High Absolute DebtDespite improved ratios, absolute debt (~¥1.19T) remains large for an airline and can constrain liquidity and strategic choices in downturns. High nominal obligations amplify exposure to demand shocks and interest cost variability, limiting room for aggressive capital allocation or rapid deleveraging within months.
Weak Free Cash Flow ConversionOperating cash is sizable, but free cash flow converts only ~34% of net income and fell ~17.7% YoY. Weaker FCF reduces the firm's ability to pay down debt, fund capex or absorb shocks, making financial flexibility more sensitive to cyclical demand and capital spending over the coming months.
Margin Compression RiskMargins have softened from 2024 peaks (net margin fell from 7.6% to ~6.5% TTM), signaling cost or pricing pressure in a cyclical airline sector. If sustained, margin erosion would curb earnings resilience and further strain cash generation, complicating investment and deleveraging plans over the medium term.