Rolling Plan
2019

JAL Group Medium Term Management Plan - Rolling Plan 2019

Challenge, Leading to Growth

February 25th, 2019Japan Airlines Co., Ltd.

1

Rolling Plan
2019

On Establishing Medium Term Management Plan-Rolling Plan 2019
We reflect deeply on a series of alcohol-related incidents which were the cause of “The Order to Improve
Business Operations” in December 2018 and are determined to act swiftly to rebuild safety and sense of security.
Further, to meet the expectations of all our customers including regions and society, we commit to restore publictrust and to increase corporate value by enhancing our services and making a substantial contribution to society.
Rebuilding Safety and Sense of Security
In addition to taking measures to prevent recurrence of similar acts in response to the order to improve business
operations, we will inspect the JAL Group thoroughly from a safety perspective in order to rebuild the foundationof the company including improvement of the corporate culture and human resources development.
Restoring public trust and increasing corporate value

We will prepare for the development of airports in metropolitan area scheduled in FY2020 and contribute toachieving the 40 million inbound passenger target for 2020 and the successful delivery of the Olympic andParalympic Games Tokyo 2020.
Further, we will continue to drive our initiatives even more vigorously to create new business values, develop
human resources and solve social issues, just to name a few.

Building on our achievements under the JAL Group FY2017～2020 Medium Term Management Plan subtitled“Challenge, Leading to Growth,” we will solidify our foundation in Rolling Plan 2019 and finish up the mid-termplan by “accelerating” actions to prepare for FY2020, the final year of the plan, and to achieve our long-termtargets specified in the “Grand Design.”

2

Table of Contents
１

Review and Long-term Targets in the"Grand Design"-1 Progress of FY2017～2020 Mid-termManagement Goals-2 Review of FY2017～2018-3 Long-term targets in the "Grand
Design"Rolling Plan 2019２

-1 Positioning of Rolling Plan 2019
-2 Expand networks-3 Innovate better products andservices-4 Expand business domains-5 Human Resources x Technology-6 ESG Management towards
achievement of SDGs

Our 3 Management Goals¥
JAL Target

SafetyRealize “Zero Aircraft
Accidents” and“Zero Serious Incidents”

FY2019～2020 Initiatives

Customer
Satisfaction

FinanceAchieve the world’s
top-level Customer
Satisfaction by
FY2020

Achieve 10% or above
operating profit margin
and 9% or above Returnon Invested Capital(ROIC)“JAL Target-3 Management Goals” and “Overview of New
Medium Term Management Plan.”

３

Financial Strategy and Capital Policy-1 Financial strategy-2 FY2018～2020 Investment Plan

４ Revenue and Expense Targets-1 Fleet Plan and ASK-2 Revenue and profit targets-3 FY2019 related indicators3

Progress of FY2017～2020 Mid-term Management Goals

Rolling Plan
2019

As safety targets were not reached, we will inspect the JAL Group thoroughly
from a safety perspective in order to rebuild the foundation of the company.

SafetyAircraft Accidents

Serious Incidents

1
Realize “Zero Aircraft
Accidents” and “ZeroSerious Incidents”

00Target2017

Review• Aircraft Accident (June 2018)：
Cabin attendant fractures left leg due to sudden turbulence
during cruising• Serious Incident (May 2018)：
Aircraft suffers engine trouble just after takeoff and metallic
parts fall from engine while returning to departure airport.
Enforced countermeasures such as shortening the inspection
intervals.
• As a proactive security management measure, improved use of
database and internal audits to speedily gather information andlaunched new practices■ Responses to the order to improve business
operations and business improvement
recommendation• Incorporated tighter drinking management with reviewed alcohol
inspection criteria in the Safety Management System• Set up an in-house Verification Committee to identify essential
problems and consider corrective action

1

1

2017

2018

0
2018

TargetGoing forward• Improve work environments such as speedy provision of weather
information and enhanced cockpit connectivity• Safety Education for all staff based on the three actuals “theactual place, object and people.” Maintain human error measures
focused on the impact of the surrounding environment andorganizations• Intensive measurements for FY2020
Falling objects:
Gather and study information about falling objects aircraft,shorten the inspection periods, plan and take actions forprevention, and enhance daily inspection.
Security:
In addition to security management launched in FY2018,
introduce advanced security inspection devices■ Implement bold reforms• Establish and implement measures to tackle issues in terms of“Awareness” of Safety First, “Culture” of Solving Tasks
Completely and “Organizations” to Assure Flight Safety by theend of March 20194

Progress of FY2017～2020 Mid-term Management Goals

Rolling Plan
2019

To achieve financial targets and customer satisfaction targets,
we will “accelerate” quality and service enhancement initiatives.
Customer
Satisfaction

Domestic Flights NPS*1+5.3pt+1.7pt+0.8pt2017

2018(FY-end result) (OCT-DEC result)

2020
target• Domestic Flights (▲0.9pt from FY2017-end result）：
Trended up in FY2018 but dropped from end of OCT when
drinking incident occurred• International Flights (＋0.6pt over FY2017-end result） ：Evaluation of Japanese passengers declines as with Domestic
Flights, but on winning SKYTRAX 5-STAR rating, evaluation of
Non-Japanese passengers improved

Achieve 10% or above
Operating Profit Margin
and 9% or above ROIC
(Return on Invested Capital)*2+2.0pt+2.6pt2017

2018(FY-end result) (OCT-DEC result)+4.5pt2020
targetGoing forward

Review

Finance(vs start of FY2017)(vs start of FY2017)(Recommend Intention Rate）

Achieve the world’s
top-level Customer
Satisfaction by FY2020

International Flights NPS*1• Improve basic product & service quality including on-time
operations• Improve operability through website and application
innovations• Improve comfort through new aircraft launches such as
Airbus A350, cabin modifications and airport renewals

Operating Profit Margin

Return on Invested Capital(ROIC)

10.0%

12.6%

11.8%

9.0%

10.1%

9.5%

Target2017

2018

Target2017

2018＊1 Net Promoter Score a questionnaire to measure the customers‘ intentionts fo recommend a service＊2 An indicator to measure profit that a company generates from invested capitals.

5Rolling Plan
2019

Review of FY2017～2018

2017
Expandnetworks

2018• Launched Narita=Melbourne, Narita=Kona routes• Increased flight frequency between Haneda=London• Reached basic agreement on new partnershipwith 5 foreign carriers

343 cities• Established preparatory company T.B.L. for mediumand long-haul LCC• Launched Haneda =Manila, Tokunoshima=Okinoerabu=Naharoutes• Early disaster recovery at Kansai and New Chitose airports• Reached basic agreement on new partnership/expansion with
2 foreign carriers
cities402

Innovatebetterproducts
and services• Revamped passenger service system• Launched complimentary inflight Wi-Fi service on
domestic routes• Renovated lounges(Manila, Narita, Naha, Komatsu,
Kagoshima)• Introduced wooden wheelchair, planned wheelchair ski
tour• Started to introduce ATR42-600 to Japan Air Commuter,completed aircraft renewal of Ryukyu Air Commuter• Increased free video programs and introduced live
TV on domestic flights• Opened new lounge(Honolulu/Okayama), and renovatedlounge in Narita, Itami and Matsuyama• Expansion of mileage use opportunities for receiving free ticket• Introduced preventive care charter flight and sign
language interpreter service• Completed aircraft renewal of J-AIR and Japan Transocean Air.

Expandbusinessdomains• Partnered with supersonic aircraft developer BOOM andspace development company ispace• Established Fintec company• Started providing full maintenance service including
maintenance management to Spring Airlines Japanand Amakusa Airlines• Established travel prepaid card business in Fintec

HR ×Technology• Launched workstyle innovation in Flight Operations, Cabin
Attendants, Maintenance divisions using mobile devices• Workstyle innovation in back-offices using RPA＊1• Established JAL Innovation Lab• Introduced JAL OODA＊2• Launched workstyle innovation in airports division using mobile
devicesAwards（2018）
Nadeshiko Brand
2018

New Diversity
Management
Selection 100

SKYTRAX
5 starIT Japan Award
2018 Grand Prix

1st place
FlightGlobal
On-time Arrival Rate

FY2018 Award for
Excellence in Corporate
Disclosure＊1 Robotic Process Automation. Concept that robots with technologies such as artificial intelligence automate tasks＊2 Observe/Orient/Decide/Act . A decision-making process that enhances speed and creativity through this loop

6Rolling Plan
2019

Long-term targets in the "Grand Design"

We strive to realize “Grand Design” soon, and accelerateenhancing our services and making a substantial contribution to society.

JAL VisionCorporate Policy
JAL Vision
Mid-term
Management Plan

To realize the JAL Group Corporate Policy and become “The world’s most valued and preferred airline”,
we will focus on the following while continuing our unwavering efforts and determination in maintaining flight safety

1

Transform JAL intoa truly global airline
As a Japanese carrier, we will leverage Japan’s
uniqueness and strengths, many of which are
acclaimed around the world, and further expand
our business in global markets. We aim tobecome an airline that is recognized andsupported by customers in both Japan andaround the world. To accomplish this, we will
promote diversification of values and humanresources, and adapt flexibly and speedily to
global changes.

2Create new values
one step ahead ofcompetitors
We will continue to embrace new challenges and be
one step ahead of competitors in the industry. We
will continuously work to create relevant andinspiring value offerings. To accomplish this, we willtreat each and every customer encounter as unique,and provide unparalleled travel experience throughintertwining highest service quality and latest digitaltechnology.

3

Achievesustainable growth
Being in a competitive and volatile industry,
we will continue our focus on balancing growthand stability. To accomplish this, we have set dual
goals of both high profitability and financial
stability. We will actively invest in future growth,pass on benefits to customers, shareholders andstaff, and contribute to regions and the society atlarge.

Within this 10-Year Grand Design period, we will
• Service over 500*1 major cities in the world• Have 50%*2 of revenue from overseas
sales for international passenger
operations• As a group of professionals that are able
to dynamically accommodate with multicultural and diversified markets andenvironments• Provide a stress-free travel experience forall our customers• Create new businesses and services that
stimulate air travel demand• Adopt new technology and source
capabilities to improve quality andproductivity, and to innovate customer
experience• Aiming to maintain the target of profit
margin 10% or above, achieve Operating
Revenue 2 tn yen/Operating profit 250 bn
yen/Market capitalization 3 tn yen• Maintain safe operations and lead thedevelopment of the airline industry• Actively contribute to tackling social
issues such as SDGs*1＊1 Aiming to realize a sustainable society, SDGs consist of

17 targets that the international community should be solved
by 2030.

7

Table of Contents
１

Review and Long-term Targets in the"Grand Design"-1 Progress of FY2017～2020 Mid-termManagement Goals-2 Review of FY2017～2018-3 Long-term targets in the "Grand
Design"Rolling Plan 2019

２

FY2019～2020 Initiatives-1 Positioning of Rolling Plan 2019
-2 Expand networks-3 Innovate better products andservices-4 Expand business domains-5 Human Resources x Technology-6 ESG Management towards
achievement of SDGs

３

Financial Strategy and Capital Policy-1 Financial strategy-2 FY2018～2020 Investment Plan

４ Revenue and Expense Targets“Positioning and Direction”, JAL Group Medium Term
Management Plan (Apr 28, 2017)-1 Fleet Plan and ASK-2 Revenue and profit targets-3 FY2019 related indicators8

Rolling Plan
2019

Positioning of Rolling Plan 2019

We will rebuild the foundation of the company by inspecting the JAL Groupthoroughly from a safety perspective, and “accelerate” actions to
prepare for FY2020 and realize the “Grand Design”.
Rolling Plan 20192019～20202017～20182021～

Restore public trust and increase corporate value
Meet the expectations of customers, regions and society

Accelerate ongoing initiatives
Expand networks

FY2020Business Environment

Innovate better products
and services• Development at Narita
and Haneda

Expand business domains
HR × Technology

Accelerate the realization of the“Grand Design”• 40 million inboundpassenger target• Olympic and Paralympic
Games Tokyo 2020

FY2027 Target

JAL Vision
Grand
DesignRebuild Safety and Sense of Security
Inspect JAL Group thoroughly from a safety perspective andreshape the company

9Rolling Plan
2019

Expand networks
FY2019～2020 Focus Points
JAL Operation

Airline Partners

Service over 500 major
cities in the world■ Expand networks at Haneda and Narita
Narita＝Seattle service launch (Mar 31, 2019〜）
Narita＝Moscow flight frequency increase (Mar 31, 2019〜）
Narita＝Bengaluru service launch (open by FY2020 summer schedule)■ Expand partnerships with global partner airlines

Have 50% of revenue from overseas sales
for international passenger operations■ Provide services to 500 cities soon
Target year FY2020■ Contribute to world events held in Japan andregistration as World Heritage site
Participate in 2019 Rugby World Cup, Olympic and Paralympic
Games Tokyo 2020, promote registration of Amami and Okinawa asWorld Natural Heritage site contribute to passenger
transport through carrier’s network

Launch joint business *1 ：Hawaiian Airlines, China Eastern Airlines
Expand joint business ：British Airways
Kansai＝London service launch (Mar 31, 2019〜)
Finnair
Kansai=Helsinki flight frequency increase (Apr 1, 2019〜)
New Chitose＝Helsinki flight frequency increase (Dec 16, 2019〜)■ Enter medium-and long-haul LCC business

Launch codeshare：Aeromexico Airlines, VISTARA
Expand codeshare：Alaska Airlines■ Expand LCC partner strategy

Expand sales activities in overseas regions with joint business partners(FY2020FH〜）

Offer low-cost high-quality new travel style on medium- and long-haulroutes to Asia, Europe and North America from Narita hub

Deepen relationship with our Japanese LCC affiliate andcontribute to inbound demand expansion through low-fares

Main network from Seattle hub
Passenger business portfolio from FY2020
Stability

High

Full Service Carrier

Growth

LCC partner

Price
range

NEW

Mid- and long-haul LCC
Maintenancemanagement

High*1 Assuming approval from relevant authorities

Domestic
Flights

Short

T.B.L. (preparatory company)
International
Flights

Low

Long

10

Rolling Plan
2019

Innovate better products and services
FY2019～2020 Focus Points
Excellent Quality & Comfort

Personal & Timely■ Introduce new aircraft and improve cabin comfort
Domestic Flights ：Introduce the A350-900(Sep 2019〜 installpersonal monitors, power sources)
Introduce the 787-8 (Oct 2019〜 install personal monitors,
power sources)
Install personal power sources on 767/737 progressively
Introduce the ATR42-600 (Hokkaido Air System)
International Flights ：Fully-flat Business Class seats on all flights on Europe andNorth America, Australia routes (Jun 2019〜)■ Meet diverse customer needs• Improve/expand multilingual services, inflight meals and lounge
drink/meal service to meet diverse needs, cashless payment• Improve the accessibility by modifying check-in counters, providing sign
language translation service and renewal of Web page
• Chatbot, Chatbox, SNS・SMS to provide timely
information and to progress the business quality

Provide a stress-free travel experience
for all our customers■ Realize “smart airports”（FY2020〜)
Refurbish/increase self-check-in machines, introduce self-baggage drop,
promote “Fast Travel” by using face authentication and shorten
procedure time

Domestic Flights ：5 airports (Haneda, New Chitose,
Itami, Fukuoka, Naha)
International Flights ：2 airports (Narita, Haneda)

Image of “smart airports” (FY2020～)
Increase new selfcheck-in machines
Check-inIntroduce selfbaggage drop

Aim for zero
waiting time at countersof contact center• Integrate multiple smartphone apps and improve usability
Advance security
check■ Actions for operation stabilities
Improve on-time operation quality
Optimize flight schedule, use stand-by aircraft, improve theefficiency of airport operations
Strengthen disaster response capacity
Rebuild BCP*1 including early recovery plan of flights, taking
into account recent disasters, provide multilingual services anddeliver safety and sense of security.

＊1 Business Continuity Plan. Provides measures to continue operations in case of unexpected situations.

One ID by faceauthentication(Only international flights)

Automated gate

11Rolling Plan
2019

Expand business domains
FY2019～2020 Focus Points
Realize air transport
for the global market

Create new businesses and services
that stimulate air travel demand

Maintain safe operations and lead thedevelopment of the airline industry

Airline-related business■ Realize “sustainable regional aviation”
The aviation industry plans to establish a Limited Liability Partnership(LPP) to stimulate demand through greater efficiency from a unified
operations & maintenance structure and code sharing (scheduled in FY2019)■ Expand contracted services using our know-how• Expand contracted services for other airlines, such as airport handling,
maintenance, crew training and cargo handling• Establish a cooperative business in the engine maintenance field including
MRJ engine with Japanese heavy industry manufacturers

Travel & Transportation■ Promote initiatives to increase inbound visitors andrevitalize regions• Provide experiential travel using regional tourism resources, develop
products utilizing local specialty products, advertise in inflight magazines,
etc. through business-local government collaboration• Develop original products and open a tourism farm through joint venture“JAL Agriport Co., Ltd.” with WAGO Co., Ltd. (FY2020〜)■ Enter the business jet business (Apr 2019〜)
Established joint venture JAL Business Aviation Co., Ltd. with Marubeni Corp.
and promote increased use of business jets

■ Promote “Air Mobility Revolution”• Promote initiatives to commercialize drones for cargo transportation• Participate in industry-academia-government collaboration for “flying cars”

New market exploration■ Enter the digital marketing business
Established a joint venture with Nomura Research Institute Co., Ltd.
called JAL Digital Experience Co., Ltd. to provide customers with truly
unique digital experiences, services and products that enrich lifestyles
based on customer data (scheduled in autumn of 2019)■ Fintec business service expansion
Provide services as a neobank＊1; e.g. exclusive accounts orforeign current deposits that suit travel prepaid card
”JAL Global WALLET”

Business portfolio
Airline-related
business

Travel &Transportation

New market
exploration

JAL’s customer base

JAL’s know-how

JAL×Partners
Stimulate aviation demand

AirportGrand handling
Cargo & mailCrew training

Maintenance

FintecBusiness jet

Drones for transport

Digital marketing

Airport business■ Participate in supersonic jet and space development
Support development by providing JAL assets such as maintenancetechnology＊1 To partner with a bank and provide new financial products & services

12

HR ×

Rolling Plan
2019

Technology
FY2019～2020 Focus Points

As a group of professionals that are able todynamically accommodate with multi-cultural anddiversified markets and environments■ Relearn and practice the JAL Philosophy
Build framework to link lessons from past failures and reflection to practice■ Promote health management (pursue mental andphysical health of staff)
Proactively promote preventive medicine that suits each staff through a Data
Health Plan*1■ Nurture professionals• Nurture JAL OODA-type staff and leaders that act independently• Promote global staff in all over the world to important position• Develop expertise of senior staff and expand work fields (including raisingcompulsory retirement age)
• Continue in-house entrepreneur audition “Wings of Creation” and introduce“Lab member” system to verify staff’s own perceptions and intelligence■ Train the next generation of aviation professionals
to lead Japan’s aviation industry• Build a scheme to hire and train foreign staff using the new residence status• Participate in founding of Aeronautical Engineer University through industryacademia-government cooperation and train aeronautical engineers■ Create social value through new technologies andideas
Established corporate venture capital (CVC) fund firm called Japan Airlines
Innovation Fund.

■ Build world’s most advanced maintenancetechnology base
Build an advanced integrated maintenance base that produces next-generation
maintenance technology at Narita (start rebuilding in FY2020)

Adopt new technology and source capabilities
to improve quality and productivity, andto innovate customer experience■ Labor-saving and automation through workstyleinnovation on frontlines
Flight Operations : Introduce new system to manage manuals unitarily
Cabin Attendants : Introduce RPA, AI to work process
Airport： Introduced GSE *2 equipped with advanced technology such as
automatic driving
Maintenance： Introduction of electronic aircraft log book and aircraft
maintenance record management system
Cargo ：Use image authentication technology, automated transport
robots, AI, etc.
Back-offices：Promote work process innovation through RPA, AI■ Promote innovation through partnerships with
Labs of other companies
Lab Alliance with NTT Communications, Docomo, KDDI, IBM, SAP, CTC,
The Nikkei, etc. and use new technologies across countries and industries

Platform for innovation
Create innovation
NEW

NEW

CVC
Technology & Data

Partners

Lab Alliance

Idea & Action

Innovation Lab

PoC*3

Human Resources
Employee’s wisdom and aspirations on “This is what I want to do or be”

人財NEW
Business modelcompetition

Lab members*1 Analyze and use the digital data of health medical information effectively*2 Ground Support Equipment: Ramp Bus, Tow Truck, etc.
*3 Proof of Concept, means demonstration experiment13

Rolling Plan
2019

ESG Management towards achievement of SDGs

In this Medium Term Management Plan,
we look to identify priority issues from the viewpoint of ESG management.
And strive to solve social issues through to achieve SDGs*1 in 2030.

2030
FieldsEnvironmental

Grand Design
SocialCustomer &Region2020
Medium Term
Management
Plan

View of ESG
Management

Priority Issues• Reduce greenhouse gas• Reduce wastes• Lower noise• Lead safe operation in aviation industry• Provide Air travel for all customers• Promote initiatives to increase inboundvisitors as a tourism nation• Revitalize all regions in Japan• Products and services trusted bycustomers

SocialHuman Rights
D&I*2• Diversity & Inclusion, health management• Develop female leaders• Establish healthy*3 supply chains

Governance• Obey compliance• Disclose information positively andkeep accountability• Robust risk management*1 Aiming to realize a sustainable society, SDGs consist of 17 targets that the international community should be solved by 2030.
*2 To take advantage of different experiences and perspectives, accepting the difference, and create new things.
*3 Condition which realize close attention to environment, fair business process, respect of human right etc.

14

Table of Contents
１

Review and Long-term Targets in the"Grand Design"-1 Progress of FY2017～2020 Mid-termManagement Goals-2 Review of FY2017～2018-3 Long-term targets in the "Grand
Design"Rolling Plan 2019

２

FY2019～2020 Initiatives-1 Positioning of Rolling Plan 2019
-2 Expand networks-3 Innovate better products andservices-4 Expand business domains-5 Human Resources x Technology-6 ESG Management towards
achievement of SDGs

３

Financial Strategy and Capital Policy-1 Financial strategy-2 FY2018～2020 Investment Plan

４ Revenue and Expense Targets“Financial Strategy and Capital Policy” in JAL Group Medium
Term Management Plan Rolling Plan 2018 (Feb 28, 2018)-1 Fleet Plan and ASK-2 Revenue and profit targets-3 FY2019 related indicators

15

Rolling Plan
2019

Financial strategy

We will strategically allocate capital to increase corporate value, while maintaining
a firm financial structure with high capital efficiency.
Improve asset efficiency
and capital efficiency• Due to investments and preparatory
costs for “development at Haneda andNarita” in FY2020, together withtemporary supply-demand imbalance,
ROE and ROIC will decline temporarily.
However we aim to maintain or increase
ROE from 10% and further increase ROIC
through sustainable profit growth.

158

Further increase
shareholder returns

Capital allocation• We will maintain approximately 2.6 months’
worth of revenue as cash on hand required
for stable management and allocate theadditional capital strategically.
• Growth investment is actively promoted withinterest-bearing debt. Also, the 50-billion yen
strategic growth investment line will beeffectively utilized.
• By the first half of FY2019, approximately 80
billion yen will be injected to the Corporate
Pension Fund for strengthening its financialbase and reducing debts relating to JAL
retirement benefits .

Strengthen financialbase of Corporate
Pension Fund
▲80

330

Injectionplanned in
FY2019H1

Strategic growthinvestment line
▲50

Free cash flow*2
・Debt utilization,etc.

• We will raise the dividend payout ratio
from FY2019 to maintain the current levelof dividend per share, after the effective
tax rate increase, in order to stabilize
dividends while referring to Dividend on
Equity Ratio (DOE) .
• Combining stable dividends and flexible
share repurchases, we will implement
shareholder return measures , taking into
account a total return ratio *1.

Shareholder
returns

Capital allocation

2.6 months’
worth ofrevenue(Unit：JPY bn)

Cash & deposits
projection at the endof FY2018*1（ Total amount of dividend + Amount of share repurchase) / net profit
attributable to owners of the parent*2 Cash flow from operating activities＋cash flow from investing activities

Cash & deposits
Projection at the endof FY202016

Rolling Plan2019

FY2018～2020 Investment Plan

Capital investments will be made within cash flow from operating activities.
Approximately 2/3 of the total investment will be actively used for growth investment
to increase corporate value.

Aircraft investments will be accelerated with the additional 40 bn yen for further growth.
FY2018～2020

Total

Replacement
investments

220bn yen

700bn yen (vs previous ＋40
plan

vs previous plan40)

Growthinvestments

Generate
new cashflow

480bn yen

Investments
to achieve
extraordinary
growthStrategic growthinvestment line

50bn yen

Aircraft

490bn yen(vs previous
plan

＋40 )

Under
consideration

International capacity expansion＋30
Change introduction schedule, etc.＋10

FY2018FY2019～20

179 bn yen
311 bn yen (planned)

Ground・IT, etc.

Medium- and long-haul LCC

210bn yen

23～bn yen

Smart airports, improved
revenue management, etc.
Aircraft

Ground・IT, etc.

Growth investments：

Aircraft introduction for new routes, flight frequency
increase or improved operational efficiency
FY201859 bn yen
Replacement investments：Replace old regional prop aircraft, aircraft parts, or etc.
FY2019～20
151 bn yen (planned)
Growth investments：
Improve quality, service or efficiency. Develop new
business domains,, etc.
Replacement Investment: Replacement of existing old facilities or for compliance to laws and regulations or etc.

17

Table of Contents
１

Review and Long-term Targets in the"Grand Design"-1 Progress of FY2017～2020 Mid-termManagement Goals-2 Review of FY2017～2018-3 Long-term targets in the "Grand
Design"Rolling Plan 2019

２

FY2019～2020 Initiatives-1 Positioning of Rolling Plan 2019
-2 Expand networks-3 Innovate better products andservices-4 Expand business domains-5 Human Resources x Technology-6 ESG Management towards
achievement of SDGs

３

Financial Strategy and Capital Policy-1 Financial strategy-2 FY2018～2020 Investment Plan

４ Revenue and Expense Targets-1 Fleet Plan and ASK-2 Revenue and profit targets-3 FY2019 related indicators18

Rolling Plan
2019

Fleet Plan and ASKResultForecast

Plan(Target)

FY2017FY2018FY2019FY2020

Total

231

Total

231

Total

236

Total

236

Total

End offiscal year

INT85
DOM 146(excl. Regional176)

INT 89DOM 142(excl. Regional 180)

INT 90T.B.L 2
DOM 144(excl. Regional 186)

INT 92
T.B.L 2
DOM 142(excl. Regional 186)

International

Large

24

24

24

24

56

58

(INT)

51

55

Small

10

10

16
20

16
22

19
23

20
20

55

53

52

52

55

51

50

50

MediumMedium-T.B.L.

Large

Domestic(DOM)

Medium
Small

2

10

2

10

Regional

125 (116)

FY17=100( ) represents previous year ASK

122(113)：excl. T.B.L

117 (110)

ASK

INT(inc. T.B.L.)

115(108)：excl. T.B.L

DOM
Total
(inc. T.B.L.)

106
104
101

109 (103)107 (103)104 (103)105 (101)19

Rolling Plan
2019

Revenue and profit targets
ResultForecast

Plan

Target

FY2017FY2018FY2019FY2020Grand
DesignSame asprevious plan

2,000.0
Revenue（JPY bn）

OthersCargo & Mail

1,383.2

1,488.0

DOM PAX

310.0

326.0

INT PAXOperating profit

92.0

1,600.0

1,563.0
343.0
106.0

101.0

518.2

527.0 *1

539.0

462.9

534.0 *1

575.0

12.6

11.8

(11.5)(11.3)

Operating profit
MarginOperatingprofit（JPY bn）

Fuel/FX
Markets

10.9

Operating profit
before depreciation
method change *2

Operating profit
margin before
depreciation
method change *2

250.0
174.5

175.0

170.0 (180.0)(180.0)Singaporekerosene

USD/bbl

67.8

83.9

90.0

90.0

Dubai crude oil

USD/bbl

54.9

68.7

70.0

70.0

FX rateJPY/USD

111.2

110.8

115.0

115.0

*1 Reflects the change of the settlement adjustment method for domestic sectors on international itineraries from FY2018.
*2 The depreciation method is changed to a new method in which assets are classified to each components, for example, based on economic lives of components, such as aircraft fuselage,engines and cabin interior, and each component is depreciated separately.

20

Rolling Plan2019

FY2019 Related Indicators
Forecast（JPY bn）

Consolidated
Profit and Loss
Statement

Balance Sheet

Consolidated
Cash Flow

FY2018FY2019Before depreciation
method change*1

Difference

Before depreciation
method change*1

Operating revenue

1,488.0

1,563.0

Operating expense

1,313.0

1,393.0(1,383.0)+80.0(+70.0)Operating profit*1

175.0

170.0

(180.0)▲5.0(+5.0)

Operating profit
Margin(%)

11.8%

10.9%

(11.5%)▲0.9pt(▲0.2pt)

Ordinary profit

161.0

171.0

+10.0

Net profit attributable toowners of parent

138.0

114.0

▲24.0

1,974.0

1,988.0+14.0

Balance of interestbearing debt

144.0

169.0

+25.0

Shareholder’s equity

1,155.0

1,177.0

+22.0

58.5%

59.2%

+0.7pt

ROIC*2(%)

9.5%

8.7%

ROE*3(%)

12.5%

9.8%

ROA*4(%)

9.1%

8.6%

CF from operating
activities

274.0

219.0*5▲55.0

CF from investing
activities *6▲198.0▲259.0

▲61.0

76.0

▲40.0*5▲116.0

▲37.0

▲47.0

▲10.0

EBITDA

300.0

309.0

+9.0

EBITDAR

319.0

327.0

+8.0

Total assets

Consolidated

Plan

Shareholder’s equity ratio(%)

Free CF *6
CF from financing
activities+75.0(9.2%)▲0.8pt(▲0.3pt)▲2.7pt
(9.1%)▲0.6pt(▲0.1pt)*1 The depreciation method is changed to a new method in which assets are classified to each components, based on economic lives of components, such as aircraft fuselage, engines and cabin interior, and each component isdepreciated separately.
*2 Return On Invested Capital (ROIC) indicates how much return is generated with invested capitals.
Return on Invested Capital (ROIC)(%) = Operating profit (excl. Tax)／Average of fixed assets at beginning and end of fiscal year (incl. future rental expenses under operating leases)*3(Net profit attributable to owners of the parent)／(Average of shareholder’s equity at beginning and end of fiscal year)*4 (Operating profit )／(Average of total assets at beginning and end of fiscal year
*5 FY 19's operating CF and free CF include injection of approximately 80 billion yen to the corporate pension fund that is planned during the first half of FY 19*6 Excludes deposits and withdrawals

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Rolling Plan
2019

Establishment of the Medium Term Management Plan from FY2020
The JAL Group FY2017～2020 Medium Term Management Plan was established leading up to FY2020
when major impacts on the airline industry were scheduled, namely, the development of airports inmetropolitan area and the Olympic and Paralympic Games Tokyo 2020.

In FY2019, we will continue to take action to achieve our management goals and work toward the early
achievement of our operating profit target of 180 billion yen*1 in the current Plan.



Meanwhile, as development of airports in metropolitan area are expected to materialize in FY2019, we feelthat an environment will be put in place to formulate a new plan from FY2020.



Therefore, next fiscal year we will sum up our initiatives and achievements and establish a Medium Term
Management Plan starting from FY2020 that presents a concrete growth plan to realize our long-termtargets in the “Grand Design.” We also plan to adopt International Financial Reporting Standards (IFRS).
*1 before depreciation method change

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Rolling Plan
2019

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