China Airlines Ltd. · TWSE:2610
China Airlines — Q1 2024 Earnings Presentation
33 slides from China Airlines's earnings presentation, Jun 6, 2024
Slide 1: China Airlines 2024 1st Investor Conference
China Airlines 2024 1st Investor Conference Jun.6 ’24
Slide 2: Safe Harbor Notice
Safe Harbor Notice • The information disclosed in this presentation and its accompanying announcements, including content relating to business outlooks, financial operations, and business forecasts, is based on information derived from internal corporate data and external economic developments as a
Slide 3: Agenda
Agenda 2024Q1 Operating Performance Market Outlook Passenger Market, Performance & Strategies Cargo Market, Performance & Strategies Fleet Development Sustainability Actions and Achievements 3
Slide 4: 2024 Q1 Operating Performance
2024 Q1 Operating Performance
Slide 5: 2024 Q1 Financial Performance
2024 Q1 Financial Performance NTD 100 Million 2024 Q1 2023 Q1 Differences YoY Operating revenue 486.5 426.9 59.5 13.9% Passenger revenue 330.1 245.5 84.6 34.5% Cargo revenue 123.1 157.0 -33.9 -21.6% Other operating revenue 33.3 24.4 8.9 36.4% Net Operating Income 38.5 18.3 20.3 111.0% Net Income Aft
Slide 6: Operating Revenue by Source
Operating Revenue by Source The share of passenger revenue has gradually increased to nearly 70% of total revenue, and passenger revenue in the first quarter of 2024 increased more than 30% compared with the same period in 2023 Monthly revenue NTD100 million Pax Rev Cgo Rev Other Rev 160 120 80 96 9
Slide 7: The growth operating revenue in 2024Q1
The growth operating revenue in 2024Q1 The operating revenue over the first quarter of 2024 increased by 9.6% compared with the same period last year. Mostly contributed by the 32.1% annual growth rate of passenger revenue, the passenger revenue from all regions increased significantly. NTD100 milli
Slide 8: Cost Breakdown and Comparison
Cost Breakdown and Comparison 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2024Q1 33.2% 14.3% 16.7% 14.2% 10.5% 11.1% Airport & Rental & ground Passenger service, Fuel Depreciation Labor Maint. handling Sales & OTH 2023Q1 35.5% 17.4% 14.2% 13.6% 10.0% 9.3% Based on individual financial report 8
Slide 9: Fuel Cost Analysis
Fuel Cost Analysis Unit 2024Q1 2023Q1 YoY Jet fuel(MOPS) USD/BBL 102.4 110.6 -7.4% Fuel Consumption 10K BBL 377.7 354.7 6.5% TWD Fuel Cost 100 million 130.7 130.3 0.3% TWD Hedging gain 100 million 0.04 0.13 - TWD Total fuel cost 100 million 130.7 130.4 0.2% Based on individual financial report 9
Slide 10: Crude Oil and Jet Fuel Price Trends
Crude Oil and Jet Fuel Price Trends USD/BBL Brent Jet Fuel 120 108 108 98 100 91 94 82 80 81 23 MAY 24’ 77 60 1-Jan-24 1-Feb-24 1-Mar-24 1-Apr-24 1-May-24 10
Slide 11: Financial Risk Management
Financial Risk Management • CAL’s hedging of fuel, exchange rates and interests rates etc., are based on the decisions made by the Risk Committee of Board of Directors. • Exchange rates：Natural hedge is applied in order to reduce exposure of currency fluctuation risks. • Interest rates ： Issue fixed
Slide 12: Market Outlook
& CHINA AIRLINES :¥) Market Outlook
Slide 13: 2024 Global Economics Outlook－Slow but Steady
2024 Global Economics Outlook－Slow but Steady • From 2023 to 2024, the global GDP is expected to remain steady at 3.2% • In 2024, the U.S. GDP is projected to reach as high as 2.7%, serving as a major driver of global growth • China's economic outlook is weakening due to sluggish domestic demand GDP
Slide 14: Global Passenger Market Overview
Global Passenger Market Overview • In February 2024, driven by the Lunar New Year celebrations, global international passenger traffic for the first time exceeded pre-pandemic (2019) levels. • Due to factors such as aircraft supply and labor shortages, the load factor across various regions for the
Slide 15: Forecast for the Recovery of International Passenger Markets by Region
Forecast for the Recovery of International Passenger Markets by Region Regional Recovery（RP, 2020-2026） 2019 = 100% 2020 2021 2022 2023 2024 2025 2026 123% 110% 113% 113% 111% 107% 109% 107% 106% 104% 102% 98% 95% 97% 97% 91% 85% 86% 79% 79% 73% 67% 62% 40% 34% 33% 35% 31% 28% 27% 26%28% 19% 15% 9%
Slide 16: Global Cargo Market Overview
Global Cargo Market Overview • Driven by the booming e-commerce, limited shipping capacity (due to the Red Sea crisis), and diversification of supply chains, the demand for air freight has shown positive YoY growth since August 2023. • In January 2024, the Asia-Pacific region reached a peak in cargo
Slide 17: Passenger Market Overview
Passenger Market Overview Taoyuan airport passenger Demand Continues to Soar • In Q1 2024, passenger traffic at Taoyuan Airport reached 93% of the levels in 2019 • Since the lifting of travel restrictions in 2022, travel demand has been rising month by month, regardless of the season • It is anticip
Slide 18: Cargo Market Outlook
Cargo Market Outlook ---Benefiting from E-commerce Boom, Expected to Grow Quarterly • In Q1 2024, cargo volume was higher compared to the same periods in 2019 and 2023 • Due to a continuous supply of cross-border e-commerce goods after the Lunar New Year in March, and increased shipments of AI and s
Slide 19: Delivery Delays, Capacity Constrained
Delivery Delays, Capacity Constrained • Based on previous aircraft delivery cycles, the peak annual delivery volume from 2020 to 2023 should have reached approximately 1,800 aircraft per year. • Due to post-pandemic supply chain disruptions, the global aviation industry is facing delivery delays, wi
Slide 20: Passenger Market, Performance & Strategies
Passenger Market, Performance & Strategies
Slide 21: 2024 Q1 Passenger Operational Results
2024 Q1 Passenger Operational Results 2024Q1 vs 2024Q1 Passenger Revenue 2024Q1 2023Q1 2023Q1 Sources by Region Passenger Hong revenue 27.9 21.1 +32.1% Kong, 4% Trans- (NT $billion ) Pacific, Revenue 21% passenger 2,945 1,877 +56.1% Northeast (‘000) Asia, 32% Available Seat Kilometer 11.8 9.5 +24.8%
Slide 22: Capacity (AS) Reached 80% & Revenue up to 119% of pre-COVID19
Capacity (AS) Reached 80% & Revenue up to 119% of pre-COVID19 Long-Haul S.E. Asia AS：90%~116% AS：90% （PAX revenue：138%~178%） （PAX revenue：116%） AS up to 80% Revenue up to 119% China & in 2024Q1 Japan、Korea Hong Kong AS：80% AS：52%~61% （PAX revenue：114%） （PAX revenue：52%~68%） ※ 2024Q1 vs.. 2019Q1(AS &
Slide 23: Passenger Operation Strategy
Passenger Operation Strategy Steady Development Continuous Innovation • Take advantage of Taiwan’s • Provide a unique journey to passengers geographic position as a transit hub. with enhanced digitalized customer service. • Develop bilateral tourism by integrating local resources. • Upgrade member s
Slide 24: Cargo Market, Performance & Strategies
Cargo Market, Performance & Strategies
Slide 25: 2024 Q1 Cargo Operational Results
2024 Q1 Cargo Operational Results 2024Q1 vs 2023Q1 vs 2019Q1 2024Q1 Cargo Revenue Cargo Sources by Region revenue 12.3 -21.6% +21.6% Hong (NT $billion ) Oceanic, Kong, 4% Carried tons (‘000) 166 -9.8% -8.3% North East 2% Asia, 5% Available Freight Ton Kilometer 1.82 -6.6% -0.5% China, 6% (AFTK)(bill
Slide 26: Cargo Market Share Performance in 2024Q1
Cargo Market Share Performance in 2024Q1 CI's Cargo Market Share in Taiwan Market in 2024Q1 • In 2024Q1, China Airlines maintained the 60.0% leading market share from 2023 across all 51.2% cargo segments, including export, import, 40.0% 40.0% transfer, and direct transfer in Taiwan. 30.7% 26.0% • Ch
Slide 27: Global Market Outlook
Global Market Outlook • 2024H2, the global freight market will maintain stable growth, and demand is estimated to be better than 2024H1 • Global e-commerce will continue to see a growth in the near future • The industrial supply chain inventory continues to be depleted, and the forecasts for the pro
Slide 28: Cargo Operation Strategy
Cargo Operation Strategy Optimize Network and Strengthen Revenue Management • Introduce the new 777F freighter. • Focus on the cross-border e-commerce and AI-related semiconductor markets, and optimize the cargo network accordingly. • Pursue medium- and long-term customized services and chartered fl
Slide 29: Fleet Development
& CHINA AIRLINES :¥) Fleet Development
Slide 30: Fleet Development
Fleet Development Aircraft Type 2024.Q1 End of 2024 Remark 777-300ER 10 10 787-9 0 0 2025 Commencing Introduction A350-900 15 15 One Extra Lease Revert Aircraft to Lessor、 A330-300 18 16 Extend Short Leases 737-800 10 10 Extend Short Leases A321neo 11 15 Continue to Introduce Passenger 64 66 744F 13
Slide 31: Sustainability Actions and Achievements
Sustainability Actions and Achievements
Slide 32: Carbon Reduction Target/Strategy
Carbon Reduction Target/Strategy • CAL continues to execute fleet renewal, introduce fuel-saving technologies/sustainable fuels, improve passenger/cargo load factors, optimize routes and air traffic management operations, reduce fuel consumption and carbon emissions intensity, and lower operational
Slide 33: Thank you
& CHINA AIRLINES :¥) Thank you