marketline industry profile airlines in japan

Japan - Airlines 0104 - 0756 - 2011

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 1

MarketLine Industry Profile

Airlines in Japan October 2012

Reference Code: 0104-0756

Publication Date: October 2012

WWW.MARKETLINE.COM

MARKETLINE. THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED

http://www.marketlineinfo.com/

Japan - Airlines 0104 - 0756 - 2011


EXECUTIVE SUMMARY

Market value The Japanese airlines industry shrank by 9.3% in 2011 to reach a value of $21.1 billion.

Market value forecast In 2016, the Japanese airlines industry is forecast to have a value of $34.8 billion, an increase of 64.9% since 2011.

Market volume The Japanese airlines industry shrank by 14% in 2011 to reach a volume of 89.9 million passengers.

Market volume forecast In 2016, the Japanese airlines industry is forecast to have a volume of 96.4 million passengers, an increase of 7.3%

since 2011.

Category segmentation Domestic flights is the largest segment of the airlines industry in Japan, accounting for 86.6% of the industry's total

volume.

Geography segmentation Japan accounts for 16.7% of the Asia-Pacific airlines industry value.

Market rivalry Rivalry in the airlines industry is strong, due in part to the sheer size of competitors and the difficulties in exiting the

industry.

Japan - Airlines 0104 - 0756 - 2011


TABLE OF CONTENTS

Executive Summary ....................................................................................................................................................... 2

Market value ............................................................................................................................................................... 2

Market value forecast ................................................................................................................................................. 2

Market volume ............................................................................................................................................................ 2

Market volume forecast .............................................................................................................................................. 2

Category segmentation .............................................................................................................................................. 2

Geography segmentation ........................................................................................................................................... 2

Market rivalry .............................................................................................................................................................. 2

Market Overview ............................................................................................................................................................ 7

Market definition ......................................................................................................................................................... 7

Market analysis .......................................................................................................................................................... 7

Market Data ................................................................................................................................................................... 8

Market value ............................................................................................................................................................... 8

Market volume ............................................................................................................................................................ 9

Market Segmentation ................................................................................................................................................... 10

Category segmentation ............................................................................................................................................ 10

Geography segmentation ......................................................................................................................................... 11

Market Outlook ............................................................................................................................................................. 12

Market value forecast ............................................................................................................................................... 12

Market volume forecast ............................................................................................................................................ 13

Five Forces Analysis .................................................................................................................................................... 14

Summary .................................................................................................................................................................. 14

Buyer power ............................................................................................................................................................. 15

Supplier power ......................................................................................................................................................... 16

New entrants ............................................................................................................................................................ 17

Threat of substitutes ................................................................................................................................................. 18

Degree of rivalry ....................................................................................................................................................... 19

Leading Companies ..................................................................................................................................................... 20

All Nippon Airways ................................................................................................................................................... 20

Japan Airlines Co., Ltd. ............................................................................................................................................ 23

Skymark Airlines Inc. ................................................................................................................................................ 26

Macroeconomic Indicators ........................................................................................................................................... 27

Japan - Airlines 0104 - 0756 - 2011


Country Data ............................................................................................................................................................ 27

Appendix ...................................................................................................................................................................... 29

Methodology ............................................................................................................................................................. 29

Industry associations ................................................................................................................................................ 30

Related MarketLine research ................................................................................................................................... 30

Japan - Airlines 0104 - 0756 - 2011


LIST OF TABLES

Table 1: Japan airlines industry value: $ billion, 2007–11 .............................................................................................. 8

Table 2: Japan airlines industry volume: million passengers, 2007–11.......................................................................... 9

Table 3: Japan airlines industry category segmentation: million passengers, 2011 ..................................................... 10

Table 4: Japan airlines industry geography segmentation: $ billion, 2011 ................................................................... 11

Table 5: Japan airlines industry value forecast: $ billion, 2011–16 .............................................................................. 12

Table 6: Japan airlines industry volume forecast: million passengers, 2011–16 .......................................................... 13

Table 7: All Nippon Airways: key facts ......................................................................................................................... 20

Table 8: All Nippon Airways: key financials ($)............................................................................................................. 21

Table 9: All Nippon Airways: key financials (¥)............................................................................................................. 21

Table 10: All Nippon Airways: key financial ratios ........................................................................................................ 21

Table 11: Japan Airlines Co., Ltd.: key facts ................................................................................................................ 23

Table 12: Japan Airlines Co., Ltd.: key financials ($) ................................................................................................... 23

Table 13: Japan Airlines Co., Ltd.: key financials (¥) ................................................................................................... 23

Table 14: Japan Airlines Co., Ltd.: key financial ratios ................................................................................................. 24

Table 15: Skymark Airlines Inc.: key facts .................................................................................................................... 26

Table 16: Japan size of population (million), 2007–11 ................................................................................................. 27

Table 17: Japan gdp (constant 2000 prices, $ billion), 2007–11 .................................................................................. 27

Table 18: Japan gdp (current prices, $ billion), 2007–11 ............................................................................................. 27

Table 19: Japan inflation, 2007–11 .............................................................................................................................. 28

Table 20: Japan consumer price index (absolute), 2007–11 ........................................................................................ 28

Table 21: Japan exchange rate, 2007–11 .................................................................................................................... 28

Japan - Airlines 0104 - 0756 - 2011


LIST OF FIGURES

Figure 1: Japan airlines industry value: $ billion, 2007–11 ............................................................................................. 8

Figure 2: Japan airlines industry volume: million passengers, 2007–11 ........................................................................ 9

Figure 3: Japan airlines industry category segmentation: % share, by volume, 2011 .................................................. 10

Figure 4: Japan airlines industry geography segmentation: % share, by value, 2011 .................................................. 11

Figure 5: Japan airlines industry value forecast: $ billion, 2011–16 ............................................................................. 12

Figure 6: Japan airlines industry volume forecast: million passengers, 2011–16 ......................................................... 13

Figure 7: Forces driving competition in the airlines industry in Japan, 2011 ................................................................ 14

Figure 8: Drivers of buyer power in the airlines industry in Japan, 2011 ...................................................................... 15

Figure 9: Drivers of supplier power in the airlines industry in Japan, 2011 .................................................................. 16

Figure 10: Factors influencing the likelihood of new entrants in the airlines industry in Japan, 2011 ........................... 17

Figure 11: Factors influencing the threat of substitutes in the airlines industry in Japan, 2011 .................................... 18

Figure 12: Drivers of degree of rivalry in the airlines industry in Japan, 2011 .............................................................. 19

Figure 13: All Nippon Airways: revenues & profitability ................................................................................................ 22

Figure 14: All Nippon Airways: assets & liabilities ........................................................................................................ 22

Figure 15: Japan Airlines Co., Ltd.: revenues & profitability ......................................................................................... 24

Figure 16: Japan Airlines Co., Ltd.: assets & liabilities ................................................................................................. 25

Japan - Airlines 0104 - 0756 - 2011


MARKET OVERVIEW

Market definition The airlines industry comprises passenger air transportation, including both scheduled and chartered, but excludes air

freight transport. Industry volumes are defined as the total number of revenue passengers enplaned (departures) at all

airports within the country or region, excluding transit passengers who arrive and depart on the same flight code. For the

US and Canada, transborder passengers departing from either country are considered as part of the international

segment. Industry value is defined as the total revenue obtained by airlines from transporting these passengers. This

avoids the double-counting of passengers. All currency conversions in this profile were carried out using constant 2011

average annual exchange rates.

For the purposes of this report, Asia-Pacific comprises Australia, China, India, Indonesia, Japan, New Zealand,

Singapore, South Korea, Taiwan, and Thailand.

Market analysis The Japanese airlines industry showed fluctuating growth rates over last couple of years with the substantial decline in

2009. The industry is expected to stabilize with quite high growth rates expected in the forthcoming years up to 2016.

The Japanese airlines industry had total revenues of $21.1 billion in 2011, representing a compound annual rate of

change (CARC) of -6.9% between 2007 and 2011. In comparison, the Chinese and Indian industries grew with

compound annual growth rates (CAGRs) of 12.1% and 8.5% respectively, over the same period, to reach respective

values of $35.4 billion and $14.2 billion in 2011.

Industry volumes declined with a CARC of -7.4% between 2007-2011, to reach a total of 89.9 million passengers in

2011. The industry's volume is expected to rise to 96.4 million passengers by the end of 2016, representing a CAGR of

1.4% for the 2011-2016 period.

Domestic flights sales had the highest volume in the Japanese airlines industry in 2011, with total sales of 77.8 million

passengers, equivalent to 86.6% of the industry's overall volume. In comparison, sales of international flights had a

volume of 12.1 million passengers in 2011, equating to 13.4% of the industry total.

The performance of the industry is forecast to accelerate, with an anticipated CAGR of 10.5% for the five-year period

2011 - 2016, which is expected to drive the industry to a value of $34.8 billion by the end of 2016. Comparatively, the

Chinese and Indian industries will grow with CAGRs of 17.4% and 18.1% respectively, over the same period, to reach

respective values of $79.1 billion and $32.7 billion in 2016.

Japan - Airlines 0104 - 0756 - 2011


MARKET DATA

Market value The Japanese airlines industry shrank by 9.3% in 2011 to reach a value of $21.1 billion.

The compound annual rate of change of the industry in the period 2007–11 was -6.9%.

Table 1: Japan airlines industry value: $ billion, 2007–11

Year $ billion ¥ billion € billion % Growth

2007 28.2 2,244.0 20.2

2008 28.9 2,302.1 20.8 2.6%

2009 21.7 1,726.0 15.6 (25.0%)

2010 23.3 1,858.6 16.8 7.7%

2011 21.1 1,684.8 15.2 (9.3%)

CAGR: 2007–11 (6.9%)

SOURCE: MARKETLINE M A R K E T L I N E

Figure 1: Japan airlines industry value: $ billion, 2007–11


Japan - Airlines 0104 - 0756 - 2011


Market volume The Japanese airlines industry shrank by 14% in 2011 to reach a volume of 89.9 million passengers.

The compound annual rate of change of the industry in the period 2007–11 was -7.4%.

Table 2: Japan airlines industry volume: million passengers, 2007–11

Year million passengers % Growth

2007 122.2

2008 115.8 (5.2%)

2009 108.9 (5.9%)

2010 104.5 (4.1%)

2011 89.9 (14.0%)

CAGR: 2007–11 (7.4%)


Figure 2: Japan airlines industry volume: million passengers, 2007–11


Japan - Airlines 0104 - 0756 - 2011


MARKET SEGMENTATION

Category segmentation Domestic flights is the largest segment of the airlines industry in Japan, accounting for 86.6% of the industry's total

volume.

The International flights segment accounts for the remaining 13.4% of the industry.

Table 3: Japan airlines industry category segmentation: million passengers, 2011

Category 2011 %

Domestic flights 77.8 86.6%

International flights 12.1 13.4%

Total 89.9 100%


Figure 3: Japan airlines industry category segmentation: % share, by volume, 2011


Japan - Airlines 0104 - 0756 - 2011


Geography segmentation Japan accounts for 16.7% of the Asia-Pacific airlines industry value.

China accounts for a further 28% of the Asia-Pacific industry.

Table 4: Japan airlines industry geography segmentation: $ billion, 2011

Geography 2011 %

China 35.4 28.0

Japan 21.1 16.7

India 14.2 11.3

South Korea 5.7 4.5

Rest of Asia-Pacific 49.8 39.4

Total 126.2 100%


Figure 4: Japan airlines industry geography segmentation: % share, by value, 2011


Japan - Airlines 0104 - 0756 - 2011


MARKET OUTLOOK

Market value forecast In 2016, the Japanese airlines industry is forecast to have a value of $34.8 billion, an increase of 64.9% since 2011.

The compound annual growth rate of the industry in the period 2011–16 is predicted to be 10.5%.

Table 5: Japan airlines industry value forecast: $ billion, 2011–16

Year $ billion ¥ billion € billion % Growth

2011 21.1 1,684.8 15.2 (9.3%)

2012 21.2 1,686.2 15.2 0.1%

2013 24.0 1,911.4 17.2 13.4%

2014 27.1 2,161.6 19.5 13.1%

2015 30.8 2,452.6 22.1 13.5%

2016 34.8 2,772.2 25.0 13.0%

CAGR: 2011–16 10.5%


Figure 5: Japan airlines industry value forecast: $ billion, 2011–16


Japan - Airlines 0104 - 0756 - 2011


Market volume forecast In 2016, the Japanese airlines industry is forecast to have a volume of 96.4 million passengers, an increase of 7.3%

since 2011.

The compound annual growth rate of the industry in the period 2011–16 is predicted to be 1.4%.

Table 6: Japan airlines industry volume forecast: million passengers, 2011–16

Year million passengers % Growth

2011 89.9 (14.0%)

2012 93.2 3.7%

2013 94.1 1.0%

2014 94.7 0.7%

2015 95.8 1.1%

2016 96.4 0.7%

CAGR: 2011–16 1.4%


Figure 6: Japan airlines industry volume forecast: million passengers, 2011–16


Japan - Airlines 0104 - 0756 - 2011


FIVE FORCES ANALYSIS

The airlines market will be analyzed taking airline companies as players. The key buyers will be taken as leisure and

business travelers, the latter considered as business-to-business (b2b), and fuel suppliers, aircraft manufacturers, and

skilled employees as the key suppliers.

Summary

Figure 7: Forces driving competition in the airlines industry in Japan, 2011


Rivalry in the airlines industry is strong, due in part to the sheer size of competitors and the difficulties in exiting the

industry.

Asia Pacific carriers continue to perform well. Better than expected performance in 2011, particularly by the Chinese

carriers. For 2012, the region’s airlines are expected to again deliver large profit. Higher fuel costs will more than halve

profits in the near future but the region's relatively strong economies will continue to generate more rapid growth in travel

and cargo than the other regions. Nevertheless, Japanese airlines industry has been in decline over last few years.

Despite the large number of buyers, their power is strengthened by high price sensitivity as product differentiation tends

to be minimal, with negligible switching costs. Budget airlines can compete intensely on price with the legacy carriers.

Supplier power is strong as airlines must enter into contracts with aircraft suppliers. Boeing and Airbus dominate the

jetliner market; the relative lack of alternatives increases their power. Changing fuel prices could make it difficult to

maintain margins and discourage new players from entering the market. Strong rivalry results from factors such as low

switching costs for buyers, and a focus on passenger transport that leaves carriers vulnerable to declines in demand in

an industry that is highly sensitive to the state of the wider economy.

Japan - Airlines 0104 - 0756 - 2011


Buyer power

Figure 8: Drivers of buyer power in the airlines industry in Japan, 2011


Airlines generally have a large number of buyers. Many of these are individual consumers purchasing flights directly from

the airline, although there are B2B sales to charter companies, discounters, and similar buyers. Price sensitivity is high; a

result of factors, such as, the growth of online price comparison sites, corporate travel expense policies for business

flyers and for the legacy airlines like JAL, competition from low-cost carriers. This tends to strengthen buyer power in the

airlines market. However, airlines can defend themselves against this by differentiating their service in several ways. A

common strategy for easing price competition is to focus on the additional features available on higher-priced flights,

such as extra leg room, in-flight entertainment, and so on. The inherent switching costs for buyers in the airline market

are negligible, which strengthens buyer power. In response, airlines often use loyalty schemes, such as JAL’s Mileage

Bank. The air miles lost should a buyer choose to travel with another airline can be viewed as a switching cost. Where

the buyers are individual travelers, whether leisure or business, there is no opportunity for them to integrate backwards

or for the airlines to integrate forwards; however, vertical integration is more feasible between airlines and companies

such as travel agents. Overall, buyer power is moderate.

Japan - Airlines 0104 - 0756 - 2011


Supplier power

Figure 9: Drivers of supplier power in the airlines industry in Japan, 2011


Airlines must enter into contracts when buying or leasing aircraft from suppliers. Breaking these contracts can often imply

a heavy financial cost. Furthermore, Boeing and Airbus effectively form a duopoly of suppliers of new jetliners, especially

in the large jetliner category, with planes such as the 747 and A380. In the market for lower-capacity regional jets and

propeller-driven aircraft, companies such as Embraer, ATR, and Bombadier are significant suppliers. The relative lack of

alternative manufacturers or substitute inputs increases supplier power. In an industry where reliability and safety are

critical, the quality of the planes and their maintenance are highly important; another factor that boosts supplier power.

Staffing costs for an airline are substantial, with large numbers of flight and ground personnel, including mechanics,

reservation and transportation ticket agents required for an efficient service.

Aviation fuel is another vital input. International Air Transport Association (IATA) data indicates that for the global

industry, the high price of crude oil and its derivatives in 2008 meant that fuel accounted for 33% of total airline costs,

compared to less than 18% before 2005. The IATA estimates fuel costs to now represent 29% of the total operating

costs in 2011, up from 26% in 2010. Because of fuel being a major input to the industry IATA called for governments to

take a strategic approach to the aviation industry. Relatively few companies supply aviation fuel, strengthening supplier

power, although airlines generally defend against price rises using hedging strategies. Supplier power is restricted by the

improbability of these suppliers integrating forwards into the airline business. In addition, although a company like Boeing

has alternative sources of revenue, notably defense aerospace, civil aviation remains a very significant part of its

business. Boeing generates around 50% of total revenues from its global commercial airplanes division. Airbus itself is

dominated by its passenger jetliner business, although parent company EADS is more diversified, with space, helicopter,

and defense divisions. If a supplier lacks diversity, it is more dependent on airlines as customers, weakening its supplier

power.

Commonly, airlines are forming alliances with one another, not only to achieve network size economies through code

sharing, but also to achieve scale economies in the purchase of fuel, and even of aircraft. Combining forces to make

purchases serves to increase the industry players' bargaining power and therefore reduce supplier power. It is currently

virtually impossible to find substitutes for the inputs required for airlines to operate – an airline must have aircraft, a

supply of aviation fuel and a sufficient workforce before it can offer flights. Unlike other modes of transport, airlines have

no alternative source of energy. Overall, supplier power is assessed as strong.

Japan - Airlines 0104 - 0756 - 2011


New entrants

Figure 10: Factors influencing the likelihood of new entrants in the airlines industry in Japan, 2011


The economic entrance barriers to the airlines industry are relatively high. For an entirely new company, they include the

considerable up-front outlay needed to obtain planes, although this may not be an issue for an existing airline beginning

to offer flights to a new country or region. Distribution is not particularly easy, as new players need to establish an online

booking system, and relationships with travel agents and other sales intermediaries. It is also vital to obtain airport ‘slots’

for take-off and landing. There has been a growth in air traffic over recent years which mean that congestion at airports

in many countries is expected, especially the major hubs. The time slot given to an airline is important, and is something

all airlines negotiate with airports. Established airlines will already hold the monopoly over slots at certain airports,

making it harder for new airlines to infiltrate. This creates difficulties for a new airline aiming to negotiate prime slots at

busy airports and can result in it being restricted to offering flights only at off-peak times, or having to fly to airports

further away from popular destinations. This can be a deterrent to new airlines, as customers may seek more convenient

alternatives.

While there is some debate as to whether traditional scale economies are significant in this industry, it seems likely that

being able to offer a wide range of routes is advantageous. The larger airlines achieve this not only through their own

fleet, but through code sharing agreements with other carriers in alliances; however, a new entrant will not necessarily be

approved for membership. Although the compound annual rate of change (CARC) for the previous period, which does

not offer an attractive prospect to potential new entrants, moderate growth is predicted in the forecast period, which may

attract new entrants. However, with changing fuel prices, it may be difficult to maintain margins, thus discouraging new

players. Regulation forms an additional barrier. Japan’s Civil Aviation Bureau is responsible for security, safety,

environmental impacts and related issues. Compliance with regulation increases the height of entry barriers. For airline

markets, there is an additional regulatory issue to consider. Cabotage is the provision of domestic transport services in a

country by companies based in a different country. Airline cabotage is generally forbidden, unless explicitly permitted by

an agreement between two or more countries. For example, cabotage by any EU-based carriers is permitted in any other

EU-country; also, the Open Skies agreement, finalized in mid-2010, accords cabotage rights to US carriers in the EU.

However, until and unless similar rights are extended by Japan to other countries, access to its large domestic market by

foreign carriers will be severely restricted. Overall, there is a weak likelihood of new entrants to this industry.

Japan - Airlines 0104 - 0756 - 2011


Threat of substitutes

Figure 11: Factors influencing the threat of substitutes in the airlines industry in Japan, 2011


Other forms of transport such as road, rail and marine travel are considered as substitutes to airline travel. Buyers take

into account not only the cost of travel but also how long the journey will take on corresponding forms of transportation.

In Japan air travel makes it easier to overcome long distances and has certain benefits such as shorter travel time than

rail travel, even including the time to check in. However, in some cases especially while traveling domestically air travel

may not be so appropriate, and rail and road transportation become more attractive alternatives. Furthermore, many

consumers are now aware of the environmental impact of air travel, and are turning to rail travel instead. It is possible to

travel around much of the world by long-distance bus or train, although levels of service vary and some border crossings

may present a difficulty. Domestic flights, which account for 86.6% of air passenger volumes can be substituted by car,

coach, or rail. As Japan is a collection of islands, international air travel is difficult to find realistic substitutes for. Japan

has a fast, reliable, well developed rail service, which may act as a substitute for air travel. For business travel,

alternatives include ‘virtual meetings’ via videoconferencing and similar technologies. The switching costs here are the

cost of the equipment required. Overall, the threat from substitutes is assessed as moderate.

Japan - Airlines 0104 - 0756 - 2011


Degree of rivalry

Figure 12: Drivers of degree of rivalry in the airlines industry in Japan, 2011


The competitive landscape has several large companies, such as JAL, alongside smaller competitors. Rivalry is

increased by the presence of low-cost carriers in the market, as these companies can compete more intensely on price.

Switching costs for buyers are low, which means that it is easy for them to change to a competitor. In this market,

‘storage costs’ are actually the costs associated with unsold seats on a flight. Given the cost of fuel, staffing and so on

associated with operating a flight it is important to maximize the number of seats sold, hence the common policy of

selling slightly more tickets than there are available seats on the understanding that some buyers will not make their

plane. Where storage costs are high, rivalry is intensified. Diversification in the passenger airlines industry is quite rare.

Most carriers generate additional revenues through freight, but this is usually only a small proportion of their total sales.

A lack of diversity forces players to compete more intensely in their single core business. Exit costs are moderate.

Planes are important assets with a high purchase price, which depreciate in value with time and require frequent

maintenance expenses. The difference between the outlay on them and the amount they can be sold for represents a

sunk cost for an airline exiting the market. However, they are mobile. If conditions become tough in the Japanese airlines

market, a carrier that wishes to exit is not obliged to try to sell these assets where other companies are trying to do the

same thing. It could sell them in a location where there is high demand for second-hand planes. However, the airline

industry is quite labor-intensive; thus large numbers of employees may need to be offered severance pay should a

company lay them off on exiting this market. Airlines tend to sell tickets either online or via various intermediaries, so

they are not faced with the need to close or sell off a large network of sales offices. Rivalry in the Japanese airline

industry is assessed strong.

Japan - Airlines 0104 - 0756 - 2011


LEADING COMPANIES

All Nippon Airways

Table 7: All Nippon Airways: key facts

Head office: Shiodome City Center, 1-5-2 Higashi-Shimbashi, Minato-ku, Tokyo 105 7133, JPN

Telephone: 81 3 6735 1000

Fax: 81 3 6735 1005

Website: www.ana.co.jp

Financial year-end: March

Ticker: 9202

Stock exchange: Tokyo

SOURCE: COMPANY WEBSITE M A R K E T L I N E

All Nippon Airways (ANA) is one of the Japan's leading carriers. The company operates through 107 subsidiaries and 48

affiliates and flies on about 132 domestic and 57 international routes. The company operates through a fleet of 222

aircrafts. ANA flies about 1,012 flights per day, on domestic routes, and 130 flights per day on overseas routes. ANA

operates through three business divisions: air transportation; travel services; and other businesses. The air

transportation division primarily provides passenger, cargo, and mail transportation services. ANA operates on 126

routes in the domestic market, and 62 routes overseas. In FY2011, the company carried 40.5 million passengers with a

load factor of 63.4% in the domestic market. During the year, the domestic available seat kilometer and revenue

passenger kilometer stood at 56,796 million and 35,983 million, respectively. In FY2011, the company carried 5.1 million

passengers with a load factor of 75.3% in the international market.

During the year, the international available seat kilometer and revenue passenger kilometer stood at 29,768 million and

22,430 million, respectively. The company provides cargo services through nine medium-body cargo freighters and belly

space on passenger planes. It offers 10 domestic flights on seven routes daily and 148 international flights on 20 routes

weekly. In FY2011, the company carried 453,000 tonnes and 557,000 tonnes of cargo in the domestic market and

international market, respectively. ANA offers travel services through its subsidiary, ANA Sales Company. Through this

business division, the company sells tickets for ANA flights. It also plans and sells branded travel packages using ANA

flights, such as ANA Sky Holiday and ANA Hallo Tours. Overseas, ANA provides local services to customers who

purchased travel packages in Japan. The other businesses division offers operations related to air transportation,

information and telecommunications, trading, retailing, real estate and building maintenance, ground transportation and

distribution, and aircraft interior maintenance and repair. ANA's air transportation-related services include information

systems, product sales, logistics, and aircraft parts and repair. Through information systems, ANA mainly develops and

manages airline information terminals and software. The company's logistics services include storage and management

of imported air cargo and ground transportation. It is also involved in product sales including spare parts and other

aircraft-related products, retail sales at airport stores, and mail-order sales.

Key Metrics

The company recorded revenues of $1,727 million in the fiscal year ending March 2011, a decrease of 88.7% compared

to fiscal 2010. Its net income was $292 million in fiscal 2011, compared to a net loss of $720 million in the preceding

year.

Japan - Airlines 0104 - 0756 - 2011


Table 8: All Nippon Airways: key financials ($)

$ million 2007 2008 2009 2010 2011

Revenues 18,690.8 18,667.8 17,472.8 15,349.5 1,727.1

Net income (loss) 409.8 804.8 (53.5) (720.0) 292.4

Total assets 20,101.5 22,376.3 22,084.9 23,326.0 24,191.0

Total liabilities 15,008.5 16,655.5 18,057.5 17,302.3 17,586.8

Employees 32,460 31,345 33,045 32,578 32,731

SOURCE: COMPANY FILINGS M A R K E T L I N E

Table 9: All Nippon Airways: key financials (¥)

¥ million 2007 2008 2009 2010 2011

Revenues 1,489,658.0 1,487,827.0 1,392,581.0 1,223,353.0 137,653.0

Net income (loss) 32,658.0 64,143.0 (4,260.0) (57,387.0) 23,305.0

Total assets 1,602,091.0 1,783,393.0 1,760,165.0 1,859,085.0 1,928,021.0

Total liabilities 1,196,179.0 1,327,447.0 1,439,182.0 1,378,996.0 1,401,667.0


Table 10: All Nippon Airways: key financial ratios

Ratio 2007 2008 2009 2010 2011

Profit margin 2.2% 4.3% (0.3%) (4.7%) 16.9%

Revenue growth 8.8% (0.1%) (6.4%) (12.2%) (88.7%)

Asset growth (3.9%) 11.3% (1.3%) 5.6% 3.7%

Liabilities growth (8.9%) 11.0% 8.4% (4.2%) 1.6%

Debt/asset ratio 74.7% 74.4% 81.8% 74.2% 72.7%

Return on assets 2.0% 3.8% (0.2%) (3.2%) 1.2%

Revenue per employee $575,811 $595,560 $528,757 $471,161 $52,768

Profit per employee $12,624 $25,676 ($1,618) ($22,102) $8,934


Japan - Airlines 0104 - 0756 - 2011


Figure 13: All Nippon Airways: revenues & profitability


Figure 14: All Nippon Airways: assets & liabilities


Japan - Airlines 0104 - 0756 - 2011


Japan Airlines Co., Ltd.

Table 11: Japan Airlines Co., Ltd.: key facts

Head office: 4-11, Higashi-shinagawa 2-chome, Shinagawa-ku, Tokyo 140-8605, JPN

Telephone: 81 3 5460 6600

Fax: 81 3 5460 5929

Website: www.jal.com


Japan Airlines, formerly Japan Airlines International, is a privately-held air transportation company, which provides

scheduled and non-scheduled air transport services as well as aerial work services. Japan Airlines has a global network

reaching around 221 airports in 40 countries and regions together with its codeshare partners. Domestically, the

company covers around 55 airports throughout Japan. Japan Airlines has a fleet of 209 aircrafts including, 146 owned

and 63 leased aircrafts. Japan Airlines serves destinations in Asia, Europe and Oceania as well as in North America

including New York, Chicago, Los Angeles, San Francisco, Honolulu and Vancouver.

Key Metrics

The company recorded revenues of $24,481 million in the fiscal year ending 2009, a decrease of 12.5% compared to

fiscal 2008. Its net loss was $638 million in fiscal 2009, compared to a net income of $212 million in the preceding year.

More recent financial information was not available for this company at the time of publication.

Table 12: Japan Airlines Co., Ltd.: key financials ($)

$ million 2005 2006 2007 2008 2009

Revenues 26,723.7 27,595.8 28,882.2 27,985.1 24,481.3

Net income (loss) 377.6 (592.8) (204.1) 212.3 (638.4)

Total assets 27,134.9 27,117.2 26,238.8 26,634.7 21,965.9

Total liabilities 24,691.4 25,259.4 22,074.8 20,724.1 19,497.0


Table 13: Japan Airlines Co., Ltd.: key financials (¥)

¥ million 2005 2006 2007 2008 2009

Revenues 2,129,876.0 2,199,385.0 2,301,915.0 2,230,416.0 1,951,158.0

Net income (loss) 30,096.0 (47,243.0) (16,267.0) 16,921.0 (50,884.0)

Total assets 2,162,654.0 2,161,240.0 2,091,233.0 2,122,784.0 1,750,679.0

Total liabilities 1,967,908.0 2,013,174.0 1,759,360.0 1,651,714.0 1,553,908.0


Japan - Airlines 0104 - 0756 - 2011


Table 14: Japan Airlines Co., Ltd.: key financial ratios

Ratio 2005 2006 2007 2008 2009

Profit margin 1.4% (2.1%) (0.7%) 0.8% (2.6%)

Revenue growth 10.3% 3.3% 4.7% (3.1%) (12.5%)

Asset growth 2.3% (0.1%) (3.2%) 1.5% (17.5%)

Liabilities growth 0.7% 2.3% (12.6%) (6.1%) (5.9%)

Debt/asset ratio 91.0% 93.1% 84.1% 77.8% 88.8%

Return on assets 1.4% (2.2%) (0.8%) 0.8% (2.6%)


Figure 15: Japan Airlines Co., Ltd.: revenues & profitability


Japan - Airlines 0104 - 0756 - 2011


Figure 16: Japan Airlines Co., Ltd.: assets & liabilities


Japan - Airlines 0104 - 0756 - 2011


Skymark Airlines Inc.

Table 15: Skymark Airlines Inc.: key facts

Head office: HANEDA AIRPORT 1-5-5, OTA-KU, 144-0041 TOKYO, JPN

Telephone: 81 03 5708 8280

Website: www.skymark.jp

Financial year-end: March

Ticker: 9204

Stock exchange: Tokyo


Skymark Airlines is a Japanese domestic carrier providing low fare services and was established in September 1998.

The company has a fleet of 21 aircraft and reports carrying around 4.4 million passengers annually. The company

reports 65 return flights daily on 27 different routes. It is a main carrier at Kobe Airport and is the only operator at Ibaraki

Airport north of Tokyo. In June 2011, Skymark began providing award seats through the Delta Air Lines SkyMiles

program.

Key Metrics

In 2011 the company announced an increase of revenue by 19% to JPY49.4 billion (about $619.8 million) from JPY41.5

billion (approximately $472.5 million) and net loss of JPY 1.1 billion (about $13.8 million) as compared to net income of

JPY2.6 billion (approximately $29.6 million) for 2010. In 2012 the company employed 2,217 employees.

Japan - Airlines 0104 - 0756 - 2011


MACROECONOMIC INDICATORS

Country Data

Table 16: Japan size of population (million), 2007–11

Year Population (million) % Growth

2007 127.8 0.0%

2008 127.7 (0.1%)

2009 127.5 (0.1%)

2010 128.1 0.4%

2011 127.9 (0.1%)


Table 17: Japan gdp (constant 2000 prices, $ billion), 2007–11

Year Constant 2000 Prices, $ billion % Growth

2007 4,751.4 2.2%

2008 4,702.6 (1.0%)

2009 4,443.1 (5.5%)

2010 4,639.6 4.4%

2011 4,607.1 (0.7%)


Table 18: Japan gdp (current prices, $ billion), 2007–11

Year Current Prices, $ billion % Growth

2007 4,356.3 0.0%

2008 4,849.2 11.3%

2009 5,035.1 3.8%

2010 5,488.5 9.0%

2011 5,868.4 6.9%


Japan - Airlines 0104 - 0756 - 2011


Table 19: Japan inflation, 2007–11

Year Inflation Rate (%)

2007 0.1%

2008 1.4%

2009 (1.4%)

2010 (0.7%)

2011 (0.3%)


Table 20: Japan consumer price index (absolute), 2007–11

Year Consumer Price Index (2000 = 100)

2007 100.3

2008 101.7

2009 100.3

2010 99.6

2011 99.3


Table 21: Japan exchange rate, 2007–11

Year Exchange rate ($/¥) Exchange rate (€/¥)

2007 117.8145 161.2087

2008 103.4662 151.3969

2009 93.6167 130.1751

2010 87.8289 116.5760

2011 79.7000 110.9000


Japan - Airlines 0104 - 0756 - 2011


APPENDIX

Methodology MarketLine Industry Profiles draw on extensive primary and secondary research, all aggregated, analyzed, cross-

checked and presented in a consistent and accessible style.

Review of in-house databases – Created using 250,000+ industry interviews and consumer surveys and supported by

analysis from industry experts using highly complex modeling & forecasting tools, MarketLine’s in-house databases

provide the foundation for all related industry profiles

Preparatory research – We also maintain extensive in-house databases of news, analyst commentary, company

profiles and macroeconomic & demographic information, which enable our researchers to build an accurate market

overview

Definitions – Market definitions are standardized to allow comparison from country to country. The parameters of each

definition are carefully reviewed at the start of the research process to ensure they match the requirements of both the

market and our clients

Extensive secondary research activities ensure we are always fully up-to-date with the latest industry events and

trends

MarketLine aggregates and analyzes a number of secondary information sources, including:

- National/Governmental statistics

- International data (official international sources)

- National and International trade associations

- Broker and analyst reports

- Company Annual Reports

- Business information libraries and databases

Modeling & forecasting tools – MarketLine has developed powerful tools that allow quantitative and qualitative data to

be combined with related macroeconomic and demographic drivers to create market models and forecasts, which can

then be refined according to specific competitive, regulatory and demand-related factors

Continuous quality control ensures that our processes and profiles remain focused, accurate and up-to-date

Japan - Airlines 0104 - 0756 - 2011


Industry associations

International Air Transport Association (IATA)

Travel Industry Designator Service, 800 Place Victoria, P.O. Box 113, Montreal, Quebec, H4Z 1M1, Canada

Tel.: 1 514 874 0202

Fax: 1 514 874 1753

www.iata.org

International Air Carriers Association Rue Montoyer, 23, BE-1000 Brussels Belgium

Tel.: 32 2 546 1060

Fax: 32 2 546 1070

www.iaca.be

Association of Asia Pacific Airlines 9th Floor, Kompleks Antarabangsa, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia

Tel.: 60 3 2145 5600

Fax: 60 3 2145 7500

www.aapairlines.org

Japan Business Aviation Association Toranomon MK Bldg. 4F, 5-11-11 Toranomon Minato-ku, Tokyo 105-10001, Japan

Tel.: 81 3 5405 2136

Fax: 81 3 5405 2239

www.jbaa.org

Civil Aviation Bureau Minstry of Land, Infrastructure, Transport and Tourism ,2-1-3 Kasumigaseki, Chiyoda-ku, Tokyo 100-8918, Japan

Tel.: 81 3 5253 8111

www.mlit.go.jp/koku/english/index.html

Related MarketLine research

Industry Profile

Global Airlines

Airlines in Asia-Pacific

Airlines in Australia

Airlines in South Korea

Airlines in China

MARKETLINE | 119 FARRINGDON ROAD | LONDON,

UNITED KINGDOM, EC1R 3DA

T: +44 161 238 4040 | F: +44 870 134 4371

[email protected]

df

E: [email protected]

Copyright of Airlines Industry Profile: Japan is the property of MarketLine, a Datamonitor business and its

content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's

express written permission. However, users may print, download, or email articles for individual use.

marketline industry profile airlines in japan

Documents