Chapter 2 The JAL Group Value Creation Story

1. Reconceptualizing Social Issues

1.Understanding Social Issues●Reassessing and reacknowledging the challenges of the SDGs in the aviation industry fromSocial issues

FY2019 to FY2020●Reconceptualizing social issues in light of social changes following the COVID-19

Social change

pandemic

2.Important Analysis for the JAL GroupManagement discussed the
JAL Group's Value Creation

Opportunities

2. Important Analysis for the JAL Group●The JAL Group defines the business creation of social and economic values through airtransportation and societal connections●We evaluated the relevance of recognizing social issues with the creation of social andeconomic values through air transportation and societal connections in our business. The
rate of importance was assessed under the perspectives of how the business measures
for social issues connected to acquiring opportunities in aviation and non-aviation growthand how to reduce risk expenses due to environmental regulations

Risks

3. Important Analysis for Stakeholders

Dialogue with Stakeholders(p.25)

Degree of Interest

3. Importance Analysis for Stakeholders●Understand the level of interest and the level of expectations from stakeholders for the JAL

Degree of Expectation

Group to resolve and recognize social issues through dialogue with stakeholders (p.25)●Evaluate the importance of each stakeholder from the perspective of having a higher

overall level of interest and expectations

Materiality Specific Process
To identify materiality, we first reconsidered social issues in the post COVID-19 pandemic period. We then analyzed the important social issues for
the JAL Group and its stakeholders based on the social and economic values that the JAL Group creates through air transportation and societal
connections. The identification of materiality was reported and approved by the Board of Directors after extensive management discussions at
the Sustainability Promotion Council chaired by the President.
The identified materiality is reflected in the business strategy of Rolling Plan 2023 of the Medium-Term Management Plan. We also set anddisclosed metrics and targets for each materiality.

Identifying Materiality

Material Issues (Materiality)

Indicator of Social Values [FY2025 target]

Promoting economic growth and international mutual understanding through tourism●The Sustainability Promotion Council discussed and decided to identify social issues of

Setting Indicators and Targets

high importance as materiality based on analysis. This was reported and approved by the
Board of Directors●Set metrics and targets based on identified materiality and disclose performances●Regional Revitalization[+10% compared to domestic total passengers FY2019]
Management target●Inbound expansion[1,505,000 inbound tourists to Japan using domestic flights]

Regional Revitalization

Bring prosperity and vitality to the community●Expansion of regional product distribution[Domestic cargo volume +10% compared to FY2019]
Management target●Promotion of new tourism

Resilience throughDiversity

Build a diverse society in which people, cultures, values, and modes of behavior are respected
and new values are created

Safe and
Secure Society

Create, develop, and protect a safe infrastructure of the skies

Aviation Infrastructure

Pass on the basis of sustainable air transport to the future[JAL Wellness and Travel 10 Municipalities in partnership]●Promotion of research with outside parties[200 Workstyle Research Members]●Respect for human rights[Implementation rate of human rights due diligence 100%]●Barrier-Free and Stress-Free[2.5 times the FY2019 boarding rate for customers who find
it difficult to travel]●Building a foundation for next-generation air mobility[FY2023 drone logistics business, FY2025 eVTOL business]●Maintenance and expansion of aviation and logistics networks[More than 65 domestic entry points including code share]●Reduction of CO2 emissions

Precious Earth●Improving the ability to create social value

Human Capital

Enhance capacity for value creation and productivity of all JAL Group employees[Highly engaged employees percentage 64.4%]●Promotion of DEI[Ratio of women in management 30%] Management target

Goals of the Relevant SDGs

●Expansion of air travel and total passengers[+10% compared to domestic total passengers FY2019]
Management target[1,505,000 inbound tourists to Japan using domestic flights]●Increase in transportation of local products[Domestic cargo volume +10% compared to FY2019]
Management target●Increase in contracted number of flights[128,000 flights operated by customer airlines]●Increase in the number of partnership municipalities related to travel[JAL Wellness and Travel 10 Municipalities in Partnership]●Expansion of mile life service users[There are 810,000 Dokokani mile users Development ofsubscription-type travel products 250% compared to FY2022]●Expansion of air travel in total passengers[2.5 times the FY2019 boarding rate for customers who find it
difficult to travel]●Commercialization of air mobility services[FY2023 drone logistics business, FY2025 eVTOL business]●Air total passengers: Expansion of the number of travelers and cargo traffic[+10% compared to FY2019 in total passengers and cargo volume +10%
compared to FY2019 in Japan] Management target●Expansion of air travel in total passengers[+10% compared to domestic total passengers v.s. FY2019] Management target●Expansion of commerce[15 companies strengthen planning and sales of recycled products
in cooperation with companies outside the JAL Group]

Data Section

Preserve and restore the global environment, which serves as a source of people, sales anddistribution channels, and to pass it on to the next generation[Scope 1 Emissions < below 9.09 million t (FY2019)] Management target●Conservation of biodiversity [1,000 colonies of sexually reproducing corals by 2026]●Reduction of single-use plastics Management target[Cabin Lounge: Total elimination of new petroleum derived products][cargo and airport: 100% change to environmentally friendly materials]

Indicator of Economic Values [FY2025 target]

Sustainability

Fulfilled Hearts

Enhance happiness and cultivate affluent life through free movement and connection of goods
and people

Identifying Materiality

Reflected in Medium Term Management Plan

Growth Strategy

Tourism Nation

The JAL Group Value Creation Story

The JAL Group positioned its ESG strategy at the topmost of the JAL Group Medium-Term Management Plan
Rolling Plan 2023 and reviewed its materiality to create social and economic value and solve social issues
through air transportation and societal connections generated by its business.
To date, materiality has been identified as 22 issues in 4 areas in order to contribute to achieving the 17
goals/169 targets of the SDGs. This is mainly in the FSC business area. Through the materiality identification
process, we are reviewing materiality so that it is closely linked to the creation of economic value in all
business areas of the JAL Group, and not just in aviation. In addition, we define human resources (humancapital), which is the JAL Group’s greatest strength, as materiality because to improve the value creation andproductivity of all our employees is an important management issue.
The JAL Group aims to achieve medium- to long-term growth by creating a safe and secure society and asustainable future through our materiality initiatives.

Introduction

1. Materiality●Improving the ability to create economic value[+15% per capita sales v.s. FY2019]●Promoting DEI [Ratio of women in management 30%]Management target

Please see pp.85-88 for more information on "metrics and targets."

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Chapter 2 The JAL Group Value Creation Story

1. Materiality

2.2.JALValue
JAL Group'sGroup's Value
Creation
Story
Creation Story

3. JAL Group's Value
Creation Process

4. Foundations ofValue Creation

5. The Trails of Challenges

Introduction

2.JAL Group's Value Creation Story

Achieving JAL VISION 2030 and Carbon Neutrality

Our Purpose

FY2021 to 2025 Medium Term Management Plan

To become the world’s most
preferred and valued airline group,
where many people and goods
freely move aroundAchieve value creation through ESG strategies to achieve medium- to long-term growth
Rolling Plan 2023

❶ ESG Strategy pp.49-50

p.46

Airline Industry and JAL● Market conditions: Cost increases due to fueland foreign exchange market conditions● Human resources: Shortage of human resourcesin the aviation and tourism industries● Competitors: Delayed recovery of international
flight capacity

❸

E
S

G

Drive ESG Strategy

Rolling Plan 2022

Market● Passengers: Passengers originating overseas
show strong recovery, but those originating inJapan and domestic flights are still weak● Cargo: High levels of volume but unit prices aregradually falling

ESG Strategy

Business Model Reform: Increase the percentage of new areas to 50%

p.51

Assign human resources to growing business areas

JAL

Finance Strategy
JAL

多くの人々やさまざまな物が自由に行き交う、心はずむ社会・未来において

pp.67-74

FY2021

Finance Strategy pp.77-80▼10％pp.75-76

100

Approx.50% Cargo and Mail

15

Approx.10% LCC

70

Approx.40% Infrastructure

FSC/

ESG investment 650 Bn JPY
JALDividend payout ratio of about 35% or more
Debt repayment approx. 300 Bn JPY

64.5 Bn JPY

100 Bn JPY

185Bn JPY

FY2022

FY2023

FY 2025(Plans)

世界で一番選ばれ、愛されるエアライングループを目指します

FY2019

pp.65-66

GX Strategy:70 fuel-efficient aircraft/SAF procurement

Sustainability

Build a better future
where everyone canfeel fulfilled andhopefulMileage, Lifestyle, andFY2050Carbon Neutrality
p.90

Data Section

132Bn JPY●❹
Investment in Human resources and ESG

Implement management strategies with
ESG strategies as the core

DX Strategy: Creating new value in the CX/EX spaceJAL
Vision2030

Sustainability

Business Strategy

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JAL REPORT 2023

Build a society
where everyone
can live safely,
securely and witha peace of mind

Use of Digital Technology

45

13

Safety andPeace of Mind

Business Strategy

Human Resources Strategy: Per capita sales: +15%

CO2 emissions

Pre COVID-19*2

Our Vision

JALグループは、大きく時代が動き価値観が変わるなか、「安全・安心」と「サステナビリティ」
を未来への成長のエンジンとして、以下を実現します❷ Economic value

JAL

Society● Environment: Acceleration toward carbon
neutrality and conservation of biodiversity● Society: Low birthrate/aging population,
stagnant regional economies

EBIT*1❷ Social value

Long-Term Business Strategy
Topmost Strategy in Order to Realize Value Creation and Growth

Growth Strategy

Changes in theExternal Environment

The JAL Group Value Creation Story

The JAL Group has set forth the JAL Vision 2030, which aims to create a society of Safety and Peace of Mind and a Sustainable future for the purpose of our company, which is to create avibrant society and a future where many people and goods freely move around.
❶ In the 2021 to 2025 JAL Group Medium Term Management Plan Rolling Plan 2023, we reviewed the positioning of our ESG strategy and defined it as our top-level strategy.
❷ Through our ESG strategy, we will create social value in terms of air transportation and societal connections, realize JAL Vision 2030, and improve economic value.
❸ In the business strategy to promote the ESG strategy, the JAL Group will expand its earnings and achieve sustainable growth through business model reform, human resources strategy,
DX strategy, and GX strategy for carbon neutrality.
❹ The financial strategy underpinning the ESG strategy is to appropriately allocate cash generated by the enhancement of economic value to ESG-promoting investments, such as humanresources and shareholder return, among others, while maintaining both risk tolerance and growth.

*1 EBIT: Earnings Before Interest and Taxes*2 FY2019 results excluding the impact of COVID-19(FY2019 Q3 earnings forecast disclosed at the time of financial announcement (IFRS))(Plans)

FY 2030

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Chapter 2 The JAL Group Value Creation Story

1. Materiality

2. JAL Group's Value
Creation Story

3.3.JALValue
JAL Group'sGroup's Value
Creation
Process
Creation Process

4. Foundations ofValue Creation

5. The Trails of Challenges

Solving Social Issues and Enhancing Sustainable Corporate ValueINPUT (key management resources)

Business Model (Business Activities)
Balancing environmental measures andnetwork expansion

Diverse and professional human resources● JAL Group Employees: 36,039 employees● 1,365 female managers (22.8% of all managers)● Highly engaged employees

FSCIntellectual capital

The JAL Group supports the movement of people and goods in the areas of FSC, LCC, and Cargo and Mail, andcreates societal connections through air transportation while maintaining safe operations, which is the foundationof our business. We aim to continuously increase corporate value by creating social and economic value throughthe movement and connection of people and goods, and by strengthening human capital and other capital.

OUTPUT（Movement and Connection of Goods and People）

Number of new cities and routes in service● Introduction of fuel-efficient and state-of-the-art equipment

RPK* 2● Cooperation with alliances, other transportation modes, and regional airlines

CO 2 emissions

Accumulated expertise

OUTCOME(Enhancement of Value and Capital Created through Air Transportation and Societal Connections)
Value created through air transportation and societal connections
Movement of people and goods✓Safety and security✓Conservation of environment and biodiversity✓ Social infrastructure network✓ Revitalize the local economy✓ Carbon neutrality✓ Improvement of people's well-being

Human resources that respect diverse values,
challenge new value creation, and drive change● Productive and professional JAL Group employees● Female managers 30% of all managers● Highly engaged employees 64.4%(+10pts compared to FY2019)● IT systems that achieve high quality in the aviation domain

Creation of new flows of people
LCC

Networks connecting regional areas in Japan with the world● Young generation, families, and inbound● Development of simple services and new location points● JAL Group Airlines and Affiliated Airlines● Collaboration with local communities

Social Value

Number of new cities and routes

Intellectual Capital
Know-how to improve CX and EX and create new values

Number of cities and routes in service● Regulations and manuals that protect the safety of new skies systems● IT systems that utilize AI and advanced technologies to realize DX

RPK* 2Customer baseCO 2 emissions

Air
Transportation

Customer base centered on aviation

Social CapitalSocietal
Connections

Human resource baseNetworks that enhance air transportation andsocietal connections● JAL Group Airlines and affiliated airlines● About 37 million JAL Mileage Bank members

Substantial aircraft

Cargo
and Mail● JAL Group number of aircraft: 8 models, 224 aircraft among

Connecting goods, people and communities throughhigh-speed transportation● Transport of medical/pharmaceutical/regional products● Cooperation with other transport modes and drone logistics

which, 11 aircraft were deployed in growth areas.
*1● New type of fuel efficient equipment 29%● Collaboration with local communities and business partners

Strategic item handling volume● JAL Mileage Bank Member

Natural capital

Creating connections between people and goods
Mileage
Lifestyle, andInfrastructure

Mileage and card

Travel and retail

Regional solutions
Air mobility● Aircraft fuel using fossil fuels● Tourism resource

Production capital (FY2025)
Aircraft to support growth by accelerating renewal of fuel-efficient equipment

CO 2 emissions

Number of travelers on tours● Number of JAL Group aircraft 9 types 232 to 238

Expand New Air Transport Demandby Societal Connections

Develop new businesses that
expand Societal Connections

Expansion of aviation revenues

Turn non-aviation business into new revenue sources

FSC

LCC

Cargo and Mail

22 to 26 equipment deployed in internal and growth areas● New type of fuel saving equipment 2 models 47%● Equity ratio of approximately 50% (for rating purposes)● Credit Rating A Flat

Natural Capital

Stakeholders

Precious Earth/Resource use with low environmental impact

Number of authorized foreign airline flights
Air mobility service

Financial Capital (FY2025)
Rebuild a strong financial base to enhance risk
tolerance and balance growth

Mileage, Lifestyle, and Infrastructure

Amount of retail transactions
Amount of regional solution transactions

Ground handling

Effective use of resources

Customers

Regional Next Generation/
Environment
Communities

Business
Partners● World below the 1.5°C scenario

External
Partners

Shareholders
andInvestors

Employees● Conservation, restoration, and expansion of environmental resources that are also tourism resources● Securing and using resources with low environmental impact

Sustainability*1 Passenger aircraft with 100 seats or more

Economic Value

Number of issued miles

Financial infrastructure with the necessary risk tolerance
during the COVID-19 pandemic● Maintain credit rating of A

Customer base spanning aviation and non-aviation areas

RTK* 3Financial capital● Capital adequacy ratio 39.3% (for rating purposes)

Partnerships working together to solve social issues

Number of cities and routes in service

Growth Strategy

Production capital

Capital enhancement
Human Capital (FY2025)

Societal Connections● Regulations and manuals to protect aviation safety

Social capital

The JAL Group Value Creation Story

Human capital

Introduction

3.JAL Group's Value Creation Process*2 Number of paid passengers x transport distance *3 Weight of paid cargo and mail x transport distanceStrengthening human capital andimproving capital efficiency

Business portfolio
International

Stability

Foundations of Value Creation
Safety Charter pp.17-19

JAL Philosophy p.20

Divisional Profitability Management System p.21

High

FSC

GrowthLCC

LCC

Governance pp.22-42

LCC

Price range

High

Data Section

Enter into the same routes to maximize shares

Domestic

Low
Short
Domestic Flights

Long
International Flights

Increase corporate Value
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Chapter 2 The JAL Group Value Creation Story

1. Materiality

2. JAL Group's Value
Creation Story(1) Safety Charter

3. JAL Group's Value
Creation Process(2) JAL Philosophy

4.4. FoundationsofFoundations of
Value
Value Creation
Creation(3) Divisional Profitability Management System

5. The Trails of Challenges(4) Governance■Implementation of the Safety Management System (PDCA cycle)(1) Safety Charter❶Gathering and dissemination of information▶Safety risk management❷Managing risks
In formulating safety measures for air transport and promoting

We gather a wide range of information from reports on unsafe

responses to accidents and troubles, we manage risk through the

behavior and acts, the flight data analysis program, crew fatigue

following steps.

and alcohol risk management program, and use it to prevent safety
events.

Identify hazard*

Safety Charter● Utilizing gathered information on unsafe conditions and unsafe events, we identify
hazards and real or hidden risk factors with the potential to cause or contribute to an
aircraft accident, serious incident or other adverse events.
 ny source of danger or potential danger that may cause or contribute to an aircraft accident,*A
serious incident or other adverse events.

Safety: The protection of lives.
This is the commitment and basic foundation of business continuity for the JAL Group.
We take to heart our mission and responsibility as safety professionals to ensure a safe
operation on every flight with the best of our knowledge, skills and abilities.
To accomplish this, we will act according to the following principles.

Assess risk

● We determine the severity of consequences and the probability of occurrence, assess
the acceptability of the risk level and examine the need to take action. Multiple risks areprioritized, as necessary, to know which ones are most urgent.
● We establish and implement measures to eliminate each hazard so that high priority
risks are reduced to a tolerable level.

Establish measures● We monitor the measures and evaluate their effectiveness. If the risk is determined not
to be acceptable, we establish and implement additional measures.

Monitor and review▶Education, training and safety awareness❶Initiatives based on the three actuals principle

A safety management system is a generic term for a collection of structured

Plan

Do

organizational processes that include safety policies, organizational structures, responsibility

Act

Check

addition, we conduct safety training for new employees, employees,

actual place), looking at aircraft debris and personal belongings of

who have worked for JAL for 10 years, and new managers.

To assure stable safety and quality standards, training and assessment
are conducted for pilots, maintenance engineers, cabin attendants,
Plan

Do

Plan

Do

Act

Check

Act

Check

Divisions

Corporate Safety and Security
Division

PDCA Cycle of the Safety Management System■Safety Management Structure●The President assumes final responsibility for safety.
●The Chief Safety Officer, appointed by the President, has overall
responsibility and authority for the safety management system,
and makes important management decisions including safetymeasures and safety investments.
For details on the safety management system, please visit the JAL website.
https://www.jal.com/en/safety/safety_system/#systemand dispatchers.
▶Internal audits
We conduct internal audits regularly in accordance with the requirements established by the Ministry of Land, Infrastructure, Transport and Tourism(MLIT) and the International Air Transport Association (IATA) in order to identify areas for improvement in the safety management system and improvesafety standards.
▶Management review

Data Section

JAL REPORT 2023

from the depths of their minds by going to the accident site (the❸Training and assessment

Division and other divisions implement the PDCA cycle for safety, and organically link it across17

aim of creating awareness based on the basic premise of safety. In

experienced the accident (the actual people).

Charter, our fundamental safety policy, management, the Corporate Safety and SecurityWEB

Safety education is conducted every year for all employees with theJAL Group employees are educated on the importance of safety

victims (the actual objects), and listening to stories of those who

sharing, and methods of safety risk management. In accordance with the JAL Group Safety● As there are eight airlines in the JAL Group including Japan Airlines,
safety is managed under a common policy which was confirmed by
the Group Safety Enhancement Council in order to maintain uniform
and high safety levels throughout the JAL Group. In addition, theGroup Operational Safety Promotion Committee has been
established as a subcommittee of the Group Safety Enhancement
Council to maintain and strengthen safety cooperation between JAL
divisions and Group airlines.

❷Safety education

Sustainability

Safety Management System

Management

improvements are made.

Growth Strategy· Stop immediately when safety concern arises.
· Comply with rules and strictly follow standard operating procedures.
· Always check and confirm; never rely on assumptions.
· Promptly communicate information without omission to ensure safety.
· Deal with problems quickly and appropriately without underestimation.

organizations to ensure the safety management system functions properly and continuous

The JAL Group Value Creation Story

The Safety Charter demonstrates the JAL Group's determination, basic philosophy, and actions toward safety, which is thebasic premise for creating value as an airline. Every employee, from top management to front-line employees, implements
the Safety Charter on a daily basis.
The JAL Group places particular importance on the Safety Management System, which is an organizational safety
promotion mechanism for maintaining and improving aviation safety, and the Safety Culture, which is an organizational
culture for functioning the safety management system.

Introduction

4. Foundations of Value Creation

The Group Safety Enhancement Council reviews policies and plans every year and evaluates and improves the safety management system to ensurethat it is functioning effectively.
▶Management of change
We have established and implemented a change management process to manage risks arising from upsizing and downsizing of organizations, andchanges to facilities, systems, processes, and procedures with the probability of affecting safety.

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Chapter 2 The JAL Group Value Creation Story

1. Materiality(1) Safety Charter

2. JAL Group's Value
Creation Story

3. JAL Group's Value
Creation Process(2) JAL Philosophy

4.4. FoundationsofFoundations of
Value
Value Creation
Creation(3) Divisional Profitability Management System

5. The Trails of Challenges(4) Governance▶Third-party assessment❶External audit
JAL regularly undergoes safety audits by MLIT and IATA Operational Safety Audit (IOSA), aninternational safety audit program to enhance safety management.

Safety Advisory Group: (left rear) Prof. HAGA,
Prof. KOMATSUBARA, (left front) Prof. HATAMURA,
Mr. YANAGIDA (Chair), and Prof. KAMATA

Introduction❷Advice and recommendations from the Safety Advisory GroupIn August 2005, the Safety Advisory Group was established comprising five external experts toprovide advice on safety issues. The members possess extensive knowledge and experiencein human factors, failure and defect analysis, organizational operation and culture, and safety,
and provide a wide range of objective advice and recommendations on safety from an expert’s
viewpoint, which we apply to the JAL Group management and safety operations.

(2) JAL Philosophy
The JAL Philosophy is a mindset, a set of values, and an attitude expected ofeveryone working on JAL services and products.
Each member of the JAL Group aims to achieve the JAL Group corporate policyof "Deliver unparalleled service to our customers and Increase corporate value
and contribute to the betterment of society" throughout the daily practice of JAL
Philosophy.
When JAL Group employees think and act autonomously, JAL Philosophy aligns
the vectors of all employees.

The JAL Group Value Creation Story

A Safety Culture
A safety culture is an organizational culture and an organization’s shared awareness about safety. The JAL Group is working to foster a safety
culture based on lessons learned from the past.

A reporting culture

A culture of decision-making
and challenge

A culture of refining manuals

A culture of thinking fromthe “second to third person
perspective”

KAWASAKI Kinuka
JAL Infotech Co., Ltd. Service Business Division
Field Service Division

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JAL REPORT 2023

Chapter 3 Accumulate Tedious Efforts with Passion
Work Earnestly
Accumulate Tedious Efforts
Work with Voluntary Attention

Chapter 4 Ability Will Improve
Ability Will Improve
Part 2 To Become a Wonderful JAL
Chapter 1 Each of Us Makes JAL What It Is
Each of Us Makes JAL What It Is
Discuss Frankly
Lead by Example
Be the Center of the Vortex
Valuable Lives Are Entrusted to Us in Our WorkBe Thankful
Put Yourself in the Customer’s Position
Chapter 2 Have a Keen Sense of Profitability
Maximize Revenues and Minimize Expenses
Elevate Our Cost-Consciousness
Pursue Profit Fairly
Manage the Company Based on Accurate Figures

Chapter 4 Possess a Fighting Spirit
Maintain an Ardent Desire
Never Give Up Until We Succeed
Boast and Make It Come True
Possess True Courage
Chapter 5 Be Creative in Our Work
Today Should Be Better Than Yesterday, Tomorrow
Better Than Today
Conceive Optimistically, Plan Pessimistically, andExecute OptimisticallyThink Through to Visualize the Results
Decide and Act with Speed
Face Challenges with Courage
Aim High

The JAL Group employees strive to understand the true meaning of their work manuals by always asking
themselves, "What is this procedure for?" Also, manuals are there to follow but also to change. Therefore,
we search for improvements necessary when using the manual and revise manuals together with
manufacturers. We have established a framework for periodic inventory both in quality and in quantity.

■Initiatives to Practice the JAL Philosophy▶ JAL Philosophy workshop▶ Leaders workshop

In order to encourage JAL Group employees to think from the customer’s perspective, we place importanceon the “second to third person perspective,” which combines the third person perspective of thinking from a
specialized airline professional and the first and second person perspective of treating customers as if we or
our family were the customer.

All JAL Group employees participate in workshops three times a year withthe aim of providing the best service to customers and contributing to theadvancement of society through the study of JAL Philosophy. In FY2022, we
deepened our learning on the theme of what each individual should be aware of
in order to solve social issues through business activities. The aim is to becomea driving force for tomorrow by learning the value of our daily work throughdialogue and introspection with our peers.

In FY2022, six workshops were held annually for executives
and department heads and two sessions annually for
managers, with the aim of helping leaders improve theircharacter. Focusing on leadership that responds to thechanging times and building an organization that takes onchallenges, the JAL Group's leaders strive to compete witheach other in order to demonstrate the strength of the JAL
Group in human resources.

Renew one's desire for safety
Safety Seminar for New Employees
I climbed Mt. Osutaka for the first time and felt the tragedy of the accident firsthand by witnessing the accident
site. I was determined to maintain safe flight operations as a member of the JAL Group through this memorial
climbing, and I thought it was my mission to pass on the memory of Mt. Osutaka. In day-to-day operations, as an
IT engineer, I will always be aware of how systems support the safe operation of Japan Airlines, and I will work
quickly and sincerely to resolve problems and issues while valuing the voices of those on the ground.

Safety Seminar for New Managers
Through the training, I felt that with my relocation, my desire for safety, which is the basis of my thinking, became
stronger. When I visited the site again, I could vividly see the scenes of that time, and the words from the people
and the actual people resonated more deeply.
In addition, by interacting with people of the same generation in other occupations, the sense of camaraderie
increased, my own feelings were inspired, and my awareness of safety increased.

View of the event heldin June 2022

Online workshop

Voice
Data Section

IMURA Yu
Ryukyu Air Commuter Co., Ltd.
Chief Crew First Officer Group 2

The JAL Group is promoting communication and creating opportunities for employees to verbally share
information face-to-face. An activity has been running since 2006, where employees across divisions
meet and revitalize the organization. We also employ verbal confirmation as a means of interactive
communication to ensure thorough checks and instill this practice in workplaces.

Chapter 2 Have the Right Attitude
Base Criteria for Decision-Making on“Doing What Is Right as a Human Being”
Have a Beautiful Mind
Be Humble and Honest
Always Be Cheerful and Positive
A Small Good Is Like a Great Evil, While aGreat Good May Appear MercilessWrestle in the Center of the Ring
Grasp Matters Simply
Possess Opposing Extremes

Chapter 3 Unite Our Hearts
Make the Best Baton Pass
Align Mental Vectors“Workfloor” Management
Follow the Merit System

Fire Yourself Up
Strive for Perfection

Sustainability

Voice

The JAL Group aims to achieve sustainable growth and development by adapting to the rapidly changing
environment. As it is extremely important from the viewpoint of safety for employees to make decisions
within their authority and responsibility, we are reviewing and improving the decision-making process toensure smooth and prompt decision-making.

Part 1 In Order to Lead a Wonderful Life
Chapter 1 The Formula for Success(The Formula for Life and Work)The Result of Life and Work= Attitude × Effort ×
Ability

Growth Strategy

A communication culture

Reporting hazards is essential to safety management. Therefore, we have introduced a voluntary reporting
system to avert emerging safety problems. Even minor human errors are reported and used to establish
preventive measures. In 2007, JAL became the first airline in Japan to introduce a non-punitive reporting
policy to inform employees that they will not be punished for human errors if the JAL Group deems thatthey occurred even though every precaution was taken. In this way, we have created an environment toencourage employees to report spontaneously without hesitation.

JAL Philosophy

JAL Philosophy and ESG Strategy
Last year, we focused on ESG strategies as the theme of the JAL Philosophy workshop, hoping to convey that our work basedon altruism has led to ESG strategies. Participants commented, "I found that the results of each person's daily work lead to
ESG strategy, and my motivation for work increased." It was a challenge to tackle a difficult subject, but I feel that thinking
through the common values of JAL Philosophy has enabled us to bring all employees together.
TAMURA Yuko
Work Philosophy DepartmentTOP

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20

Chapter 2 The JAL Group Value Creation Story

1. Materiality(1) Safety Charter

2. JAL Group's Value
Creation Story

3. JAL Group's Value
Creation Process(2) JAL Philosophy

4.4. FoundationsofFoundations of
Value
Value Creation
Creation(3) Divisional Profitability Management System

5. The Trails of Challenges(4) Governance(4) GovernanceThe divisional profibility system, based on our Amoeba Management, has advantages such as fostering
personnel with a sense of management, proactive business management, and the realization of Management
by All. All JAL Group employees work on figures involved in company management to maximize profits.
Along with the implementation of JAL Philosophy, we aim to realize our corporate philosophy by not only
maximizing profit in each division, but also pursuing optimal profits throughout the entire company.

Governance is positioned as the foundation for the JAL Group's value creation. Through the JAL Group
Code of Conduct, which all employees must adhere to, company-wide risk management, and corporate
governance, which exercises strong management oversight functions based on high managementtransparency, we will firmly establish aggressive and defensive governance and achieve sustainablegrowth.

JAL Vision
Medium-Term Management Plan

JAL Group Code of Conduct (Information Disclosure and Compliance)
The JAL Group Code of Conduct is a commitment
to society through which the JAL Group conducts
its business and is an action guideline that all
employees must adhere to in order to create value
sustainably through their daily work.
In addition to implementing the JAL Philosophy, allemployees will think and act in accordance with
the Code of Conduct, thereby fulfilling the promise
to society, such as solving social issues including
the SDGs.

JAL Group Corporate Policy

Divisional Profitability
Management System

JAL Philosophy■ Developing Human Resources that Contribute to Sustainable Development

JAL Group Code of Conduct

In the Amoeba system, the leaders of each organization are responsible for the income and expenditure of their own organization. They gain
managerial experience by formulating intentional organizational goals and engaging all members to achieve the goals. This initiative will produce

JAL Philosophy

managerial talent.

■ Realize Business Model Reform by Leveraging Strengths

For the full text of the JAL Group Code of Conduct, please visit the JAL website.

Each month, we formulate earnings forecasts for the FSC, the LCC, and theWEB

Mileage, Lifestyle and Infrastructure businesses. Based on these forecasts, we
examine and implement measures to maximize earnings. At the Group performance
report meetings, which are attended by all executives, discussions will be repeatedbusiness. In addition to cost management, which was a major topic of discussion
during the COVID-19 pandemic, the focus of discussions will be to maximize
income based on changes in the current business environment. All participants
will share their insights toward achieving the annual earning goal and rebuilding
the business portfolio. By taking advantage of proactive management and theManagement by All, we will realize the growth of each business, thereby leading to
the sustainable growth of the JAL Group.

Contribution to Improve Income and Expenditure

Monthly departmental meetings in the frontline (Left: JAL Cargo Right: JAL Sky)JAL REPORT 2023

Initiatives based on the JAL Group Code of Conduct
We formulate and implement initiatives based on the JAL Group Code of Conduct, ranging from the business strategy of the medium-term management
plan with ESG strategy at the top to initiatives related to more universal governance. Specific initiatives for more universal governance include:① Information Disclosure and Dialogue■In order to continue to be a trusted company in society, the JAL Group strives to have better dialogue with a wide range of stakeholders and to enhanceand improve the quality of information disclosure, which is a prerequisite for dialogue.
■We strive to disclose information carefully and engage in constructive dialogue with shareholders, investors and other stakeholders.
■In order to disclose the JAL Group's corporate stance, we have posted a variety of information on our company website, including the JAL Report,

a consolidated report on finance and ESG, the JAL Group Safety Report, which summarizes our attitude and initiatives toward safety, as well as our
corporate philosophy, corporate information, safety and quality information, sustainability information, and IR information. We also disclose informationon our management plans and financial results in a timely, fair and appropriate manner. In addition, we will carry out dialogue to promote understanding
from a wide range of stakeholders and enhance corporate value.

■ Proactive Information Disclosure

Data Section

Divisional profitability initiatives exerted its authority during the COVID-19 pandemic. The leaders of each organization took the lead in formulating earning forecasts
based on the latest demand trends of each month, and appropriately managed costs in response to the sharp decline in income. In addition, these forecasts were sharedat departmental meetings where all members gathered, regardless ofjob title or years of employment, and all organizations considered andimplemented measures to improve income and expenditure, such asplanning new businesses utilizing the resources that we own. In thisway, each organization continued to take advantage of the strengthsof the system, and the JAL Group as a whole has improved its
income and expenditure.

https://www.jal.com/en/philosophy-vision/codeofconduct/

Sustainabilityon the income and expenditure forecasts and measures formulated by each21

1. Safety
2. Pursuit of customer satisfaction
3. Trust with stakeholders(1) Information disclosure and dialogue(2) Prohibiting insider trading
4. R espect for human rights and job satisfaction (human rights and labor)(1) Respecting human rights and diversity(2) Safe and comfortable work environments
5. Mission and responsibility as a member of society(1) Contributing to regional revitalization through our business(2) R esponsibility as a company that plays a role in social infrastructure(3) Responsibility as a corporate citizen
6. Passing on the precious earth to the next generation (global environment)(1) Global environmental preservation initiatives(2) Disclosure of environmental information and dialogue
7. Fair business practices(1) Reinforcing compliance(2) Preventing corruption(3) Fair business relations with business partners(4) Free and fair competition(5) M anagement of personal information and intellectual property(6) E liminating relations with antisocial forces

Growth Strategy

Driving Force to Involve all Employees in Management

JAL Group Code of Conduct

The JAL Group Value Creation Story

Realization of the JAL Group
Corporate Philosophy

Introduction(3) Divisional Profitability Management System

The JAL Group is working to enhance the quality of information disclosure and emphasize two-way communication
so that stakeholders can understand the situation and business environment accurately and deeply. In recognitionof this proactive disclosure of information, we have been ranked number one in the transportation sector for the
fourth time in the past five years since 2018 by the Japan Securities Analysts Association as a "Disclosure Excellent Company".
In order to build better relationships with stakeholders, we will continue to actively disclose information and strengthen communication throughdialogue events and IR materials and strive to conduct IR activities with higher quality.

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22

Chapter 2 The JAL Group Value Creation Story

1. Materiality

2. JAL Group's Value
Creation Story(1) Safety Charter

4.4. FoundationsofFoundations of
Value
Value Creation
Creation

3. JAL Group's Value
Creation Process(2) JAL Philosophy(3) Divisional Profitability Management System

5. The Trails of Challenges(4) Governance③ Responsible Procurement■The JAL Group carries out fair business activities in order to remain a company trusted by society.

Introduction② Fair Business Practices■We will maintain fair and clear procurement and strive to co-exist and co-prosper with our suppliers by building a sustainable supply chain through thedissemination and compliance with the JAL Group Supplier Code of Conduct.

■Fair business practices will be ensured through compliance, anti-corruption, engagement in free and fair competition, management of personal■To this end, we will endeavor to respond in good faith and identify and resolve issues from the perspectives of legal compliance, global environmental

information and intellectual property, and measures against anti-social forces.
■To this end, we will raise awareness of compliance and conduct based on the Code of Conduct through the education for each employee. We will also

protection, respect for human rights, proper labor practices, and fair business practices.

establish a consultation desk and work to detect fraud as soon as possible.
■In particular, as we work to prevent corruption, we comply with laws and regulations and international treaties applicable to our respective countries andregions as part of our global business development, and we are working to strengthen controls on bribery and prevent money laundering.

■ ESG Initiatives - Supply Chain ESG Program The JAL Group's businesses, including air transportation, are supported by the supply chains of a wide variety of suppliers. Throughout this supply

The JAL Group Value Creation Story

chain, we operate a supply chain ESG program to identify and address significant risks and impacts from an ESG perspective.

■ Promotion System▶Main Initiatives of the Program

Compliance initiatives, including the promotion of fair business conduct, are reported at the Group Risk

The Supply Chain ESG Program assesses and supports suppliers according to the level of their ESG risks.

Management Meeting directly under the President, and the status of initiatives is supervised. In addition,

The JAL Group Supplier Code of Conduct is presented to all our suppliers to understand and comply with. To significant suppliers judged to be

we have established the JAL Group Compliance Network, consisting of executives from each JAL Groupat high risk, the JAL Group uses SAQ*1 of Sedex*2 or the responses from our company's own Self-Assessment Questionnaire (JAL questionnaire)company, to ensure thorough compliance across the Group.

to confirm the compliance status, business practices, human rights, and the environment, as well as business materials such as labor conditions,sector-specific characteristics, and ESG in countries and regions.

■ Enhancement of Employee Education

In addition to quality, price, and delivery dates, we will continue to evaluate sustainability through SAQ and other means and promote responsible

Since the establishment of the Code of Conduct in 2019, the JAL Group has been conducting training programs with the aim of improving the levelof awareness, understanding, and steady implementation. All employees attend a seminar on our Code of Conduct annually in October, known as
the Compliance Month. In FY2022, we aimed to further implement the Code of Conduct by sharing and discussing what we think is important foreach employee and how to implement the Code of Conduct and share their problems at work. After their training, we distribute a questionnaire to all
In addition to the above training, we are also working to further raise awareness of compliance by providing education by job level, including the bbreviation for Self Assessment Questionnaire.
*1 A*2 Established in the U.K. in 2004 this is a non-profit organization that provides a platform for managing and sharing corporate ethics information with the aim of realizing
responsible business practices in the supply chain.

■ Promotion System
Goal setting and progress review and risk management at Board of Directors.

executive level, and lobby in each workplace, including overseas departments.

 ompliance with JAL Group SupplierC
Code of Conduct in FY2022 (percentage by field)

Growth Strategy

participants and work to improve the curriculum every year based on their responses.

procurement activities to achieve the SDGs.

（％）
100
80

Purchasing activities based on compliance with the JAL Group Supplier Code of Conduct.

■ Development of Consultation Services for Employees

60
40

We have established internal and external reporting and consultation desks (24 hours, 365 days, Japanese/English) that can be used anonymously

20

Education of procurement personnel0by all JAL Group employees. In addition, each group company has its own consultation desk, and the JAL Group as a whole is conducting early
detection and correction of fraud. The number of internal reports in FY2022 was 170. In order to make the contact easily accessible to employees,
we will continue to disseminate information that makes it easy to understand where to present their report and provide internal education on thewhistleblowing system.

■

Items

Number of Events■ Consultation Services for Business Partners

The number of violations of the Code of Conduct (disciplinary actions)

Bribery or Corruption

0

In FY2022, we began operating the JAL Supplier Hotline, a window

in FY2022 is shown at right. When violations are discovered, we not

Discrimination0

for direct consultation from suppliers and their employees. We visited

only investigate them appropriately and take action, but we also strive toHarassment

6

several suppliers, who were thought to be at high risk from a humanprevent the recurrence of such cases by frequently sharing the reported

Customer Privacy

0cases, providing in-house education, and establishing a system toConflict of Interests

0

prevent violations.

Money Laundering or Insider Trading0

rights perspective, and conducted awareness campaigns for our
hotline. While giving maximum consideration to the privacy of callers,
we cooperate with suppliers to confirm compliance with the JAL
Supplier Code of Conduct and engage in dialogue to resolve theissues.

Efforts for further implementation

23

JAL REPORT 2023

FY2019FY2020Understand andpractice(Individuals)

Key Performance Indicators (KPI)

PeriodBy

TargetAchievement（FY23）

Monitoring completion rate of primary
suppliers

FY2023

FY2023

100%

100%

Soundness confirmation rate ofprimary suppliers

FY2023

FY2023100%

100%

Auditing rate of suppliers requiringaudit

FY2023

FY2023100%

N/A

Consultation response rate

Each year

Each year

100%

100%

Training rate of procurement staff

Each year

Each year

100%

100%

FY2021 and onwards

Topic
Established anddisseminated(individuals)

Metrics and Targets

Practice and introduce(individuals andorganizations)

Data Section

Since its establishment in 2019, we have been working on a step-by-stepprocess to steadily implement the system by spreading the word and promoting
understanding. Since FY2021, each employee has been reflecting on the Codeof Conduct once again, sharing and discussing their own problems at work,
which they believe is an important practice for further application.

■

Sustainability■ Number of Violations of the Code of Conduct
in FY2022■

CDP Supplier Engagement Assessment

In the Supplier Engagement Assessment conducted by CDP, an international environmental non-profit organization, JAL was the
only airline in Japan to receive an "A," the highest rating given to the top eight percent from approximately 18,700 companies
Climate Change "A-" Assessment
in Japan and overseas. There after JAL was certified as a Supplier Engagement Leader.

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Chapter 2 The JAL Group Value Creation Story

2. JAL Group's Value
Creation Story

1. Materiality(1) Safety Charter(2) JAL Philosophy(3) Divisional Profitability Management System

5. The Trails of Challenges(4) GovernanceDialogues with Stakeholders

To realize our corporate policy, the JAL Group established a Multi-Stakeholder Policy based on the belief that
it is important to create value co-creation with diverse stakeholders such as shareholders, employees,
business partners, customers, creditors, and local communities.
Awareness and advice for improvement gained through constructive dialogue with a wide range ofstakeholders around the company are used to continuously enhance corporate value.
For information on our multi-stakeholder policy, please visit the JAL website.
https://www.jal.com/ja/sustainability/governance/fair-business-practices/pdf/multistakeholder_ja.pdf?230315*Japanese only

■For All Employees to Work Together to Create Value

Round table meeting between employees and management

For more examples, visit the JAL website.
WEB

Shareholders
andInvestors

Business Partners■Communication to Improve the Soundness of the Supply Chain

Following FY2021, we invited Mr. SHIMOTAYA Takeshi (photo), the founder of The Global Alliancefor Sustainable Supply Chain, who has expert knowledge on human rights in the supply chain,to hold a dialogue with the board members of the Sustainability Promotion Committee. In this
dialogue, he gave us valuable advice on the involvement of farmers and other producers in the
supply chain, as well as factory workers, and the progress of our company's efforts from a global
perspective. Based on the advice we received, we included the identification and conductionof on-site audits to suppliers that are closely tied to our company and highly important from an
ESG perspective, to one of our human rights due diligence efforts for FY2023. The JAL Groupwill continue to engage in dialogue with society and continue to address issues and make
improvements based on the belief that respect for human rights is a universal value.

As a member of the oneworld Alliance, JAL works with its allies to promote various measures to improve customer convenience and realize
sustainability through regular and subcommittee meetings. Going forward, JAL will be loading SAF, which is a joint procurement that has been
under discussion with member companies. Together with oneworld member companies, we will strive to realize new values and improve thequality of our services.
For details, refer to "SAF Procurement Overseas" on p.96

order to further promote ESG management by grasping the latest social trends andincorporating the knowledge of experts into our strategies, we held a dialogue withexecutives and Professor KANIE Norichika, a leading expert in SDGs research and aprofessor at Keio University Graduate School, regarding the process of formulating the
Medium-Term Management Plan Rolling Plan.
As aviation is an indispensable social infrastructure, Professor KANIE pointed out theequipment, and inflight meals, through the implementation of the Sustainable Model
Flight. In addition, flying to the area and actually feeling it through the five senses not
only brings joy and enjoyment to people, but also provides a valuable indication thatthe airline industry plays a great role in building a more resilient society and promoting

Shareholders and Investors■Strengthening Communication with Individual Shareholders and Investors
We strive to disclose information by posting management-related information such as our
corporate philosophy, management strategies, management plans, and results on our website
and by sending IR-related information in a timely manner through IR Mail. In addition, as a meansof strengthening two-way communications, we conducted new initiatives at the General Meeting
Hangar tour for shareholdersof Shareholders held in June 2023, such as livestreaming from the opening to the closing of themeeting and answering all questions received in advance. In addition, as a means to deepen
understanding of the JAL Group, we conducted tours of the JAL plant and held online briefings for shareholders living far away. We will continue
to work to further enhance and improve the quality of information disclosure and achieve better dialogue with shareholders and investors.

■Interacting with Institutional Investors through Interviews and Events

Data Section

significance and importance of challenging the future of flight, such as fuel, onboard

Sustainability

https://www.jal.com/ja/sustainability/human/satisfaction/customer*Japanese only

The midterm year between the enactment and achievement of SDGs is 2023. In

JAL REPORT 2023

External Partners■Conduct Regular Meetings and Subcommittees with Alliance Members■Becoming a Part of Building a Diverse and Resilient Society

25

Business Partners

External Partners

Community, Next Generation/Environment

diversity in society as a whole.

Next Generation/
Environment

Growth Strategy

Examples of Improvements in the Last Year
Based on customer feedback, [W ith sign language
interpretation and subtitle] Safety video - for your own safety- was produced.

■Creating Customer Value through Dialogue with Customers

JAL Sustainability Advisor Sustainable Flight Navigator
Professor KANIE Norichika of Keio University Graduate School (center)
SAITO Yuji, Corporate Planning Division (left)
AOKI Noriyuki, General Affairs Division (right)

Regional
Communities■Dialogue on Human Rights in the Supply Chain

Customers
Customer feedback is reported to the Board of Directors on a monthly basis. In
addition, through company-wide consultations at the management level, we confirm
how to solve problems and examine countermeasures. In addition, we are working
to develop new products and improve our services based on customer satisfaction
surveys after boarding our flights and the feedback received at the contact desk. The
JAL Group will continue to take customer feedback seriously and strive to improve its
services.

Customers

Our suppliers were requested to comply with the JAL Group Supplier Code of Conduct in order to raise the level of the entire supply chain fromthe perspective of ESG management. In addition to daily business meetings, participants from 39 significant suppliers participated in the briefing
session in FY2022 to publicize the JAL Group's ESG initiatives (such as CO2 reduction) and the JAL Supplier Hotline, established in FY2022.
Moreover we strive to improve our suppliers' understanding of ESG/SDGs through visits to supplier plants.

Employees
In order for all employees to work together to improve corporate value throughsustainable value creation, we are rapidly sharing accurate information and promoting
direct communication between management and employees. In order to ensure aproper understanding of the JAL Group's management strategy and status, our top
management distributes not only internal newsletters but also instructional videos on
the Medium Term Management Plan and quarterly financial results. In addition, regularbriefings by the President are available to our worldwide employees. Furthermore, wehold round-table meetings between the President and employees at various branches,
including overseas offices, to directly communicate with each other about safety, otherworkplace initiatives, and issues.

Employees

The JAL Group Value Creation Story

WEB

Stakeholders

Introduction

Special Feature

4.4. FoundationsofFoundations of
Value
Value Creation
Creation

3. JAL Group's Value
Creation Process

In addition to individual meetings, we actively engage in dialogue with institutional investors through a variety of IR events held throughout the year.
We have also resumed face-to-face events, striving to engage in interactive, polite dialogue with our stakeholders. We regularly provide feedback
to the Board of Directors and key departments concerned on the valuable opinions and comments obtained at these events, to reflect in ourmanagement.
Please see the following pages for details.
pp.77-80 Financial Strategies
p.110 Main Evaluations from Outside PartiesTOP

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Chapter 2 The JAL Group Value Creation Story

2. JAL Group's Value
Creation Story

1. Materiality(1) Safety Charter

4.4. FoundationsofFoundations of
Value
Value Creation
Creation

3. JAL Group's Value
Creation Process(2) JAL Philosophy

5. The Trails of Challenges(3) Divisional Profitability Management System(4) Governance■ The JAL Group defines risk as an event or action that interferes with the achievement of an organization's mission, objectives and goals. We haveestablished a company-wide risk management system and have selected priority risks in order to achieve sustainable growth and create social andcorporate value through our business, as well as to minimize the damage caused when risks occur, and to achieve early resolution and recovery.
■ We will strengthen our business continuity management (BCM) for unknown viral infections, large-scale IT failures, and the anticipated Tokyo

Metropolitan Earthquake. In addition, we will strengthen information security measures, including cybersecurity measures.
For information on business risks, please visit the JAL website.

The Group Risk Management Committee, chaired by the President, has been established to comprehensively manage the risks of the JAL Groupand stabilize management.
The meeting will discuss basic policies for risk management, countermeasures for priority risks identified through risk research and assessment, andBCM. In addition, a separate committee dedicated to financial and information security risks has been established at the lower end to provide moredetailed and frequent responses. We have established a multi-layered risk governance system, in which responses to priority risks determined at themeeting are reported to the Board of Directors and further measures are discussed as necessary.
Risks related to aviation safety are discussed at the Group Safety Committee, and risks related to sustainability in general, such as the environmentand human rights, are discussed at the Sustainability Promotion Committee.
For information on priority risks, please visit the JAL website.

Board of Directors

WEB

PresidentGroup Safety Enhancement Council

https://www.jal.com/en/sustainability/governance/
riskmanagement/#thinking

Reporting of priority risks

Reporting of priority risks

Chair: PresidentGroup Operational Safety
Promotion Committee

Risk Management andInformation Security Committee

Financial Risk Committee

Sustainability Promotion
Committee

Chair: Senior Vice President of
Safety Promotion Division

Chair: Senior Vice President ofGeneral Affairs Division

Chair: Senior Vice President of
Accounting Division

Chair: Senior Vice President ofGeneral Affairs Division

Aviation Safety

Corporate Risk Operation Risk(i) Implementation of the risk management cycle(ii) Enhancement of BCM

27

JAL REPORT 2023

1
2

Changes in the business environment
domestically and internationally

Progress management,
residual risk assessment(includes review, training, auditing, etc.)

Overseasregional
headquarters

Division A
Dept.
A-1

Confirm the mission, goals,
and targets of eachorganization

Entire JAL Group

6
Responserisks

Level III

Dept.
A-2

Group
airlineGroupcompany

3
Identify risks

54Clarify priority risks

Update the risk map

In March 2020, we received a DBJ BCM rated loan fromthe Development Bank of Japan (DBJ), and the rating
results commended Japan Airlines for “particularly
advanced business continuity initiatives.”

Response the command office・A Command Office chaired by the President (or Executive Vice
President) is set up and normal operations system quickly shifts tothe crisis management system.

In view of the importance of information security and personal dataprotection in a sophisticated information and telecommunications
society, we have established the JAL Group Fundamental Policy on
Information Security and are working to properly manage and protect
important information held by the company, such as personal dataof customers entrusted, by disclosing on our website, information oncompliance with laws and internal rules, our management system,
safety measures, education, awareness raising activities, cooperation
with subcontractors, accident handling measures and our help desk.

JAL Group Information Security Measures
People and Organizations

・Establishment of CISO and internal
committees
・Establishment of 24 hour monitoring system
・Collaboration with external ISAC
・Security training for all employees

Policies and Rules

・Basic Policy on Information Security in
the JAL Group・Development of internal rules

https://www.jal.com/en/sustainability/governance/riskmanagement/
information-security/

Technical measures

・Measures against cyber incidents suchas information leakage and unauthorizedaccess・ISO27001 certification for IT
infrastructure organizations■ Information Security

By establishing a Risk Management and Information Security
Committee to manage and promote personal information andinformation security, we aim to reduce corporate risks such as
information leaks in preparation for sophisticated and complex
external cyber-attacks.
Under the leadership of our Senior Vice President of the IT Planning
Department, also known as the Chief Information Security Officer(CISO), we are working to further improve our information security
management system by being members of Transportation ISAC
Japan*1 and Aviation ISAC*2 and by obtaining certification fromassociations that are under the jurisdiction of ISA27001, a global
standard for information security and infrastructure.

As an important public transportation infrastructure provider, wetake measures against cyber incidents such as information leaks
and unauthorized access in accordance with the guidelines set by
the Ministry of Land, Infrastructure, Transport and Tourism (MLIT).
Our internal efforts include regular e-Learning security training for
all employees, the establishment of a CSIRT system, and various
training programs to prevent cyber incidents and respond promptly
when they occur. In addition, as a measure to strengthen security
during telework, we have built a system that fully encrypts terminal
communications outside the company and constantly monitors them.
In cooperation with the outside world, specialized agencies monitor
threats 24 hours a day, 365 days a year, and conduct periodic audits.

 rganizations that promote activities contributing to the improvement of the*1 O
collective defense capabilities of transportation and transportation business
operators
 lobal information sharing organization consisting of airlines, aircraft*2 G
manufacturers, among others

Voice

NISHIMOTO Yuka
Security Strategy Dept.
Security Supervision Group

Contribute to Fostering a Security Culture
In 2022, JAL acquired ISO27001 certification for the division that is responsible for the system infrastructure of the entire JAL
Group. In order to expand the scope of certification, we are currently developing the necessary documents for ISMS* while
involving members of other departments and other groups. I am motivated by the feeling that we are building a security culture
one step at a time.
I also find it rewarding that the results are tangible and directly linked to the company's reputation. In fact, in the external
evaluation that evaluates corporate sustainability from an ESG point of view, whether or not a company has obtained ISO27001
certification is an evaluation item, so I feel that I can contribute to the evaluation of the company, which is a driving force for
my work.

Data Section

In order to fulfill our mission as a public transportation system that plays a role insocial infrastructure, we are promoting BCM and building a system that enables
us to carry out operations appropriately in times of emergency. In the event of an
unknown viral infection, major IT failure, or an earthquake directly beneath Tokyo,
we have established individual BCPs to protect the safety of our customers,
employees, family members, and related personnel. We have also established basic
policies and systems necessary for the continuation of the JAL Group's important
air transport services, including reservation and information services, and payment
and settlement services. In order to continue to improve the effectiveness andeffectiveness of the BCP, we conduct regular training, utilizing the knowledge ofexternal experts, and revise the BCP from time to time. The JAL Group's business
continuity capabilities have been highly evaluated by rating agencies.

We implement the risk management cycle regularly so thateach organization can achieve their targets.
7

・A committee is formed by Vice Presidents of main departments withVice President of Risk Management as Secretariat and risk response
is implemented. Vice President of Risk Management advises the
person in charge of determining the risk level to shift to Level III or I
depending on the situation.

■ Basic Policy■ Management System

Overall sustainability(Environment, Human Rights, among others)

Response the special committee

Sustainability

The JAL Group defines risk as "an event or action that threatens the achievementof the mission, purpose or target of an individual or an organization," mandating
all organization leaders to manage their own risks as the risk officer.
In implementing preventive risk management, risk officers conduct risk
assessments twice a year to identify prioritized risks and take risk measures. (Risk)
Control Self-Assessment, is provided the organization at stake to reassess andimprove risk responses through a workshop style self-assessment and provides
risk consulting, as needed.

Level II(iv) Information security measures

WEB

Please visit the following pages for details.
Aviation Safety Risk Management: p.17 Safety Management System, p.31 Meeting directly under the President
Sustainability Management: General Sustainability, p.84, Environmental Management, p.89

② Efforts

・The person in charge (leader of organization where the risk has
occurred) responds by assembling people deemed necessary.
・The person in charge advises the person responsible for determining
the level of risk to shift to Level Ⅱ or Ⅲ according to the severity ofthe situation.

For more information about the JAL Group's Basic Policy on
Information Security, visit our company website

Sustainability
Promotion Council

Board Chair: President

The JAL Group has established a system for the responsible person
to quickly determine the level of crisis management (Levels I to III)according to the situation and to take immediate action in the event
we detect or confirm the occurrence, or threat of, a risk impedingflight safety and security, a natural disaster, pandemic, and other risks
to air transport.
In recent years, in response to BCP activation on the outbreak andspread of COVID-19 and on safety and security risks in certain
regions and airspace due to the Ukraine-Russian situation, we haveestablished a task force to gather and analyze information andtake appropriate action. We also conduct drills regularly and enricheducation and training to raise staff awareness of crisis management.

Response by the person responsible for handling the risk

Growth Strategy

Board Chair:
PresidentGroup Risk
Management Council

Level lThe JAL Group Value Creation Story

https://www.jal.com/en/investor/risk/

WEB① Risk Management Structure(iii) Development of crisis management system

Introduction

Risk Management*Information Security Management System: How Information Security is Managed

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JAL REPORT 2023

28

Chapter 2 The JAL Group Value Creation Story

1. Materiality

2. JAL Group's Value
Creation Story(1) Safety Charter

3. JAL Group's Value
Creation Process(2) JAL Philosophy

4.4. FoundationsofFoundations of
Value
Value Creation
Creation(3) Divisional Profitability Management System

5. The Trails of Challenges(4) GovernanceCorporate Governance*

A person to whom none of the following Independence Standards apply shall be judged to be independent and outside officers, who do not qualify as being highly
independent, will not be nominated as outside directors or outside audit and supervisory board members. In addition, individuals, who concurrently serve as directors or audit& supervisory board members at more than four listed companies other than the company, will not be nominated.

Basic views on corporate governanceIndependence Standards for Outside Officers

As a leading safety company in the transportation field, the JAL Group will provide the best service to its customers while maintaining
safe operations, which is the basic premise of its existence. In addition to fulfilling our economic responsibility to provide good
products and earn appropriate profits through fair competition, we are conducting business with the view that we are a corporategroup that fulfills its responsibilities and contributes as a member of society. Based on this, we have established the JAL Philosophy
under our Corporate Philosophy and promptly make appropriate management decisions. At the same time, we strive to enhance
corporate value and fulfill our accountability by establishing a corporate governance system that demonstrates strong management
oversight functions under high management transparency.

https://www.jal.com/en/philosophy-vision/governance/*Matters not specifically mentioned in this section are those about Japan Airlines Co., Ltd.

The JAL Group Value Creation Story

1. An individual who has executed business* of the Company and the Company’s consolidated subsidiaries at present or in the past 10 years.
2. An individual who corresponded to any of the below items a. to f. in the past three years.
a. A business counterpart or a person who executed business of such business counterpart, whose transactions with the Company for one business year exceeded
one percent of consolidated revenue of or the business counterpart.
b. A major shareholder or a person executing business of such shareholder having an equity ratio of five percent or more in the Company.
c. A major lender of borrowings of the Company or a person executing business of such lender.
d. An individual receiving contributions of over 10 million yen a year from the Company or a person belonging to an organization receiving such contributions.
e. An individual receiving remuneration of over 10 million yen excluding Director’s remuneration from the Company or a person belonging to an organization
receiving remuneration exceeding one percent of consolidated revenue of the Company.
f. In case a person executing business of the Company is assigned as Outside Director of another company, the person executing business of such other company.
3. The spouse or relative within second degree of kinship of individuals corresponding to 1 and 2.

For details of the Fundamental Policies of Corporate Governance and the Corporate Governance Report, please visit the JAL website.
WEB

Introduction

Independence of Outside Officers

In order to achieve sustainable growth and increase social and economic value, the JAL Group undertakes strong managementtransparency.
We have established a corporate governance system that provides management oversight functions.

*A person executing business refers to an Executive Director or Executive Officer.

① Corporate Governance System
Board of Directors｜ Held 18 meetings in FY2022

Corporate Governance System
General Meeting of Shareholders

Appointment・Dismissal
Appointment・Dismissal

Corporate Governance Committee
Three of the four members
are Outside Directors.
Outside Audit and Supervisory Board
Member one Observer

Advisory・
Recommendation

Board of Directors
Three of the nine are Outside Directors.
Audit

Nominating Committee

Appointment・Dismissal
Instruction

Three of the five members are
Outside Directors.

Compensation Committee

Advisory・
Recommendation

Supervision・Instruction・Transfer of Authority

President

Executive Officers

29

JAL REPORT 2023

ReportReport・Collaboration

Audit Department

Collaboration

Personnel Committee ｜ Held three meetings in FY2022
The Company discusses matters to be consulted by the Board of Directors
regarding the appointment and dismissal of executive officers and reports
the results to the Board of Directors. In FY2022, in addition to the mattersto be reported to the Board of Directors, we discussed the development ofcandidates for executive officers and the new execution system.

Councils andCommittees, etc.*1

Officers Disciplinary Committee
Three of the five members are
Outside Directors.

Departments and Subsidiaries
Executive Management Council

Audit

In accordance with the annual audit plan established by the Audit
Department based on the results of the risk analysis, we conduct
audits focusing on risks that may hinder the achievement of JAL
Vision 2030, such as the risk of serious losses, the effectivenessand efficiency of operations, the reliability of financial reporting,compliance with laws and regulations, and asset preservation. As
for the reliability of financial reporting, we evaluate the internal
control reporting system for financial reporting under the Financial
Instruments and Exchange Act as an independent organization under
the direct control of the President.

Audit and Supervisory Board ｜ Held 15 meetings in FY2022
The Audit and Supervisory Board makes appropriate judgements from an independent
objective standpoint, based on their fiduciary responsibilities to the shareholders, whenfulfilling their role and responsibilities such as auditing the execution of the Director’s
duties, appointing or removing accounting auditors, and executing rights concerning
auditor remuneration.

Data Section

Decides disciplinary action of Directors and Executive Officers.

Instruction

Financial Audit

Compensation Committee ｜ Held four meetings in FY2022
The Compensation Committee discusses matters concerning the amount ofcompensation for Directors, Executive Officers and Corporate Auditors based on an
inquiry from the Board of Directors and reports back to the Board. In addition, thecommittee reviews the remuneration system as appropriate to ensure that it provides
sound incentives for sustainable growth.
In FY2022, we discussed specific indicators and evaluation methods for the executive
compensation system to promote the medium-term management plan more strongly,
and submitted a report to the Board of Directors.

Internal Audit
Supervision*Please refer to p.31 for the Executive Committee directly under the President.

Officers Disciplinary Committee ｜ Not held in FY2022

Collaboration

Instruction・ReportPersonnel Committee
Three of the five members are
Outside Directors.

Three of the five members are
Outside Audit and Supervisory
Board Members.

Decision of
Proposals regarding
Appointment/
Dismissal
Accounting Auditor

Sustainability

Corporate Governance Committee ｜ Held twice in FY2021

Instruction・Transfer ofAuthority

Audit & Supervisory Board

Appointment・Dismissal

Appointment・Dismissal

Three of the five members are
Outside Directors.

Checks whether business activities comply with the JAL Group Fundamental
Policies of Corporate Governance, conducts analysis and assessment
to determine whether they will contribute to sustainable growth andenhancement of corporate value over the medium- to long-term, andprovides necessary feedback and recommendations to the Board of
Directors.
To assess the effectiveness of the Board of Directors, from the previous
year, we have been proposing an expansion of the scope of interviews to
all Directors and Corporate Auditors because the assessment has been
conducted through a questionnaire only for External Director. Furthermore,
a number of recommendations were made as a topic to be addressed in
the future such as promoting a new DX strategy and the need for further
operational ingenuity.

When submitting a proposal to the General Meeting of Shareholders concerning theappointment of candidates to the positions of Director and Corporate Auditor, theNominating Committee will comprehensive judgment of the personality, knowledge,
ability, experience and performance, and the like, of the candidate based on an inquiry
from the Board of Directors and will report back to the Board.

Internal

Growth Strategy

The Board of Directors exercises strong management monitoring with ahigh degree of transparency through the nomination of Directors, Audit
and Supervisory Board Members and Executive Officers, decision of officer
remuneration, and important decision-making.
To fulfill this role,①The Board separates the management monitoring and business executionfunctions. The Board Chair is nominated from among Directors who do notconcurrently serve as Outside Officer.
②At least three highly independent candidates are nominated for Outside
Director, and from the Ordinary General Meeting of Shareholders in June
2021, Outside Directors account for at least one-third of all Board members.
③In FY2021, we decided to increase female Director appointments.
④From fiscal 2021, Directors and Audit and Supervisory Board Members
are required to basically attend at least 80% of all Board meetings.
⑤The Board transfers appropriate authority to the President to ensure
efficient decision-making.

Nominating Committee ｜ Held nine meetings in FY2022
OutsideAccounting Audit
Accounting audits are conducted by KPMG AZSA LLC at our request, according to audits
required under the Companies Act and the Financial Instruments and Exchange Act. In
addition to periodic audits, accounting issues such as the establishment, amendment
and abolition of laws, regulations and rules are checked as necessary to achieve
appropriate accounting work.

TOP

JAL REPORT 2023

30

Chapter 2 The JAL Group Value Creation Story

1. Materiality

2. JAL Group's Value
Creation Story(1) Safety Charter

3. JAL Group's Value
Creation Process(2) JAL Philosophy

4.4. FoundationsofFoundations of
Value
Value Creation
Creation(3) Divisional Profitability Management System

5. The Trails of Challenges(4) Governance■ Support for Directors and Audit and Supervisory Board Members

The Board of Directors transfers appropriate authority to the President in order to make efficient decisions.

Legal considerations are explained to the directors, as necessary, to ensure that they are fully aware of their duties, including the fiduciary
duties of the duty of loyalty and the duty of care. They are provided opportunities for continuous participation in external training and affiliatedorganizations.
In addition to the provision of corporate information, Audit and Supervisory Board Members are given opportunities to participate in external
training and external organizations.
In order to deepen their understanding of the Company, we provide Outside Directors, Outside Auditors, and Supervisory Board Members withsafety education including a memorial climb of Mt. Osutaka, a visit to the Safety Promotion Center, and visits to frontlines. We also provide
advance briefings on agenda items as necessary and opportunities and materials to explain other matters at their request.

PresidentGroup Safety
Enhancement Council

Group Risk
Management Council
Risk Management andInformation Security
Committee

Customer Value
Creation Council

Sustainability Promotion
Committee

JAL Philosophy
CouncilGroup Business Performance
Reporting Meeting

Customer Experience
Promotion Committee

Financial Risk
Committee

Group Management
Council

JAL Wellness Promotion
Committee

Investment Monitoring
Committee▶Sustainability Promotion Council｜Held three meetings in FY2022
The Sustainability Promotion Council reviews progress management of

JAL Group for the purpose of contributing to appropriate and flexible

important issues and annual targets, management of risks anddecision-making by the Board of Directors and the President. The

opportunities of climate change, the environmental management

committee will deliberate over important issues requiring a resolution ofsystem, and human rights due diligence in order to promote ESG

the Board of Directors and matters requiring approval by the President

management for achieving the SDGs, build a better future wherethat need to be confirmed by the Executive Management Council

everyone can feel fulfilled and hopeful as stated in JAL Vision, andbefore presenting these issues to the Board or to the President

work with society to achieve sustainable development.

Main activities in FY2022: Discussed important management issues to

Main activities in FY2022: Disclosure of information on TCFD, DJSI

be submitted to the Board of Directors.

evaluation results and review, summary of ESG evaluation,
reorganization of important issues, initiatives based on changes in the▶Group Safety Enhancement Council｜Held 12 meetings in FY2022

external environment and social requirements, addition and revision of

To secure flight safety and promote safety management of the entire

targets, among others, were discussed and reported to the Board of

JAL Group, the Group Safety Enhancement Council makes decisions

Directors twice in FY2022.

on important safety management policies, confirms the status of andProgress in Strengthening Corporate Governance
Ahead of the establishment of the Corporate Governance Code, we established in FY2012 voluntary committees for nomination and remuneration, among others,
as a company with an Audit and Supervisory Board, and have actively made efforts to improve board effectiveness to strengthen governance in accordance with the
Corporate Governance Code.
In FY2022, we established a system whereby the Audit Department reports directly to the Board of Directors in addition to the Board of Corporate Auditors (Dual
Reporting Line). At the June 2023 Annual General Meeting of Shareholders, we established a system with multiple female directors.

2012
Trends in the Corporate
Governance Code, etc.
Institutional design
as a company
with an Audit andSupervisory Board
Strengthening
supervisory functions

Composition of
Directors
Chair of the Boardof Directors▶Customer Value Creation Council ｜ Established in June 2023

to be taken concerning safety in daily operations, among others,

Aiming at resolving important issues related to customer value for all

according to the JAL Group Corporate Policy and company policies tocustomers and society, the initiatives, and communications of eachsecure flight safety and promote safety management of the entire JAL

business with customer value as the starting point will be monitored.

Group.

Discussions will take place to reach decisions that will resolve theMajor Activities in FY2022: In addition to understanding the JAL

issues.

Compliance with the
Corporate Governance Code

we discussed how to respond to aviation accidents and other▶JAL Philosophy Council ｜ Held one meeting in FY2022

Improving board
effectivenessincidents during the fiscal year under review. In the event of an air

The JAL Philosophy Council establishes the fundamental policy, andaccident, the the JAL Group will promptly report the incident to thedraws up, enforces, and manages progress of measures to promote

Board of Directors.

penetration of the JAL Philosophy.

▶Group Risk Management Council｜Held two meetings in FY2022▶Group Business Performance Reporting Meeting ｜ Held 12Group's overall aviation safety policy and safety management system,

To conduct overall risk management and achieve stable JAL Group

2018

2021

★2018 Revised the Corporate
Governance Code★2015 Established the Corporate
Governance Code2023

★2021 Revised the Corporate
Governance Code■FY2012・Established committees relating to nomination, officer remuneration, etc. chaired by an Outside Director■FY2021・Outside Audit and Supervisory Board Members joined
the Corporate Governance Committee as observers■FY2017
・Introduced a new officer remuneration system to share interests with shareholders
・Created a succession plan for the President, etc.
■FY2012・Independent Outside Directors (2)■FY2021・Outside Directors shall accountfor 1/3 of the directors.
■FY2016
・Increased the number of Outside Directors from 2 to 3 ・Documented the establishment■FY2023of a system with multiple female ・Two or more female■FY2014
directors
・To be chaired by a non-executive
directors
director■FY2021■FY2017・Compliance with all principles of the (revised) Corporate
・Compliance with all principles of theGovernance CodeCorporate Governance Code■FY2018
・Compliance with all principles of the (revised) Corporate■FY2022
Governance Code■FY2015
・Established a dual reporting line
・Started Board Effectiveness Assessment
whereby the Audit Department reports
directly to the Board of Directors■FY2017
・Commenced Board Effectiveness Assessment using a third party■FY2019・Strengthened the risk management meeting bodySustainability

regularly reviews the Safety Management System, and decides actions

2015

Growth Strategy▶Executive Management Council ｜ Held 35 meetings in FY2022
The Executive Management Council is an organ established by the

The JAL Group Value Creation Story

Group Operational
Safety Promotion
Committee

Sustainability
Promotion Council

Executive Management Council

Introduction■Management Committees directly under the President*Trends since its listing on the First Section of the Tokyo Stock Exchange in September 2012 are presented.

meetings in FY2022

management, the Risk Management Council establishes the

The Group Business Performance Reporting Meetings are aimed at

fundamental policy on risk management, conducts regular risk

sharing earnings of each Group company and each division in the JAL

assessment, establishes countermeasures, and manages businessGroup and considering ways to improve business performance.

31

Main activities in FY2022: Review of priority risks, status of response▶Group Management Council ｜ Held 26 meetings in FY2022

to priority risks, and discussion on priority issues such as cyber

The Group Management Council conducts deliberation to checksecurity and response to the anticipated Tokyo Metropolitan

progress of important management issues facing the JAL Group andEarthquake. In FY2022, we reported to the Board of Directors twice inestablish measures to address these issues, and reports information of

total.

significant importance.

JAL REPORT 2023

Data Section

continuity, among others.

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JAL REPORT 2023

32

Chapter 2 The JAL Group Value Creation Story

1. Materiality

2. JAL Group's Value
Creation Story(1) Safety Charter

4.4. FoundationsofFoundations of
Value
Value Creation
Creation

3. JAL Group's Value
Creation Process(2) JAL Philosophy(3) Divisional Profitability Management System

5. The Trails of Challenges(4) Governance(i) Board of Directors

Introduction② Management Structure(as of August 1, 2023)

AKASAKA Yuji (January 3, 1962/61 years old/male)

SHIMIZU Shinichiro (December 13, 1962/60 years old/male)

Director, Chairperson

Representative Director, President

Representative Director, Executive Vice President

After joining the Company, Mr. UEKI acquired insight related tosafety operations, among others, and on-the-job experience as aflight crew at an extremely high level. He has taken control ofdeveloping and executing the Medium Term Management Plan,
exercising strong leadership and decision-making skills, as
Representative Director and Presidentand, since 2012.
Furthermore, he has continued to contribute to the strengthening of
the supervisory function of the Board of Directors serving as
Chairman of the Board of Directors and a member of the Corporate
Governance Committee since 2018.

After joining the Company, Mr. AKASAKA engaged mainly inEngineering and Maintenance Division, and acquired on-the-job
experience and insight related to safety operations, among others, at
an extremely high level as well as significant knowledge and extensive
connections in the airline engineering and maintenance industry. He
has strengthened the foundation for safety operations, exercisingstrong leadership and decision-making skills, as Representative
Director, President of JAL ENGINEERING CO., LTD., since 2014. In
addition, as being Representative Director and President of the JAL
Group since 2018, he has worked to uphold in the JAL Group thatflight safety is the foundation of the JAL Group and by “Lead by
Example” through his own practicing of JAL Philosophy he has aimed
to greatly contribute to the realization of JAL’s corporate philosophy
with all employees.

After joining the JAL Group, Mr. SHIMIZU successively engaged inpersonnel and labor affairs related to flight crews and cabin
attendants, among others, and other divisions, and realized material
achievements, exercising great leadership and strong planning andcoordination capabilities. Having served as Senior Vice President of
the Human Resources Division since 2013 and Senior Director of theSecretary’s Office since 2016, he has contributed considerably to
improving and stabilizing the JAL Group’s external presence byjudging the situation which the JAL Group is in from a higher
perspective. Since 2020, he has been assisting the President as
Representative Director, Executive Vice President, and considerably
contributing to further strengthening and enhancement of the
management structure.

SAITO Yuji (September 26 1964/58 years old/male)

TSUTSUMI Tadayuki (December 19, 1960/62 years old/male)

Representative Director, Senior Managing Executive Officer

Director, Senior Managing Executive OfficeDirector, Senior Managing Executive Office

After joining the Company, Ms. TOTTORI gained a high level of insightand field experience in safe flight operations and service through her
career as a cabin attendant and through her work with Corporate Safety& Security. Since 2020, she has demonstrated outstanding leadershipas Senior Vice President, Cabin Attendants Division in balancing humanresource development and employee motivation under the challenging
management environment of the COVID-19 pandemic, making asignificant contribution to maintaining safe operations. From 2023, she
has contributed to improving the quality we provide to our customers as
Senior Vice President, Customer Experience Division, helping to maintainand improve the quality of our services.

After joining the Company, Mr. SAITO has held positions inInternational Passenger Sales and the Corporate Planning Office,where he has proven his ability to exercise precise analysis andgood judgment. After assuming the position of Executive Officer in
2019, he was appointed as Senior Vice President, Corporate
Control Division. In 2021, he was appointed as Senior Vice
President, Corporate Planning Division and Senior Vice President,
Corporate Control Division, and since 2023, he has been
undertaking the position of Senior Vice President, Corporate
Planning Division and Chief Financial Officer of the JAL Group,
during which time he has provided a broad and objective view of theGroup’s management and made a significant contribution to ourearly return to profitability amid a challenging business environment.

After joining the Company, Mr. TSUTSUMI acquired insight related tosafety operations, among others, and on-the-job experience as a flightcrew at an extremely high level. As Executive Officer and Senior Vice
President, Flight Operations Division since 2019, Senior Vice President,
Corporate Safety & Security Division since 2020, and Director since2021, he has greatly contributed to supporting flight safety with hisstrong sense of responsibility and sense of ethics.

Growth Strategy

UEKI Yoshiharu (September 16, 1952/70 years old/male)

TOTTORI Mitsuko (December 31, 1964/58 years old/female)

KOBAYASHI Eizo (January 7, 1949/74 years old/male)

The qualifications required of the President and other leaders are as follows: “Persons with qualities to steadily achieve positive results toward realizing the Corporate
Policy by working together with all employees based on a firm commitment to flight safety, which is the basic foundation of business continuity for the JAL Group.
They must also display initiative in practicing the JAL Philosophy.
The Nomination Committee continuously discusses candidates for the position of President, among others, and provides the candidates with practical and diverse
experience, such as management experience at group companies, expatriate experience, and activities at outside organizations, so that they can acquire thenecessary background for management at an early stage.
With regard to the development of the next generation of executives, including executive officers, the Human Resources Committee holds practical discussions on
setting career paths, rotating across departments, forming external networks, and pooling human resources in order to promote diversity and expand capabilities andperspectives.

Mr. KOBAYASHI has extensive experience in global management
and leadership over multifaceted group companies and deep
insight into management as a member of top management of ageneral trading company that develops businesses around theworld. With such experience and insight, he gives advice to theCompany’s management and appropriately supervises theperformance of duties from practical and diversified perspectives,and if he is elected, the Company expects that he will continue tofulfil those duties.

Attendance (FY 2021)*

Tenure (year)

Attendance of Board meetings

11

412

100%

(18/18)

〇

5

124

100%

(18/18)〇〇Chairperson

〇

〇

〇

〇

〇

Representative Director, President

AKASAKA Yuji

Representative Director, Executive

SHIMIZU Shinichiro

5

47

100%

(18/18)TOTTORI Mitsuko

new post

5——

SAITO Yuji

new post

11

—

—

2

10

100%

(18/18)Outside Director, Japan Airport Terminal Co., Ltd.*TSUTSUMI Tadayuki
KOBAYASHI Eizo

Outside Director, Japan Exchange Group, Inc.

Independent Outside Director

YANAGI Hiroyuki

Independent Outside Director

MITSUYA Yuko

Outside Director, AGC Inc. Independent Non-executive Director,
Kirin Holdings Company Limited Mitsubishi Electric* Outside Director
Outside Director (Audit and Supervisory Committee Member), ENEOS Holdings, Inc. Outside
Director, Denso Corporation* Representative Director, SORA Representative Director, Japan
Basketball Association Vice President of the Japan Olympic Committee

Ms. MITSUYA has gained extensive experience and broad insight as acorporate manager, as well as a wealth of experience and practicalknowledge in human resource development, and we expect her tofulfill these roles after her appointment.

Nominating
Committee

Compensation
Committee

Officers Disciplinary
Personnel Committee
Committee

Management
Experience

Finance & Accounting

Legal/Risk
Management

Personal Affairs/
Safety Management
Talent Development

〇

〇

〇

〇
〇

〇
〇

Global Experience

CX Marketing

DX/IT/Technologies

GX/Environment
〇

〇
〇

〇

〇

〇

〇

〇

〇

〇

〇

Data Section

Name

Representative Director, Senior
Managing Executive Officer
Director and Senior Managing
Executive Officer
Director and Managing Executive
OfficerIndependent Outside Director(Lead Independent Outside Director)

Important positions concurrently held ( is a public company)

Corporate GovernanceCommittee

UEKI Yoshiharu

Mr. YANAGI has deep insight and extensive experience as a member of
top management in a company pushing ahead with international
expansion. With such insight and experience, he gives advice to theCompany’s management and appropriately supervises the performanceof duties from practical and diversified perspectives, and if he is elected,
the Company expects that he will continue to fulfil those duties.

Skills Matrix

Attendance rate ofBoard meetings

Position

MITSUYA Yuko (July 29, 1958/65 years old/female)
Independent Outside Director

Appointment of Committee Members

Number of Company
shares held (100 shares)

Director, Chairperson

YANAGI Hiroyuki (November 20, 1954/68 years old/male)
Independent Outside Director

Sustainability■ Succession Plans for the Presidents and Other Leaders

Independent Outside Director (Lead Independent
Outside Director)■List of Directors

The JAL Group Value Creation Story

Directors are selected from those with extensive experience in various fields and high insight and expertise, paying attention to ensuring diversity in terms of gender,international nature, work history, and age, among others. We also aim to have more than one female director from FY2021. In addition to the previous one outside
director, we have now appointed one in-house director to realize a system with multiple female directors. The JAL Group will explain legal considerations and othermatters to the directors and will ensure that the directors are fully aware of their duties, including the duty of loyalty and the duty of care to good offices, andprovide opportunities for outside training and continuous participation in external organizations. The term of office of directors shall be one year to clarify
management responsibilities for each fiscal year.
Outside Directors are elected from three or more suitable independent candidates and comprise at least one third of the Board of Directors. In accordance with ourcompany's "Independence Standards" for Outside Officers, The JAL Group will not appoint outside directors who are unable to secure substantial independence
or who concurrently serve as directors of more than four listed companies in addition to our company. Furthermore, one of the Outside Directors will be appointed
as the Lead Independent Outside Director to strengthen cooperation with Audit and Supervisory Board Members and internal divisions.

〇
〇

8

92

100%

(18/18)Chairperson〇

Chairperson

〇

〇

〇

〇

〇

2

40

100%

(18/18)〇Chairperson〇〇

Chairperson

〇

〇

〇

new post

—­

—

—

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

*Number of stocks based on the shareholder list as of March 31, 2023.

33

JAL REPORT 2023

TOP

JAL REPORT 2023

34

Chapter 2 The JAL Group Value Creation Story

1. Materiality

2. JAL Group's Value
Creation Story(1) Safety Charter

3. JAL Group's Value
Creation Process(2) JAL Philosophy

4.4. FoundationsofFoundations of
Value
Value Creation
Creation(3) Divisional Profitability Management System

5. The Trails of Challenges(4) Governance③ Officer Remuneration

In addition to attending meetings of the Board of Directors and other important meetings, the Audit and Supervisory Board Members audit important matters related to corporate andbusiness operations and the status of business execution by inspecting important Kessai documents. In addition, together with Corporate Auditors Office staff, they conduct annual
audits of each business site and subsidiary, and report the results to the Representative Director. In addition, they will strive to exchange information with the Internal Audit Division and
the Accounting Auditor. They will also hold regular meetings with our subsidiaries, Audit and Supervisory Board Members, to enhance and strengthen auditing throughout the Group.
our company provides company information to Audit and Supervisory Board Members. In addition, they provide external training opportunities and continuous participation in externalorganizations for internal Audit and Supervisory Board Members.
Outside Audit and Supervisory Board Members appoint persons with extensive knowledge and experience in a variety of fields. In accordance with our Outside Director's"Independence Standards" established by our Company, will not appoint persons who are unable to secure substantial independence. Furthermore, a person who concurrently holds
more than four listed companies other than our company will not be appointed as an Outside Audit and Supervisory Board Member. Outside Audit and Supervisory Board Members,
together with other Audit and Supervisory Board Member companies, will work with the Internal Audit Division and the Accounting Auditor to ensure the soundness of management byconducting audits from a more neutral and objective perspective.

■Policy on the Decision of Officer’s Remuneration▶Total amount of remuneration, among others①Total amount of money in remuneration, and the like: not more than
700 million yen per year [of which, the total amount of fixed basic
remuneration is no more than 350 million yen (of which the total
amount of outside directors is no more than 50 million yen) andthe total amount of performance-linked bonuses is no more than
350 million yen]*Maximum amount to be paid in: Money to be paid in: Performance of applicable period in the execution of duties in which
remuneration receivables are used as consideration
Our company Stock Exchange for three months before and after the expiration of the evaluation period (six months in total)
the highest closing price of the common stock▶Basic Policy

KIKUYAMA Hideki (March 19, 1960/63 years old/male)

Audit and Supervisory Board Member

Audit and Supervisory Board Member

Since joining the the JAL Group, Mr. KITADA has worked mainly inmaintenance including maintenance technology and quality assurance.
Serving as Executive Officer of Engineering and Maintenance from 2018,he supervised the maintenance division of the JAL Group and contributed
significantly to maintaining and improving engineering and quality. Since
June 2020, as Managing Executive Officer of Engineering and
Maintenance, he has provided precise comments at Board meetings andother meetings from the perspective of maintaining flight safety based on
his extensive frontline experience in engineering and quality assurance.

After joining the the JAL Group, Mr. KIKUYAMA worked primarily in generaladministrative roles in, for example, the IT Planning Department, Human
Resources Department, and Labor Relations Department, as well as serving
as the Vice President of the General Affairs Department, the Americas Office,and Vice President of the Corporate Planning Office. After assuming theposition of Executive Officer in 2010, he has been contributing significantly tomaximizing route profits as Senior Vice President of Managing Division RouteMarketing Division since 2013. Since 2019, serving as the Senior Vice
President of the Finance & Accounting Division, he has worked to provide
highly transparent information disclosure and exercised proper management
decisions and decision-making skills that benefit the interests of shareholders.

KAMO Osamu (March 25, 1947/76 years old)
Outside Audit and Supervisory Board Member/
Independent Director

Since registering as an attorney-at-law in April 1973, Mr. KAMO has
accumulated extensive experience and insight on compliance andcorporate governance, including guidance on compliance for government
agencies and companies and working in an investigative committee on
fraud. Since June 2016, he has provided legal and auditing advice to thecompany as an Audit and Supervisory Board Member.

② We will establish appropriate ratios for performance-linked
bonuses based on business performance. For the purpose offurther promoting the alignment of interests of shareholders,establish appropriate ratios for performance-linked shared based
remuneration linked to corporate value in accordance withmedium- to long-term performance, in order to contribute to
demonstrating sound entrepreneur dynamics.
③ We will provide remunerations that are appropriate to our top
management in accordance with our business performance.
▶Remuneration Levels and Remuneration Composition Ratios

KUBO Shinsuke (June 22, 1960/67 years old)

OKADA Joji (October 10, 1951/71 years old)

Since joining Sanwa & Co. Tokyo Marunouchi Office (currently Deloitte
Touche Tohmatsu LLC), Mr. KUBO has gained a wealth of experience,achievements, and deep insight into accounting through experience incorporate audits, share listings, corporate revitalization, M&A and othercases.

Mr. OKADA possesses extensive experience and expertise as a Senior
Management Executive and Director of Finance and Accounting at a
general trading company. Through his experience as Audit and Supervisory
Board Member of a general trading company and Chair of the Japan Audit
and Supervisory Board Members Association, he has gained a goodunderstanding of governance and auditing including risk management.

Outside Audit and Supervisory Board Member/
Independent Director■List of Audit and Supervisory Board Members
Name

Audit and Supervisory Board Member

KITADA Yuichi

Audit and Supervisory Board Member

35

Important positions concurrently held (*is a public company)

KIKUYAMA Hideki

Standard for achieving a target of 100%0％
Basic remuneration
50％

Tenure(year)

Number of Company
shares held (100 shares)

Board Attendance

2

15

100%

Number of Board of Attendance rate of Audit and Attendance of Audit andDirectors Attendance Supervisory Board meetings Supervisory Board meetings(18/18)100%

new post

18

KAMO Osamu

7

100

100%

(18/18)100%（15/15）

Outside Audit and Supervisory Board
Member/Independent Director

KUBO Shinsuke

Representative Partner, Kyoei Accounting Office Certified Public Accountant
Outside Audit and Supervisory Board Member, Kawasaki Kisen Co., Ltd.

5

63

100%

(18/18)100%（15/15）

Outside Audit and Supervisory Board
Member/Independent Director

OKADA Joji

Outside Director, NEC Corporation
Outside Director, Nippon Exchange Self-Regulation Organization

3

40

100%

(18/18)100%（15/15）

JAL REPORT 2023

—

80％

100％

Skill Matrix

〇

〇
〇

—

〇
〇

observer

〇
〇

〇
〇

〇

〇

〇

〇

〇

〇

〇

(assuming 100 at the timeof achievement of theperformance target)

Performanceindicators andpercentages〇〇〇

The amount paid varies by 0 to 150

The number of shares to be paid fluctuatesby 0 to 150*2

0％

25％
EBIT

（50％）

Performance
evaluation period

50％

75％

100％ 0％Individual Performance Evaluation*3

（20％）

25％
TSR*4

（30％）

（25％）

50％
ROIC*5（25％）

One year

75％
ESG*6

（25％）

100％
CO2*7

（25％）

Three years
Financial goal

Non-financial goal

*1 The Chairperson, President, among others, do not set "individual performance evaluation indicators for each officer," butevaluate them using "EBIT". Considering the progress in achieving the targets for flight safety.
*2 The final business year of Medium-Term Management Plan fluctuates between 0 to 200, adjusted according to theachievement of the targets.
*3 Individual indicators for each officer*4 TSR: Valuation based on the comparison between our company's total shareholder yield and TOPIX yield including
dividends*5 Valuation based on consolidated ROIC
*6 Rating based on the number of selected representative ESG issues (DJSI World Index, FTSE Blossom Japan Index, APEXWORLD CLASS, CDP A-, MSCI WIN)
*7 Evaluation based on CO2 emissions per ton-kilometer charged■Procedures for Remuneration Decision

Matters concerning the remuneration of the directors shall be decided
by the Board of Directors after deliberation and report to theCompensation Committee, which is voluntarily established by ourcompany. The majority of the members of the Compensation
Committee shall be outside directors, and the chair shall be selectedfrom outside directors.
The fixed basic remuneration is paid monthly, and performance-linked
bonus and performance-linked stock remuneration are paid once a year.

■Reasons why the Board of Directors has determined that the
remuneration for individuals should conform to the policy
With regard to the remuneration, and the like for individuals, theCompensation Committee, which is chaired by an outside director andis attended by a majority of the members, held discussions based on
the above-mentioned Policy on the Decision of Officer’s Remuneration.
Decisions were made at our Board of Directors meeting held on
February 17, 2022 with due respect for the deliberations and reports.
Therefore, the company judged that the contents of remuneration, andthe like, for individuals in FY2022 are in line with the above policy
stipulated by our company.

■Payment of remuneration to Directors andAudit and Supervisory Board Members (FY2022)

Performance-linked stock
remuneration
20％

Corporate Governance Management Finance & Legal/Risk Human Resource and Human Safety
GlobalDX/IT/GX/CX Marketing
Committee
Experience Accounting Management Resource Development Management Experience
Technologies Environment（15/15）

Attorney at Law, Managing Partner of Ginza Sogo Law Office.
Outside Audit and Supervisory Board Member of Azearth Corporation

Outside Audit and Supervisory Board
Member/Independent Director

Linked to financial or non-financial targets

Performance-linked bonus
30％

Appointment ofCommittee Members

Attendance (FY2022)

Fixed remuneration

50％

Performance-linked Renumeration

Total remuneration by category, etc. (1 million yen)

Position

Number ofpeopleTotal remuneration, etc.
(1 million yen)

Director

9

406

250

122

32

(including Outside Director)

(3)

(34)

(34)

(ー)

(ー)

Basic
remuneration

Performancelinked
bonus

Performancelinked
share-based remuneration

Audit and Supervisory Board Member

5

77

77

ー

ー

(including Outside Audit andSupervisory Board Member)

(3)

(28)

(28)

ー

ー

Total

14

484

328

122

32

Data Section

Position*The amount shall be the amount excluding the allowance in the case where Executive Officers concurrently serve as a
Director and the allowance in the case where he has the right of representation.

Outside Audit and Supervisory Board Member/
Independent Director

Performance-linked Bonus*1
Fluctuation range

Sustainability① We will set appropriate remuneration levels with reference to thebusiness environment and objective remuneration data in themarketplace.
② Taking into account the nature of our company's business and theeffectiveness of performance-linked remuneration, the ratios of (A)the amount of fixed basic remuneration*, (B) the amount of
performance-linked bonus to be paid based on the degree ofachievement of the target, and (C) the amount of performancelinked stock remuneration to be delivered based on the degree ofachievement of the target are set as follows (The following
percentages are indicative and fluctuate in response to changes instock prices, and the like).

Performance-linked bonuses and performance-linked stock
remuneration performance indicators are reviewed as appropriate in
response to changes in the business environment and the roles of each
executive. In FY2022, we reviewed performance-linked bonuses andperformance-linked stock remuneration performance indicators in orderto more vigorously promote ESG, business and financial strategies,
which are the three pillars of the Medium-Term Management Plan's
management strategy.
Performance-linked shares of remuneration commencing in FY2019,
FY2020, and FY2021 will be uniformly not paid based on performance.

Growth Strategy

KITADA Yuichi*(June 22, 1960/63 years old)

① To achieve sustainable and steady growth and increase corporate
value over the medium- to long-term, we promote businessexecution in accordance with the Corporate Policy andmanagement strategies, and strongly motivate Directors toachieve specific management targets.

■Framework for Performance-linked Remuneration

The JAL Group Value Creation Story② Total amount of remuneration receivables, and the like perperformance evaluation period of remuneration (meaning the mostrecent three consecutive fiscal years ended): 1. Maximum numberof shares to be issued per performance evaluation period (100,000
shares) multiplied by the maximum amount to be paid in per share*

Introduction(ii) Audit and Supervisory Board Member (as of August 1, 2023)*1 Performance-linked bonuses and performance-linked stocks remuneration, and the like, represent the amounts recorded as
expenses in the relevant fiscal year.
*2 The total amount of remuneration, and the like, for directors does not include salaries for employees who concurrently serve
as a Director.
*3 The total amount of remuneration of the Audit and Supervisory Board Members is "no more than 100 million yen per annum"(resolution of the Extraordinary General Meeting of Shareholders held on July 10, 2012). Remuneration for Audit andSupervisory Board Members is only fixed remuneration (monthly remuneration) from an independent standpoint, and thedecision is made through consultation of Audit and Supervisory Board Members. The number of Audit and Supervisory
Board Members at the conclusion of so the General Meeting of Shareholders was five (including three Outside Audit andSupervisory Board Members).

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JAL REPORT 2023

36

Chapter 2 The JAL Group Value Creation Story

2. JAL Group's Value
Creation Story

1. Materiality(1) Safety Charter

3. JAL Group's Value
Creation Process(2) JAL Philosophy

4.4. FoundationsofFoundations of
Value
Value Creation
Creation(3) Divisional Profitability Management System

5. The Trails of Challenges(4) Governance

Main Agenda Items Discussed by the Board of Directors(i) Effectiveness Effectiveness Evaluation of the Board of Directors

In FY2021, a total of 19 monthly Board meetings and extraordinary Board meetings were held.

While referring to the self-evaluation of each director and auditor, and third-party analysis, we conduct an effectiveness evaluation annually.
We aim to improve our corporate value over the medium to long term by reviewing our operations.

【Management Strategy】【Financial Results Finance】●2021-2025 JAL Group Medium Term Management Plan

●Quarterly financial results●Response to Audit and Supervisory Board Member Audit
Results●Air accident report●Financing

Progress of the Rolling Plan 2022

●Verification of cross-shareholdings

Sustainability Initiatives【Dialogue with Stakeholders】

Promotion of business structure reformSupervision

Dialogue with shareholders

Challenges

Need to continually address new risks such as business expansion
and IT security

Efforts

Evaluation

Confirms that Directors and Audit and Supervisory Board Members
are well-balanced in terms of diversity, including expertise andacquired experience

Further constructive dialogue needs to be strengthened in light of
the increase in the number of individual shareholders

Further strengthening risk management

Enhancing interactive communication through better disseminationof information and understanding and analysis of needs

Ensure a systematic and comprehensive understanding of externalrisks and implement the PDCA cycle

Reinforcing information dissemination to individual shareholders
and establishing communication infrastructure

Promotion of human resources strategies【Governance and Risk Management】

Promotion of DX Strategy●Evaluation of Board effectiveness●2021-2025 JAL Group Medium Term Management Plan
Formulation of Rolling Plan 2023
●Strengthening risk management●Revision of Nominating Committee Statute●Status of operation of the shareholder benefit system●Report and decision of the Committee on●Efforts to further strengthen constructive dialogue withshareholders

appointment of new executives and remuneration●Development and evaluation of internal controls●Feedback on IR briefings, among others【Decision and Oversight of Other Important Duties】●Risk Management Related Reports●Disclosure on climate change based on TCFD

●Introduction of Boeing 737-8●Internal Audit Report by Auditing Department●Customer feedback●Corporation for the realization of solution sales Merger●Audit and Supervisory Board Member Audit Policy
and Resultswith JAL Sales(ii) Effectiveness Evaluation of the Audit and Supervisory Board
Sustainability, business model reform, and human capital

E va l u a t i o n

E va l u a t i o n

Efforts

In particular, in order to continuously improve the power of human resources,
we promote human resources strategies in line with our business strategies.

Confirms steady efforts to reduce CO2 emissions and steady progress inaddressing other issues

Review progress by businessarea

Review issues and direction ofefforts

・We confirm that we conduct free
and open discussions respecting theopinions of outside directors while
being audited by Audit andSupervisory Board Members on theexecution of duties.

FY2022・In addition to actively providing
information to outside directors, we
also ensure that there is highaccessibility to information, and we
confirm that outside directors fulfill
their roles appropriately.

FY2023

Evaluation of Audit and Super visor y Board Member Audits

Ef f orts

In general, each item (audit policy, audit activities, operation of Audit
and Supervisory Board, among others) was highly evaluated, and it was
confirmed that effective audits were conducted based on the audit
policy and audit plan that fully considered management issues andissues pointed out in the past.

Based on the Medium-Term Management Plan
Rolling Plan 2023 and Effectiveness Evaluationof the Board of Directors, we confirmed progressin our business structure reform and productivity
improvement. We also confirmed that the Audit
and Supervisory Board will be involved in the
Audit and Supervisory Board Member election
process and cooperate with voluntarycommittees, while being aware of the expanded
responsibilities required as an Audit
and Supervisory Board Member.

Consensus building has been carried out in the Audit and Supervisory
Board while respecting the opinions of each Audit and Supervisory
Board Member. The audit environment has been developed and evolved
by enhancing online discussions, attending various meetings by Outside
Audit and Supervisory Board Members, and enhancing the contents ofrecords.

Continuingchallenge
Medium- and long-term strategy
Business model reform

Human capital

Need to sort out how sustainability
initiatives lead to increased
corporate values

In some business areas, initial plans
have not been met due to delays inmarket recovery, among others, andquantitative reviews and discussions
on future moves are necessary.

Going forward it will be necessary
to take our initiatives more
seriously.

Efforts

Reorganize social issues to beresolved and quantify the targets ofinitiatives materialize therelationship with corporate valueenhancement

Review plans in each business area
to steadily implement the PDCA
cycle and create an environment for
expanding new areas

In order to enhance human capital,
we will further clarify the ideal
human capital profile and promote
the allocation of human capital to
growth areas and investment in
human capital.

DX
In order to realize the Medium-Term
Management Plan, it is necessary tovisualize the efforts of eachheadquarters and accelerate thecompany-wide promotion. Promote
initiatives related to DX strategy tocreate new customer value andimprove productivity.
In order to secure more time fordiscussion and to stimulate further
discussion, further efforts must be
made to improve the management
issues identified in FY2022.

In order to secure more time for discussion
and to stimulate further discussion,

Main Agenda of Audit and Supervisory Board
A total of 15 Audit and Supervisory Board events were held in FY2022.
Further efforts must be made to improve themanagement issues identified in FY2022.
< Examples >・Further ingenuity and improvement of materials
・Further contrivances of explanatory videos to supplement
pre-sent materials
・Supplementary explanation to questions about the contents ofthe proposal
・Clarification of issues by sharing issues within the execution【Audit】【Cooperation】【Remuneration of Self-Assessment】●Formulation of audit policies and plans●Resolution on reappointment of financial auditor and●Resolution on Audit and Supervisory Board Member's●Report on Audit Activities and Audit and Supervisory
Board Member Report Committee●Checking Risk Management Status●Investigation of proposals and documents for the
General Meeting of Shareholders

For more information about the results of the 2022 evaluation and future initiatives, visit our company website.

JAL REPORT 2023

remuneration's consent●Prior Understanding of Non-Guaranteed Business by Accounting
Auditors

Individual remuneration●Audit and Supervisory Board Member Questionnaire
Survey (Evaluation of Effectiveness Evaluation)●Review of KAM●Management interview●Review of the consolidated report

Data Section●Formulation of audit reports

WEB

Sustainability

Ch al l en g es

Sustainability

Operation

Growth Strategy

Challenges

Strengthened supervision of sustainability issues and business structural reforms is needed

The Audit and Supervisory Board conducted a questionnaire to all Audit and Supervisory Board Members and carried out a self-assessment on
the status of audit activities, which was used as a reference for planning for the next fiscal year.

Assessment of Audit and Super visor y B oard

37

Shareholders

Operations

Intermediate strategies
FY2022

FY2023●Approval of proposals related to the General Meeting of

The JAL Group Value Creation Story

Composition of the Board of Directors

Introduction④ Effectiveness Evaluation●Verifying the EMS Audit

https://www.jal.com/en/philosophy-vision/governance/#effectivenessTOP

JAL REPORT 2023

38

Chapter 2 The JAL Group Value Creation Story

1. Materiality

2. JAL Group's Value
Creation Story(1) Safety Charter

3. JAL Group's Value
Creation Process(2) JAL Philosophy

4.4. FoundationsofFoundations of
Value
Value Creation
Creation(3) Divisional Profitability Management System

5. The Trails of Challenges(4) GovernanceIntroduction⑤ Message from Outside Directors and Chair of the Board of Directors

Support the Company's Challenges
with the Knowledge of General
Trading Company Management andWork to Realize Rolling Plan 2023

The JAL Group Value Creation Story

Support the JAL Group's
sustainable growth with theknowledge of development as
a manufacturing and global
manager

KOBAYASHI Eizo

Independent Outside Director (Principal Independent Outside Director)
Chair of Corporate Governance Committee
Chair of Renumeration Committee

Independent Outside Director
Chair of the Nominating Committee■Deliver a sustainable growth story from theBoard of Directors■S upport growth strategy with knowledge
gained as top management

At the trading company where I was President, there was a saying,

The JAL Group Board of Directors has three outside directors, eachcontinued to say to my employees, "Challenge, Create, Commit" andAt the 2022 meeting of the Board of Directors, we discussed bothdeveloping engines and synthetic fuels at our manufacturers and thewith different knowledge and experience, who discuss various

I asked them to be honest in order to be trusted by our customers,

structural reforms and growth strategies. In terms of structural

National Institute of Advanced Industrial Science and Technology toissues. There was a sense of tension at the Board Meeting when theand to become people who launch businesses that open the futurereform, we focused on breaking away from the COVID-19 pandemic

provide advice on the importance of synthetic fuels for the future of

COVID-19 pandemic was anticipated to continue for three morewith an aggressive spirit and frontier spirit.

and restoring the LCC business. As for the growth strategy, we

decarbonization and GX.

years from the beginning of 2 0 2 0 as this would weaken the

Our company's board of directors also spoke out based on this

discussed refurbishing the cabin of passenger aircraft and thefoundation of the JAL Group. In 2 0 2 1, when the COVID- 1 9

experience.

business model utilizing freight-only aircraft, and decided on the■D iscussing board diversity from a global
perspective

investment paths when the COVID-19 pandemic subsides. When I

In addition to discussions on the Succession Plan at the Nominating

pent-up demand, the JAL Group changed its policy from the pre-■Enhance Effectiveness Evaluation of the Board
through Discussions

discuss growth strategies, I first have a hypothesis or a concept,

Committee, we decided to reappoint the President, which has been

COVID-19 FSC-only stance and attempted to introduce a new

In the Corporate Governance Committee, discussions were focused

which I use to develop a business plan and manage to check theenforced at other companies where I am an Outside Director.

businesses from a completely different perspective.

on the effectiveness evaluation of the Board. As Chair of theflow of decisions. And I believe that the decisive and driving factor in

Looking back at the President's efforts over the past year, andThere is a limit to what we can do with our employees when

Committee, I am conscious of the transparency of management

decision making is whether the company has established methods

confirming his future desires, we will be able to have a transparent

developing new businesses. But if you look at other companies,

decision making, and am facilitating it from the viewpoint of

to consolidate its management.

and exciting management process from the perspectives of whether

there are always companies that excel in different fields with talented

strengthening our company's management.

The growth strategy of the JAL Group now includes expanding into

his ideas will lead to the improvement of corporate values.

people. I think we have entered an era in which we can take on big

I always advise people to implement the Medium-Term Management

new areas. In March 2023, JAL signed a purchase agreement for 21

At our company, three of the nine directors are Outside Directors.

challenges by incorporating our foresight and knowledge. The future

Plan's PDCA, but when evaluating its effectiveness, I ask what they

Boeing 737-8 fuel-efficient aircraft. This is the first time in 18 years

However, as corporate management is questioning the importance

growth strategy of the JAL Group will be to take advantage of

could and couldn't do, why was it not possible and how it could bethat JAL has ordered a new Boeing model, which will be introducedof diversity, it is not enough to have a diversity of directors.

external resources through collaborating businesses and to establish

made into a valuable experience and asset.

in 2026. This is a very large investment that the JAL Group rarely

One of the outside directors was originally a woman, but it is

two or three new business realms.

In addition, when revising the Corporate Governance Code, we

makes. I hope the whole Group will be excited and take on thesignificant that Ms. TOTTORI Mitsuko, who was a former JAL

In formulating Medium Term Management Plan Rolling Plan 2023,

believe that it should be "Comply and Express" rather than "Comply

challenge. In order to achieve this, the Board of Directors needs toemployee, has joined the board as a Representative Director Senior

we recommended that it is important to convey our management

or Express." There is no point in adhering to the Corporate

properly communicate to our Group employees the story of why "airManaging Executive Officer. Furthermore, based on my experience inphilosophy to all employees and put it into our individual mission. In

Governance Code unless you can properly explain its contents. I willtransportation and societal connections" set forth in this Rolling Plan

global management, I feel that non-Japanese often have a stronger

order to achieve the stated goals, each employee must do their best,

continue to contribute to the improvement of board effectiveness bycreates value and a sustainable business model.

awareness of issues such as human rights, and it is time for ourand if it is difficult to do so, the PDCA must be turned around andtaking the reins of the Committee as Chair so that we can improve

From the viewpoint of sustainability, the aviation industry has a greatcompany to start considering the appointment of non-Japanese

reset again, and the whole company must work on it again.

our issues and move in a better direction.

responsibility to promote measures against climate change, such as

directors. As Chair of the Nominating Committee, I will continue toreducing CO 2 emissions. From an aircraft perspective, there are twoenhance discussions on the diversity of the Board of Directors inbasic directions to change the aircraft: change to an energy-efficientorder to broaden the scope of our company's business and promoteaircraft or change the loaded fuel. In particular, the production anddiverse discussions.

domestic SAF is a pressing issue. We will use our experience in

JAL REPORT 2023

Data Section

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Sustainability

JAL REPORT 2023

"the status quo is, in other words, an omission". At that time, I

stable supply of synthetic fuels is essential, and research on

Growth Strategy

pandemic came to an end and air transport demand showed a

39

YANAGI Hiroyuki

40Chapter 2 The JAL Group Value Creation Story

1. Materiality

2. JAL Group's Value
Creation Story(1) Safety Charter

3. JAL Group's Value
Creation Process(2) JAL Philosophy

4.4. FoundationsofFoundations of
Value
Value Creation
Creation(3) Divisional Profitability Management System

5. The Trails of Challenges(4) GovernanceIntroduction

To maximize the strengthof Board Members withdiverse backgrounds andadvanced knowledge toinspire employees

MITSUYA Yuko

UEKI Yoshiharu

Outside Director■Create a climate where challenges can betaken through dialogue

also in many other companies. From now on, men and women will
have equal opportunities. A system must be created that allows them

Director, Chairperson■Build a trusting relationship with each andevery director■Support the implementation of growthstrategies through communication

to make mistakes, and experience small successes and small failures

Based on its responsibilities to shareholders and other stakeholders,

Needless to say, it is up to the JAL Group employees to implement thevolleyball member most of my travel was with JAL to and from Narita

over again from a young age. In order to create a climate in which

the Board of Directors is required to promote the sustainable growth

medium- to long-term growth strategy determined by the Board of

Airport. As my first flight was also with JAL, JAL is my starting point inyoung people can take on challenges, I want to engage in dialogueof the JAL Group and the improvement of corporate value over the

Directors. Taking advantage of my long term experience as a captain

air travel. As an athlete, my judgment is made not whether I can do it,with diverse employees in our company, including women and young

medium to long term while resolving social issues. In order to achieve(pilot) at the front line and coming from within the company, I always

but whether I want to do it. When I was offered the position of anpeople.

this, while conducting highly effective supervision, we must takeorganize the decisions made at the Board of Director meeting by

appropriate risks and present a major direction.

taking on the viewpoint of how to convey them to our employees. I

As stated in the Skills Matrix, diversity is a strength of our Board ofalso seek to deliver messages that will increase the commitment of ourI became a teacher soon after I retired from being an athlete, and I■Submit your perspectives to the Board
because this is your first year
In the coming year, I will use my experience to strengthen humanDirectors, which consists of members with diverse backgrounds andemployees.

this Rolling Plan 2023, we are focusing on human resource

resources development, diversity, and governance. The advantage

broad knowledge. Outside Directors, who have a wealth of

These days, some argue that Outside Directors should serve as Chairdevelopment and diversity under the guidelines of developing andof my first year as an outside director is that I can see JAL from amanagement experience and high levels of expertise, provide opinionsof the Board of Directors, but the important thing is to make optimal

hiring "a person who respects diverse values, challenges new value

fresh perspective. This will be a period before I will becomethat are hard to come by among internal executives. We have not

management decisions and make sure that those decisions are

creation, and inspires change". I would like to use my experience toaccustomed to the company's l thinking. I will be able to evaluate

once or twice heard proposals that extend much longer than planned

implemented. The responsibility of the Chair of the Board of Directors

contribute to the development of human resources that the JAL

the company from outside perspectives, including the perspectives

or that are not approved as proposed due to severe objections. This

is to ensure that the JAL Group is "the world's most preferred andGroup values. The point of contact with airlines that many customersof our customers, and compare it with other companies.

proves that a strong supervisory function is definitely enforced.

valued airline group".

imagine are cabin attendants (CAs). Given the fact that there is still a

I believe that it is my role to contribute to the improvement of

On the other hand, we decided to take the opportunity of thelarge percentage of women working as CAs among Japanese airlines,

Effectiveness Evaluation of the Board by making statements at the

COVID-19 pandemic to build a highly resilient business portfolio, but

the JAL brand and image as well as our service assessment will

Board of Directors meetings on areas we should improve.

in order to expand new business areas, we need to draw on theknowledge of Outside Directors to boldly support new challenges.

Because women often pursue their careers through life events such as

However, new businesses are reasonably risky and sometimes

childbirth and child-rearing, it is necessary for the JAL Group to

divided.

consider how to design their lives in the midst of the various options

My 30 plus years of pilot experience is advantageous. Pilots gather

that women have, and to prepare a system that enables suchdiverse information and opinions on every flight in order to deliver

employees to pursue their careers throughout their lives. In this sense,

safety and security based on the trust relationship with colleagues,

I feel that the appointment of Ms. TOTTORI Mitsuko as Representative

including those working at airports and in the cabin. Like an orchestra

Director Senior Managing Executive Officer is of great significance. In

conductor, the role of the Chair of the Board of Directors is to create

the past, women commonly were backups for men not only in JAL but

the best possible symphony by harmonizing the various voices in an

Data Section

depend on how many promising women we can produce.

Sustainability

have been working on human resource development since then. In

Growth Strategy

When I was in my 20s and traveling around the world with the national

Outside Director, I accepted this challenging offer.

The JAL Group Value Creation Story

Work to create a systemthat enables women andyoung people to play anactive role by leveraging
their experience as leaders

open discussion. The optimal feature of the Chair of the Board of
Directors is that it brings the minds of board members together in aposition that is distinct from execution.

41

JAL REPORT 2023

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JAL REPORT 2023

42

Chapter 2 The JAL Group Value Creation Story

1. Materiality

2. JAL Group's Value
Creation Story

3. JAL Group's Value
Creation Process

4. Foundations ofValue Creation

5.5.TheChallenges
TheTrails
Trails ofof Challenges

Introduction

5. The Trails of Challenges
Since its establishment in Japan in 1951 as the first commercial airline after World War II, the JAL Group hasconstantly grasped the trends of the times, and accumulated challenges and innovations. Going forward, we
will continue to take advantage of the strengths we have cultivated through our 70-plus year history to realize
vibrant society and future where many people and various where many people and goods freely move aroundand work together with our stakeholders to achieve the "the world's most preferred and valued airline group."

Became one of the world's leading global
airlines through privatization

Recovery from Bankruptcy
Overcoming the COVID-19

Create relationships and connections through airtransportation with ESG strategy as top strategy

1951 to 1970s

1980s to 2000s

2010 to Today

Initially, we hired another company, aircraft, and started our business by
operating and maintaining outsourcing.
However, we expanded our route network by realizing our long-awaited aircraft
and independent operations and supported the mass transit era of the 1970s.

As we enter the era of great competition due to the Open Sky agreement andderegulation of aviation, we improved our service quality to differentiate andgrow as a global airline.

After bankruptcy in January 2010, we recovered our business by optimizing the scale of our operations andreforming employee attitudes. An unprecedented crisis emerged with the COVID-19 pandemic, however wewill overcome it by taking advantage of the strengths we built up to date and working together to realize JAL
Vision 2030.

The JAL Group Value Creation Story

Leapfrogged into the era of mass transportation through theestablishment of a flight system and management foundation

To Become
The World’s
Most Preferredand Valued
Airline Group

Human Capital (FY2025)
Human resources that respect diverse values,
challenge new value creation, and drive change■ Aircraft
1951: Martin 2-0-2 operation started
1960: DC-8 operation started (leftphoto)
1970:Launch of jumbo jet Boeing
747 (right photo)■ Human Resources■ IT system
1964: Domestic electronic seat reservation
system started (photo)
1974: Domestic check-in system started■ Route Network
1952: Launch of domestic independent operations
1954: Launch of the first international flight,
Tokyo-Honolulu-San Francisco routes
1961: Launch of northbound European routes*
Launch of independent operations

1962: Launch of southbound European routes
1966: Launch of New York routes
1967: Launch of round-the-world routes
1970: Launch of Moscow routes*
Launch of independent operations
1974: Launch of China routes
1978: Launch of Brazil routes

1965: Launch of the sale of Japan's firstoverseas package tour, JALPAK2012: Launch of Boeing 787-8
services (left photo)
2019: Launch of A350-900 services(right photo)

1988: Announcing the recruitment of 113 non-Japanese stewardesses (70 fromthe U.K., 22 from West Germany, and 21 from Singapore)
1994: Introduced flextime system
1995: The first female 1st grade aircraft mechanic
1997: The first female pilot operates a flight, for the first time in Japanese regularaircraft, on Tokyo-Hakodate route as a co-pilot of B747 aircraft
1997: Introduced captains over 60 years old

2010: Introduced the first female captain in Japan
2015: Diversity management companies
Selected for the first time as "Nadeshiko Brand"
Selected as the first health and productivity
management brand2017: Introduction of Telework
2017: Introduced WORKCATION

1995: Launch of JAL website
1996: Launch of online domestic flight reservation services
1997: Launch of online international reservation services
1999: Launch of JAL ONLINE (Domestic business travel support system)
2002: Introduced Japan’s first international flight check-in machine (photo)
2005:Launched online check-in services (for domestic and international flights)
Touch-and-Go boarding begins

2012: Introduction of Wi-Fi on international flights
2017: Transfer passenger check-in system to Altea
2019: Introduced Self Baggage Drop (SBD) at Narita Airport
2020: Realized JAL SMART AIRPORT
Launched JAL Chat Auto Answer Service
2021: Launch Face Express

1983: Became the world’s highest passenger and cargo according to International Air
Transport Association (IATA) statistics(Five years in a row until 1987)
1991: Terminated northern European routes passenger services via Anchorage
1996: Founded J-AIR Corporation
2007: Registered as a oneworld member

2011: Launch joint business with American Airlines
2011: Founded Jetstar Japan in collaboration with the
Qantas Group in Australia.
2012: Launched joint business with British Airways
2014: Launched joint business with Finnair
2016: Launched joint business with Iberia Airways

1982: Issued JAL card
1984: Founded JALCARD Co., Ltd.
1993: Introduced International Mileage Program
1997: Introduced JAL Mileage Bank on domestic flights
2003: JAL card membership exceeds one million members
2004: Launch of Class J services

2007: Launch of first class services on domestic flights
2008: JAL card membership exceeds two million members

1990: Launched the (former) JAL Foundation
1991: Launched the Atmospheric Observation & Monitoring Project at the (former) JAL Foundation (periodic observation
started in 1993).
1994: Launch of a reservation center for priority guests
2009: World's first test flight using biojet fuel

The first Tsurumaru logo

(Plus 10.0 pts compared to FY2019)Intellectual capital
2019: Seven JAL Group companies certified as Certified Health & Productivity Management
Outstanding Organizations Recognition Program 2019 White 500
2019: Childcare introduced to pilots and cabin attendants with a short-day working system
2021: Nursing care introduced to pilots and cabin attendants with a short day working system
2021: Telework of part of the customer contact center work
2022: Promotion requirements reflected for childcare, nursing care and maternity leave periods
2022: Strengthen efforts to encourage male employees to take childcare leave

Improve CX and EX and create new values
and know-how● Regulations and manuals that protect the new aviation

safety● IT systems that utilize AI and advanced technologies torealize DX

Social and related capital
Networks that enhance air transportation andsocietal connections● JAL Group Airlines and partnership airlines

Work together to solve social issues
Partnership●Collaboration with local communities and business

partners

Customer base spanning aviation and non-aviation●JAL Mileage Bank Member

2020: Launched joint business with Malaysian Airlines
2021: SPRING Japan becomes a consolidated subsidiary

Manufacturing Capital (FY2025)
Accelerate aircraft renewal to support growthin fuel-efficient aircraft● J
 AL Group has nine types and a total of 232 to 238 aircraft

Of which 22 to 26 are deployed to internal and growth areas

1987: Full privatization
2002: Japan Airlines and Japan Air System integrate management Established
the Corporate Policy, Safety Charter and Code of Conduct

The second Tsurumaru logo

Financial Capital (FY2025)

2013: Launch of "JAL CLUB EST" credit card for people
in their 20s
2014: JAL card membership exceeds three million
members

2010: Became the first eco-first airline after concluding an
Eco First Agreement between the Minister of theEnvironment and the President
2011: Launched “Japan Project,” a regional revitalization
project
2014: Diversity Declaration

2010: Petition for reorganization
Restructuring of the route network,
Withdrawal from the dedicated cargo aircraftbusiness
2011: Established a new Corporate Policy JAL Philosophy
Introduced divisional profitability management
system and a revived Tsurumaru Logo

Rebuilding a strong financial base tostrengthen risk tolerance and achieve growth●About 50% of equity ratio (based on rating)●Credit Rating A Flat

2016: Established the JAL Group Supplier Code of Conduct
2019: Established a new JAL Group Code of Conduct
2019: Eliminated plastic straws and muddlers in cabins and lounge
2020:Announced commitment to achieve "Net Zero CO2 Emissions" by
2050
Japan's first successful production of domestic SAF using cotton
clothing
2012: Re-listed on the Tokyo Stock Exchange
Established Fundamental Policies of Corporate Governance
2019: Revised our Safety Charter and established a new Code of Conduct
2021: Formulated JAL Vision 2030

The third Tsurumaru logo

Natural Capital
Precious Earth/Resource use with low
environmental impact●World below the 1.5°C scenario●Conservation, restoration, and expansion ofenvironmental resources that are also tourism resources●Securing and using resources with low environmental

impactData Section■ Organization and Management Foundation
1951: Launch of Japan Airlines Co., Ltd. (former company)
1953: Founded Japan Airlines Co., Ltd. (new company)
1959: Introduced the Tsurumaru logo●H ighly engaged employees 64.4%●New fuel-efficient aircraft Two aircraft types 47%■ Sustainability
1964: Transportation of Tokyo Olympic torch
1967: Designated as the official airline for the World Expo
1972: Special flight between Tokyo and Beijing to transport two
giant pandas (Kan Kan and Lan Lan)
1974: Special flight to Moscow to transport the Mona Lisa
1975: Launched JAL Scholarships Program for students in Asia and Oceania (Photo)● Female managers 30% of all managers

Sustainability■ Customer Base

1990: Launch of Boeing 747-400 services(left photo)
1995: Launch of B737-400 (small aircraft)
1996: Launch of Boeing 777 services (rightphoto)

Growth Strategy

1951: Employment of stewardesses
1953: Employment of stewards
1954: Two Japanese acquired pilot certificates for DC -4
1965: Overseas dispatch apprenticeship program and student
program established
1969: Introduced Employee Stock Ownership Plan

● Productive and professional JAL Group employees

JALグループは、大きく時代が動き価値観が変わるなか、「安全・安心」と「サステナビリティ」
を未来への成長のエンジンとして、以下を実現します

Safety andPeace of Mind

Build a society
where everyone
can live safely,
securely and witha peace of mind

JAL
Vision2030

Sustainability

Build a better future
where everyone canfeel fulfilled andhopeful

多くの人々やさまざまな物が自由に行き交う、心はずむ社会・未来において

43

JAL REPORT 2023

世界で一番選ばれ、愛されるエアライングループを目指しますTOP

JAL REPORT 2023

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