ANA Reports Profitable First Half to Fiscal Year 2006.

Tokyo, Japan, Oct 31, 2006 - (JCN Newswire) - ANA Group today reported a profitable first half for the current fiscal year, the six months period from April 1 - September 30, 2006.

A consolidated net profit of JPY 33.2 billion (2005: JPY 19.7 billion) was posted on revenue of JPY 752.8 billion (2005: JPY 690.9 billion). These figures represent a 9% improvement in revenue and a 68.8% improvement in net profit compared with the previous year - ANA's highest ever net profit at the half year point. However, the large difference can be attributed partly to an extraordinary loss posted in fiscal 2005, which arose from a change in accounting methods. No conspicuous extraordinary loss was reported in the present term under discussion.

Operating profit fell 1.2% to JPY 68.7 billion (2005: JPY 69.5 billion) squeezed by an almost 41% increase in fuel costs compared with the previous term. As a result, recurring profit also dropped 2.4% to JPY 57.9 billion (2005: JPY 59.4 billion).

Consolidated Financial Results

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                                                    (Billions yen)
                          FY 2006     FY 2005
                         mid-term    mid-term     Change       %
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Operating revenue           752.8       690.9       61.9    +9.0

Operating cost              684.0       621.3       62.7   +10.1

Operating profit             68.7        69.5       -0.8    -1.2

Non-operating revenue       -10.7       -10.1       -0.6      --

Recurring profit             57.9        59.4       -1.4    -2.4

Extraordinary profit/loss    -1.1       -14.7       13.6      --

Net profit                   33.2        19.7       13.5   +68.8
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ANA Group consists of air transport, travel, hotel operations and other businesses. Taking the air transportation segment alone, a consolidated revenue of JPY 629.3 billion (2005: JPY 573.3 billion) and an operating profit of JPY 60.7 billion (2005: JPY 62.6 billion) were posted. Airlines* within the Group carried 25.6 million passengers (2005: 25.2 million) over 30.4 billion Revenue Passenger Kilometres (RPKs), which breaks down to 23.3 million domestic passengers and 2.2 million international passengers over 20.4 billion and 9.9 billion RPKs, respectively.

Domestic Air Transportation

In the Japanese domestic market, despite increased competition on trunk routes, the number of passengers carried held steady vis-a-vis the previous year, when domestic travel was buoyed up by the World Expo of summer 2005. Amongst other factors, the retention of passengers is attributed to the successful introduction of the new Tabiwari promotional fare, in April, which spurred demand for individual travel. ANA has also continued its efforts to make air travel ever more simple and convenient, and on September 1 started its innovative 'SKIP' service at 24 airports up and down the country, which removes the physical need to check-in for flights.

"The good results from the first six months of this year are evidence of the recovering Japanese economy and the increasing demand for air travel within that, particularly business travel. Domestically, we are pleased to have beaten last year's passenger and revenue figures, given that demand was particularly high in summer 2005 because of the Aichi World Expo, and that more airlines have been competing on our trunk routes since April this year," commented Tomohiro Hidema, ANA's Executive Vice President, Finance. "Internationally, we have been able to improve our load factors and capture a growing number of passengers, while maintaining capacity at more or less the same level," he continued.

International Air Transportation

On the international front, strong demand for individual travel - in particular business travel - continued to fuel demand. The six months under review saw the completed roll-out of the popular New Style Club ANA product on North American routes. Aircraft downsizing and increased frequencies on Osaka (Kansai) - Qingdao and Osaka (Kansai) - Xiamen achieved a better match of aircraft type with demand and secured greater passenger convenience.

Demand for leisure travel to China showed no residual effect of the anti-Japan demonstrations which depressed passenger numbers in the same period of the previous term. The June 2 move to Terminal 1 at Tokyo's Narita airport with other Star Alliance member carriers resulted in vastly improved connecting times and amenities for all passengers. Facilities for first and business class passengers in particular were greatly enhanced.

As a result, passenger growth outstripped capacity growth, and revenue improved 20% compared with same period of the previous year.

Cargo

Healthy demand for cargo services was also evident throughout the six months under review, with gains in both domestic and international arenas. Domestically, figures were buoyed up by the improving economic outlook in Japan, and the addition of extra late-night cargo flights in February this year. Internationally, ANA was able to capture a greater share of the Japan-North America market thanks to the introduction of aircraft with greater cargo capacity on those routes.

Outlook for Fiscal Year 2006

The economic recovery in Japan is expected to continue and with it a healthy demand for air transportation services. Combined with ANA's drive to increase sales to counter growing competition, this is expected to produce revenue outstripping that of earlier forecasts. However, the price of fuel is also expected to continue at its current historically high level, and greater sales and marketing costs will be incurred as ANA moves to grow passenger numbers, driving up operating costs and squeezing profits. Accordingly, while revenue projections will be raised, projected costs will also increase. Although ANA will continue its on-going efforts to reduce them at all levels, costs are forecast to increase by JPY 30 billion, and revenue by the same amount; profit forecasts remain unchanged.

Revised Forecast for Fiscal Year 2006

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                                                   (Billions yen)
FY2006 Forecast              Revised     Original
                            forecast     forecast       Change
                                        (4/28/06)
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Operating Revenue              1,450        1,420         30.0

Operating cost                 1,374        1,344         30.0

Operating profit                76.0         76.0            0

Recurring profit                47.5         47.5            0

Net profit                      27.0         27.0            0
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*All figures are rounded down (except percentages). All comparisons are year-on-year.

*ANA Group Airlines: ANA, Air Nippon (ANK), Air Japan (AJX), A-Net (Air Nippon Network), Air Next (NXA), Air Central (CRF).

For more information, please visit the ANA investor relations website at http://www.ana.co.jp/eng/aboutana/corporate/ir/index.html .

About ANA

All Nippon Airways (TSE: 9202), or ANA, is the seventh largest airline in the world by passenger load (IATA ranking) and Japan's largest domestic carrier. It is listed on the Tokyo Stock Exchange with a market capitalisation of US$8.1bn (JPY932bn) as of 29 Sep 2006. Carrying almost 50 million passengers every year to 50 destinations in Japan and 23 cities throughout Asia, Europe and the United States, ANA is recognized for outstanding passenger service both on the ground and in the air. In the greatest Japanese tradition of mixing hospitality with high technology, personalised a la carte service complements state-of-the-art entertainment systems and the latest in cabin design. ANA has been in the airline business for over 50 years, and combined with ANA Group companies, its activities extend across a host of complete travel and aviation-related services. For more information, please visit www.ana.co.jp.

Source: ANA

Contact:

Rob Henderson,
ANA Public Relations
[e-mail]

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