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Nov 07, 2005
JAL Launches New Corporate Reforms

Tokyo November 7 2005: The JAL Group, faced with a continuing difficult business environment, is launching a new initiative of corporate reforms including additional investment in safety systems, customer-focused service to increase competitiveness, restructuring of international passenger operations, and cost restructuring.

The new plans, announced on November 7th, are aimed at creating a airline group with enhanced customer appeal and a stronger corporate base in time for 2009, a crucial year for Japan's aviation industry. That year will see the expansion of Tokyo's predominantly domestic Haneda Airport with more international services and the extension of Narita Airport's second runway enabling more arrivals and departures there, all adding up to a major business chance for JAL's future growth.

1. Securing safety and reliability - rebuilding the safety foundation

JAL will invest about 60 billion yen in safety related systems and measures between FY2006 and FY2010. This investment includes the strengthening of Information Technology systems and improved maintenance facilities in support of flight safety, such as additional maintenance docks at Narita for B777 aircraft.

Other related plans include an increase in the number of maintenance technicians and a review of maintenance training programmes.

2. Commitment for quality

Fleet modernization plans include the introduction of 23 new aircraft between 2006 and March 2009. These include 4 Boeing 787s and 19 Boeing 737-800s. Other passenger service improvement plans include upgraded in-flight entertainment systems and in-flight meals.

JAL will accelerate the retirement of older 747 models, (the 200 and 300 series) completing the process during FY2009. Currently JAL has 30 aircraft of this type in service.

Between 2006 and 2010 JAL will invest 65 billion yen in service related equipment improvements.

JAL will adopt the concept of Universal Design/Universal Service in developing and providing products and services. This will be introduced to airport facilities and aircraft cabin specifications. We will assign qualified “Service Care Staff” at airports.

Joining the oneworld global alliance will enable JAL to expand the network, e-ticket cooperation, mutual use of airport lounges, link-up of mileage programmes and smooth through check-in services for customers.

3. Restructuring of international passengers operations to aim for sustainable growth

From FY2006, JAL plans further restructuring of international routes and reduction in aircraft size and capacity.

In FY2007-2008, JAL will expand routes served by middle and small size aircraft, mainly on Japan-China routes. By continuing fleet downsizing JAL will increase the percentage of middle and small size aircraft from the present 40.0% to about 60% by the end of FY2008 (March 2009). From FY2009, JAL will expand its fleet in order to capitalize on the start of international services from Haneda and the increase of slots at Narita, and proactively expand into growth markets.

As announced in the current medium term business plan, JAL's management is focusing on increasing efficiency and cost-effectiveness through simplification, standardization and equalization of the business process, aiming at an expansion of e-business and improved cost structure reform, boosted by participation in the oneworld global alliance.

4. Additional contingency measures

- Board members remuneration will be reduced further, ranging from 23% to 40%.

- Monthly salary cuts for employees of JAL International, JAL Domestic, JAL Corporation and JAL Sales, averaging 10% will be introduced from January 1st 2006 to March 2008. We will hold negotiations with the labor unions.

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For further information contact: geoffrey.tudor@jal.com / stephen.pearlman@jal.com

Telephone: 81-3-5460-3109 / Fax: 81-3-5769-6487/ www.jal.com/en/corporate/

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