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| ANA Group Mid-Term Corporate Plan Fiscal Years 2005 –
2007 |
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| TOKYO February 1, 2005 – ANA Group today
announced its Mid-Term Corporate Plan for the three fiscal years
commencing April 1, 2005 to March 31, 2008. |
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| The new plan builds on the success of its predecessors, in particular
the FY 2003-2005 Cost Reduction Plan, under which annual cost savings
of ¥30 billion per annum were achieved within the present fiscal
year, 2004, one year earlier than anticipated. Thanks to successful
and quick implementation of this and other restructuring measures,
ANA Group was able to resume dividend payments at the end of the
Fiscal 2003 – for the first time in 7 years – and forecasts
for the present fiscal year were revised upwards yesterday in expectation
of greater revenue and profit. |
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| These achievements come in spite of the continuing difficult operating
environment exacerbated by high crude oil prices. ANA Group has
been able to maintain profitable operations within these volatile
market conditions, and at the end of the present fiscal year expects
to announce its first profits on international operations in the
18 years since their inception. |
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| The new plan holds the expansion and internationalisation of Haneda
firmly within its sights. The three year period of fiscal 2005 –
2007 is a time for further groundwork in terms of increasing profitability
and strengthening the ANA Group’s fiscal fitness on the “Road
to Haneda”. |
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| 1. Positioning |
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| The ANA Group aims to be Asia’s top airline
in terms of quality, customer satisfaction and value creation. |
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| 2. Forecast for Demand |
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1) Domestic: demand is not expected to grow. After
growing at a rate of 4-6% in the 90s, it has leveled off since fiscal
2002 and is expected to maintain this trend.
2) International: Europe and North America current levels, China
5% growth, the rest of Asia 2% growth.
3) Cargo. The following levels of growth are expected: Japan, 7%,
China, 13-15%, the rest of Asia 5-7%, Europe 4-5%, North America
2%.
4) For present purposes, the US dollar is presumed to be at US$1=¥110.
Dubai crude-oil is presumed at US$37 per barrel, and Singapore kerosene
at US$53 per barrel. |
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3. Strategy
1) Value Creation
(1) International strategy |
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| In view of stronger than expected demand and to increase
operating profit, introduction of the Boeing 777 series as part
of ANA’s fleet rationalisation plan will be speeded up. Ten
777-300ER derivatives, as opposed to the originally planned six,
will be brought into service for use mainly on the North American
market. This will comprise two new orders and the conversion of
767-300ER aircraft on order to two 777-300ER aircraft. These more
efficient aircraft will be used to improve service and product quality
and to differentiate ANA from its competition. |
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| ANA Group will also investigate the reopening of its
Chicago route (closed in the aftermath of 9/11), other routes from
which it has withdrawn, and the opening of new routes to China. |
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| (2) Domestic Strategy |
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| As demand is expected to remain stable, emphasis will
be placed on improving profitability within the network. The same
aircraft for both international and domestic operations, as well
as jet and propeller aircraft, will be used to secure a more convenient
service with better connections, and a more convenient schedule. |
| (3) Cargo |
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| As the third pillar of the Group’s aviation business,
freighter operations will be expanded in line with growing demand
and used to increase late night cargo flights in the first instance,
as well as on international operations, in order to strengthen mail
and cargo services. Including both international and domestic operations,
revenues are expected to increase by 20% compared with fiscal 2004
levels. |
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| (4) Alliance |
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| Star Alliance will remain at the centre of ANA’s
alliance strategy as the Group works towards greater value creation
and increasing overall competitive strength. In particular, all
Star Alliance member carriers will move together into Terminal 1
of Tokyo’s Narita Airport in 2006. |
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| (5) Financial |
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Expansion of shareholder equity to ¥250 billion yen
by the end of FY 2007. |
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Reduction of the present debt to equity ratio to four times
from the present seven times. |
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Losses from other businesses within the Group and losses
arising from the liquidation of assets are expected to amount
to ¥30 billion. |
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| 2) Accelerate Fleet Rationalisation |
| The rationalisation of the fleet into fewer types
of newer, more economic aircraft to bring down costs and increase
competitive strength across the network. |
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| 4. Financial Forecast |
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| The following consolidated results for the ANA Group
are forecast: |
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