ANA HOLDINGS INC.

If a failure occurs in aircraft operation-related systems or reservation, payment, and boarding management systems, it could become substantially difficult to provide air transportation services, and the inherent risk assessment is rated as "very high." The risk is increasing due to the progress of cloud adoption and the increase and sophistication of AI-enabled cyberattacks. The Group has established a comprehensive response system through the CSIRT launched in 2024, 24/7 monitoring, a system architecture oversight function, and conducts failure response training.

If a large volume of personal information, including ANA Mileage Club member information, is unlawfully leaked, this could result in claims for damages, payment of fines or surcharges imposed by governments in various countries, and reduced competitiveness due to loss of trust from customers and society, with the inherent risk assessment rated as "very high." The risk is further increasing due to the frequent occurrence of information leak incidents from cyberattacks both domestically and internationally, as well as the strengthening of related laws and regulations. The Group implements computer virus countermeasures, monitoring for unauthorized operations, enhanced authentication, continuous system vulnerability inspections, and education and awareness activities for all employees.

Amid continued high prices and supply shortages of SAF (Sustainable Aviation Fuel), there are risks of increased costs from purchasing emission credits, reduced competitiveness due to fare pass-through, and increased costs from stricter environmental regulations such as carbon taxes. Delays in climate change countermeasures could also lead to lower evaluations from investors and customers. The Group has set a medium-term target of reducing CO2 emissions by at least 10% in real terms by FY2030 (ending March 2031) compared to FY2019 (ending March 2020) levels, and is promoting operational improvements, technological innovation, SAF supply chain development, use of emissions trading, and diversified use of negative emissions technologies.

Since the Group's business foundation is concentrated in the Tokyo metropolitan area, if Haneda or Narita Airport is significantly affected by a natural disaster, there is a risk of serious constraints or disruptions to business operations. There are concerns about the intensification and increased frequency of wind and flood damage due to climate change, as well as the occurrence of large-scale earthquakes. The Group has formulated an all-hazard type BCP and promotes BCM, has established backups for core functions, prepared satellite phones, stockpiled supplies, and a safety confirmation system, and conducts regular disaster prevention drills in cooperation with airport operating companies and others.

With the expansion of the international business, the risk of overseas staff, crew members, and business travelers becoming involved in wars, conflicts, terrorism, or large-scale riots has relatively increased, potentially resulting in human, property, and functional damage. There are also concerns about impacts on the supply chain from an economic security perspective. In addition to maintaining internal communication systems, manuals, and various training programs during normal times, the Group promptly gathers information, confirms the safety of personnel, and issues alerts when risk events occur.

Based on the experience of being severely impacted by COVID-19, a recurrence of a large-scale infectious disease outbreak could make it difficult to properly provide passenger and cargo transportation services due to a sharp decline in demand from restrictions or bans on human movement and mass absenteeism among officers and employees. There are also concerns that climate change may increase infectious disease risks. The Group maintains stockpiles of masks and other supplies, maintains a system for physical transport response through ownership of dedicated cargo aircraft, and has built an optimal response system for limited demand.

As Japan's population continues to decline, securing labor such as flight crew, mechanics, and airport staff is becoming difficult, which may result in rising per-unit labor costs and operational constraints due to labor and skill shortages. Labor shortages among outsourcing partners and general agents could also become a business continuity risk. The Group monitors turnover rates and recruitment fulfillment rates across the entire group, implements measures to improve engagement, strengthens recruitment activities including year-round hiring, and promotes measures such as mutual support between airports.

If coordination with competing operators on fares, seat capacity, etc. violates competition laws in various countries, it could develop into a situation that shakes the management foundation through massive fines, corrective orders, restrictions on business licenses, and claims for damages. In addition, failure to respond to the increasing complexity and stricter enforcement of various industry-specific laws, including the Civil Aeronautics Act, carries the risk of administrative sanctions such as business improvement orders or business suspension orders. The Group has established rules for approving contact with competitors based on its competition law compliance manual, obtains advance approval for exemptions under the Antimonopoly Act, and has built a system for quickly reflecting information on the enactment and revision of related laws and regulations internally.

In the event of an aviation accident or serious incident, in addition to liability for damages arising from personal injury or property damage, revenue could decline broadly and over the long term due to customers refraining from air travel or shifting to other airlines' flights. There is also a risk that preventive flight suspensions due to manufacturing defects in aircraft, etc. could lead to flight cancellations or reductions. The Group conducts safety quality audits by a dedicated organization, visualization through SPI (Safety Performance Indicator), risk management focused on recurrence prevention and preemptive prevention, and continuous education and training utilizing the "ANA Group Safety Education Center."

The increasing uncertainty in the international situation, including the situation in Ukraine and the Middle East and the U.S.-China conflict, may lead to a slowdown in business travel and tourism demand and a decline in inbound demand. Increased air transport costs and cases requiring detour flights are also anticipated, which could broadly impact revenue on both international and domestic routes. In response, the Group is building a network that avoids excessive dependence on specific countries or regions, and has established a system for flexibly changing flight plans and routes in the event of deteriorating conditions.