JAL Group Troubled Results

16th May 2003

TOKYO MAY 16: The Japan Airlines System Corporation, holding company of the JAL Group, today
announced the consolidated result for the year ended March 31, 2003, of Japan Airlines and Japan Air
System. The announcement includes the company’s forecast for the year ending March 31, 2004.
This is the first time that the JAL/JAS results have been published together on a consolidated basis.
For comparisons with the previous year, we have calculated what the combined JAL/JAS results
would have been for FY2001.
International passenger numbers increased by 4.1% to 14.6 million (measured in revenue passenger
ton kilometers, the volume increase was almost 6%). In the first half, the negative impact of the US
terror attacks (September 11, 2001) remained. Other negative factors were the 2002 World Cup in
Korea and Japan, which discouraged Japanese overseas travel, and in the second half the Bali
bombing, the Guam typhoon and the build-up to the war in Iraq stifled international tourist travel out
of Japan.
Domestic traffic was intensively price competitive and yield went down by 4.0%. Demand was
unchanged on the previous year.
International cargo traffic increased especially outbound from Japan, with an increase in revenue
Fuel costs. Although the price of Singapore kerosene increased from US$27.3 per barrel to US$30.5
per barrel, the Group fuel bill was 246,200 million yen, or 4,500 million yen lower than the
previous year because of hedging strategy and favorable exchange rates.
Non operating income included 42,000 million yen in credit memos from manufacturers (JAL 35,000
million, JAS 6,100 million and others)
The average US dollar exchange rate went down from the previous year’s rate of 124.6 yen to the
dollar to 122.9 yen to the dollar, a difference of 1.7 yen, which had the effect of boosting international
air transport segment revenues by 2,600 million yen.
International passenger traffic estimates have been revised down by 14% on the year just ended. The
effect of the Iraq war on international passenger demand is estimated to last five months in all, (April
through August inclusive), and the impact of the SARS outbreak will last until March 2004 on China
and South East Asia routes. On other routes demand is expected to recover to the level of medium
term business plan estimates by December 2003.
The negative impact on operating revenue is estimated at 162 billion yen and the estimated negative
impact on operating profit is 115.5 billion yen. This will be offset by cost-cutting measures to save
37 billion yen and a fuel price forecast revised by 5.5 billion yen. Net impact on operating profit is
estimated at 73 billion yen.
Domestic demand is expected to pick up a little and yield will improve following fare increases this
International cargo demand forecast is expected to remain steady.
Aircraft credit memos will boost non-operating income by 30 billion yen.
Assumptions on which the forecast is based include an exchange rate of 120 yen against the U.S.
dollar; and, with respect to aviation fuel costs, Singapore Kerosene at a market price of US$28 per
barrel, and the CIF price of crude oil at US$25 per barrel.
No dividend is expected for the year ending March 31 2004.


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