taxes, business taxes, and other adjustments, net income attributable to owners of the parent amounted to ¥157.0 billion, compared with ¥89.4 billion in the previ- ous fiscal year. Income per share was ¥335.09, compared with ¥190.24 in the previous fiscal year. Comprehensive income amounted to ¥183.8 billion, compared with ¥63.2 billion in the previous fiscal year, mainly due to the record- ing of net income attributable to owners of the parent. 122 123 Financial Results and Other Information Management’s Discussion and Analysis Cash Flows Basic 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. We secure funds for working capital and capital expenditures (mainly aircraft) through self-financing, bank loans, or through the issuance of bonds. Our basic policy is to secure stable sources of liquidity and funds necessary for business operations. As of March 31, 2024, we have secured commitment line agreements totaling ¥100.0 billion with several financial institutions. 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 2023 Free cash flow amounted to ¥21.0 billion (sum of cash flows from operating activities and investing activities). Net cash used in financ- ing activities totaled ¥136.0 billion. As a result, cash and cash equiv- alents decreased ¥110.9 billion from the beginning of the fiscal year, amounting to ¥1,002.5 billion at the end of the fiscal year. Cash Flows from Operating Activities After adjusting the ¥204.8 billion in income before income taxes for depreciation and amortization, notes and accounts payable, notes and accounts receivable, and other non-cash items, net cash pro- vided by operating activities amounted to ¥420.6 billion, compared with ¥449.8 billion in the previous fiscal year. Cash Flows from Investing Activities Net cash used in financing activities was ¥399.5 billion, compared with ¥78.3 billion in the previous fiscal year. This result was mainly due to capital investments in aircraft, etc. Substantial cash flows from investing activities after excluding net outlays of ¥185.0 billion from payments into and proceeds from withdrawals of time deposits and payments for purchases and proceeds from redemptions of market- able securities (including negotiable deposits with maturities exceed- ing three months) amounted to ¥214.4 billion. Free Cash Flow Net cash provided by operating activities totaled ¥420.6 billion. Since net cash used in investing activities was ¥399.5 billion, free cash flow for fiscal 2023 amounted to ¥21.0 billion, a decrease of ¥350.4 billion compared with the previous fiscal year. Substantial free cash flow after excluding payments into and proceeds from withdrawals of time deposits and payments for purchases and proceeds from redemptions of marketable securities (including negotiable deposits with maturities exceeding three months) amounted to ¥206.1 billion, compared with ¥373.1 billion in the previous fiscal year. Cash Flows from Financing Activities Net cash used in financing activities was ¥136.0 billion, compared with ¥142.9 billion in the previous fiscal year. This result was mainly due to redemptions of convertible bonds with stock acquisition rights and repayments of loans. Capital Expenditures and Aircraft Procurement Capital Expenditures In fiscal 2020, the ANA Group began temporary restraints on the scale of investment, particularly in aircraft, and has reviewed the timing of investment as appropriate. Capital expenditures for fiscal 2023 amounted to ¥240.4 billion, an increase of 105.7% year on year. By segment, Air Transportation Business capital expenditures increased 103.5% year on year to ¥234.3 billion. Airline Related expenditures increased 34.5% to ¥2.8 billion, while Travel Services expenditures increased 75.7% to ¥2.5 billion. Trade and Retail capital expenditures increased 66.5% to ¥1.9 billion, and Others increased 5.0% to ¥0.1 billion. 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 air- craft, (2) Optimizing supply to demand by increasing the ratios of narrow- and medium-body aircraft; and (3) Allocating resources to growth areas, as represented by the international business. Fundamentally, the group purchases and owns 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 adjust- ment. 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 procurement method. Aircraft Procured in Fiscal 2023 Based on our fleet strategy, aircraft totaled 278 as of the end of fiscal 2023, an increase of two compared to the end of the previous fiscal year. The table below shows changes in the number of aircraft by type for the fiscal year under review. The ANA Group added ten aircraft, consisting of two Boeing 787-10s, three Boeing 787-9s, and five Airbus A320-200neos. Meanwhile, we retired eight Airbus A320-200 aircraft. Aircraft Procurement Plan for Fiscal 2024 We plan to add a total of 8 aircraft during fiscal 2024. These aircraft consist of five Boeing 787-10s, one Boeing 787-9, and two Airbus A320-200neos. Meanwhile, the group retired six aircraft, consisting of three Boeing 767-300Fs and three Airbus A320-200s. Capital Expenditures* / Depreciation and Amortization * Capital expenditures contains only fixed assets. (¥ Billions) 400 200 300 100 0 240.4 142.3 116.8 148.2 351.3 175.7 176.3 156.7 133.3157.5 2023 2022 2021 2020 2019 Changes in the Number of Aircraft in Fiscal 2023 ( ) changes Aircraft Number of Aircraft Owned Leased Airbus A380-800 3 3 0 Boeing 777-300 18 9 9 Boeing 777-200 10 10 (+1) 0 (–1) Boeing 777F 2 2 0 Boeing 787-10 5 (+2) 4 (+2) 1 Boeing 787-9 43 (+3) 37 (+3) 6 Boeing 787-8 36 31 5 Boeing 767-300 15 15 0 Boeing 767-300F 9 6 3 Airbus A321-200neoLR 3 0 3 Airbus A321-200neo 22 0 22 Airbus A321-200 4 0 4 Airbus A320-200neo 26 (+5) 11 15 (+5) Airbus A320-200 19 (–8) 0 19 (–8) Boeing 737-800 39 26 (+2) 13 (–2) De Havilland Canada DASH 8-400 aircraft 24 24 0 Total 278 (+2) 178 (+8) 100 (–6) (FY) Capital expenditures Depreciation and amortization 124 125 Financial Results and Other Information Management’s Discussion and Analysis Financial Position Assets Total assets as of March 31, 2024 amounted to ¥3,569.5 billion, an increase of ¥202.8 billion compared to March 31, 2023. Total current assets amounted to ¥1,701.1 billion, up ¥150.3 billion from the end of the previous fiscal year. Cash and deposits amounted to ¥600.8 billion, a decrease of ¥2.7 billion compared to the end of the previous fiscal year. Marketable securities increased ¥76.8 billion to ¥656.9 billion. As a result, liquidity on hand amounted to ¥1,257.8 billion, up ¥74.0 billion year on year. Total non-current assets at the end of the fiscal year stood at ¥1,867.8 billion, up ¥52.9 billion year on year. We plan to reduce total assets over the medium term and shift to more efficient financial management. Liabilities Total liabilities as of March 31, 2024 amounted to ¥2,516.9 billion, up ¥20.5 billion year on year. Current liabilities increased ¥152.0 billion year on year to ¥1,035.4 billion, mainly due to an increase in contract liabilities resulting from increased airline ticket bookings. Total long-term liabilities amounted to ¥1,481.4 billion, a decrease of ¥131.4 billion. Interest-bearing debt, including finance lease obligations, decreased ¥123.8 billion to ¥1,484.0 billion, mainly due to repay- ments of loans. Our debt/equity ratio amounted to 1.4 times, a decrease of 0.4 points compared with the end of the previous fiscal year. Net debt/equity ratio on a net interest-bearing debt basis was 0.2 times. Interest-Bearing Debt (¥ Millions) (End of Fiscal Year) 2023 2022 Change Short-term debt: ¥ 229,998 ¥ 209,850 ¥ 20,148 Short-term loans 84,170 92,170 (8,000) Current portion of long-term loans 73,777 84,633 (10,856) Current portion of bonds with stock acquisition rights 70,000 30,000 40,000 Finance lease obligations 2,051 3,047 (996) Long-term debt*: 1,254,038 1,398,068 (144,030) Bonds 155,000 155,000 0 Convertible bonds with stock acquisition rights 150,000 220,000 (70,000) Long-term loans 943,808 1,017,585 (73,777) Finance lease obligations 5,230 5,483 (253) Total interest-bearing debt ¥1,484,036 ¥1,607,918 ¥(123,882) * Excluding current portion of long-term loans and current portion of bonds Net Assets Net assets as of March 31, 2024 amounted to ¥1,052.6 billion, an increase of ¥182.2 billion compared to the end of the previous fiscal year. Shareholders’ equity amounted to ¥951.1 billion, an increase of ¥156.6 billion compared to the end of the previous fiscal year. This increase was mainly due to the recording of net income and the increase in retained earnings. Total accumulated other comprehensive income amounted to ¥93.3 billion, an increase of ¥25.4 billion compared to the end of the previous fiscal year. This increase was mainly due to an increase in deferred gain on derivatives under hedge accounting. As a result, total shareholders’ equity increased ¥182.0 billion from the end of the previous fiscal year, amounting to ¥1,044.5 billion. Shareholders’ equity ratio increased 3.6 points to 29.3%. Book value per share (BPS) at the end of the fiscal year was ¥2,222.03, compared to ¥1,833.64 as of the end of the previous fiscal year. Interest-Bearing Debt / Debt/Equity Ratio* * Excluding off-balanced lease obligations (¥ Billions) (Times) (Left) Interest-bearing debt Net interest-bearing debt (Right) Debt/Equity ratio Net debt/Equity ratio 0 500 1,000 1,500 2,000 1.4 226.2 0.2 0 0.6 1.2 1.8 2.4 2023 2022 2021 2020 2019 1,484.0 Bond Ratings The Company has obtained credit ratings on various long-term bonds from Japan Credit Rating Agency, Ltd. (JCR) and Rating and Investment Information, Inc. (R&I). Bond ratings as of March 31, 2024 were as follows: Bond Ratings JCR R&I Issuer rating A- A- Outlook Positive Stable Retirement Benefit Obligations The ANA Group has established a defined contribution pension plan and a defined benefit pension plan. The defined benefit plans consist of defined benefit corporate pension plan and lump-sum retirement benefit plans. Certain employees are entitled to additional benefits upon retirement. Certain consolidated subsidiaries adopting defined-benefit corpo- rate pension plans and lump-sum retirement benefit plans use a sim- plified method for calculating retirement benefit expenses and liabilities. Retirement Benefit Obligations and Related Expenses (¥ Millions) (Fiscal Year/End of Fiscal Year) 2023 2022 Retirement benefit obligation ¥(215,433) ¥(217,079) Plan assets at fair value 58,604 57,568 Net liability arising from defined benefit obligation in the consolidated balance sheet (156,829) (159,511) Liabilities for retirement benefits (160,027) (161,129) Assets for retirement benefits 3,198 1,618 Net liability arising from defined benefit obligation in the consolidated balance sheet (156,829) (159,511) Net periodic benefit costs 14,279 14,765 Main basis for actuarial calculations Discount rates 0.1–1.6% 0.1–1.5% Expected rates of return on plan assets 1.0–2.5% 1.0–2.5% Contribution to defined contribution pension plans ¥4,825 ¥4,587 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’s international business. The group conducts fuel hedging (for ANA) three years in advance of the applicable period after considering fuel surcharge revenues. The group hedges U.S. dollar payments for ANA HOLDINGS and ANA related to 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 bal- ance 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. Allocation of Profits Basic Policy on Allocation of Profits We recognize that 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 in light of earnings fluctuations and to conduct growth investments (aircraft, etc.) to support future business development. We examine the shareholder returns in terms of dividend levels and share buybacks on an ongoing basis, while considering the level for free cash flow. Our basic policy is to pay a year-end dividend of sur- plus once a year. Our General Meeting of Shareholders is the deci- sion-making body for the distribution of surpluses. Dividends for Fiscal 2023 and Plans for Fiscal 2024 During the fiscal year under review, operating income, ordinary income, and net income attributable to owners of the parent increased as a result of higher revenues, mainly in the Air Transportation Business, stemming from International Passenger and Domestic Passenger operations, supported by strong demand for inbound travel to Japan and strong leisure demand. We have decided to pay a dividend of ¥50 per share for the current fiscal year. This dividend is an increase of ¥20 per share compared with our previous forecast, announced on October 31, 2023. We plan to pay a dividend of ¥50 per share in the next fiscal year, having addressed the issues described in the FY2023-25 ANA Group Corporate Strategy. (FYE) 126 127 Financial Results and Other Information Operating Risks As a corporate group whose core business is air transportation, we consider safety to be our most important social mission and consider any damage or impediment to this mission to be the most important risk we face. In addition to the severe impact of the COVID-19 pan- demic over the past several years, we face a variety of other risks, including risks related to climate change, which has increased in importance and urgency, and risks related to international affairs, which are becoming increasingly uncertain. The following is a summary of the risks as of the end of the current fiscal year that the ANA Group believes may have a significant impact on investor decisions. The following includes forward-looking state- ments, which may not be consistent with actual conditions, and may omit other risks that affect the group. (1) Most Important Risk The most important risk to the ANA Group is the risk of damage or impairment to safety. Summary Safety is the foundation of our business and our promise to the public. Any event that damages or impedes safety will have a major negative impact on the group. In particular, any human casualties could shake the foundations of the group’s social credibility and trust. In the event of an airline accident or other incident that results in per- sonal or property damage, we may be held liable for compensation for such damages. If safety is impaired or compromised, the impact could be far-reaching, even leading to a decline in group revenues over the medium term as customers become hesitant to fly with the group or choose to fly with another airline. In the event that a manufacturing defect or other issue is discovered in an aircraft, we may be forced to suspend the operation of said air- craft as a precautionary measure to ensure safety. In such cases, however, ANA Group business operations could be affected by flight cancellations or reductions due to a shortage of available aircraft. Changes and Outlook We believe this risk to be the most important risk for the ANA Group. Response The ANA Group is an organization dedicated to the promotion of safety. This team conducts safety quality audits and has built a sus- tainable mechanism to ensure safety. We engage in safety risk man- agement that prevents recurrence while incorporating preventive and predictive measures. We pursue further safety improvements through risk management focusing on factors that include best practices and case studies from outside the group and fatigue risk management for flight crew and flight attendants. Further, we provide visibility to safety through safety performance indicators and engage in numerous other means to improve safety further. At the same time, we conduct ongoing and recurring education and training for flight crew, flight attendants, and other employees involved directly in aircraft opera- tions. We also provide constant safety awareness activities for all employees in the ANA Group. In these ways, and through the ANA Group Safety Education Center, we strive to foster and strengthen a corporate group culture of active safety and security. We also work closely with aircraft manufacturers and other parties to exchange information and opinions that support safety and high-quality operations. (2) Major Risks 1. Addressing climate change issues is becoming more important and urgent. Summary Aircraft operations emit CO2 and other greenhouse gases. Reducing these emissions is a pressing matter for the group. The ANA Group is working to achieve net-zero CO2 emissions by 2050. To this end, we aim to replace aircraft with more fuel-efficient models and utilize sus- tainable aviation fuel (SAF). SAF is jet fuel with significantly lower CO2 emissions than conventional fuels throughout the life cycle, from raw material production and collection to combustion. At this point in time, there are no technical prospects indicating that SAF will be in sufficient supply on a stable basis at a reasonable price. If SAF is not in stable or sufficient supply, the group may be forced to purchase CO2 emission credits or allowances from outside carbon reduction programs, which may increase operating expenses. If SAF prices remain high, the operating cost of aircraft may increase, affecting group profitability. High operating costs could also affect competitiveness against other modes of transportation, such as railway and ocean transportation, as we must pass on costs in the form of higher fares. In the event that group plans to reduce CO2 emissions do not progress as targeted, customers may prefer other modes of trans- portation, such as rail, which emit relatively lower levels of CO2. If an adequate supply of SAF cannot be sourced in Japan, group aircraft may encounter restrictions or limitations in access among certain countries or regions that have adopted strict environmental standards. Changes and Outlook We believe that issues related to climate change represent urgent worldwide matters, and that addressing this risk is of extremely high importance and priority. We also believe that the aviation industry in general and the ANA Group in particular, may be required to take more stringent and sophisticated measures to address this risk more quickly in the future. Response In addition to replacing aircraft with newer, more fuel-efficient types, we also take proactive measures in the use of negative emissions technologies (NETs) to capture, absorb, store, and immobilize atmo- spheric CO2. We are also establishing an SAF development and supply system through public–private partnerships (including other companies in the industry), SAF manufacturers, and the government. The ANA Group discloses information in line with the recommen- dations of the Task Force on Climate-related Financial Disclosures (TCFD) on our corporate website. (https://www.ana.co.jp/group/en/csr/environment/goal/) 2. Increased risks due to instability in the international situation Summary The ANA Group has expanded our International Business in search of further growth opportunities. However, international affairs have become increasingly uncertain due to U.S.–Chinese frictions, the situations in Ukraine and the Middle East, the emergence of third- party powers, etc. Other uncertainties regarding future events have also emerged. International air transportation has grown against the backdrop of economic globalization. However, if this trend stagnates or reverses, or if peace fails due to war or conflict, etc., ANA Group revenues could be affected negatively due to slow demand for business travel or a decrease in demand for tourism. Instabilities in international affairs could affect not only our interna- tional business but also our domestic business, caused by lower inbound demand (foreign tourists visiting Japan), etc. In addition, instabilities could force aircraft to stop flying over or reroute around war or conflict zones. The impact of these costs could be far-reaching. Changes and Outlook Uncertainty about the direction of international affairs and the global- ization of economic activities is increasing. We believe there is a growing need to manage and address these matters as risks. Response In developing our international business, we focus not only on short- term profitability when building an airline network but also on the risks associated with the global situation. We will continue to focus on this risk in the future. The ANA Group will also take care that we do not rely overly on passenger acquisition in certain countries or regions overseas, but rather strive for a balanced approach. In the event that an emergency response is required to an escala- tion in the global situation, we will be flexible in altering flight plans and routes to mitigate the impact. 3. Outbreaks of large-scale infectious diseases have a tremendous impact on the ANA Group. Summary The ANA Group was impacted severely by the COVID-19 pandemic. If a large-scale outbreak of infectious disease were to occur again in the future, demand for our services could decline drastically due to restrictions or prohibitions on travel, having a significant impact on ANA Group business performance. Controlling Air Transportation Business expenditures in the short term will not be easy, since aircraft expenses, personnel expenses, and other fixed costs account for a large portion of our business. In addition, measures to curb business expenditures could affect group business performance, even during the phase of recovery in demand, as a certain amount of time would be required to rebuild business structures. Changes and Outlook In general, climate change (global warming) is said to increase the risk of infectious disease, and we believe this risk will be increasingly important to address in the future. Response The ANA Group secured passenger aircraft and freighters as resources allowing for a proactive response to the movement of goods, even when personal travel has declined. At the same time, we are able to serve personal travel to limited demand in the most appropriate approach through our three brands: ANA, Peach, and AirJapan. We are also diversifying our business structure, expanding revenue domains not linked to the Air Transportation Business and expanding the ANA Economic Zone for the sustainable growth of the ANA Group. 4. The impact of a system failure is significant. Summary The ANA Group seeks to systematize business operations to provide air transportation services of ever-higher quality and efficiency. The potential impact of system failures on our business continues to increase, regardless of whether the failure is caused by internal or external factors, such as a cyberattack. In the event of a systems fail- ure related to aircraft operations, it may become difficult to operate aircraft. And in the event of a failure in related systems such as reser- vations, payments settlements, and boarding management, it may become impossible to accept and settle reservations or manage boarding at airports. In effect, the group would not be able to provide air transportation services. Changes and Outlook We believe the risk of system failures and cyberattacks is increasing with the rising number and sophistication of cyberattacks related to the increasing use of cloud systems, business supply chain intercon- nectivity and linkage, and even geopolitical considerations. We believe there is a growing social demand to prevent and reduce this risk. Response Last year, we established the Group IT Department and the ANA Group Computer Security Incident Response Team (CSIRT) as specialized organizations in charge of systems operation and management for the ANA Group. We have made advancements in strengthening overall cybersecurity governance and resistance to cyberattacks, building a comprehensive and multifaceted structure for systems operations and to deal with cyberattacks. The group is also bolstering our response to intangible aspects through a function to oversee overall system architecture, improved education, and system failure-response training. 5. Dealing with the risk of information leakage is increasingly important. Summary The ANA Group retains a great deal of information, which includes the personal data of ANA Mileage Club members. In the event of an unauthorized leakage of such information, the ANA Group may be sued for damages, ordered to pay fines and penalties by govern- ments, etc., and lose the trust of our customers and society, thereby experiencing a competitive disadvantage. Changes and Outlook We believe the need to address this risk appropriately is only rising in light of heightened social awareness and norms regarding infor mation handling, based on increasingly strict laws and regulations. 128 129 Financial Results and Other Information Changes and Outlook Although market fluctuations are always a possibility, we believe the potential of this risk has increased recently in light of growing uncer- tainties regarding international and economic conditions. Response We take measures to reduce, mitigate, and equalize risks through the use of hedging transactions, etc. As a group, we strive to enhance resilience to market fluctuations. To this end, we engage in more fun- damental measures that include increasing foreign currency-denomi- nated revenues to build a revenue structure that is resilient to the effects of exchange rates, replacing our fleet with new aircraft having superior fuel efficiency, diversifying our business portfolio to develop businesses less susceptible to market fluctuations, and procuring funds under appropriate financial discipline. 9. Investments designed to strengthen competitiveness and achieve new growth also entail risks. Summary The ANA Group considers and executes investments to achieve growth for the future. However, these investments also entail risks. Our Air Transportation Business introduces new aircraft to maintain and improve competitiveness against other companies, as well as to reduce greenhouse gas emissions. However, these investments may not be as effective as expected in the event of large-scale pandem- ics, the rapid and dramatic development of technologies, associated changes in social behavior, or the fragmentation of global economic activities due to political circumstances. In addition, we strive to increase the risk tolerance of the group through the consideration and execution of investments in related businesses that we expect to have synergies with the Air Transportation Business and similar businesses. These businesses may utilize expertise from the Air Transportation Business, namely, regional revitalization businesses, various air mobility businesses, Metaverse avatar businesses, ANA Economic Zone businesses, etc. While we expect these investments to be highly impactful when they produce the expected results, these investments may not produce the expected results in all cases. Changes and Outlook We continue to believe risk management related to investments is important. Response When considering and executing investments, we strive to manage risk appropriately, not only through discussions and deliberations at Board of Directors' meetings and other management-level meetings but also through our investment management committee, which oversees investments for the group. In this way, we ensure a hierar- chical management system that incorporates pre-investment evalua- tion and post-investment withdrawal standards. 10. A declining population may cause markets to contract or make it more difficult to secure a workforce. Summary The most significant business foundation of the ANA Group exists in Japan. But as Japan’s population continues to decline, the size of this market may contract in the future. Population declines may also have an impact on the ability to secure the labor force necessary for ANA Group business operations. In this event, unit labor costs may increase or business operations may be limited due to labor shortages. Changes and Outlook We believe this risk has a high probability of emerging in the future. Response We take into account and reflect assumptions of social change (declining populations, etc.) when forming corporate strategies. We also strive to revitalize the market as a whole by utilizing our LCC brand. Over the medium to long term, we will continue to expand our international business, which addresses a market likely to grow over the medium to long term. To secure a sufficient workforce, we will improve our ability to com- pete in recruitment via proactive investments in human capital. These investments will include appropriate assignments and expanded education and training opportunities. At the same time, we pursue mechanization, labor savings, and unattended operations, etc., for greater productivity. 11. Expansion of high-speed rail networks may intensify competition between air and land transportation. Summary Further expansion of the high-speed rail network in Japan is sched- uled in the future, and competition with the shinkansen bullet train and other railways may become more intense. The extension of bullet train lines and the acceleration of existing lines may impact the ANA Group’s domestic operations. This impact could include a decline in market share or a drop in unit price due to intensified price competition. Changes and Outlook We believe this risk is likely to emerge over the medium to long term. Response We take into account and reflect assumptions of changes in the competitive environment, such as an extension of high-speed rail networks, etc., when forming corporate strategies. We also strive to revitalize the market as a whole by utilizing our LCC brand. Over the medium to long term, we will continue to expand our international business, which addresses a market likely to grow over the medium to long term. Response We engage in appropriate information management in accordance with the laws and regulations of each country. We also implement computer virus countermeasures, email security checks, monitoring for unauthorized operations, restrictions on employee access to information, and information management education and training for all employees. In addition, we take measures to prevent cyberattacks and information leaks, engaging in ongoing inspections of group sys- tems to detect and respond to aging systems and vulnerabilities as early as possible. 6. Human rights risk involves expanding factors demand- ing greater attention. Summary Any acts that violate human rights will bring social criticism or boy- cotts, whether the violation occurs within our group or within the business chain related to our business, including contractors, suppli- ers, and business partners. Certain countries and regions overseas are enacting legislation related to the protection of human rights in the supply chain. Any acts that violate human rights, including acts committed by contractors or other parties outside the group, may result in penalties levied on the group under the jurisdiction of these countries and regions. Further, any problem resulting in a shutdown of a supplier or other subcontractor could lead to restrictions or limi- tations on group business operations. Changes and Outlook As we respond to the shrinking labor force in Japan and expand our businesses overseas, our base of human resources becomes more diverse, and we believe in the need to address this risk from multiple perspectives. Response The ANA Group established a human rights due diligence mecha- nism under the ANA Group Policy on Human Rights that reflects the procedures detailed in the United Nations Guiding Principles on Business and Human Rights. We strive to manage this risk appropri- ately by conducting human rights risk assessments across our supply chain. When necessary, we confirm and investigate human rights risks with external parties or the worker themselves directly through dialogue, etc. Within the ANA Group, we conduct employee education on human rights and perform periodic monitoring at man- agement-level meetings. 7. The risk of severe natural disasters is increasing. Summary Air transportation has the advantage of being relatively more resilient to natural disasters compared to most transportation systems, as this means of travel connects points by air. Even if certain airports fail to function, alternative flights can be provided using nearby airports. However, the ANA Group business is based and concentrated in the Tokyo metropolitan area. Therefore, major restrictions or disruptions to ANA Group flight operations could occur if the Haneda or Narita airports are impacted by a natural disaster. Changes and Outlook Climate change (global warming) is said to lead to more frequent and severe natural disasters, and we believe this risk will be one of several increasingly important risks to address in the future. Response We formulated a business continuity plan (BCP) and regularly review the plan to ensure we restore operational functions quickly and fulfill our mission as a public transportation service in the event of a large- scale natural disaster, such as an earthquake directly under the Tokyo metropolitan area. We have backup systems in place for the various core functions essential to our flight operations. These sys- tems include satellite phones, emergency provisions, employee safety confirmation systems, etc. In addition, we conduct regular disaster drills in cooperation with related parties, including airport companies, etc. 8. The ANA Group business is affected significantly by market fluctuations, including foreign exchange rates, crude oil prices, and interest rates. Summary a. Foreign exchange rates Since the aircraft used by the ANA Group are manufactured by over- seas manufacturers, a significant depreciation of the yen will increase the cost of aircraft procurement. Aircraft fuel, which accounts for a major portion of our operating expenses, relies on the import of crude oil, which is used as a raw material. Here as well, operating expenses will increase if the yen depreciates significantly. A weaken- ing of the yen boosts yen-equivalent revenues earned in foreign cur- rencies overseas by the ANA Group. However, the group has more foreign currency-denominated expenses than foreign currency- denominated revenues, and the effect does not offset the entire increase in expenses. The group also takes measures to mitigate the impact of exchange rate fluctuations through hedging transactions, etc. And while these measures may mitigate or equalize the impact, they do not com- pletely eliminate the impact. Nor can these measures be expected to be effective in controlling costs in all cases. b. Crude oil prices The price of jet fuel is linked to the price of crude oil. A sharp rise in crude oil prices inevitably leads to an increase in aircraft fuel costs. In certain of our businesses, the ANA Group adopts measures that include assessing and collecting fuel surcharges based on fuel prices. However, these revenues do not always offset the entire increase in fuel costs. The group also takes measures to mitigate the impact of crude oil prices through hedging transactions, etc. And while these measures may mitigate or equalize the impact, they do not completely eliminate the impact. Nor can these measures be expected to be effective in controlling costs in all cases. c. Interest rates The ANA Group business operations leverage aircraft financing and other external funds. A significant rise in interest rates could affect the group in the form of increased financing costs. Operating Risks 130 131 Financial Results and Other Information (3) Other Risks a. Risks related to transportation and aviation policies Certain key airports, such as Haneda, have already reached a maxi- mum number of slots for departures and arrivals. Given that the throughput capacity is essentially up to national policy, such airports may limit the future business development of the group. Further, future policies could result in the reduction or recovery of slots at these airports currently in use by the group. b. Risks related to taxation and taxes and public dues Our Air Transportation Business is subject to taxes and public dues that include airport landing fees, parking fees, and navigation and facility usage fees. These fees run in addition to fuel tax and other taxes. Any raises to existing taxes or new taxes and public dues could have a negative impact on the group. c. Risks related to economic fluctuations Medium- to long-distance air transportation is more susceptible to economic fluctuations than regular short-distance transportation. d. Risks related to profit structure, financial platform, and funds procurement The Air Transportation Business uses costly aircraft and incurs many expenses (fuel, maintenance, etc.) linked to flight operations, regard- less of the volume of passengers and cargo carried. A significant decline in demand could cause a major reduction in profitability. In addition, the ANA Group has recorded deferred tax assets. However, these assets may be reversed in the event of a decrease in expected future taxable income. The group may procure funds necessary for capital investment, etc., from financial institutions and the market. However, if the group is constrained in its ability to procure funds due to changes in credit- worthiness or market turmoil, such events may have a negative impact on the group. e. Risks related to business portfolio In addition to the Air Transportation Business, which accounts for a large percentage of the ANA Group revenues and earnings, many of the group’s other businesses, including Airline Related, Travel Services, and Trade and Retail businesses, are related to the Air Transportation Business. Any significant negative impact on the Air Transportation Business could affect these other businesses materially. f. Risks related to lawsuits Lawsuits filed in Japan or overseas related to the ANA Group business activities could have a negative impact on the group. 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. VFR (Visiting Friends and Relatives) Refers to travel for the purpose of visiting friends and relatives. 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 containers or palletized cargo. Belly The space below the cabin on passenger aircraft that is used to transport cargo. 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 300 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 2024, 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 inter national 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 strengthening 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). Operating Risks 132 133 Financial Results and Other Information Consolidated Financial Statements Consolidated Balance Sheet ANA HOLDINGS INC. and its consolidated subsidiaries As of March 31, 2024 Yen (Millions) U.S. dollars (Thousands) As of March 31 2024 2023 2024 LIABILITIES AND EQUITY Current liabilities: Short-term loans ¥ 84,170 ¥ 92,170 $ 555,907 Current portion of long-term debt 145,828 117,680 963,133 Accounts payable 236,297 167,303 1,560,643 Accounts payable to unconsolidated subsidiaries and affiliates 1,113 1,225 7,350 Contract liabilities 444,982 393,545 2,938,920 Accrued expenses 80,417 53,198 531,120 Income taxes payable 8,015 6,910 52,935 Other current liabilities 34,606 51,370 228,558 Total current liabilities 1,035,428 883,401 6,838,570 Long-term liabilities: Long-term debt 1,254,038 1,398,068 8,282,398 Liability for retirement benefits 160,027 161,129 1,056,911 Deferred tax liabilities 505 206 3,335 Asset retirement obligations 1,312 1,537 8,665 Other long-term liabilities 65,593 51,992 433,214 Total long-term liabilities 1,481,475 1,612,932 9,784,525 Contingent liabilities Equity: Common stock: Authorized – 1,020,000,000 shares; Issued – 484,293,561 shares in 2024 and 484,293,561 shares in 2023 467,601 467,601 3,088,309 Capital surplus 404,065 407,328 2,668,681 Retained earnings (Accumulated deficit) 135,971 (21,126) 898,031 Treasury stock – 14,224,644 shares in 2024 and 13,961,988 shares in 2023 (56,512) (59,365) (373,238) Accumulated other comprehensive income: Unrealized gain on securities 41,360 36,824 273,165 Deferred gain on derivatives under hedge accounting 59,782 42,496 394,835 Foreign currency translation adjustments 3,677 2,481 24,285 Defined retirement benefit plans (11,436) (13,820) (75,530) Total 1,044,508 862,419 6,898,540 Non-controlling interests 8,119 7,972 53,622 Total equity 1,052,627 870,391 6,952,163 TOTAL ¥3,569,530 ¥3,366,724 $23,575,259 Yen (Millions) U.S. dollars (Thousands) As of March 31 2024 2023 2024 ASSETS Current assets: Cash and deposits ¥ 600,893 ¥ 603,686 $ 3,968,648 Marketable securities 656,913 580,037 4,338,636 Notes and accounts receivable 218,208 186,052 1,441,172 Accounts receivable from and advances to unconsolidated subsidiaries and affiliates 2,350 2,741 15,520 Lease receivables and investments in leases 12,219 14,724 80,701 Inventories 53,961 44,655 356,389 Prepaid expenses and other 156,931 119,183 1,036,463 Allowance for doubtful accounts (285) (258) (1,882) Total current assets 1,701,190 1,550,820 11,235,651 Property and equipment: Land 44,069 44,045 291,057 Buildings and structures 258,669 257,665 1,708,401 Aircraft 1,898,878 1,781,646 12,541,298 Machinery and equipment 100,406 99,411 663,139 Vehicles 36,330 33,137 239,944 Furniture and fixtures 60,326 60,748 398,428 Lease assets 9,295 9,849 61,389 Construction in progress 224,173 186,967 1,480,569 Total 2,632,146 2,473,468 17,384,228 Accumulated depreciation (1,301,393) (1,202,156) (8,595,158) Net property and equipment 1,330,753 1,271,312 8,789,069 Investments and other assets: Investment securities 129,700 122,820 856,614 Investments in and advances to unconsolidated subsidiaries and affiliates 31,167 31,667 205,845 Lease and guaranty deposits 18,452 16,362 121,867 Deferred tax assets 213,374 263,303 1,409,246 Goodwill 15,999 18,115 105,666 Intangible assets 87,908 69,705 580,595 Other assets 40,987 22,620 270,702 Total investments and other assets 537,587 544,592 3,550,538 TOTAL ¥3,569,530 ¥3,366,724 $23,575,259 134 135 Financial Results and Other Information Yen (Millions) U.S. dollars (Thousands) Year Ended March 31 2024 2023 2024 Net income ¥158,327 ¥ 90,098 $1,045,683 Other comprehensive income (loss): Unrealized gain on securities 4,472 4,466 29,535 Deferred gain (loss) on derivatives under hedge accounting 17,279 (29,641) 114,120 Foreign currency translation adjustments 1,277 (1,139) 8,434 Defined retirement benefit plans 2,406 (554) 15,890 Share of other comprehensive income in affiliates 59 6 389 Total other comprehensive income (loss) 25,493 (26,862) 168,370 Comprehensive income ¥183,820 ¥ 63,236 $1,214,054 Total comprehensive income attributable to: Owners of the parent ¥182,499 ¥ 62,560 $1,205,329 Non-controlling interests 1,321 676 8,724 Consolidated Statement of Income ANA HOLDINGS INC. and its consolidated subsidiaries Year Ended March 31, 2024 Consolidated Statement of Comprehensive Income ANA HOLDINGS INC. and its consolidated subsidiaries Year Ended March 31, 2024 Yen (Millions) U.S. dollars (Thousands) Year Ended March 31 2024 2023 2024 Operating revenues ¥2,055,928 ¥1,707,484 $13,578,548 Cost of sales 1,642,263 1,403,567 10,846,463 Gross income 413,665 303,917 2,732,085 Selling, general and administrative expenses 205,754 183,887 1,358,919 Operating income 207,911 120,030 1,373,165 Other income (expenses): Interest income 1,294 838 8,546 Dividend income 1,311 1,092 8,658 Equity in earnings of unconsolidated subsidiaries and affiliates 1,060 801 7,000 Foreign exchange gain, net 4,459 2,306 29,449 Gain on sales of assets 2,265 7,854 14,959 Gain on donation of non-current assets 367 1,060 2,423 Compensation income 14,404 – 95,132 Interest expenses (23,324) (24,845) (154,045) Loss on sales of assets (50) (85) (330) Loss on disposal of assets (4,866) (3,233) (32,137) Grounded aircraft expense – (4,638) – Gain on reversal of foreign currency translation adjustments – 1,987 – Other, net 7 11,175 46 Other income (expenses), net (3,073) (5,688) (20,295) Income before income taxes 204,838 114,342 1,352,869 Income taxes: Current 5,971 4,578 39,435 Deferred 40,540 19,666 267,749 Total income taxes 46,511 24,244 307,185 Net income 158,327 90,098 1,045,683 Net income attributable to non-controlling interests 1,230 621 8,123 Net income attributable to owners of the parent ¥ 157,097 ¥ 89,477 $ 1,037,560 Yen U.S. dollars Year Ended March 31 2024 2023 2024 Per share of common stock: Basic net income ¥335.09 ¥190.24 $2.21 After adjusting for diluted shares net income per share 301.62 170.16 1.99 Cash dividends applicable to the year 50.00 – 0.33 136 137 Financial Results and Other Information Thousands Yen (Millions) Accumulated other comprehensive income Number of shares of common stock outstanding Common stock Capital surplus Retained earnings (Accumulated deficit) 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 Total Non- controlling interests Total equity Balance at March 31, 2022 470,336 ¥467,601 ¥407,328 ¥(113,228) ¥(59,350) ¥702,351 ¥32,311 ¥ 72,167 ¥ 3,688 ¥(13,268) ¥ 94,898 ¥6,166 ¥ 803,415 Net income attributable to owners of the parent 89,477 89,477 89,477 Purchase of treasury stock (5) (15) (15) (15) Disposal of treasury stock (0) 0 0 0 Changes in scope of consolidation – Changes in scope of equity method 2,625 2,625 2,625 Net changes in the year 4,513 (29,671) (1,207) (552) (26,917) 1,806 (25,111) Total changes during the fiscal year (5) – (0) 92,102 (15) 92,087 4,513 (29,671) (1,207) (552) (26,917) 1,806 66,976 Balance at March 31, 2023 470,331 ¥467,601 ¥407,328 ¥ (21,126) ¥(59,365) ¥794,438 ¥36,824 ¥ 42,496 ¥ 2,481 ¥(13,820) ¥ 67,981 ¥7,972 ¥ 870,391 Net income attributable to owners of the parent 157,097 157,097 157,097 Purchase of treasury stock (263) (9,510) (9,510) (9,510) Disposal of treasury stock (3,282) 12,362 9,080 9,080 Changes in the parent’s ownership interest due to transactions with non-controlling interests 19 19 19 Change in treasury shares arising from change in equity in entities accounted for using equity method 1 1 1 Net changes in the year – 4,536 17,286 1,196 2,384 25,402 147 25,549 Total changes during the fiscal year (263) – (3,263) 157,097 2,853 156,687 4,536 17,286 1,196 2,384 25,402 147 182,236 Balance at March 31, 2024 470,068 ¥467,601 ¥404,065 ¥ 135,971 ¥(56,512) ¥951,125 ¥41,360 ¥ 59,782 ¥ 3,677 ¥(11,436) ¥ 93,383 ¥8,119 ¥1,052,627 Thousands U.S. dollars (Thousands) Accumulated other comprehensive income Number of shares of common stock outstanding Common stock Capital surplus Retained earnings (Accumulated deficit) 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 Total Non- controlling interests Total equity Balance at March 31, 2023 470,331 $3,088,309 $2,690,231 $ (139,528) $(392,081) $5,246,932 $243,207 $280,668 $16,385 $(91,275) $448,986 $52,651 $5,748,570 Net income attributable to owners of the parent 1,037,560 1,037,560 1,037,560 Purchase of treasury stock (263) (62,809) (62,809) (62,809) Disposal of treasury stock (21,676) 81,645 59,969 59,969 Changes in the parent’s ownership interest due to transactions with non-controlling interests 125 125 125 Change in treasury shares arising from change in equity in entities accounted for using equity method 6 6 6 Net changes in the year – 29,958 114,166 7,899 15,745 167,769 970 168,740 Total changes during the fiscal year (263) – (21,550) 1,037,560 18,842 1,034,852 29,958 114,166 7,899 15,745 167,769 970 1,203,592 Balance at March 31, 2024 470,068 $3,088,309 $2,668,681 $ 898,031 $(373,238) $6,281,784 $273,165 $394,835 $24,285 $(75,530) $616,755 $53,622 $6,952,163 Consolidated Financial Statements Consolidated Statement of Changes in Equity ANA HOLDINGS INC. and its consolidated subsidiaries Year Ended March 31, 2024 Consolidated Statement of Cash Flows ANA HOLDINGS INC. and its consolidated subsidiaries Year Ended March 31, 2024 Yen (Millions) U.S. dollars (Thousands) Year Ended March 31 2024 2023 2024 Cash flows from operating activities: Income before income taxes ¥ 204,838 ¥ 114,342 $ 1,352,869 Adjustments for: Depreciation and amortization 142,315 148,270 939,931 Amortization of goodwill 2,116 2,115 13,975 Loss (gain) on disposal and sales of property and equipment 2,651 (6,123) 17,508 Loss on sales and valuation of investment securities 2,818 841 18,611 Reversal of foreign currency translation of investment securities – (1,987) – Decrease (increase) in allowance for doubtful accounts (11) 506 (72) Increase in liability for retirement benefits 1,554 2,906 10,263 Interest and dividend income (2,605) (1,930) (17,204) Interest expenses 23,324 24,845 154,045 Subsidies for employment adjustment – (5,043) – Foreign exchange gain (4,268) (2,348) (28,188) Increase in notes and accounts receivable (33,419) (36,523) (220,718) (Increase) decrease in other current assets (25,279) 5,758 (166,957) Increase in notes and accounts payable 62,539 35,612 413,044 Increase in contract liabilities 51,437 137,522 339,719 Other, net 14,111 50,230 93,197 Subtotal 442,121 468,993 2,920,025 Interest and dividends received 3,563 2,202 23,532 Interest paid (23,419) (24,990) (154,672) Proceeds from subsidy income 15 7,300 99 Income taxes paid (1,658) (3,683) (10,950) Net cash provided by operating activities 420,622 449,822 2,778,033 Cash flows from investing activities: Purchases of marketable securities (528,209) (154,321) (3,488,600) Proceeds from redemption of marketable securities 343,158 152,739 2,266,415 Purchases of property and equipment (202,066) (93,450) (1,334,561) Proceeds from sales of property and equipment 29,171 42,717 192,662 Purchases of intangible assets (38,403) (23,442) (253,635) Purchases of investment securities (2,534) (674) (16,736) Proceeds from sales of investment securities – 277 – Proceeds from withdrawal of investments in securities 1,153 – 7,615 Other, net (1,795) (2,146) (11,855) Net cash used in investing activities (399,525) (78,300) (2,638,696) Cash flows from financing activities: Decrease in short-term loans, net (8,000) (7,900) (52,836) Repayment of long-term loans (84,633) (62,775) (558,965) Redemption of bonds (30,000) (70,000) (198,137) Repayment of finance lease obligations (2,947) (3,764) (19,463) Proceeds from share issuance to non-controlling shareholders – 2,000 – Net increase of treasury stock (9,339) (15) (61,680) Other, net (1,126) (455) (7,436) Net cash used in financing activities (136,045) (142,909) (898,520) Effect of exchange rate changes on cash and cash equivalents 3,979 2,539 26,279 Net (decrease) increase in cash and cash equivalents (110,969) 231,152 (732,904) Cash and cash equivalents at beginning of year 1,113,481 882,329 7,354,078 Cash and cash equivalents at end of year ¥1,002,512 ¥1,113,481 $ 6,621,174 138 139 Financial Results and Other Information Vancouver Seattle San Francisco Los Angeles Honolulu Chicago New York Houston Mexico City Washington, D.C. Manila Kuala Lumpur Singapore Jakarta Sydney Perth Ho Chi Minh City Hanoi Bangkok Brussels London Paris Munich Guangzhou Taipei Hong Kong Delhi Mumbai Beijing Dalian Qingdao Seoul Hangzhou Shenzhen Shanghai Frankfurt Vienna Haneda Narita ANA-Operated International Routes Osaka (Kansai) Shanghai Beijing Haneda routes Narita routes Haneda / Narita routes Does not include routes not in service Narita–Perth service to be resumed from October 2024 Compilation by ANA HOLDINGS INC. (As of August 1, 2024) Sapporo (New Chitose) Kushiro Sendai Tokyo (Narita) Tokyo (Haneda) Seoul (Incheon) Bangkok Taipei (Taoyuan) Kaohsiung Hong Kong Nagasaki Osaka (Kansai) Kagoshima Amami Oshima Miyazaki Shanghai Okinawa (Naha) Ishigaki Fukuoka Niigata Nagoya (Chubu) Memanbetsu Oita Peach Aviation-Operated Routes Osaka route 140 141 Financial Results and Other Information International Passenger Market Global Air Transportation Passenger Volume by Region Foreign Visitor Arrivals / Number of Japanese Overseas Travelers 9,000 6,000 3,000 0 3,000 1,000 0 2,000 8,167 2,214 1,978 771 446 173 2,583 2023 2022 2021 2020 2019 0 8,000 16,000 24,000 32,000 28,834 10,986 2023 2022 2021 2020 2019 (Left) Total (Right) : Asia-Pacific : North America : Europe : Middle East : Latin America : Africa Number of Travelers (Thousands) RPK (Billions) Foreign visitor arrivals Japanese overseas travelers (CY) (FY) Source: International Air Transport Association (IATA) Source: Japan National Tourism Organization (JNTO) 2023 2022 2021 2020 2019 12.6 0 20 40 60 80 100 120 0 3 6 9 12 15 18 Number of Domestic Passengers and LCC Share Global Freight Ton Carried by Region ANA International Cargo Operations: ATK and RTK ANA Domestic Passenger Business: ASK, RPK, and Number of Passengers (FY) Source: Ministry of Land, Infrastructure, Transport and Tourism Source: International Air Transport Association (IATA) Number of Passengers LCC Share (Millions) (%) 254 263 106 49 21 1,200 600 300 0 900 400 200 100 0 300 2019 2020 2021 2022 2023 1,021 327 6,316 3,464 2019 2020 2021 2022 2023 0 2,000 4,000 6,000 8,000 2023 2022 2021 2020 2019 38,060 54,225 0 20,000 40,000 60,000 0 20,000 40,000 60,000 40,763 RTK (Billion Tons) ATK / RTK (Millions) ASK / RPK (Millions) Number of Passengers (Thousands) (CY) (FY) (FY) (Left) Full service carriers LCC (Right) LCC share Domestic Passenger Market International Cargo Market Environmental Ratio of Employees with Disabilities (ANA) CO2 Emissions Fuel-Efficient Aircraft (No. / Ratio) 1,364.8 1,050.7 2019 2020 2021 2022 2023 0 500 1,000 2,000 1,500 307.7 6.4 80.3 204 0 25 50 75 100 0 60 120 180 240 2019 2020 2021 2022 2023 (%) (10,000 tons) (Aircraft) (%) (FY) Social Number of Employees Hired Overseas (ANA) 0 500 1,000 1,500 2,000 1,482 2020 2021 2022 2023 2024 (People) (FY) (As of June 1 of each year) (As of March 31 of each year) Notes: 1. Figures for China include the Hong Kong routes. 2. Figures for Asia / Oceania include the Vladivostok routes. 3. Figures for Others include RFS (Road Feeder Service). Note: We applied the Accounting Standard for Revenue Recognition in fiscal 2021. Scope 1 Scope 2 Scope 3 * ANA Group aircraft (jets) * Fuel-efficient aircraft: Boeing 777, 787, 737-700 and -800; Airbus A320neo and A321neo (Left) Aircraft (Right) Ratio (Left) ASK RPK (Right) Number of passengers (Left) Total (Right) : Asia-Pacific : North America : Europe : Middle East : Latin America : Africa ATK RTK : North America : Europe : Asia / Oceania : China : Others Ratio of employees with disabilities Legally mandated ratio 2.66 0 1.0 2.0 3.0 2.3 2020 2021 2022 2023 2024 A B Ratio of Female Managers / Ratio of Female Directors (ANA) 20.2 21.3 2020 2021 2022 2023 2024 0 6 12 18 24 (%) (As of April 1 of each year) Ratio of female managers Ratio of female directors E C F Ratio of Managers Hired Mid-Career / Ratio of Non-Japanese Managers* (ANA) 7.0 6.0 0 3.0 6.0 9.0 12.0 2020 2021 2022 2023 2024 (%) Ratio of managers hired mid-career Ratio of non-Japanese managers * Ratio of non-Japanese managers is calculated excluding TC1 (Americas region) as defined by the International Air Transport Association (IATA). D (As of March 31 of each year) For further information, Fact Book 2024 can be downloaded from the ANA Group corporate website in PDF format. https://www.ana.co.jp/group/en/investors/irdata/annual/ WEB Market Data Environmental and Social Data 142 143 Financial Results and Other Information Human Resources Data (ANA) (S) (FY) Unit 2019 2020 2021 2022 2023 Carbon dioxide (CO2) emissions*1 Total (Aircraft, ground equipment and vehicles) 10,000 tons 1,245.8 548.0 776.0 941.9 1,057.1 Aircraft 1,233.2 538.7 766.9 932.5 1,047.4 Passenger 1,195.8 470.9 678.0 846.8 933.3 Cargo 37.4 67.8 89.0 85.7 114.1 Ground equipment and vehicles 12.6 9.3 9.1 9.4 9.7 Total (Scope 1, 2, and 3) 10,000 tons 1,682.2 723.3 976.0 1,179.6 1,364.8 Scope 1 1,237.3 541.4 769.5 935.4 1,050.7 Scope 2 8.4 7.0 6.6 6.5 6.4 Scope 3 436.4 174.9 199.9 237.6 307.7 [Breakdown by Category]*2 1,000 tons 1 Purchased goods and services 986.6 624.9 548.8 753.0 971.4 2 Capital goods 788.6 361.3 327.2 250.9 560.4 3 Fuel- and energy-related activities (not included in Scope 1 or 2) 1,664.1 734.2 1,038.1 1,258.6 1,413.2 4 Upstream transportation and distribution 1.7 0.6 1.1 0.7 1.6 5 Waste generated in operations 30.8 17.5 17.3 33.0 39.4 6 Business travel 1.6 0.3 2.3 4.0 6.4 7 Employee commuting 9.4 9.9 8.9 8.5 8.4 11 Use of sold products 881.7 0.0 0.0 0.0 0.0 13 Downstream leased assets *3 *3 55.6 67.6 75.9 Aircraft CO2 emissions per RTK kg-CO2 1.01 1.21 1.09 1.00 0.99 Total sustainable aviation fuel (SAF) emissions 1,000 tons — — 4.03*4 6.32*4 0.03*4 Total energy consumption Total Crude oil equivalent: 10,000 kl 480 212 300 364 407 Aircraft energy 474 207 295 359 403 Ground energy (non-aircraft operations) 6.3 4.8 4.7 4.9 4.8 Ozone depletion Fluorocarbon Aircraft (ANA brand only) kg 2.7 2.9 0.0 0.0 0.0 Ground (non-aircraft operations) — 254*5 169 80 120 Halon Aircraft (ANA brand only) 31.7 20.5 12.8 12.8 44.3 Fuel-efficient aircraft (Fiscal year-end)*6 Number of aircraft ANA Group (jet aircraft) Aircraft 199 195 188 194 204 Ratio % 70.3 72.5 74.6 77.0 80.3 *1 We have not yet reflected the impact of sustainable aviation fuel (SAF) on CO2 emissions from fiscal 2019 to fiscal 2020 *2 Scope 3, categories 8, 9, 10, 12, 14, and 15 are not applicable *3 Not applicable *4 Direct CO2 emissions from the combustion of the SAF that ANA purchased are not included in Scope 1. SAF is made from animal fat and has an approximate 90% CO2 reduction compared to the life cycle of conventional aviation fuel. Calculated beginning fiscal 2021 *5 Calculated beginning fiscal 2020 *6 Boeing 777, 787, 737-700, -800, Airbus A320neo, and A321neo *7 A to B : See graphs on P.143 Climate Change Countermeasures (E) (FY) Unit 2019 2020 2021 2022 2023 Waste produced Total 1,000 tons 22.9 12.7 16.0 27.3 30.1 General waste (cabin waste and sewage included) 15.3 7.8 4.8 16.1 21.2 General waste (ground waste included) 2.9 1.0 2.8 1.6 1.5 Industrial waste 4.7 3.8 8.4 9.6 7.5 Water consumption Total 10,000 kl 68.4 35.1 31.6 40.9 50.1 Clean water 60.7 30.6 27.1 35.8 43.9 Non-potable water 7.8 4.5 4.4 5.1 6.1 Resource Savings (FY) Unit 2020 2021 2022 2023 2024 People Number of employees (As of March 31 of each year)*1 People 14,830 15,114 13,689 12,803 12,854 Number of employees hired overseas (As of March 31) People 1,464 1,404 1,375 1,399 1,482 Number of overseas managers hired locally (As of March 31 of each year) People 157 173 198 207 248 Ratio of managers hired mid-career (As of March 31 of each year) % 9.4 9.9 10.9 9.6 7.0 Ratio of non-Japanese managers*2 (As of March 31 of each year) % 2.9 3.5 4.3 5.0 6.0 Ratio of female managers (As of April 1 of each year, excluding individuals 60 years old and over) % 16.9 17.0 18.3 19.3 20.3 Ratio of employees with disabilities*3 (As of June 1 of each year) % 2.68 2.80 2.75 2.72 2.66 Average age of employees (As of March 31 of each year) Years 38.0 37.9 38.9 39.2 41.0 Years worked Average years worked (As of March 31 of each year) Years 13.6 12.5 13.4 14.2 16.9 Job turnover rates Job turnover rates of employees (FY) % 4.0 4.2 3.5 3.6 — Average annual salary Gender wage gap (FY)*4 % — — 38.6 42.8 — Diverse work styles Number of employees on pregnancy or childcare leave / Male (As of March 31 of each year) People 645 / 29 643 / 27 727 / 61 856 / 194 790 / 140 Number of employees on nursing care leave (As of March 31 of each year) People 10 11 17 13 22 Health management Ratio of employees with healthy BMI (Male / Female, As of March 31 of each year)*5 % 72.5 / 73.0 67.7 / 70.1 74.3 / 69.1 73.7 / 68.4 73.4 / 70.8 Ratio of employees that smoke (Male / Female, As of March 31 of each year) % 16.7 / 3.1 14.5 / 2.6 14.1 / 2.3 13.6 / 2.4 13.7 / 2.2 Employee obesity rate (Male / Female, As of March 31 of each year) % 12.9 / 1.0 8.2 / 1.7 11.2 / 1.3 11.1 / 1.0 9.5 / 0.9 *1 Figures for fiscal 2023 was revised. *2 Excluding TC1 (Americas region) as defined by the International Air Transport Association (IATA) *3 Total of ANA HOLDINGS INC., ANA, and qualified ANA Group companies (total of 11 companies including 1 special subsidiary) *4 The significant difference in wages between men and women is due to factors that include the higher average age of men compared to women and the higher percentage of men in flight crew positions, where wages are relatively high. *5 Ratio of employees with BMI of 18.5%–25.0% *6 C to F : See graphs on P.143 Governance-Related Data (G) * ANA only Unit 2020 2021 2022 2023 2024 Corporate governance Ratio of female directors (As of April 1 of each year) % 12.5 14.6 16.3 16.3 21.3 Risk management Work-related accidents (As of March 31 of each year) 69 25 26 65 83 Flight-Related Data (All Passenger Flights on ANA International and Domestic Services) (FY) Unit 2019 2020 2021 2022 2023 In-service rate % 97.4 43.5 59.3 95.0 97.7 On-time departure rate*7 % 88.7 97.3 94.5 88.1 83.9 On-time arrival rate*7 % 87.5 96.8 93.6 88.1 82.0 *7 Delays of 15 minutes or less, excluding canceled flights Customer-Related Data (FY) Unit 2019 2020 2021 2022 2023 Number of customer feedback reports 117,628 59,862 69,661 91,632 96,087 [Breakdown by route type] Domestic % 59.5 54.6 65.6 58.65 54.43 International % 37.9 11.7 11.2 23.99 30.79 Other % 2.7 33.7 23.2 17.36 14.77 [Breakdown by report type] Complaint % 42.3 30.1 29.1 38.30 40.80 Compliment % 21.1 20.8 28.3 25.27 23.96 Comment / Request % 16.6 28.8 21.9 19.62 17.39 Other % 20.1 21.3 20.7 16.82 17.85 Please visit our corporate website for more: https://www.ana.co.jp/group/en/csr/data/ WEB A*7 B*7 E*6 C*6 F*6 D*6 E*6 ESG-Related Data The following data is the environmental results related to the ANA Group. (Aggregate figures for fiscal 2023 are preliminary.) 144 145 Financial Results and Other Information Corporate Data (As of March 31, 2024) ANA HOLDINGS INC. Organization (As of July 1, 2024) Number of Subsidiaries and Affiliates (As of March 31, 2024) Operating segment Total of subsidiaries Total of affiliates of which, consolidated of which, equity method of which, equity method Air Transportation 5 4 — 1 — Airline Related 41 29 — 4 2 Travel Services 6 5 — 3 1 Trade and Retail 72 8 — 1 — Others 12 9 1 27 9 Total 136 55 1 36 12 Major Subsidiaries (As of March 31, 2024) Company name Amount of capital (¥ Millions) Ratio of voting rights holding (%) Principal business Air Transportation ALL NIPPON AIRWAYS CO., LTD. 25,000 100.0 Air transportation Air Japan Co., Ltd. 50 100.0 Air transportation ANA WINGS CO., LTD. 50 100.0 Air transportation Peach Aviation Limited 100 77.9 Air transportation Airline Related ANA Cargo Inc. 100 100.0 Cargo operations Overseas Courier Service Co., Ltd. 100 91.6 Express shipping business ANA Systems Co., Ltd. 80 100.0 Innovation and operation of IT systems Travel Services ANA X Inc. 25 100.0 Planning and sales of travel products, and other customer-related businesses Trade and Retail ALL NIPPON AIRWAYS TRADING Co., Ltd. 1,000 100.0 Trading and retailing Note: No specified wholly owned subsidiaries as of the end of the fiscal year under review Corporate Profile Trade Name ANA HOLDINGS INC. Date of Foundation December 27, 1952 Head Office Shiodome City Center, 1-5-2 Higashi-Shimbashi, Minato-ku, Tokyo 105-7140, Japan Number of Employees 41,225 (Consolidated) Paid-In Capital ¥467,601 million Fiscal Year-End March 31 Number of Shares of Common Stock Authorized: 1,020,000,000 shares Issued: 484,293,561 shares Number of Shareholders 761,448 Stock Listing Tokyo Ticker Code 9202 Contact ANA HOLDINGS INC. Shiodome City Center, 1-5-2 Higashi-Shimbashi, Minato-ku, Tokyo 105-7140, Japan Investor Relations Email: ir@anahd.co.jp Administrator of Register of Shareholders Sumitomo Mitsui Trust Bank, Limited (Stock Transfer Agency Department) 1-4-1, Marunouchi, Chiyoda-ku, Tokyo Independent Auditor Deloitte Touche Tohmatsu LLC American Depositary Receipts Ratio (ADR:ORD): 5:1 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 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 state- ments. 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 state- ments in this report will prove to be accurate. Fact Book 2024 Fact Book 2024 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/ Annual Report (PDF) https://www.ana.co.jp/group/en/investors/irdata/annual/ 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 Stakeholders’ priorities Management priorities Reported in this report Reported on the website Scope of This Report The ANA Group Profile High General Meeting of Shareholders Corporate Communications and Branding General Administration Executive Secretariat Government & Industrial Affairs Legal & Insurance Human Resources Employee Relations DEI Promotion Finance, Accounting & Investor Relations Business Management Internal Audit Division Group Management Committee Group ESG Management Promotion Committee Chairman President & Chief Executive Officer Corporate Sustainability Audit & Supervisory Board Members Audit & Supervisory Board Audit & Supervisory Board Members Office Finance, Accounting, Investor Relations & Business Management Group IT Management Board of Directors Corporate Planning Corporate Strategy Future Creation Facilities Planning Business Strategy New Business Development New Mobility Business Creation Digital Design Lab Airline Management Procurement 146 147 Financial Results and Other Information