• While the global economy continues to face challenges due to the impact of the Coronavirus (COVID-19) outbreak, there is now a movement toward recovery, especially when judged against figures from recent quarters, and it is clear that income from domestic passenger sales and international cargo sales are increasing.
• In response to the decline in demand, ANA drastically reduced the scale of operations to reduce fuel costs, airport usage fees and other associated costs.
• In November, the ANA Group became the first airline in Japan to operate commercial flights from Japan using sustainable aviation fuel (SAF), procured from Neste, the world's leading supplier of renewable fuel. By utilizing SAF, ANA will continue to achieve sustainable growth by creating social and economic value.
• •To address how air travel has changed globally as a result of COVID-19 and position itself for the future, ANA is transforming its business model with a future oriented operational strategy aimed to meet the needs of a broader set of customers.

TOKYO, Jan. 29, 2021 -ANA HOLDINGS INC. (hereinafter "ANA HD") today reports its financial results for the financial period ended December 31, 2020.

Overview
In the first nine months (April 1, 2020 - December 31, 2020; hereinafter the "nine months ended December 31, 2020") of fiscal year 2020, although the Japanese economy was naturally in a difficult position due to the effects of COVID-19 and ANA HD was impacted with a sudden decrease in corporate earnings. We are now seeing movement toward a recovery.

The airline industry has faced an unprecedented, worldwide and severe contraction, resulting from passenger demand which dramatically decreased by immigration restrictions and stay-at-home request in Japan.

Under these economic conditions, operating revenues decreased to 527.6 billion yen due to the severe impact across all segments. As a result, ANA HD implemented measures to cut costs by 473.0 billion yen through reducing fixed costs, in addition to reducing variable expenses by curbing the scale of operations. However, due to the extremely large reduction in operating revenues, operating loss was 362.4 billion yen, ordinary loss was 350.7 billion yen and net loss attributable to owners of the parent was 309.5 billion yen. ANA HD recorded special losses of 76.0 billion yen for business transformation expense, due to large-scale retirement of aircrafts aimed at improving the revenue balance.

Separately, ANA was selected as the "Industry Leader" of the "Dow Jones Sustainability World Index", one of the world's leading indicators of socially responsible investment.

In November, ANA used Sustainable Aviation Fuel (SAF), which has a lower environmental impact than conventional jet fuel, on a regular international flight, marking a first for a Japanese airline. Looking ahead, we will continue to aim for sustainable growth by simultaneously creating social value and economic value.

"Comparing gains made in the third quarter to results from earlier in the year provides a clear indication that our recovery is already underway. We took swift actions to strengthen our finances by raising capital from issuing new shares and securing cash through subordinated loans, as well as strategically recording special losses on the value of the large-sized aircrafts as impairments," said Ichiro Fukuzawa, Executive Vice President and Chief Financial Officer of ANA HOLDINGS INC. "With the worst of the global slowdown behind us, our group is committed to providing safe, reliable and convenient travel options to meet passenger demand. Our employees have gone to great lengths to Reform our Business Structure during this unprecedented crisis, and ANA will continue to adjust our operations including the network, timing and frequency of flights, and the type of aircraft utilized to maximize efficiency."

• ・Due to the impact of COVID-19, customer demand decreased dramatically and operating revenues have significantly decreased year-on-year. Although passenger demand has been moving toward recovery on domestic routes, it began to show decline again from December due to the rise in the number of infections. While passenger demand remains in a slump on international routes, demand for cargo services recovered to the level of the previous year during the third quarter (October - December) due to the resumption of economic activity. In addition to reducing fuel costs and airport usage fees by constraining the scale of operations to match the decline in demand, ANA HD also took steps to reduce personnel costs such as excecutive compensation, managerial wages and lump-sum payments, but a large operating loss was recorded.
• ・Furthermore, as the impact of COVID-19 continues, ANA has engaged in delivering clean and sanitary environments in airports, lounges and aircraft cabins to enable customers to use aircrafts safely and with comfort.
• ・ANA HD has been recognized for its various efforts and performance over the past decade, being named by Flight Global, a leading aviation magazine, as the winner of the Decade of Airline Excellence Awards 2020 for the Asia-Pacific region. ANA was also recognized in the 38th Information Technology Awards (2020) announced by the Japan Institute of Information Technology, receiving the Information Technology Award of Excellence (Customer and Business Functions) due to its efforts in establishing a digital platform to improve its service.

Air Transportation

• 1. International Passenger Service (ANA)
• ・In international passenger services, both passenger numbers and revenue decreased significantly year-on-year. This was due to the continued decline in passenger demand due to the continuation of immigration restrictions worldwide.
• ・In terms of the route networks, while large-scale suspensions are still ongoing, we are closely monitoring demand and selecting which routes to continue operating and which to set as temporary routes. In the three months ended December 31 (October - December), travel demand rose for foreign trainees and international students, as well as for people returning to Japan for the New Year holiday, made possible by the relaxing of immigration restrictions from some countries and regions. Furthermore, since demand is expected to stay at a fixed amount for cargo transportation, ANA HD started operating a Narita-Shenzhen route in December, as well as a Haneda-San Francisco route. As a result, the scale of operations was 18.6% compared to the same period last year.
• ・In terms of sales and services, we have extended our discounted fares for one-way trips flying out of Japan until February of this year. We plan to capture demand for Japanese citizens overseas, foreign exchange students, and other passenger segments, and in December we relaunched our in-flight duty-free service on international flights. This service has been changed so products can be ordered from the seat monitors as a precaution against infection.

As a result, revenue from international passenger service decreased by 475.7 billion yen (down 93.6 percent year-on-year).

• 2. Domestic Passenger Service (ANA)
• ・Domestic passenger services have been heavily affected by COVID-19, with passenger numbers and revenues decreasing significantly compared to the same period in the previous year. After the emergency restrictions were lifted in May, while passenger demand has steadily recovered especially since October, it began to decline again from December due to the increase in the number of infections.
• ・In terms of the route network, the operational volume for the first quarter was 26.7% year-on-year, but by increasing the number of flights to watch the recovery in demand, this number went up to 50.7% for the second quarter (July - September), and was 61.4% in the third quarter (October - December).
• ・In terms of sales and service, based on the COVID-19 situation, a campaign that would allow our customers to change flight dates and destinations without handling fees, was extended until the end of March this year. ANA will continue to strive to enhance services that customers can use with comfort.

Revenue from domestic passenger service decreased by 397.1 billion yen (down 71.7 percent year-on-year).

• 3. Cargo Service (ANA)
• ・For international cargo, as the effects of COVID-19 have caused suspensions and reductions of passenger flights on a global scale and the amount of cargo space was limited, the cargo volume also decreased from the same period of the previous year within ANA HD. Meanwhile, in addition to the increase in demand for emergency cargo transport of medical supplies such as masks during the first quarter (April - June), demand for vehicles and vehicle components, as well as semiconductors and other electronic equipment which began to recover from August, reaching the previous year's levels in the third quarter (October - December) as tight demand continued. In these conditions, besides beginning operation of Boeing 777F large cargo aircraft on the Narita-Frankfurt route in October and the Narita-Bangkok route in December, and significantly increasing the operation of temporary cargo flights using passenger planes, ANA HD has also actively worked to draw in demand by setting temporary flights and charter flights of cargo planes. As a result, revenue reached a record level in the third quarter (October - December), significantly surpassing that of the previous year.

Revenue from international cargo service increased by 23.4 billion yen (up 30.0 percent year-on-year) and revenue from domestic cargo service decreased by 4.3 billion yen (down 22.0 percent year-on-year).

• 4. LCC (Peach Aviation)
• ・Both passenger numbers and revenue decreased significantly year-on-year due to the suspension and reduction of flights together with the decline in demand caused by the effects of COVID-19. Although passenger demand for domestic routes has been recovering steadily since the emergency restrictions were lifted in May, it began to decline again from December due to the increase in the number of infections.
• ・In terms of the route network, domestic flights operated at 42.0% capacity over the three months ended Jun. 30 compared to the same period in the previous year. In addition to restoring the network with additional frequencies in response to increased passenger demand, ANA HD opened the Narita-Kushiro and Narita-Miyazaki routes in August, the Sapporo (Shin-Chitose) - Okinawa (Naha) and Sendai - Okinawa (Naha) routes in October, and the Nagoya (Chubu Centrair) - Sapporo (Shin-Chitose) and Nagoya (Chubu Centrair) - Sendai routes in December. As a result of these additional routes, the scale of operations grew to 112.4% year-on-year for the secound quarter (July - September), and 132.2% for the nine months ended Dec. 31 (October - December). Suspensions continued on all international routes, but flights to Taipei (Taoyuan) partly resumed in October due to the easing of immigration restrictions.
• ・In order to provide passengers with peace of mind, we started a service in November that allows customers to apply for a ticket reservation and an antibody test simultaneously on some domestic routes.

As a result, revenue from the LCC segment decreased by 48.9 billion yen (down 76.1 percent year-on-year).

• 5. Others
• ・Other revenue in Air Transportation was 107.1 billion yen (down 165.6 billion yen, 35.3% year-on-year). Other revenue in Air Transportation includes revenue from the mileage program, in-flight sales revenue, and revenue from maintenance contracts, etc.
• Airline Related, Travel Services, Trade and Retail, and Others
• ・As a result of a decrease in contracts for ground handling services such as passenger check-in and baggage handling at all airports and the decrease in contracts related to in-flight meals due to the impact of suspension and reduction of flights of various airlines due to the spread of COVID-19, operating revenues decreased by 25.8% year-on-year to 166.7 billion yen and operating income decreased 81.9% year-on-year to 2.0 billion yen.
• ・Online sales of ANA international Economy Class in-flight meals started in December, which showed exceptional popularity among consumers. With significant figures, ANA will continue to increase revenue by expanding its product lineup in the future.
• ・Travel services have been heavily affected by the decline in demand with respect to both domestic travel services and overseas travel services. Due to the effects of travel restrictions on overseas travel services, all tours operated by the ANA Group have been suspended.
• ・Through various factors such as the support of the Japanese government's "Go To Travel" campaign from July, domestic travel services saw a gradual recovery in demand-turnover of the dynamic package products sold online exceeding the previous year's levels during the third quarter (October to December), but it began to decline again from December due to the impact of the increase in infections. As a result, operating revenues have decreased 69.7% year-on-year to 36.1 billion yen and operating loss was 4.7 billion yen, compared to an operating income of 1.9 billion yen in the previous year.
• ・As the impact of COVID-19 continues, the "ANA Travelers Online Tour" service was launched to capture new demand. The service enables users to enjoy the scenery of travel destinations while providing a simulated experience of traveling through communication with experts and others familiar with the local area.
• ・The decrease in demand has significantly impacted our retail division, primarily centered around ANA DUTY FREE SHOP airport tax-free store, and ANA FESTA shops in airports. Although ANA FESTA is seeing a steady recovery together with the recovery in domestic passenger service numbers, it began to decline again from December. Furthermore, in the lifestyle-industries business, trade in items such as in-flight food, beverages and amenities also decreased significantly. As a result, operating revenues decreased 46.7% year-on-year to 61.0 billion yen, and an operating loss of 3.0 billion yen was recorded, compared to an operating income of 3.1 billion yen in the previous year.
• ・Due to the decrease in demand for managerial work at airport lounges resulting from the closure of the facilities and decline in demand for other services, operating revenues decreased 12.6% year-on-year to 27.4 billion yen and operating income decreased 74.7% year-on-year to 0.5 billion yen.

Outlook for the FY2020 (April 2020 - March 2021)

• ・There is no change to the consolidated outlook for the FY2020 ending March 31, 2021.

ANA HOLDINGS Financial Results for the Nine Months Ended December 31, 2020