All Nippon Airways: Notice of Implementation of FY2009 Emergency Income Recovery Plan

TOKYO -- (MARKET WIRE) -- Jul 01, 2009 -- Faced with a major downturn in the global economy following the financial market shock, we are in the process of implementing our FY2009 Emergency Plan, which comprises three areas: business strategy review based on the matching of supply and demand volumes; [limiting non-strategic investment;][this doesn't seem to be mentioned in the offering circular] and critical strengthening of our business structure, including cost cutting measures. Such implementation is imperative in the current environment of rapidly decreasing airline demand. However, we see the planned expansion of Narita and Haneda Airports in 2010 as a key business opportunity.

Since the start of the current fiscal year, we have been expecting the recovery in airline demand to occur in the latter half of the year. However, despite signs of recovery in global markets, the economic outlook currently remains uncertain. The spread of a new influenza strain presented another market shock, and thus we found ourselves in a difficult environment for the current first quarter, following the fourth quarter of FY2008. In particular, demand for business travel dropped more than expected at the start of the term. Passenger numbers for April and May this year fell considerably from the previous year: down 14.0% and 13.1%, respectively, for domestic flights, and down 10.1% and 16.7%% for international flights. Domestic flights, which were more significantly impacted by the effects of influenza, suffered a greater drop than initially expected. Lagging demand has continued through June, with passenger numbers as of June 25 falling 14.0% (domestic) and 17.8% (international) as compared with the same period last year. And we may see revenue decreases at the end of the first quarter of this year amounting to approximately JPY30 billion compared to our revenue plans. Results for the first quarter are therefore expected to be significantly worse than the fourth quarter of FY2008.

Company Name:
All Nippon Airways Co., Ltd.
Representative Name:
Shinichiro Ito, President & CEO
(Code 9202 1st Section, TSE and OSE)

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Contact:
Tomoyuki Kotsuji
Director, General Administration
TEL: 03-6735-10010