JAL unveils medium-term plans

The JAL Group has revealed its medium-term business plan for the five years
FY2006 to FY2010, from April 1, 2006 to March 31, 2011.Safety and customer satisfaction will be at the forefront of the JAL Group’s medium-term business plan, outlined in the following statement:
‘Specifically, we plan to return to our traditional strengths in order
to win back the trust and confidence of all of our stakeholders by rebuilding our safety record one day at a time and
by providing the customer with products and services that prioritize safety, comfort and reliability. We aim to
launch the revival of the JAL Group in FY 2006 through, among other measures, the merger in October of our two
main operating subsidiaries, JAL International and JAL Domestic.

The JAL Group plans to execute this new Medium-Term Business Plan, which sets forth concrete steps for the
achievement of the goals announced last November in our JAL Group Corporate Reform Policy. In order to
capitalize on the business opportunities presented from FY 2009 by the expansion of Haneda Airport, which includes
increased international flights, and the increase in slots at Narita Airport, we see the first three years (from FY
2006-2008) as the rebuilding stage for our Group’s business base, during which time we plan to further restructure
costs as well as international passenger operations. We aim to realize sustained growth by rebuilding our business
base by focusing our resources on safety and customer satisfaction.
The three main pillars of the new Medium Term Business Plan are as follows:
1. Toward a New JAL Group - Regaining Trust and Focusing on Customer Satisfaction
We plan to implement the recommendations of the Safety Advisory Group, an external committee of experts
established last year to advise the JAL Group on safety issues, in order to rebuild the foundation for flight safety and
refocus our corporate mind set to concentrate on customer satisfaction. We plan on investing an estimated 125 billion
yen in the areas of safety and service so that we can strive to reemerge as a company with high safety standards and
strengthen the quality of our products and services.
2. Improve profitability through the restructuring of international passenger operations and the downsizing of
our equipment
In FY2006 ?2008, we plan to continue to focus on high profit and high growth routes and will suspend low profits
routes to build a more profit-focused network; achieve downsizing of our fleet by replacing older aircraft with new
mostly medium and small size aircraft to strengthen our competitive edge; and enhance our cost effectiveness in
accordance with our reassessment of our business. We plan to increase both seat load factor and yield through
measures such as enhancing route networks to meet the needs of business travelers and providing high quality
products and services.
3.Implement further cost-restructuring
We will seek to continue to build upon the measures we have taken to improve our return estimated to generate cost
savings of approximately 57 billion yen for FY2005. In order to achieve our medium term goal, which is cost
restructuring in the amount of approximately 119 billion yen* per year, by the end of FY 2010, we plan to continue to
focus on and continually reassess our cost structure on a Group wide basis.’
——-