Japan Airport Terminal Co.,Ltd.

The occurrence of terrorism or sabotage at Haneda Airport's passenger terminals could cause human and physical damage, as well as suspension of airport functions and loss of social credibility, potentially having a serious impact on business continuity. The Group addresses this through enhanced security systems in collaboration with relevant organizations, the establishment of crime-prevention systems utilizing the latest technologies, and continued education and training for employees.

If natural disasters such as large-scale earthquakes or abnormal weather, aircraft accidents, or major power outages cause severe damage to airport facilities or lifelines, airport functions could be suspended for a prolonged period, potentially having a material impact on business results and financial condition. The Group addresses this by implementing long-term repair plans that include seismic reinforcement of facilities and duplication/decentralization of critical facilities, as well as formulating effective BCPs and conducting various drills.

The emergence and spread of new infectious diseases could have a broad and long-term impact on overall business activities through travel restrictions, a significant decline in aviation demand, and a reduced operational structure due to employee infections. The Group addresses this by utilizing contactless technologies, thoroughly maintaining hygiene management within facilities, disseminating action plans based on an infectious-disease-response BCP, and building a flexible business operation structure that can respond to fluctuations in aviation demand.

Cyberattacks such as leaks of confidential information including customer and management information, core system outages, and ransomware attacks are becoming increasingly sophisticated and elaborate, potentially causing operational disruption, loss of social credibility, economic losses, and legal liability. The Group is promoting 24/7 monitoring systems, cloud infrastructure development, ongoing cybersecurity training and education, and human-resource measures such as the development of relevant regulations.

Due to the declining working-age population from the falling birthrate and aging society and intensifying competition to secure talent, shortages of personnel, delays in talent development, and declines in employee engagement could occur, potentially leading to constraints on store operations, delays in promoting new businesses, and a decline in medium- to long-term competitiveness. The Group addresses this through the introduction of a multi-track personnel system, operation of a mentoring program, and management of the effectiveness of talent measures via a PDCA cycle utilizing engagement surveys.

Insufficient information sharing among group companies, inadequate dissemination of the Company's policies, or the occurrence of fraud or compliance violations could damage the credibility of the group as a whole and reduce management efficiency; preventing recurrence in light of past inappropriate incidents remains a challenge. The Group is promoting revisions to its basic policy on internal control systems, the designation of a supervising division to manage the business plans and operations of each group company in an integrated manner, and the establishment/review of committees to strengthen group management systems.

If an increase in interest-bearing debt due to large-scale capital investment or a significant deterioration in profitability results in a breach of financial covenants attached to loan agreements with financial institutions, the Company could be required to repay borrowings in a lump sum, potentially having a material impact on cash flow and financial condition. The Group addresses this through strengthening earning power based on its medium-term management plan, generating stable cash flow, monthly confirmation of income/expenditure and fund flow trends, and enhanced information sharing with financial institutions.

Physical risks associated with climate change (such as facility damage from abnormal weather) and transition risks (such as tighter regulations including carbon taxes, and increased costs for energy conservation and renewable energy adoption) could increase business operating costs, raise the burden of capital investment, and lower corporate valuation. The Group addresses this through formulating a decarbonization roadmap, expanding the adoption of renewable energy, converting vehicles within the airport to EVs, promoting the 3Rs for waste reduction, and introducing water-saving equipment.

The Group's earnings are heavily dependent on the number of air passengers and the business activities of airlines; if aviation demand were to decline sharply due to a resurgence of infectious diseases, international conflicts, or an economic downturn, there is a risk that business results could fluctuate significantly unless the revenue base from non-aviation businesses is sufficiently developed. The Group is working to mitigate this dependence on aviation by creating new revenue opportunities, including through airport-area development, digital platform businesses, and participation in overseas airport operation projects.

New business ventures, M&A, and large-scale capital investments undertaken as part of the growth strategy carry the risk of failing to achieve expected results, requiring a longer period for investment recovery, or falling short of business plans due to changes in market conditions; overseas businesses also entail country risk. Recognizing the importance of business evaluation with awareness of cost of capital, the Company will newly establish an Investment Committee to clarify investment/financing decision criteria and withdrawal criteria based on thorough market research, business feasibility assessment, and risk analysis.