Press Release

Tokyo, Friday July 29: The JAL Group has decided on changes in route network, frequency and fleet plans in the second half of the current business year ending March 31 2006.

Up to now JAL has tried to overcome the effects of rising fuel prices through restructuring and cost improvements but the company has reviewed its previous plans placing further emphasis on increasing profitability.

The following fundamental policies have been applied to each business segment.

International passenger business: JAL will suspend under-performing routes in order to maximize profitability. Low cost subsidiary, JALways, will be introduced on more routes to increase cost competitiveness. In the period JAL will retire a total of four 747 aircraft, three more than was initially planned.

Domestic passenger business: JAL will continue to develop network plans in an effort to increase passenger convenience at the same time as maximizing profitability.

International Cargo: JAL will review freighter route and frequency to meet changes in market demand and increase revenue.

A. International Passenger Routes

(1) Reduction and suspension of low profit routes

(2) Review of JALways' role

From October 1^st, JALways will maintain its operating capacity by taking over four routes from JAL: Tokyo-Manila, Tokyo-Brisbane, Tokyo-Denpasar (Bali) and Osaka-Denpasar. JALways already flies on selected routes including Japan-Honolulu routes and Japan-Bangkok routes.

(3) Other changes to international passenger services

B. Domestic Routes

(1) Haneda Routes: JAL will allocate large, medium and small aircraft according to seasonal demand changes in order to optimize aircraft utilization. For example, larger-sized aircraft will be utilized on Sapporo routes during peak seasons.

(2) Osaka (Itami/ Kansai) and Kobe Routes: In order to maximize passenger convenience in the Kansai area, JAL Group will actively develop the route network from the three airports in the Kansai region: Itami, Kansai and the soon to be open Kobe Airport. The JAL Group will adopt an appropriate strategy taking into account total demand and the network development of other carriers.

When Kobe Airport opens on February 16, 2006, JAL plans to provide flights to six Japanese destinations: Sapporo, Sendai, Tokyo, Kumamoto, Kagoshima and Naha. Details will be announced in November 2005.

(3) Nagoya Routes: JAL will continue to develop business at the newly opened Chubu International Airport (also known as Centrair), such as by increasing flights between Chubu and Okinawa, where there is high demand. JAL's commuter subsidiary J-Air will increase operations with CRJ-200 aircraft at Nagoya's Komaki airport.

C. International Cargo Freighter Plans

JAL will increase flights in response to high cargo demand out of Asia.

JAL will continue to monitor the developments of bilateral aviation talks between China and Japan, and is ready to further develop both the passenger and cargo route network between these two countries.

D. Fleet Plans

Changes to previous plans.

(1) Early retirement of three additional 747 aircraft to a total of four.

(2) Transfer of one 767 aircraft from international to domestic service

By the end of FY2005 the JAL Group will operate a fleet of 281 aircraft, instead of 284 according to the original plan.

FY2005 Fleet Changes

Aircraft of Ryukyu Air Commuter (RAC) not included.

*All business plans are subject to government approval.

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