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Aug 07, 2006
JAL Group Announces First Quarter Consolidated Results for Financial Year 2006

Tokyo, MondayAugust 7, 2006: Today the JAL Group announced consolidated financial results for the first quarter (April through June 2006) of the current financial year (ending March 31 2007).

Total operating revenues for the three-month period were 522.2 billion yen, 18.8 billion yen (+3.7%) more than the same period last year. During the quarter, JAL continued its restructuring of international passenger routes by concentrating more on high profit and high growth routes. Route restructuring led to an improvement in passenger load factors, and contributed to the 5.2% increase in international passenger revenue during the period.

Cost-structure reforms conducted by the JAL Group limited the negative impact that increased fuel costs, up 11.6% on the previous year, and an unfavorable US$ = Yen exchange rate had on operating expenses. Operating expenses were 554.1 billion yen, up 3.5% on the same period last year..

The Group posted a first quarter net result of a 26.7 billion yen loss, an improvement of 11.5 billion yen on the previous year's first quarter net loss of 38.3 billion yen.

Over the past 12 years, the first quarter result has generally shown a loss, with the loss being made up and profits earned in the second quarter.

JAL Group First Quarter Consolidated Resultsfor FY06

Units: billions of yen

1st Quarter FY06

(April 1 - June 30, 2006)

1st Quarter FY05

(April 1 - June 30, 2005)

Previous Yen Comparison

Previous Year

% Comparison

Total operating revenue

522.2

503.3

18.8

103.7%

International passenger

167.8

159.6

8.2

105.2%

Domestic passenger

150.9

150.3

0.6

100.4%

International cargo

43.8

41.1

2.6

106.6%

Other

159.5

152.3

7.2

104.7%

Total operating expenses

554.1

535.4

18.7

103.5%

Operating income (loss)

- 31.9

- 32.0

0.1

-

Ordinary income (loss)

- 35.5

- 37.4

1.8

-

1st quarter net income (loss)

- 26.7

- 38.3

11.5

-

(Figures rounded down to one decimal place.)

AIR TRANSPORT SEGMENT DETAILS

International passenger traffic: Overall passenger demand on international routes was favourable. There was particularly strong demand on Europe, US, Southeast Asia and Korea routes. Demand on China routes bounced back, making a remarkable recovery from the negative impact that last year's anti-Japanese demonstrations had on travel to China.

Due to an increase in demand for first and business class travel, and fuel surcharges introduced to cope with higher fuel prices, there was an 11.2% increase in unit price. Revenue passenger numbers decreased by 5.8% to 3,192,191 on the same period last year, mainly due to a 11.6% reduction in the number of available seats kilometer (ASK), the result of route restructuring and aircraft down-sizing. The international passenger load factor was up 4.6 points on the same period last year. Revenue passenger kilometers decreased by 5.4% and revenue grew by 8.2 billion yen (5.2%) to 167.8 billion yen.

Domestic passenger traffic: When compared to last year, the domestic revenue passenger total was down by 1.6% to 10,368,755, mainly due to the increase demand generated by the 2005 World Exposition held in Japan from March 25, 2005. Unit price increased due to fare increases caused by rising fuel costs, resulting in revenues of 150.9 billion yen, up 0.6 billion yen (+0.4%) on the same period last year. JAL increased the number of Class J seats - business class seats - on domestic routes due to popular demand, and expanded its IC check in services. There was a reduction in revenue passenger kilometers of 0.8% - basically no change on the year before.

International cargo traffic:Demand out of overseas markets, such as China including Hong Kong, was generally weak, but demand from Japan was buoyant. Traffic measured in revenue cargo ton kilometers was down 3.4%. However, unit price rose 10.3% when compared to the previous year, due to an increase in the percentage of high yield cargo carried, and due to revised fuel surcharges. Revenue was up by 2.6 billion yen (+6.6%) to 43.8 billion yen.

Fuel: This year's first quarter fuel costs rose to an average of US$82.0 per barrel of Singapore Kerosene, compared to an average price of US$66.7 in the same period last year. Countermeasures such as fuel hedging and fuel consumption reductions, helped to limit the full impact of the price increase. As a result, the fuel bill for the quarter was 97.4 billion yen, an increase of 10.1 billion yen, up 11.6% on the same period last year.

Foreign exchange: The average US dollar - yen exchange rate for the period was US$1.00 = 115 yen, compared to a rate of US$1= 106.7 yen for the previous year. The exchange rate had a negative effect on operating income of minus 6 billion yen.

Forecast for the consolidated results for the year ending March 31, 2007 is unchanged on the forecast made on May 10, 2006.

Consolidated Financial Forecast for the Year Ending March 31, 2007(As of May 10,2006)

Units: millions of yen

FY 2006 - Year ended

March 31, 2007

Difference on FY2005 Year ended March 31, 2006

(1) Consolidated operating revenues:

2,301,000

101,700

International passenger revenue

725,000

34,800

Domestic passenger revenue

703,000

43,100

International cargo revenue

198,000

17,500

Other

675,000

6,500

(2) Consolidated operating income

17,000

43,800

(3) Consolidated ordinary income

500

42,100

(4) Consolidated net income

3,000

50,200

JAL Group Consolidated Traffic Statistics First Quarter

First QuarterFY2006

(April 1 - June 30 2006)

First QuarterFY2005 (April 1 - June 30 2005)

Change%

Or points

INTERNATIONAL

Passenger number

3,192,191

3,390,003

94.2%

Revenue passenger Kilometers (000)

15,341,359

16,219,477

94.6%

Available seat Kilometers (000)

21,961,711

24,854,560

88.4%

Revenue seat load factor

69.9%

65.3%

4.6

Revenue cargo ton Kilometers (000)

1,049,579

1,086,497

96.6%

Mail ton kilometers (000)

38,548

37,669

102.3%

Revenue ton Kilometers (000)

2,510,256

2,628,343

95.5%

Available ton kilometers

3,819,694

4,122,269

92.7%

Revenue weight load factor

65.7%

63.8%

1.9

DOMESTIC

Passenger number

10,368,755

10,542,344

98.4%

Revenue passenger Kilometers (000)

7,724,386

7,786,396

99.2%

Available seat Kilometers (000)

12,779,296

12,732,734

100.4%

Revenue seat load factor

60.4%

61.2%

-0.8

Revenue cargo ton Kilometers (000)

90,637

91,801

98.7%

Mail ton kilometers (000)

19,327

19,028

101.6%

Revenue ton Kilometers (000)

697,319

693,591

100.5%

Available ton kilometers

1,500,428

1,493,280

100.5%

Revenue weight l/factor

46.5%

46.4%

0.1

TOTAL

Passenger number

13,560,946

13,932,347

97.3%

Revenue passenger Kilometers (000)

23,065,745

24,005,873

96.1%

Available seat Kilometers (000)

34,741,007

37,587,294

92.4%

Revenue seat load factor

66.4%

63.9%

2.5

Revenue cargo ton Kilometers (000)

1,140,216

1,178,298

96.8%

Mail ton kilometers (000)

57,875

56,697

102.1%

Revenue ton Kilometers (000)

3,207,575

3,321,934

96.6%

Available ton Kilometers (000)

5,320,122

5,615,549

94.7%

Revenue weight l/f

60.3%

59.2%

1.1

International results include data from JAL, Japan Asia Airways and JALways. Domestic results include data from JAL, Japan Transocean Air, JAL Express, Japan Air Commuter, Hokkaido Air System and J-Air.. Domestic results for the 1st quarter FY2006 also includes data from Ryukyu Air Commuter.

DISCLAIMER

Certain statements made in this document, including some management strategies and targets, may contain forward-looking statements which reflect management's views and assumptions. We may not be successful in implementing our business strategies, and management may fail to achieve its targets. The management targets and other forward-looking statements involve current assumptions of future events as well as risks and uncertainties that could significantly affect expected results, including without limitations adverse economic or political conditions in Japan or other countries; increased jet fuel prices; negative changes in foreign exchange rates; terrorist attacks and military conflicts, and health epidemics. Please see other disclosure and public filings we made or will make for additional information regarding the risks in our businesses. To the extent this document contains such forward-looking statements, we have no obligation or intent to update them unless required by law.

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

Telephone: 81-3-5460-3109 / Fax: 81-3-5460-3108/ www.jal.com/en/corporate/

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