Notice of Decision to Provide Support to Japan Airlines
January 19, 2010
Enterprise Turnaround Initiative Corporation of JapanThe Enterprise Turnaround Initiative Corporation of Japan (hereafter, “ETIC”) has decided toprovide support to the companies listed below in accordance with Article 25.4 of the Enterprise
Turnaround Initiative Corporation of Japan Act (Act No. 63 of 2009, hereafter, “the ETIC Act”).
1 Name of Persons or Companies Receiving Support
Japan Airlines Corporation, Japan Airlines International Co., Ltd., and JAL Capital Co., Ltd.
(hereafter, “the JAL Companies”)
2 Name of Financial Institutions Jointly Applying for Rehabilitation Support with the JAL
Companies
Development Bank of Japan Inc., Japan Finance Corporation, Mizuho Corporate Bank, Ltd.,The Bank of Tokyo-Mitsubishi UFJ, Ltd., and Sumitomo Mitsui Banking Corporation
3 Outline of the Business Revitalization Plan
See Attachment
4 Opinion of State Ministers in Charge of ETICThe Prime Minister: No particular opinion
The Minister of Finance: No particular opinion
The Minister of Public Management, Home Affaires, Posts and Telecommunications:
It is our request that, in the process of the review on the flight routes to the local places, you
should reach the conclusion with the through coordination with the government sharing theright direction of a discussion on the importance of flight routes in scope of our nation’s futuresocial infrastructure.
The Minister of Health & Welfare Labour:
No particular opinion ; however, the Minister request that ETIC should guide the subjected 3companies to hold a consultation with the employees immediately after the ETIC’s decision forthe support and that ETIC should pay sufficient attention and cares for the compliance to thelaws and regulations and the situations of said consultations are the employees.
The Minister of Economy, Trade & Industry:
The airline business is the very fundamental for peoples’ life and economic activities. We
request that ETIC should pay sufficient attention and care not to invite any situation where
Japan Airlines may face difficulties for its business and operational continuations, and to avoid
impacts to those companies with the related business in the restructuring
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Opinion of State Ministers Supervising Business Activities
The Minister of Land, Infrastructures & Transport

1

The entity subject to support this time plays very important role forming the airline network,
which in tern is our nation’s foundation of the growth.
Therefore, we should request that its safe & stable flights would be secured and that ETIC
should listen thoroughly to the opinions of the Minister in charge of airline administration.
In addition, we should request that great effort should be placed to shorten the restructuring
period as possible and to reach the target of planned vitalization at earliest.
6 Debt Purchase Application Period
January 19, 2010 to March 26, 2010 (receipt by ETIC)
7 Request for Temporary Suspension
As the JAL Companies filed a petition with the Tokyo District Court on January 19, 2010 tocommence Corporate Reorganization procedures and were notified of the decision tocommence on the same day, no request for a temporary suspension will be made under
Article 27.1 of the ETIC Act.
8 ETIC’s Rationale for Deciding to Provide Support
ETIC’s rationale for deciding to provide support is as follows:
8.1 Background and Circumstances Leading to the Request for Corporate Rehabilitationand ETIC Support
The JAL Companies have made a considerable independent effort to break away fromtheir high cost structure, implementing reforms that include reducing the workforce
through increased labor productivity, revised wage and retirement benefit systems andcurbs on lump-sum payments, as well as revision to their operating structure andbusiness processes. The companies have also thoroughly revised international anddomestic routes from the standpoint of profitability, updated aircraft and other equipment,
and implemented downsizing of the aircraft fleet. However, before reaching afundamental improvement in earnings, the falloff in demand caused by such factors as
the fallout from Lehman Brothers’ collapse and the H1N1 influenza outbreak became thetrigger that led to the current situation.
The JAL Companies face the difficulty of requiring a large amount of working capital in ashort period of time. To gain access to the financing necessary for businessrehabilitation, the JAL Companies have decided to utilize a pre-packaged reorganization
scheme (hereafter, “the JAL Reorganization Procedures”) that combines simultaneously
filing for Corporate Reorganization - a condition for receiving ETIC support and ameasure that ensures transparency and a fair process – and applying for ETIC support.
8.2 Business Revitalization Plan
Because the JAL Reorganization Procedures are a combination of ETIC support andCorporate Reorganization procedures, the revitalization plan prepared by the JAL
Companies may be revised or amended by the business reorganization plan to besubmitted later. However, ETIC’s view regarding the current revitalization plan for the
JAL Companies is as outlined below.
One of the reasons that the JAL Companies have fallen into this situation is the excess
of airline routes and aircraft compared to demand. JAL’s inability to take decisive and2appropriate action to reduce capacity resulted in a resolution to this problem being
postponed, and the company being forced to continue to carry excess personnel andother fixed costs.
The revitalization plan for the JAL Companies aims to fully resolve this fundamental
issue through the following measures.
8.2.1 Further Safety Enhancements
The JAL Companies will maintain and strengthen measures focused on the threepillars of: “investment in safety,” “safety management” and “a culture of safety” toensure an unwavering commitment to safety. Investments in safety will focus on
improving IT and technical systems, measures to prevent human error and otherproblems through avoidance of over-reliance on the actions of on-site
employees, and raising safety awareness among employees. Safety
management will be enhanced by bolstering preventative risk management,
greater utilization of safety data, and the use of the PDCA (plan-do-check-act)system, as well as by strengthening the structural links for safety management,
and enhancing the risk management framework. A culture of safety will befostered based on the new recommendations of the Safety Advisory Group,
creating and establishing multiple layers of solid safety procedures.
8.2.2 Smaller Aircraft to Improve Efficiency
The JAL Companies will swiftly retire less fuel-efficient large aircraft such as the747-400, and actively introduce more advanced aircraft such as highly fuelefficient small and midsized aircraft and regional jets. This will improve overall
fuel efficiency and provide flexibility in the availability of aircraft.
8.2.3 Decisive Withdrawal from Unprofitable Routes and Pursuit of Alliance Benefits
The JAL Companies will decisively withdraw from unprofitable routes, while
maintaining network coverage by utilizing its alliances. This will allow foradjustments to supply, incorporating such measures as a flexible increase or
decrease in the number of flights in response to demand, as well as thecancellation and resumption of flights.
8.2.4 Streamlining of Workforce and Organizational Structure, and Fundamental
Improvement in Flexibility
The JAL Companies will make adjustments to their workforce in line withdiminished supply, including to head-office administration personnel, pilots, flightattendants, maintenance workers and ground handling crew. They will also
increase flexibility in flight crew personnel expenses through fundamental
revisions to flight crew compensation, minimum crew flight hours and otherpolicies.
8.2.5 Redesigning an Organizational Structure for Swift On-Site Decision-Making
The JAL Companies will establish an organizational structure that is focused on
operations sites and that allows for flexible, decisive and appropriate
decision-making in response to changes in the business environment. The
companies will make appropriate investments in IT systems and other3

infrastructure to support this structure.
With regard to JAL’s pension program, if the Ministry of Health, Labour and Welfare
provides formal approval to the changes made to the pension terms, the necessary steps will
be taken in the JAL Reorganization Procedures to continue existence of a pension program.
In addition, a further ¥600 billion line of credit from Development Bank of Japan Inc.
and ETIC has been established to provide sufficient funding for immediate business
operations. ETIC’s view is that ensuring that business operations and flights continue andimplementing the necessary debt forgiveness and/or reductions to fundamentally improve thecompany’s financial position will allow for the successful rehabilitation of the JAL Companies.
ETIC also believes that in order for the JAL Companies to maintain safe flight
operations, to avoid the risk of losing customers due to a decline in service, harmful rumors orother damaging measures, and to preserve the maximum possible business value, it is at aminimum necessary to adopt the measures outlined in Section 3 of the attachment as part of
the JAL Reorganization Procedures.
9 Appointment of a Corporate Trustee and Designation and Notification of its
RepresentativesRepresentative
The JAL Companies today received notification of the decision from the Tokyo District Court tocommence Corporate Reorganization proceedings, and with the decision to begin
proceedings ETIC has been appointed as the corporate trustee. Following the intention of thecourt, ETIC directors Hideo Seto (ETIC Committee Chairman) and Akitoshi Nakamura(Representative Director) have been designated as representatives of the corporate trustee toundertake the duties of the trustee, and notice of such was made to the court, relevant
companies and other parties.
Representative Hideo Seto will not be involved in any decisions by the ETIC Committee
regarding the JAL Companies.
– End of Document –4

Attachment: Outline of the Business Revitalization Plan
Section 1: Overview of the Companies Receiving Support
1 Corporate Outline
1.1 Companies Receiving Support
Japan Airlines Corporation (hereafter, “JALS”), Japan Airlines International Co., Ltd.
(hereafter, “JALI”), and JAL Capital Co., Ltd. (hereafter, “JLC”), hereafter collectively
referred to as “the JAL Companies”
1.2 Head Office Location
2-4-11 Higashi-Shinagawa, Shinagawa-ku, Tokyo
1.3 Date of Establishment
August 1951 (as the former Japan Air Lines)
1.4 Capitalization¥251.0 billion (JALS)
1.5 StockTotal JALS shares authorized to issue: 7,000,000,000 shares
Of which, total shares issued outstanding: 3,346,383,250 shares
1.6 Business Operations
Air transportation and airline-related businesses
1.7 Number of Employees
47,526 (JALS), 15,389 (JALI non-consolidated)
1.8 Principal Shareholders
Japan Trustee Services Bank, Ltd., Mizuho Corporate Bank, Ltd., The Bank ofTokyo-Mitsubishi UFJ, Ltd., Mitsui & Co., Ltd., and Tokyu Corporation
1.9 Principal Trading Partners
JTB Corporation, Jalpak Co., Ltd., JAL Sales Co., Ltd., JAL Tours Co., Ltd., and others
1.10 Business Locations
Narita International Airport, Haneda Airport, other domestic and international airports
1.11 Financing Banks
Development Bank of Japan Inc., Japan Finance Corporation, Mizuho Corporate Bank,
Ltd., The Bank of Tokyo-Mitsubishi UFJ, Ltd., and Sumitomo Mitsui Banking Corporation
1.12 Corporate GroupJALS with 203 subsidiaries and 83 affiliates
1.13 Financial Position (as of March 2009)
JALS Consolidated:
Operating revenues¥1,915.1 billion
Operating income(¥50.8 billion)
Recurring income(¥82.1 billion)
Net income(¥196.7 billion)
Total assets¥1,750.6 billion
JALI Non-consolidated:

Operating revenues
Operating income
Recurring income
Net income
Total assets¥1,664.7 billion(¥62.5 billion)(¥95.7 billion)¥91.6 billion¥1,652.3 billion

Reference: September 2009 (First Half Results)

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JALS Consolidated:

Operating revenues
Operating income
Recurring income
Net income¥763.9 billion (down 28.8% YoY)(¥95.7 billion)(¥82.1 billion)(¥114.4 billion)

2 Corporate Group: As of March 31, 2009
The corporate group of the JAL Companies comprises JALS, together with 203 subsidiaries
and 83 affiliates. Its business operations include air transportation, airline-related businesses,
travel services, credit card and leasing services, and other businesses. The main subsidiaries
and affiliates for each business segment are as follows.
2.1 Air Transportation: Eight consolidated subsidiaries, JAPAN AIRLINES INTERNATIONAL
CO., LTD.; JAPAN TRANSOCEAN AIR CO., LTD.; JALWAYS CO., LTD.; JAL EXPRESS
CO., LTD.; JAPAN AIR COMMUTER CO., LTD.; HOKKAIDO AIR SYSTEM CO., LTD.;RYUKYU AIR COMMUTER CO., LTD.; and J-AIR CO., LTD.
2.2 Airline-Related Businesses: Operations include passenger and cargo handling services,in-flight catering, aircraft and ground equipment maintenance and fueling provided by 95
subsidiaries and 65 affiliates, of which 52 are consolidated, including JAL GROUNDSERVICE CO., LTD., JAL CARGO SERVICE CO., LTD., and TFK CORPORATION.
2.3 Travel Services: Travel planning and sales services, including air transport via the eightcompanies in the air transportation business, provided by 35 subsidiaries and 3 affiliates,of which 27 are consolidated, including, JALPAK CO., LTD., JAL TOURS CO., LTD., and
JAL SALES CO., LTD.
2.4 Credit Card and Leasing Services: Financing, credit card services and leasing services
provided by 19 subsidiaries, of which JAL CAPITAL CO., LTD., JALCARD, INC. and one
other company are consolidated.
2.5 Other Businesses: Hotel business provided by 16 subsidiaries and 2 affiliates, of which
JAL HOTELS CO., LTD. and 8 other companies are consolidated. Wholesale and retailsales, real estate services, printing, construction, staffing and IT services provided by 30
subsidiaries and 13 affiliates, of which AXESS INTERNATIONAL NETWORK, INC., JAL
AEROPARTS CO., LTD., JAL BUSINESS CO., LTD. and 12 other companies areconsolidated.
Section 2: Background and Circumstances Leading to the Request for Corporate
Rehabilitation and ETIC Support
The JAL Companies have made a considerable independent effort to break away from theirhigh cost structure, implementing reforms that include reducing the workforce throughincreased labor productivity, revised wage and retirement benefit systems and curbs on
lump-sum payments, as well as revision to their operating structure and business processes.
The companies have also thoroughly revised international and domestic routes from thestandpoint of profitability, updated aircraft and other equipment, and implemented downsizingof the aircraft fleet. However, before reaching a fundamental improvement in earnings, thefalloff in demand caused by such factors as the fallout from Lehman Brothers’ collapse andthe H1N1 influenza outbreak became the trigger that led to the current situation.

6

The JAL Companies face the difficulty of requiring a large amount of working capital in a shortperiod of time. To gain access to the financing necessary for business rehabilitation, the JAL
Companies have decided to utilize a pre-packaged reorganization scheme (hereafter, “theJAL Reorganization Procedures”) that combines simultaneously filing for Corporate
Reorganization - a condition for receiving ETIC support and a measure that ensurestransparency and a fair process – and applying for ETIC support.
The aim of the JAL Reorganization Procedures is to achieve quick and fundamental reform of
the JAL Companies in a short period of time.
Section 3: Necessary Measures to Maintain the Business Value of the JAL Companies
The JAL Companies will work to preserve the maximum business value through the JAL
Reorganization Procedures, and to reimburse as much as possible to creditors, including thefinancial institutions, in the rehabilitation. However, in order for the JAL Companies topreserve business value to the greatest extent possible by maintaining safe flight operations,and avoiding such risks as flight stoppage, loss of customers, service degradation andharmful rumors, the following measures in the JAL Reorganization Procedures will beessential. The JAL Companies plan to realize these measures through cooperation with allparties involved.
3.1 Protection of Commercial Obligations
In order for the JAL Companies to maintain the trust of their trading partners and tocontinue the same safe flight operations, it is essential that the JAL Reorganization
Procedures include the protection of commercial obligations, premised on adherence tothe same trading terms as before. Commercial obligations include those of JAL Group
companies that handle certain aspects of the airline business and services together with
the JAL Companies, such as the obligations of JAL Card to the JAL Companies.
3.2 Protection of Customer Mileage
The mileage program provided by the JAL Companies is used by many customers andmakes an important contribution in terms of business operations. In order for the JAL
Companies to maintain operating revenues, it is essential that the JAL Reorganization
Procedures include full protection for customer mileage as before.
3.3 Protection of Lease Fee Obligations
In order for the JAL Companies to continue smooth flight operations, it is essential that
the JAL Reorganization Procedures include payment of lease fee obligation for theaircraft necessary to flight operations, with adherence to the same trading terms as
before.
3.4 Continued Existence of the Corporate Pension Program
For the JAL Corporate Pension Program that is the private pension plan for the JAL
Companies, consent forms were recently sent to plan participants and pension
recipients regarding a reduction in pension benefits and pension recipients relinquishing
their rights to lump-sum payments. The forms have been collected and a portion
necessary to revise the pension system has been secured. In order to maintain the
morale of employees, which is tied to an increase in corporate value, it is essential to7

respect the opinions of plan participants and pension recipients. And the final decision is
to take place after the formal approval by the Ministry of Health, Labour and Welfare fora change in the terms of the JAL Corporate Pension Program.
Section 4: Overview of the Business Revitalization Plan
1 Reasons for the Current Situation
The JAL Companies have arrived at their current situation due to the drag from structures
remaining from the previous era of mass transit, with inefficiency and inflexibility in both 1)
business structure (equipment and infrastructure) and 2) organizational structure (policies
and procedures). Compared to its competitors JAL has a relatively large proportion ofinternational flights, which are subject to broad fluctuations in demand. This left the airline
unable to respond in a timely and appropriate manner to the massive falloff in demandcaused by such factors as the fallout from Lehman Brothers’ collapse and the H1N1
influenza outbreak.
1.1 Business Structure Inflexibility
1.1.1 Excessive Ownership of Large Aircraft
The JAL Companies, because of the constraints on arrival and departure slots at
Haneda and Narita airports, actively introduced large aircraft and at one time had afleet of over 100 747s, one of the world’s largest. While this allowed the airline toprovide mass transit at one time, fuel and other flight costs were also high and led
to losses during periods of slack demand.
1.1.2 Maintaining Unprofitable Service Routes
The JAL Companies were previously government-affiliated corporations, and due toits extremely public nature maintained numerous unprofitable service routes. The
merger with the former Japan Air System (JAS) further expanded the number of
unprofitable service routes, primarily in regional areas of Japan. In addition, thelarge proportion of international flights, which display broad fluctuations in demand,
presents a further challenge.
1.2 Organizational Structure Inflexibility
1.2.1 Excess Workforce and a Rigid Organizational Structure
The JAL Companies were predisposed to increases in personnel, maintaining apersonnel structure and a promotion model centered on full-time employees withlifetime employment on the premise of sustainable business expansion. There wasalmost no consolidation of personnel or the organizational structure following themerger with the former JAS, leading to further excess and inflexibility.
1.2.2 Delays in Decision-Making
The JAL Companies had constant delays in decision-making as a result of a
bloated management structure and a corporate culture that strived for infallibility,
making them unable to respond promptly to changes in the business environment.
Outdated IT systems and other tools to support timely and appropriate
decision-making also further slowed decision-making.
2 Direction of Business Revitalization Plan
The business plan for the JAL Companies will focus on the following points in order to8overcome the factors that led to the current predicament.
2.1 Further Safety Enhancements
The JAL Companies will maintain and strengthen measures focused on the threepillars of: “investment in safety,” “safety management” and “a culture of safety” toensure an unwavering commitment to safety. Investments in safety will focus on
improving IT and technical systems, measures to prevent human error and otherproblems through avoidance of over-reliance on the actions of on-site employees,
and raising safety awareness among employees. Safety management will beenhanced by bolstering preventative risk management, greater utilization of safety
data, and the use of the PDCA (plan-do-check-act) system, as well as bystrengthening the structural links for safety management, and enhancing the risk
management framework. A culture of safety will be fostered based on the newrecommendations of the Safety Advisory Group, creating and establishing multiple
layers of solid safety procedures.
2.2 Smaller Aircraft to Improve Efficiency
The JAL Companies will swiftly retire aging and less fuel-efficient large aircraft such as
the 747-400, and actively introduce more advanced aircraft such as highly fuel efficient
small and midsized aircraft and regional jets. This will improve overall fuel efficiency,
and provide flexibility in the availability of aircraft.
2.3 Decisive Withdrawal from Unprofitable Routes and Pursuit of Alliance Benefits
The JAL Companies will decisively withdraw from unprofitable routes, while
maintaining network coverage by utilizing its alliances. This will allow for adjustments
to supply, incorporating such measures as a flexible increase or decrease in thenumber of flights in response to demand, as well as the cancellation and resumptionof flights.
2.4 Streamlining of Workforce and Organizational Structure, and Fundamental
Improvement in Flexibility
The JAL Companies will make adjustments to their workforce in line with diminishedsupply, including to head-office administration personnel, pilots, flight attendants,
maintenance workers and ground handling crew. They will also increase flexibility inflight crew personnel expenses through fundamental revisions to flight crew
compensation, minimum crew flight hours and other policies.
2.5 Establishing an Organizational Structure for Swift On-Site Decision-Making
The JAL Companies will establish an organizational structure that is focused on
operations sites, and that allows for flexible, decisive and appropriate decision-making
in response to changes in the business environment. The companies will makeappropriate investments in IT systems and other infrastructure to support thisstructure.
3 Numerical Targets (Summary)The earnings estimates for the JAL Companies may change as a result of petition of the
JAL Reorganization Procedures or other factors, but by implementing the JAL
Reorganization Procedures, and trimming excess to create a leaner organization, a9

considerable increase in profitability is expected. For the fiscal year ending March 2013,
the plan forecasts operating revenues of ¥1,358.5 billion, with operating income of ¥115.7
billion (operating margin of 8.5%).
In the event of the continued existence of the corporate pension fund, operating income isexpected to total ¥90.4 billion (operating margin of 6.7%) for the fiscal year ending March2013.
Section 5: Content of Financial Support (Debt Forgiveness, DIP Financing and Loans)
The JAL Companies are expected to receive debt forgiveness amounting to ¥730 billion for a
portion of their total ¥1,157.8 billion debt.
Immediately prior to and after ETIC’s decision to provide support, the JAL Companies are toreceive DIP financing though a ¥600 billion line of credit from ETIC and Development Bank ofJapan.
Following ETIC’s decision to acquire debt, the JAL Companies are to receive financing of over¥300 billion from ETIC.
In conjunction with this financing, following ETIC’s decision to acquire debt, the JAL
Companies are to receive refinancing of their debt coordinated by ETIC, Development Bankof Japan, and major banks. These funds will be used to make a lump-sum repayment of thecommon benefit claims, namely the DIP financing and rehabilitation securities and loans.
Section 6: Conformance with Standards for Support
1 Possession of Revitalization Potential
The JAL Companies are Japan’s largest airline carrier and have a large number of
employees and affiliated companies, as well as aircraft and other equipment. They operate
a network with flights providing service to numerous countries and cities throughout Japanand the world. As a public transportation facility that forms one facet of social infrastructure,
JAL possesses considerable revitalization potential.
2 Carrying Excessive Debt
The JAL Companies are carrying approximately ¥780 billion of interest-bearing debt, an
excessive amount of debt relative to their earnings capacity. Debt forgiveness and otherforms of financial support are essential for business revitalization.
3 Prospects for Business Revitalization
3.1 Consent of Major Creditors for Application
The application for support by the JAL Companies has been made jointly with
Development Bank of Japan Inc., Japan Finance Corporation, Mizuho Corporate Bank,
Ltd., The Bank of Tokyo-Mitsubishi UFJ, Ltd., and Sumitomo Mitsui Banking
Corporation
3.2 Standards for Productivity Improvement
Of the productivity improvement standards, the projection of (1) improvement in therate of return on equity of 45.8 percentage points in three years, and (2) improvementin the amount of added value per employee of 264.5 percentage points in three years,

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satisfies the required productivity improvement standards of 2 percentage points ormore for (1) and 6 percentage points or more for (2).
In the case of continued existence of the corporate pension fund, the projection of (1)improvement in the rate of return on equity of 58.2 percentage points in three years,
and (2) improvement in the amount of added value per employee of 242.9 percentage
points in three years, satisfies the required productivity improvement standards of 2
percentage points or more for (1) and 6 percentage points or more for (2).
3.3 Standards for Financial Soundness
3.3.a Ratio of interest-bearing debt to cash flow less than 10 times
The ratio of interest-bearing debt to cash flow is projected to be 2.2 times inthree years, satisfying the standard of less than 10 times.
In the case of continued existence of the corporate pension fund, the ratio ofinterest-bearing debt to cash flow is projected to be 3.0 times in three years,
satisfying the standard of less than 10 times.
3.3.b Current revenue greater than current expenditures
The ratio of current revenue to current expenditures is projected to be 114.3%
in three years, satisfying the standard of current revenue greater than current
expenditures.
In the case of continued existence of the corporate pension fund, the ratio ofcurrent revenue to current expenditures is projected to be 112.0% in three
years, satisfying the standard of current revenue greater than current
expenditures.
3.4 Comparison with Liquidation Value
The dividend yield on liquidation of the three JAL Companies would be at most 1.3%.
The recovery rate for the non-secured portion of debt applicable to the subject
business revitalization plan (17%) is clearly greater than the recovery rate throughbankruptcy proceedings.
3.5 Potential for Disposal of Debt, Shares or other Assets Acquired by ETIC Within ThreeYears
The implementation of the subject business revitalization plan will establish soundfinance for the JAL Companies. Since ETIC does not anticipate any problems for thecompany in terms of its ability to repay principal or incur interest, it has been
determined that there is a strong possibility of refinancing through the involvement of a
new sponsor or other means.
3.6 Standards in Cases of ETIC Investment
3.6.1 Necessity
Because the implementation of the subject business revitalization plan will
require the injection of new money, it will be necessary for ETIC to invest inand take control of the JAL Companies before the plan can be implemented.
Accordingly, it is extremely difficult for ETIC to strongly recommend
implementing the subject business revitalization plan without ETIC investment.
3.6.2 Exercise of Governance11Since after investment ETIC will acquire a majority stake (100%) in the JAL
Companies, a structure will be established that is able to exercise proper
governance.
3.6.3 Prospects for Investment or other Financing by Main Banks, Sponsors or Other
Parties
A loan of approximately ¥160 billion is expected to be acquired from
Development Bank of Japan immediately following the decision to provide
support.
3.6.4 Prospects for Recovery Greater than the Investment
The business value of the JAL Companies will increase as a result of theimplementation of the subject business revitalization plan, providing theprospect for recovery greater than the investment.
4 Connection with an Excessive Supply Structure
Since as a result of the implementation of the subject JAL Reorganization Procedures
there is no scope to increase business supply in light of Article 19 of the Guidelines for the
Application of the Act on Special Measures for Industrial Revitalization and Innovation,
ETIC has judged the plan as “not hindering the dissolution of an excessive supply
structure.”
5 Status of Discussions with Labor Unions
A briefing on the content of the subject business revitalization plan is to be made to theeight labor unions that exist at JALI (JALFIO, Japan Airlines Workers’ Union, JALJ
Workers’ Union, Cabin Crew Union, JALI Flight Crew Union, JALJ Flight Crew Union (JPU),
Senior Engineer Union, and Japan Airlines Captain Association) immediately following
ETIC’s decision to provide support, along with discussion on employment, working
conditions and other contract details. Since no labor unions exist at JALS or JLC,
company-wide briefings for all employees will be held at both companies, providing
opportunities for participation and discussion.
Section 7: Responsibility of Shareholders and Management
1 Responsibility of Management
Management responsibility on the part of the directors of the JAL Companies will beclarified by the retirement of all directors. (Persons necessary for the conduct of businessat the JAL Companies will be sought through a separate effort in the JAL Reorganization
Procedures.)
2 Responsibility of Shareholders
For the ordinary and A-Class shares issued by JALS (hereafter, “JALS Shares”), ETIC
intends to implement measures that meet fundamental shareholder responsibility, including
a 100% capital reduction. The final decision, however, will be made in the forthcoming JAL
Reorganization Plan.
– End of Document –12

ReferenceStandards for Determining Support(Notice of Standards for Support by the Enterprise Turnaround Initiative Corporation of Japan)• Has revitalization potential• Is carrying excessive debt
• Joint application with principal creditor, or has prospects for receiving consent from theprincipal creditor• Has prospects for meeting “Productivity Improvement Standards” and “Financial Soundness
Standards” within three years
Productivity Improvement Standards:
One of the following conditions should be met: Increase in
the return on equity of two percentage points or more;
Increase in the tangible fixed asset turnover of five
percentage points or more; Increase in the amount ofadded value per employee of six percentage points or
more.
Financial Soundness Standards:

All of the following conditions should be met: Ratio ofinterest-bearing debt to cash flow within ten times;
Recurring income greater than recurring expenditures.

• In cases where debt is acquired or investment made, there is the ability to dispose of thesubject debt, shares or other assets within three years of the decision to provide support• In cases where investment is made, conditions are met such as necessity; exercise ofgovernance, prospects for coordinated investment with sponsors or other entities, andprospect for recovery of investment• Discussions are held with labor unions or labor representatives

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