2020_2q_anahd_e

5/27 － Strategic Emphasis and Progress by Business

◎ I will now discuss the strategic points and progress by business. ◎ In our International Passenger Business, we are preparing to expand capacity in the next fiscal year. Accordingly, we are making steady progress in all areas, including human resources hiring and training, as well as receiving aircraft. As part of our expanding network at Narita Airport, we introduced service to/from Perth in September and began service to/from Chennai on October 27. We plan to start Narita-Vladivostok service in March of next year. ◎ In our Domestic Passenger Business, we are taking advantage of the impact of our new fare structure, introduced last fiscal year, to provide greater convenience through earlier advanced reservations, while achieving improved unit price at the same time. Moving forward, we plan to increase Premium Class seats on our wide-body aircraft, introduce new seats in regular class service, and take other measures to improve the quality of our in-flight products to raise unit price and strengthen our revenue platform. ◎ In our International Cargo Business, we began operating a Narita-Shanghai route using wide-body freighters in July of this year. Today, we began using these aircraft in our Narita-Chicago route as part of our efforts to offer new services, including transport of special items such as oversize cargo and hazardous materials. At the same time, we intend to improve profitability during the second half of the year through even greater flexibility in capacity adjustments not already incorporated into our original plan. This may include reducing the number of flights or suspending some routes. ◎ Our LCC Business has completed the centralization of flight operations under Peach Aviation beginning with this winter schedule. We have eliminated duplicate routes and integrated back office departments to pursue synergies through the merger. Further, we intend to improve yield management as a way to resist the increasingly severe competition from overseas airlines. At the same time, we will restructure routes, including a response to lower demand on routes to/from Korea. ◎ Please turn to page 7.