FLY INTO TOMORROWJAL REPORT 2020
Fiscal year ended March 2020

JAL REPORT 2020

JAL Group
Corporate Policy

Message fromthe President

JAL Group's
Businesses and Strategies

JAL Group
Sustainability

Financial Data/
Cor porate Information

The JAL Group adopts the Corporate Policy as
its universal management goal and management
rationale, and established the Safety Charter as theGroup′s safety policy based on the Corporate Policy.
The JAL Group also established the JAL Philosophy
as a mindset, values and attitude expected of all
Group employees, with the hope that applicationof this Philosophy will lead to realization of the
Corporate Policy.

JAL Group Corporate Policy

JAL Philosophy

The JAL Group Will:
Pursue the material and intellectual growthof all our employees;
Deliver unparalleled service to our customers;
andIncrease corporate value and contribute to
the betterment of society.

Part 1
Chapter

1

In Order to Lead a Wonderful LifeThe Formula for Success(The Formula for Life and Work)Part 2

To Become a Wonderful JAL

1

Each of Us Makes JAL What It Is

Chapter

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

The Result of Life and Work
= Attitude × Effort × Ability
Chapter2

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

Safety Charter
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.
● 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.

3

Accumulate Tedious Efforts
with Passion

Work Earnestly
Accumulate Tedious Efforts
Work with Voluntary Attention
Fire Yourself Up
Strive for Perfection
Chapter4

Have a Keen Sense of Profitability

Maximize Revenues and Minimize Expenses(Measure Your Inflow and Control Your Outflow)
Elevate Our Cost-Consciousness
Pursue Profit Fairly
Manage the Company Based on Accurate Figures
Chapter

Chapter2

3

Unite Our Hearts

Make the Best Baton Pass
Align Mental Vectors"Workfloor" Management
Follow the Merit System
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

Ability Will Improve

Ability Will Improve

Chapter5

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 High1JAL Group
Corporate Policy

JAL REPORT 2020

Message fromthe President

JAL Group's
Businesses and Strategies

JAL Group
Sustainability

Editorial Policy

Contents

The JAL Group has published this JAL Report 2020 to inform stakeholders about its businessMessage from the President

004 Message from the President

JAL Group's
Businesses and Strategies

10 History of the JAL Group

activity outcomes in the previous year, its strategies for the future, and to provide anunderstanding of the Group’s pursuit of both economic value and social value and efforts
to achieve sustainable growth. This JAL Report has been collated from a wide range of bothfinancial and non-financial information that the JAL Group has deemed to be of particularimportance to the Group’s management, all of which is made available on the Group’s

12 The JAL Group Value Creation Process
14 Basic Concept on Value Creation

corporate website.

20 Financial Strategy
22 Human Resources Strategy

Period covered by the report

24 IT and Digital Strategy

Primarily April 2019 to March 2020 (FY2019)26 JAL Group Business Activities
Topic

Scope of the report
This report covers 137 JAL Group companies, comprising Japan Airlines Co., Ltd., 81 subsidiaries0

and 55 affiliates.

Reporting Council (IIRC), and the Guidance for Collaborative Value Creation issued by the

Toward Tokyo 2020 and Beyond

36 JAL Group Value Creation (Safety and a Sense of
Security, Customer Satisfaction)

40 Financial and Non-financial Highlights

Reference guidelines
The International Integrated Reporting Framework issued by the International Integrated

Financial Data/
Cor porate Information

JAL Group Sustainability

42 Sustainability Management

Ministry of Economy, Trade and Industry, were used as references in creating this report.

43 Environment

The GRI Standard issued by the Global Reporting Initiative (GRI) was also used as references

52 People

for ESG information.

59 Communities
Topic"What we can do now"
during the COVID-19 pandemic

64 Governance
Topic

Embracing New Challenges in Renewing
Uniforms

Topic
Date of publication
September 2020

JAL corporate website
WEB

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

Offers a comprehensive insight into the JAL Group’s business approach and activities in general,
as well as investor relations and sustainability information.

Financial Data / Corporate Information

JAL and Athletes: Soaring into the Future

84 Financial Data — Eight-year Summary
86 Evaluation and Analysis of Financial Conditions
96 Consolidated Financial Statements
123 Consolidated Subsidiaries
124 ESG Data
126 International Route MAP
128 Domestic Route MAP
129 Stock Information / Corporate Information

About forward-looking statements
This report includes forward-looking statements about JAL Group businesses and outlooks. These statements reflectcurrent JAL Group analysis related to existing information and various trends. Actual performance may differ fromcurrent forecasts as a result of business risks and uncertainties.
About products, services, events, etc.
Some of the products, services, events, etc. contained within this report have been suspended due to extenuating circumstances.
For the latest information, please refer to sources such as the company’s website.

2

3

JAL GroupCor porate Policy

JAL REPORT 2020

Yuji Akasaka
Representative Director,
Executive President

JAL Group's
Businesses and Strategies

JAL Group
Sustainability

Financial Data/
Cor porate Information

Message from the President■ Looking Back at Fiscal Year 2019
Medium Term Management Plan Progress and Our Three
Management Goals
Fiscal year 2019 was to be the year we set the stage for our
final push toward our objectives concluding in 2020. Inspiredby the theme "Challenge, Leading to Growth," all of us at
the JAL Group had made steady progress toward achieving
the goals of the JAL Group Medium Term Management
Plan for Fiscal Years 2017-2020. A few examples include our
responses to development of airports in Tokyo metropolitanarea, the introduction of the cutting-edge Airbus A350, andthe opening of JAL SMART AIRPORT with all new facilities.
Indeed, there were many such projects, and employees
throughout the JAL Group undertook them with high hopesand expectations.
Meanwhile, by capturing the solid demand from the tourism
and business travel sectors, the Group's performancethroughout fiscal year 2019 was robust—until February
2020. At that point, our situation was thrown into turmoil
by the global spread of COVID-19. Worldwide travel
restrictions and other drastic measures resulted in a sudden
drop in demand for air travel; the impact on the JAL Grouphas been immense and we have had to take measures
without precedent in our company history.
Progress toward achieving our three management goals
pertaining to Safety, Customer Satisfaction, and Finance as
set forth in the Medium Term Management Plan is shownin the table below. The Safety targets are still a way off
yet, and our efforts to reach the financial targets havebeen compromised by COVID-19, but we fully achieved
our Customer Satisfaction targets as measured by the Net
Promoter Score (NPS).**A performance indicator that measures the customers' intention to recommend
to others.
Target

FY2019 Results

Target not met

SafetyAircraft accidents: 0
Serious incidents: 0

Aircraft accidents: 1
Serious incidents: 1
Target met

Customer
Satisfaction

Finance

4

Message fromthe President

Achieve the world's
top customer
satisfaction by
FY2020Operating margin:
At least 10%
ROIC:
At least 9%

NPS (Compared to FY2017 initial results)

Domestic flights: Up 7.6 pts
International flights: Up 8.2 pts
Target not met

Operating margin: 7.1%
ROIC: 5.1%

Business Improvement Order and Measures Taken in Response

and those around you—but also to replenish the lines of

In October 2019, we received our second order from

communication between crew members and the company.

authorities for business improvement following an alcohol-

What is more, I believe it is vital that this communication

related incident. This follows our first such order received

should not be a one-off event, but an ongoing effort.

in December 2018, the details of which were reported inSince beginning these initiatives, there have been no failed

last year's JAL Report. We started off 2019 with the aim totests, and we are determined to ensure this remains so by

prevent the recurrence of such incidents, to rebuild a sensestrengthening our existing measures.

of confidence in our safety and security, and to restore
the trust of our customers and the general public throughThe Human Touch: The Decisive Factor in Customer Satisfaction

consolidated efforts.

In terms of our Customer Satisfaction target, ourThe fact that flight crew subsequently failed pre-flight

performance in fiscal year 2019 has already far exceeded thealcohol tests on three occasions, resulting in a second official

goal set for fiscal year 2020, and there is a palpable feelingBusiness Improvement Order, is therefore regrettable, asthat customer satisfaction is increasing every year.

I have worked for so many years in aviation safety and I

Our efforts in this area include, on international routes, theapologize unreservedly. The cause of these incidents wasrenovation of our lounges and the launch of self-service

our failure to implement quickly enough the recurrence

check-in kiosks at Narita Airport, thus boosting passenger

prevention measures in response to the initial improvement

convenience. On domestic routes, we have introduced theorder, and I believe that our Group-wide initiatives aimed

Airbus A350 and the Boeing 787, redesigned passenger

at preventing recurrence of such incidents were insufficient,seats and cabin interiors, and upgraded the functionality

despite the fact that this issue was our top priority.

of the personal monitor installed in every seat for a moreThus, in response to our second Business Improvement

comfortable flight. These and other efforts earned us ourOrder, I have personally taken over as general safety

second 5-Star Airline rating from Skytrax for the second

manager and will oversee safety. Moreover, we will act withconsecutive year as well as the first World's Best Economy

urgency to implement recurrence prevention measures,Class Airlines award ever given to a Japanese airline.

which will focus on two main initiatives.

However, in addition to these tangible, physicalThe first is more stringent testing for alcohol. Flight crews

improvements, another decisive factor in the dramatic

will only be allowed to assume their duties on a flight after

upswing in customer satisfaction was the human touch.

taking multiple tests: by using one's own breathalyser, a

From cabin attendants and airport staff to sales staff, andself-alcohol test at home or a hotel, and a test after arriving

call center operators, and many others, there has been aat work in the presence of a third-party witness. At-homemarked change in awareness among our staff across all

tests involve new facial-recognition technology to prevent

touchpoints.

individuals from submitting other people's results.

These days, the customers' needs have become diversified,

Second is a comprehensive overhaul of our awarenesseach having different requirements, and it is vital thatregarding the importance of this issue. I and all the other

we cater to personal needs. I see that the determination

JAL executive officers have spoken directly with flightto provide attentive service tailored to the needs of thecrews to ensure they are fully aware of the risks involved.

situation and individual customer is taking hold among

We communicated to them our intention that this issue

our staff by using, for example, our personal data sharing

should not be one of the flight crews alone, but something

systems. Although it is nearly impossible to grasp the needs

that all JAL Group employees should work at. Airlines

of a customer instantaneously upon first encounter, it is very

tend to be structured into "silos," wherein flight crews,

possible to learn about them over time by referring to themaintenance engineers, and other functions each have

wealth of personal data retained by JAL Mileage Bank andtheir own organization, and authority and responsibility

JAL CARD to provide more personalized service. We also

are assigned within those discrete groups. Our dialogue

have a system for recording experiences of customers service

was aimed at impressing on the flight crews the executives'gained by cabin attendants. I believe our use of these data

hopes, requirements, and views, and at encouraging themand systems to deliver each customer more personalized

to not only discuss their day-to-day concerns with theirservice has contributed to our improvement in customer

immediate colleagues, but also to air them outside of thesatisfaction.

silo. Sitting down with all 2,500 or so JAL Group flight crew

Even in this digital age when IT is routinely used to makemembers operating throughout Japan and around thework more efficient and marketing more effective, theworld was not a simple task, but doing so served not only

human touch remains vitally important, and I look forward

as a chance for frank discussion—not least about the impact

to combining these to the JAL Group's benefit.

that alcohol-related incidents can have on the company

5

JAL GroupCor porate Policy

JAL REPORT 2020

Message fromthe President

JAL Group's
Businesses and Strategies

JAL Group
Sustainability

Financial Data/
Cor porate Information

Message from the President■ Initiatives to Achieve the SDGs

Council, which I chair, to conduct risk and opportunity

safety is—and will always be—our paramount concern.

Tackling Climate Change is Our Highest Priority

best way to approach each one.

Actions Taken So Far and Outlook for the Future

Today, 35 years after the accident of Japan Airlines Flight

The Sustainable Development Goals (SDGs) were set by the

In June 2020, we set a new long-range goal of zero CO2

In response to the unprecedented turmoil caused by

123 in 1985, we continue to take steps to ensure safety—the

United Nations General Assembly to tackle issues that mustemissions by 2050, and seek to reduce our CO2 output

COVID-19, I identified three main issues that we need tobasis of business continuity for the JAL Group—and achieve

be resolved if the world is to achieve sustainable growththrough four main initiatives: developing and using

address and overcome.

our management goals: evolve the Safety Managementand development. As the world faces such many and varied

sustainable aviation fuel; renewing our fleet to more fuel-First is stopping the virus's spread. The JAL Group must not

System, evolve the Security Management System, andsocial issues, in order for the JAL Group to achieve growthefficient aircraft; consuming less fuel in daily operations;play a part in the transmission of the virus; our role must beemphatically pass on lessons learned from accidents. In lightinto the future, our business management must therefore

and emissions trading.

to prevent and stop its global spread. To stop the movementof which, the recent series of alcohol-related incidents are acontribute to the realization of a sustainable society. To thatof people, we have suspended many international flights,

salutary lesson that our actions can pose a risk to safety.

end, the JAL Group identified 22 actionable issues acrosspartially suspended or reduced our domestic flights, and are

Meanwhile, ensuring the safety of flights from take-off tofour key areas related to environment, social, and corporateusing smaller aircraft in some cases. We have implemented

landing amid the COVID-19 crisis is a safety risk unlike anything

governance (ESG), and posted these on our website in Julythorough infection control measures for our employees,

we had imagined before. The Company is implementing a2020.

instituted a system wherein virtually all Group staff can work

broad range of measures to stop its spread. For instance, it

The COVID-19 pandemic is a typical example of how aremotely, and are encouraging staff in support departments

goes without saying that aircraft interiors and airport facilities

regional risk can quickly develop into a global problem; notto work from home.

are thoroughly disinfected, and that cabin attendants andonly has the virus caused damage to people's health, it has

The second issue is fulfilling our mission as a public transport

ground staff wear face masks and face shields at all times

also had a huge socioeconomic impact.

provider. While flights have been suspended or reduced

when serving customers. Moreover, customers are asked to

In future, I believe that there will be increased scrutiny

significantly, there is still a need to secure the means for thetake temperature checks, maintain physical distance fromof measures to contain the spread of the virus, and the

movement of people and goods where this is necessary. For

others while waiting, and wear face masks while on board

world will attach greater importance to how businesses

instance, the JAL Group is responding to societal demand

aircraft. We are also trialing touchless check-in kiosks.

incorporate ESG into their management practices. For theby operating extra flights to repatriate Japanese nationals

Our greatest concern—and the factor that has exceeded

most part, we are already headed in the right direction, but

stranded overseas and also cargo-only flights.

our previous thinking about safety—is that when a person

we must accelerate our efforts.

The third issue is to uphold the group's financial performance.

infected with a virus travels on an aircraft, we become a

Of all these challenges, it is our view that fighting climate

2019

To this end, and keeping a variety of potential scenarios in

medium for transmitting it to other countries and regions,change is most vital to the JAL Group. Global warming

thus worsening the pandemic. To prevent this, there was nocaused by CO2 emissions is an issue in which we have noCO2 emissions net zero by FY2050

mind, we are working diligently to cut costs and scale backinvestments to soften the blow to our bottom line, while

choice but to ground the world's aircraft. We must consider

small involvement, and we have a duty to work even harder

raising capital dynamically to maintain immediate liquidity.

this situation very seriously, and we should not think thatto counter it. The JAL Group has therefore established a

Meanwhile, we are using the downtime created by thefinding a solution is not part of our job. Air transport

Sustainability Committee under the Group Management

significant reduction in flights as an opportunity for humanoperators must band together to create a system for reliably

resource development. Simulators and online conferencing

preventing the travel of infected people prior to boarding

systems are being used to help flight crews and cabin

and after disembarking. Only then can we honestly say that

attendants maintain their qualifications, and to help us

air travel is safe and secure.

provide intensive training and education related to safety

To achieve this, there must be a major improvement ofservices. Many JAL Group employees are thinking hard about

air transport systems, just as sweeping security measureswhat they themselves can do in this situation, which has

were required in the aftermath of the terrorist attacks ofresulted in a number of employee-led initiatives to contribute

September 11, 2001. In that case, there was global recognition

to society, such as making masks and face shields to donate toof the need for stronger security measures, and airport

local hospitals and kindergartens.

security checks changed dramatically as a result. I believe

As we are unable to establish a master plan for fiscal yearthat COVID-19 is just as much of a global risk, and a similarly

2020 under the unforeseeable circumstances, projecting

robust approach is needed to counter it.

future COVID-affected scenarios amid today's rapidlyTokyo is set to host the Olympic and Paralympic Games inchanging conditions is even more difficult. As things stand,2021 (Tokyo 2020), and Japan needs to act. As an official

demand for air travel is less than 10 percent of what it wasairline partner of Tokyo 2020, the JAL Group is dedicatedat the same time last year, and will take a considerably long

not only to preventing the spread of COVID-19, but also totime to recover. For now, we believe that, by the end of fiscal

helping make Tokyo 2020 a successful event by maintaining

year 2020, demand may possibly return by 70–80 percent on

our function as a public transport operator without

domestic flights and by 40–50 percent on international flights,

compromising customer safety.

■ COVID-19: Impact on Our Business andChallenges to Be Addressed

Ensuring Safe and Secure Air Travel
We want passengers to fly JAL with a sense of security, so

analysis of the impact of climate change, and decide on theEnvironmental Concerns
Total CO2 emissions
Demand growth

FY2019emissions

2030

2050

and subsequently return to pre-COVID levels in one year (ondomestic routes) and three to four years (on internationalroutes).

67

JAL GroupCor porate Policy

JAL REPORT 2020

Message fromthe President

JAL Group's
Businesses and Strategies

JAL Group
Sustainability

Financial Data/
Cor porate Information

Message from the President
Social Change is Accelerating Progress toward Sustainability

COVID-19 to normal levels.

business. To date, our focus on business travelers meant

boosting tourism, I feel that air mobility and mobility as

COVID-19 is causing a broad rethink and the emergence

Moreover, in order to optimize the scale of our operations

there was no particular need to pursue LCC demanda service (MaaS) will be better received by small and mid-of the "new normal." Remote work has become widelyto the decline in demand, it is vital that we first immediately

aggressively, but business demand may not rebound to

sized rural cities than big cities. Harnessing these various

accepted and ongoing initiatives for workstyle innovation

stabilize our financial strength by reviewing our fleet andprevious levels post COVID due to rise of new normal

initiatives to unlock new domestic demand in regions acrossare accelerating even more. The JAL Group has remote work

investments.

lifestyles. There may also be changes in tourist demand, asJapan will surely help revitalize communities.

and online training systems in place for nearly all of ourThus, the process of restoring business operations back to

people reconsider the value of real experiences. The LCC

approximately 36,000 employees, and they are widely usedtheir former scale and rebuilding our financial standing willbusiness model is more profitable than full service when it

in the current situation.

form the core of the next Medium Term Management Plan.

comes to tourist demand, and I believe that LCC operations

If remote work were to become accepted as normal

Unlike other airlines, the JAL Group experienced bankruptcy

will become increasingly important in future.

practice, it would provide further momentum to efforts

a decade ago and underwent a business revitalization

With that in mind, we have established ZIPAIR Tokyo, a

to diversify the workforce by opening up more options

process. We went through a painful experience to rebuild

new mid- and long-haul LCC. Operations began in Juneto people with disabilities or health problems and people

including the establishment of the JAL Philosophy and the2020 with its Narita-Bangkok route, and a Narita-Seoul

with time restrictions due to childbirth, childcare or nursing

amoeba management system. In order to harness that hard-route was opened in September 2020. These are operatingcare. Recently, working remotely has given rise to added

won resilience for further good, we have spent the past 10

as cargo-only flights for the time being due to COVID-19,

benefits at the JAL Group such as increased communication

years patiently building up "stocks," not only of financial

but preparations are well underway to begin passenger

between cabin attendants and airport staff and information

resources, but also of resourcefulness and systems thatflights. Moving forward, we are working to build a solid

exchanges between overseas staff, all of whom previously

enable us to react flexibly to difficult times, like the current

LCC network centered on ZIPAIR Tokyo supported by ourhad few opportunities to interact. The removal of

COVID-19-driven economic downturn, which is becoming a

existing LCC partners Jetstar Japan and Spring Airlines

organizational barriers and locational restrictions has

test of endurance.

Japan.

resulted in improvements in diversity.

Even amid the current trying circumstances, we receive

Moreover, because domestic demand is expected to recoverAt the JAL Group, the unprecedented changes in the

Accordingly, I think there will be a broad reconsiderationcomments along the lines that JAL is weathering the storm

before international demand, we will work on stimulating

business environment have not compromised our dedicationof the meaning of "region," as people come to see it as awith ease. It may look that way from the outside, but if

demand in the domestic sector. Similarly, the upheaval

to fulfilling our mission as a public transport provider andplace to live, work, or travel to. "Workation" is now in thethat is the case, it is because those "stocks," painstakingly

caused by COVID-19 has highlighted the importance of

our focus on safety in doing so. In the mid-to-long term,

spotlight as a new workstyle. Until now, vacations wereamassed over the past decade, enable us to forge a sharedcargo operations, and we will seek further growth in that

we will work on rebuilding our strong financial standing,limited to specific times of the year and seasons, which

attitude that allows each individual to consider how he orarea, too.

ensuring its flexibility and high level of risk-resistance;meant that everywhere you went was crowded with othershe should act—not because anything is "easy."

Our business in domains other than air transport must also

tackle head-on the environmental issues and otherholidaymakers. However, a working holiday frees you fromI believe successful business management depends oncome under review. At present, our businesses beyond air

challenges that society faces; contribute to Japan's efforts tothe need to take leave at specific times. More options andpreparation. Just as we are surviving thanks to the "stocks"

transport, also excluding airline businesses such as airport

increase the number of foreign visitors and boost tourism,

the freedom to work and rest away from the crowds willbuilt up by my predecessor, Yoshiharu Ueki, now it is myand maintenance businesses, make up just 10 percent of

thereby encouraging the revitalization of communities andsurely provide added value to the aviation business.

turn to prepare. I look forward to using the hard experience

total revenues. I look forward to investing new efforts into

economies. In addition, we will continue playing our part

The new normal and improved workstyles will potentiallyof COVID-19 to pave the way for future generations of JAL

non-aviation business domains such as our frequent flyerin efforts to achieve the SDGs by 2030, and to reduce ourlead to swifter advances in digital technology as well. I hopeGroup employees to seek growth once demand recovers,

program and credit card businesses.

CO2 emissions to net zero by 2050. We will not stop in our

they provide further momentum to achieving a sustainable

to tailoring our next Medium Term Management Plan to

Also on the horizon are a variety of service businesses inendeavors toward business sustainability and the realizationsociety and bring us closer to reaching the SDGs. The JAL

reflect this, and to steadily building up new "stocks."

regional Japan. These are part of the aforementionedof a sustainable society. I look forward to the continued

efforts to stimulate domestic demand. In addition to

support and cooperation of all our stakeholders.

Group is working to ride this wave and doing our part tohelp make the sustainable development goals a reality.

A Business Structure Post COVID■Also strengthening ourbusinesses beyond airtransport

Percentage of
total FY2019
revenue■Strengthening
mid- andlong-haul LCC
operations■Balance ofinternational,
domestic, andcargo and mailbusinesses

Building a Sustainable Business Structure
In the wake of the company's bankruptcy 10 years ago,
we adopted a policy of selection and concentration as we■ Compiling a New Medium Term

Management Plan8

reviewed and rebuilt our business. More recently, we havepositioned international passenger operations as the driverof growth and enhanced our full service carrier business

Restoring Business Scale, Rebuilding Financial Strengthwith high-yield business travelers as our target market.

Under normal circumstances, we would have announced

On the other hand, even before COVID-19, it was thoughta new Medium Term Management Plan starting fiscalthat we had reached a juncture where it was necessary

year 2020 this spring. Unfortunately, the coronavirus has

to consider expanding our business fields as a means ofchanged the external environment that forms the basis ofpreparing for unforeseen difficulties by diversifying risk.

our plan, and we must reset new targets and initiatives.

Those unforeseen difficulties have now arisen, and it isNormally, a medium term management plan covers three

therefore vital that we review our business domains and use

or four years—roughly how long it will take for demand forthe next Medium Term Management Plan as a blueprint forinternational flights to return to pre-COVID-19 levels. For

building a sustainable business structure.

that reason, I believe the next plan will set forth the process

In terms of capturing demand, I look forward to expandingof recovering from the huge drop in demand caused byinto the LCC business in addition to our full service carrier

9JAL GroupCor porate Policy

JAL REPORT 2020

History of the JAL Group

Message fromthe President

JAL Group Value Creation Process

Basic Concept on Value Creation

JAL Group's
Businesses and Strategies
Financial Strategy

Human Resources Strategy

IT and Digital Strategy

JAL Group
Sustainability
JAL Group Business Activities

Financial Data/
Cor porate Information

JAL Group Value Creation

Financial and Non-financial Highlights

History of the JAL GroupOperating
Revenue(Billions of yen)

1951

FY2011
1,204.8

August: Establishment ofJapan Airlines

1964

August: Operates a special
DC-6B flight from Athens to
Okinawa (Naha) to transport
the Tokyo Olympic Flame

1970

February: Lists on the firstsection of a number of stock
exchanges

1983

Ranks first among IATA
(International Air Transport
Association) airline members
in passenger and cargo traffic
data (first place for five years
until 1987)

1985

August: JAL Flight 123
accident

1987

November: Becomesfully privatized2002

October: Integration of
JAL and JAS

2007

April: Joins the global
oneworld alliance

2010

January: Files forreorganization proceedings
under the Corporate
Reorganization Act

FY2012
1,238.8

2011

FY2013
1,309.3

2012

Rebirth of JAL

2013

2014

June: JAL SKY SUITE named
Best Business Class Airline Seatin the Skytrax 2013 World
Airline Awards
July: Launches Narita–Helsinki
routeApril: Commences
operations with a new"Tsurumaru" logo
Commences joint
business with American
Airlines
JAL's new "Tsurumaru"
logo (foreground)

FY2014
1,344.7

FY2015
1,336.6

FY2016
1,288.9

FY20181,487.2

FY2017
1,383.2

2015

2016

2017

March: Launches
Kansai–Los Angeles
route
September: Starts
JAL Nadeshiko Lab*

October: Commences
joint business with
IberiaDecember: Launches
Dokokani Mile service*Renamed JAL D&I Lab in
2020

January: JAL and JAC receive MLIT Award
for Barrier Free Measures
April: Opens JAL Innovation Lab
July: Certified as a 5-Star Airline andawarded Best Economy Class Airline Seat
by Skytrax

November:
Launches
Narita–Dallas route
April: Commences joint
business with Finnair
October: Intergration of
JAL and JAL Express
Hokkaido Air Systems(HAC) joins the JAL Group
December: Launches
Chubu–Bangkok route2019
February: Launches
Haneda–Manila route
March: Establishesinternational mediumand long-haul LCC,ZIPAIR Tokyo Inc.
Launches Narita–Seattle route

Takes delivery ofJAL's first Boeing 787

April: Launches Tokyo (Narita) –Boston
route with the Boeing 787
September: Relists on the first sectionof the Tokyo Stock Exchange
October: Commences joint businesswith British Airways
December: Launches Narita–San Diego
route

2018

FY20191,411.2

September: Launches Narita–Melbourne route
Launches Narita–Kona route
December: CONTRAIL Atmospheric Observation Project
receives the Environment Minister's Award for Global
Warming Prevention Activity in the International
Contribution Category
For more details, please refer to JAL's History online
https://www.jal.com/en/outline/history/

FY2019 Topics
April:
Ranks as Japan's best airline for the third
consecutive year in the Tripadvisor®
Travelers' Choice TM Awards
June:
Wins two categories in the Skytrax World
Airline Awards
July:
Chosen as a Tokyo 2020 Olympic Torch
Relay Supporting Partner
Decides new JAL Group uniform designs
August:Operates the JAL LGBT ALLY charter flight,
the first of its kind in Japan
September:
Inaugurates the Airbus A350
Starts accepting domestic reservations 330
days in advance10

October:
Certified as a Gold company in the PRIDE Index for LGBT
Initiatives (fourth consecutive year) and receives second
commendation for Best Practice
Certified as a 5-Star Airline by Skytrax for the second
consecutive year

Receives FTE Accessibility
Leadership Award
Receives award for Excellencein Corporate Disclosure in theTransportation category fromthe Securities Analysts
Association of Japan2019

November:Awarded the highest commendation in the Japan Institute ofInformation Technology's 37th
Information Technology Awards
Conducts tour for seniors, "Let's travel
again."

2020
January:Awarded a B ranking by the Carbon Disclosure Project (CDP)

December:
Joins The Valuable 500, an international initiative to promote inclusion of people with disabilities

March:Ten JAL Group companies recognized under the 2020 CertifiedHealth & Productivity Management Outstanding Organizations
Recognition Program in the Large Enterprise category
Transports the Olympic flame on a special aircraft, "Tokyo 2020
Go," from Athens to Japan Air Self-Defense Force's Matsushima
Air Base in cooperation with ANA

February:
Partially begins JAL SMART AIRPORT services at Haneda
Launches Narita–Vladivostok route

DISCLOSURE INSIGHT ACTION

11

JAL GroupCor porate Policy

JAL REPORT 2020

History of the JAL GroupJAL Group Value Creation Process

Message fromthe President
Basic Concept on Value Creation

JAL Group
Sustainability

JAL Group's
Businesses and Strategies
Financial Strategy

Human Resources Strategy

IT and Digital Strategy

JAL Group Business Activities

Financial Data/
Cor porate Information

JAL Group Value Creation

Financial and Non-financial Highlights

The JAL Group Value Creation Process
The JAL Group aims to, as stated in our Corporate Policy, contribute to the betterment of society, with the belief that safety
is the basis of existence of the Group. With the ideas laid out in our JAL Philosophy, the amoeba management system andour "Commitment to Society," we conduct business using the Group's managerial resources to create new economic andsocial values for society. Further, while taking into account the advancement of rapid urbanization, climate change, resource
scarcity, demographic changes, shifts in global economic power, technological advances and other such megatrends, we seek
innovation in our business structures, and continue to offer value demanded by society.

Key Management Resources (Input)

Data below is current as of March 31, 2020

JAL Group's Businesses andStrategies

Value Created by the JAL Group (Output/Outcome)Diverse and professional human resources
Human capital● Consolidated employees: 35,653● Percentage of men: 49.4%, Percentage of women: 50.6%● Total hours spent on drills and training per person: 72.3

p.84-

p.4-

p.20-

p.22-

p.24-

p.26-

Sustainability
p.42-

Domestic Passenger Operations
Revenue Passengers: 33.78 million

p.28-

Cargo and Mail Operations
Weight transported: 810,000 tons

p.32

Airline BusinessPriority Areas

Environment● JAL Group airlines, oneworld alliance, etc.
Cities serviced: 413
Social capital● Collaboration with regional communities

IT and Digital Strategy

Networks connecting the regional and the global

Human Resources Strategy

Intellectual capital

Financep.38-

Revenue Passengers: 8.28 million

Financial Strategy● Rules and manuals● IT Systems● Open innovation
Lab Alliance, etc.

Customer Satisfaction

p.36-

International Passenger Operations

Business Strategy

Accumulated expertise

Safety and a Sense of Security

Related SDGs

Address to Climate Change

Noise Reduction

Effective Use of Limited
Resources

Biodiversity Conservation

Prevention ofEnvironmental Pollution

p.33

Wide customer basep.33-

PeopleOther Businesses● JAL Mileage Bank members: approx. 30 million● JAL Card members: approx. 3.7 million

Prevent the Spread of
Infectious Diseases
Improving Accessibility
Respect for Human Rights

Human Resources Development
Workstyle Innovation
Health and Productivity
Management

Promotion of D&I

Aircraft and serviced airports● Equity: 1.09 trillion yen● Equity ratio: 58.9%

Limited resources● Aviation fuel12

Basis for Value Creation

Financial capital

Natural capital

Safety Charter

JAL Philosophy

p.14-

p.17

JAL Group
Code of Conduct"Commitment to Society"AmoebaManagement System
p.18

Corporate Governance

p.19

p.64

Route Network Expansion

GovernanceA strong financial baseCommunities

Group Management● JAL Group aircraft:
Production capital
16 models, 241 aircraft● Domestic and international airports: 96

Promotion of BCM

Increase Inbound Tourism
Regional Revitalization

Improving Conveniencein Travel
Disaster Restoration AssistanceCommunity Relations

Fair Business Practices
Responsible Procurement
Disclosure

13JAL GroupCor porate Policy

JAL REPORT 2020

History of the JAL GroupJAL Group Value Creation Process

Message fromthe President
Basic Concept on Value Creation

JAL Group's
Businesses and Strategies
Financial Strategy

Human Resources Strategy

IT and Digital Strategy

JAL Group
Sustainability
JAL Group Business Activities

Financial Data/
Cor porate Information

JAL Group Value Creation

Financial and Non-financial Highlights

Basic Concept on Value Creation
SafetyContinuous improvements through the Safety Management System (SMS)
To ensure a high level of safety, management, Corporate Safety & Security and divisions implement and organically link
their PDCA safety cycles to ensure the proper functioning and continued improvement of the SMS.

Safety Charter

PDCA Cycle as Part of the SMS

The JAL Group has established a Safety Charter based on

Safety Charter

its Corporate Policy in order to indicate in greater detail its

Safety: The protection of lives.

fundamental policy regarding safety.

This is the commitment and basic foundation of businessIn response to a Business Improvement Order for incidents

continuity for the JAL Group.

Management

We take to heart our mission and responsibility as safety

of inappropriate alcohol consumption, the Safety Charter

professionals to ensure a safe operation on every flight

was revised in July 2019 based on the report of thewith the best of our knowledge, skills and abilities.

Verification Committee, which was installed with the

To accomplish this, we will act according to the following

objective of resolving essential underlying problems. In theprinciples.

newly revised Safety Charter, it is clearly stated that

• Stop immediately when safety concern arises.

"Safety: The protection of lives" to ensure that decisions• Comply with rules and strictly follow standard operating

Divisions

The Group Safety Enhancement Council General
Meeting receives reports on achievement of safetytargets, safety audit results, progress of safetymeasures, occurrence of serious accidents andproblems, and status of preventive
measures and measures, decides
PlanDo
necessary action and gives instructions
as management to execute them.
Action Check

Plan

procedures.

and actions are aimed at protecting lives with a shared• Always check and confirm; never rely on assumptions.

awareness among all organizations that safety is our first

Divisions facilitate operation of the SMS at thedivision level and report status of operation andimprovements to management and Corporate
Safety & Security. Corrective action is taken basedon results of implementing the PDCA
cycle and with instructions fromPlan
Do
management and Corporate Safety &Security.
Action Check

Do

Action Check• Promptly communicate information without omission topriority.

ensure safety.

All JAL Group staff carry a card printed with the Safety

Corporate Safety & Security• Deal with problems quickly and appropriately without

Charter, and each individual performs his or her day-to-

Corporate Safety & Security facilitates operation of the SMS at the Group level. Corrective action is taken based on findings,
instructions from management and reports from divisions. Corporate Safety and Security reports status of operation andimprovements of the SMS to management, identifies issues in each division and gives instructions on improvement.

underestimation.

day duties as a professional in conformance with this Safety
Charter.
Safety Management System

To maintain uniform high levels of safety across the JAL Group, all Group airlines including Japan Airlines manage safety

Cultivating a safety culture

according to Group shared policies confirmed at the Group Safety Enhancement Council.*

On August 12, 1985, JAL Flight 123 crashed on the ridge ofquestions such as the root cause of the incidents and why

In addition, the Operational Group Safety Promotion Committee* has been established as a committee under the

Mt. Osutaka and 520 precious lives were lost. To engrave

they could not be prevented, fundamental issues uncoveredGroup Safety Enhancement Council to maintain and strengthen coordination on safety initiatives among divisions and Groupvaluable lessons in our minds, we established the Safety

by the Verification Committee regarding the background to

airlines.

Promotion Center in April 2006. To date, more than 260,000

the incidents are being treated as an opportunity for deeper

people inside and outside the Company have visited thethinking through discussion with colleagues about thecenter.

proper way to act and behave. We are cultivating awareness

The JAL Group continuously conducts Safety Awarenessof "Safety First" in relation to safety on the job. A total of

Education based on the Three Actuals Principle (the actual

10,816 employees underwent this education in fiscal 2019.

place, objects and people) to ensure that lessons learned

It is being continued in fiscal 2020 with the intention of

from past accidents are passed on and that employees

educating all relevant staff.

1

2

JAL

Group Companies*

Special Committee
on Alcohol-related
Measures *3

Chairman

GeneralManager,
FlightOperations
Manager, Flight
Operations
SafetyPromotion

GeneralManager,Engineering &MaintenanceManager,Engineering &MaintenanceManagement

JAIR, JTA, JAC, RAC, HAC
Members

SafetyGeneralManager

GeneralManager,
Cabin
Attendants
Manager, Cabin
Attendants
SafetyPromotion

President

maintain a high level of safety awareness. Employees are

SafetyGeneralManager

General Manager,
Corporate Safety& Security

Specialcommittees on
alcohol-related
measures ineach division

Group Safety
Enhancement
Council

Chairman

Executive
President

1

GeneralManager,
AirportManager,
StationPlanning*2

Chairman

GeneralManager,
Operations
Manager,
Operations
Safety & Quality
Promotion

OperationalGroup
Safety Promotion
Committee
GeneralManager,
Cargo &
Mail
Manager,Business
Affairs

Safetycommittees ineach division

Members

made aware, from the depths of their consciousness, of thevital importance of safety by ascending the ridge of Mt.

Executive
Officer of
SafetyOsutaka, the site of the JAL 123 accident (the actual site),seeing aircraft debris at the Safety Promotion Center (actual
objects), and meeting people who experienced the accident

Safety committees(names vary by company)*
Special committees on
alcohol-related measures(names vary by company)(actual people) through news footage and video interviews.
3*1 Council responsible for maintaining flight safety throughout the Group, and promoting safety management, according to the Group’s principles and policies.
*2 Committee placed under the Group Safety Enhancement Council General Meeting responsible for increasing safety in air transport of the JAL Group by
maintaining and strengthening coordination on safety initiatives among divisions and Group airlines.
*3 Committees responsible for managing alcohol-related risks of the JAL Group.

In fiscal 2019, 1,758 employees attended the Safety Seminarfor New Employees, 260 employees participated in the
Safety Promotion Seminar and 128 employees in the Safety
Seminar for New Managers.
Since December 2019, JAL Group Safety Seminar has been
conducted for all JAL Group staff. Here, the significance of
the Business Improvement Order for inappropriate alcoholrelated incidents is again reviewed, and the extent toDisplay of aircraft wreckage in the Safety Promotion Center

which the consumption of alcohol affects safety and theCompany's critical situation are reaffirmed. In addition to14

15

JAL GroupCor porate Policy

JAL REPORT 2020

History of the JAL GroupJAL Group Value Creation Process

Message fromthe President
Basic Concept on Value Creation

JAL Group's
Businesses and Strategies
Financial Strategy

Human Resources Strategy

IT and Digital Strategy

JAL Group
Sustainability
JAL Group Business Activities

Financial Data/
Cor porate Information

JAL Group Value Creation

Financial and Non-financial Highlights

JAL Philosophy
Further, given the lessons of the aircraft accident that occurred

Generations~. These talks based on a proposal from the Safety

at New Chitose Airport in February 2016, in addition to being

Advisory Group. The members provided us with inspections ofprovided with knowledge that all airline staff should possess,

the Flight Operations Division and the Cabin Attendants Division,

emergency evacuation training for all JAL Group staff is being

Group airlines and other workplaces, engaging in dialogue with

conducted since November 2016 in order to increase safety

staff at those locations.

awareness. As part of this training, staff learn in a classroom

After a second Business Improvement Order was issued forenvironment about appropriate actions and responses in therepeated incidents of inappropriate alcohol consumption,

event of an emergency. They also rehearse such procedures

concerns were aired that a certain slackness was beginningas sliding down an evacuation slide, the proper use of life

to set in with respect to our safety culture. This culture

vests and oxygen masks, and riding in lifeboats in order toought to have been instilled in our organizations andenhance their safety awareness. In fiscal 2019, in addition totheir staff, in both organizational practices and climate.

offering this training in English, a course was also established to

The Safety Advisory Group members held hearings andprovide training to staff with impairments, culminating in theinformal meetings with flight crews, and analyzed records

education of a total of 4,624 staff. In fiscal 2020, through theof the hearings of the individuals involved in the incidents.

introduction of teaching materials that utilize virtual reality, we

In March 2020, they submitted a proposal entitledare facilitating the training of each and every one of our staff,"Organizational and Awareness Reform using Lessons

including those working in overseas or other remote locations

Learned from Alcohol-related Incidents."

whose participation until now has been difficult.

The proposal, in which five experts considered a broad rangeof themes from different perspectives, contains many valuablesuggestions. The JAL Group is striving to put the proposal togood use through substantive reforms to both organization andawareness.

Basic Concept

Leader's Workshop

As we stand on the starting line of revitalization, we
deeply reflect and regret the significant inconveniencecaused to many people, and at the same time, we are filledwith gratitude for being granted a chance to rebuild thecompany. Spurred by serious reflection, we are resolved topart with the past and create a brand new JAL.
"Were we too dependent on others?""How conscious were we about profitability?""Are we serving our customers with feelings that come fromthe bottom of our hearts?"
Based on these reflections, we found it necessary to change
the awareness of every employee and established the JAL
Philosophy that is a mindset, a set of values or an attitude

In addition to the JAL Philosophy Workshop, Leader'sWorkshop is held once a month for directors and vicepresidents, and twice a year for managers, to repeatedly
study the awareness, values and attitudes required ofleaders, reaffirm their mission and roles, and put theselessons into practice. This workshop, in which leaders in all
types of jobs assemble in one place, provide the opportunity
for both serious discussion and friendly competition among
the leaders.
By moving all of these workshops online in fiscal 2020, theparticipation of both domestic and overseas branch offices
was made easier, contributing to the improvement ofcommunication across divisions.

that everyone working on JAL services and products shouldshare and have in their mind.
If everybody used the JAL Philosophy as a common criterion
for decision-making, staff members could work as a team,
where each member trusts one another. JAL would
become a company that contributes to the advancement ofsociety, and all staff members would work with pride andreassurance.
As we repeatedly study, understand and practice the JAL
Philosophy in our everyday work, it will drive us toward ourLeader's Workshop in fiscal 2019

ambitious goal of becoming "the world's most preferredand valued airline."

JAL Philosophy Convention

Fiscal 2019 Initiatives and the Future

Training using an emergency evacuation slide

In order to deepen understanding of the JAL Philosophy,
JAL Philosophy Workshop is held three times a year for all
staff involved with JAL products and services in Japan andoverseas. As we enter the tenth year since the establishmentof the JAL Philosophy, in order to further extend growth

Safety Advisory Group Members

Learning about the correct use of lifeboats

Yotaro Hatamura

The facilitators who conduct

Shinichi Kamata

Professor Emeritus, National Defense Academy of Japan
Fields of expertise include organizational theory andbusiness administration

Shigeru Haga

Senior Technology Advisor, Research Institute forSocial Safety, Professor Emeritus, Rikkyo University
Fields of expertise include traffic psychology,
industrial psychology and ergonomics

Akinori
Komatsubara

Professor, Faculty of Science and Engineering, Waseda
University
Fields of expertise include human life engineeringorganizational management and culture, and safety to provide
safety from an objective expert's viewpoint.
Group to speak at Safety Talks ~Stories to Pass On to Future

16

practice the JAL Philosophy of their own volition." Hence,
workshops has been changed

experience in human factors, analysis of failures and defects,

In fiscal 2019, we welcomed members from the Safety Advisory

take classes" to the next phase in which "they learn andProfessor Emeritus, University of Tokyo, Representative ofHatamura Institute for the Advancement of Technology Ltd.
Fields of expertise include nano and micro processing,production processing science, healthcare engineering,
the science of failure, the science of danger, and thescience of creativity.

In August 2005, JAL established the Safety Advisory Group,

the Group with wide ranging advice and recommendations on

a conventional phase in which "staff members go to

Non-fiction writer, critic

Safety Advisory Group
comprising a panel of five experts with extensive knowledge andof the JAL Group, it is necessary to transition away from

Kunio Yanagida(Chair)to promote the JAL Philosophy. Ten people were chosen topresent from a field of over 400 applicants for the 9th JAL

JAL Philosophy Workshops

Fiscal 2019 Safety Talks

The JAL Philosophy Convention is held annually in an effort

the appellation of these

Philosophy Convention held in 2019. Their presentations
were given on the theme of "lessons learned throughfailing at challenges," and staff were able to learn fromthe presenters' "attitude to challenges" and "approach topracticing the JAL Philosophy." We will continue to offer
these opportunities to strive for self-growth.
We will make continuous efforts to promote wider
application of the JAL Philosophy as we aim to realize
the Corporate Policy to deliver unparalleled service to ourcustomers and contribute to the betterment of society.

from "JAL Philosophy
Education" to "JAL Philosophy
Workshop."
JAL Philosophy Workshop
are assembled from manydifferent workplaces suchas Flight Operation, Cabin,
Maintenance and Airport,
and are also in charge of thecreation of teaching materials.

Conducting the JAL Philosophy
Workshop (online)

Fiscal 2019 JAL Philosophy Convention

17

JAL GroupCor porate Policy

JAL REPORT 2020

History of the JAL GroupJAL Group Value Creation Process

Message fromthe President
Basic Concept on Value Creation

JAL Group's
Businesses and Strategies
Financial Strategy

Human Resources Strategy

Amoeba Management System

JAL Group Code of Conduct

Basic Concept

Basic Concept

Fiscal 2019 Initiatives and the Future

The amoeba management system is a business management

In response to the sudden decline in demand from the

The JAL Group Code of Conduct, "Commitment to Society,"system that promotes "management by all" by dividing

spread of COVID-19 beginning in the fourth quarter, thewas established in July 2019 as a guideline for professionalorganizations into the smallest units and presenting theamoeba management system was utilized to its fullest

behavior to be observed by all staff. Based on the attitudeunit's result of work in an understandable way. It is based

extent to improve earnings through supply adjustments andespoused in the JAL Philosophy, it is more firmly groundedon the idea that business management should involve

cost reductions based on a swift analysis of demand trends

in the company's business and activities.

every employee and not management alone. Throughtoward the end of the fiscal year.

The 10 principles of the United Nations Global Compact and"management by all," the capabilities of every employee

These harsh conditions have persisted into fiscal 2020

Charter of Corporate Behavior of Keidanren (Japan Businessare consolidated to conduct sound and flexible corporate

as well, and reduction of variable costs based on supply

Federation) were used as reference.

management.

adjustments, decreases in fixed costs, and investment control

By behaving in accordance with the "Commitment toare being steadily managed and executed through amoebaSociety," all JAL Group staff can more securely implement

Benefits of introducing the amoeba management systemmanagement.

the JAL Philosophy in actual practice, while further linking

The introduction of the amoeba management system has

The amoeba management system is being employed,these practices to the realization of the Corporate Policy

enabled us to clarify the role and responsibility and grasp

aiming at even more muscular management focusing on theand to the achievement of SDGs and other goals of society.

the revenue and expenses of each unit, and thereby visualize

following three areas.

the achievements and profitability of each department. As aresult, members in each department have developed a sense

Rigorous profitability managementof responsibility over figures and feel more motivated andWe will pursue initiatives to continue and deepen

JAL Group Code of Conduct

IT and Digital Strategy

JAL Group
Sustainability
JAL Group Business Activities

Financial Data/
Cor porate Information

JAL Group Value Creation

Financial and Non-financial Highlights

JAL Group Corporate Policy

JAL Group Code of Conduct
Preamble

1. Safety

2. Pursuit of customer
satisfaction

3. Trust with stakeholders

4. Respect for humanrights and job satisfaction

5. Mission andresponsibility as a memberof society

6. Passing on the precious
earth to the next generation(global environment)

7. Fair business practices

JAL Philosophy

creative in their work attitude.

improvement of hourly profitability, unit revenue and

1. Safety

In the amoeba management system, every department

productivity of each division and Group company. We

2. Pursuit of customer satisfaction

prepares an annual plan for revenues and costs (Masterwill also reinforce cost control according to changes in

3. Trust with stakeholders

Plan) and implements a monthly management cycle (PDCA)

the market environment and fluctuations in revenues to(1) Information disclosure and dialogue

In fiscal 2019, the JAL Group Code of Conduct "Commitment

maximize profitability and improve risk resilience.

(2) Prohibiting insider trading

to Society" was newly adopted. Efforts have been devoted

to accomplish the annual plan. The monthly management

4. Respect for human rights and job satisfaction

cycle requires each department to set action targets at the

Fiscal 2019 Initiatives and the Future

to promoting understanding among staff through education
programs including new employee orientation, and videos

start of each month for the coming month based on theManagement by all(human rights and labor)

current environment. After business results for the month

We will work to bring together individual strengths,(1) Respecting human rights and diversity

and group discussions on "What We Can Do Today."are fixed, the difference between the target and result

increase execution capabilities to achieve targets, visualize(2) Safe and comfortable work environments

In fiscal 2020, we will strive toward further diffusion ofis analyzed, and reasons for the difference are clarified

management data more easily, and draw creativity and5. Mission and responsibility as a member of

initiative from every employee to achieve targets. We

society

the annual plan prepared at the start of each fiscal year,

will also devote more energy to nurturing leaders with

(1) Contributing to regional revitalization

monthly targets are set and achieved, which facilitates

management awareness to lead staff.

and used to create the next month's plan. In addition to

studies and other means.

through our business(2) Responsibility as a company that plays a role

prompt responses to changes in the environment, that is,
proactive management. Operating a monthly management

these attitudes through the incorporation of new casein social infrastructure

Efficient use of managerial resources(3) Responsibility as a corporate citizen

cycle at each activity level enables all staff to participate in

We will work as a team to implement muscularmanagement.

management by improving profitability of each division andAfter each department confirms its results and targets,

Group company, make efficient investments, improve asset

generation (global environment)

business results, projections, issues and countermeasures are

utilization, and optimize inventories to achieve efficient use(1) Global environmental preservation initiatives

reported by General Managers of divisions and presidents

of managerial resources.

(2) Disclosure of environmental information and6. Passing on the precious earth to the next

dialogueof Group companies at the Group Company Business

7. Fair business practices

Performance Report Meeting. The meeting is attended
by around 140 participants, including the President, all(1) Reinforcing compliancedirectors, presidents of Group companies, and online(2) Preventing corruption

observers, who hold earnest discussions on JAL Group(3) Fair business relations with business partners

management with the goal of realizing the Corporate(4) Free and fair competition

Policy.

(5) Management of personal information andintellectual property(6) Eliminating relations antisocial forces
Full text of the JAL Group Code of Conduct
Group Company Business Performance Report MeetingWEB

https://www.jal.com/en/sustainability/codeofconduct/e-Learning video for all staff

18

19

JAL GroupCor porate Policy

JAL REPORT 2020

History of the JAL GroupJAL Group Value Creation Process

Message fromthe President
Basic Concept on Value Creation

JAL Group's
Businesses and Strategies
Financial Strategy

Human Resources Strategy

IT and Digital Strategy

JAL Group
Sustainability
JAL Group Business Activities

Financial Data/
Cor porate Information

JAL Group Value Creation

Financial and Non-financial Highlights

Financial Strategy
Measures in the unprecedented situation
and JAL Groups’ future initiatives
Hideki Kikuyama
Representative Director, Senior Managing Executive Officer
General Manager of the Finance & Accounting Division

The Situations in the Fiscal Year 2019
The airline industry has been facing unprecedentedly
difficult situations due to the worldwide travel restrictions
caused by the spread of COVID-19. Up to December 2019,
the international passenger demand decreased due to therising uncertainty in the global economy caused by U.S.China trade frictions, the political situation in Hong Kongand the Japan-South Korea relationship. However, the JAL
Group made progress in preparing to expand its network byenhancing codeshare partnership programs and approvalof antitrust immunity for the joint-business with Malaysia
Airlines Berhad and by obtaining additional slots at Haneda
Airport from the fiscal year 2020 as we desired. For thedomestic passenger business, we were able to capture
both business and leisure demand. The 10-consecutive daylong holidays to commemorate the beginning of the new
Reiwa era also supported the steady domestic demand. We
improved our products and services by introducing new
aircraft such as A350.

In addition, just in case when the COVID-19 infection would
last longer than expected, we have secured about 500 billon
Japanese yen of liquidity since February 2020 to the end ofJune 2020. We will ensure enough amounts of liquidity at
hand in a timely manner with our steadfast financing ability
that has been one of our important management goals.
We will prepare for the COVID-19 impacts when it lasts
longer than expected. Also, we will prepare for possible
dynamic changes in demand in the new normal. Specifically,
overall demand recovery to the pre-COVID19 level may takea long time. Also, demand itself, especially business travel
demand, may change fundamentally. Therefore, we will
review our business portfolio to include low-cost airlines,
not only JAL brand, especially in the international passenger
business. We will reconstruct our strong financial structure
as our first priority in the new mid-term management plan
we would like to present by the end of this fiscal year,
through reducing interest-bearing debts that is expected toincrease inevitably.

Toward the New Mid-term Management
Plan
We are expecting big changes in our business environment.
Probably it takes for a while for international passenger
business to recover, and demand change may occur
especially in business travel demand. In the new normal,
new values will appear with new lifestyle and workstyle.
More attentions will be given to social issues such asenvironments or local economy. Amid the changing
environment, we will focus on four major tasks:(1) Reconstruction of a firm financial structure
We will improve our profitability and reduce fixed costthrough cost restructuring with new technology. At thesame time, we will improve profitability and reduce capital
expenditure. Through those measures, we will aim to reduce
interest-bearing debts and recover strong financial structure
as soon as possible, and then aim for shareholder return.
(2) Improvement of safety and comfort measures
We will aim for safe and stress-free travel by further

The JAL Group responded quickly to the rapidly fallingheightened hygiene standards and promoting minimal

demands in international and domestic air transport withcontact during travel

the spread of COVID-19 since January 2020, however, it's(3) Restructuring the business structure

revenue and profit both declined year-on-year. Amid thecurrent unforeseeable situations, we all will survive thisdifficult time with the strong and firm financial base that
we have steadily constructed to date to prepare for any
unexpected risks.

To Our Shareholders and Investors
It is yet unclear when the COVID-19 spread would abate anddiminish. Then, we determined to pursue liquidity at handas our first priority, and we regret that we have determined
not to pay interim dividends.
We regard shareholder returns as one of our most importantFinancial Strategy 2020
To this rapidly-decreasing demand due to the worldwide
travel restrictions, we are making utmost efforts to reduce
cost by reducing our capacity. In the fiscal year 2020, we will
minimize operation-linked costs such as fuel, maintenanceor landing fee. In addition, we will reduce at least 90 billion
Japanese yen of fixed cost by reviewing outsourcing, officerent, performance-linked bonus, employee allocation or
advertisement cost. Also, capital expenditure including
aircraft will be reduced at least by 80 billion Japanese yen.
We are making good progress in those reduction, thus wewill set further goals and strive to achieve them. For cargo
operation, most of airlines reduced their cargo capacity bycancellation of passenger flights and the demand-supply

management matters. Our fundamental policy is to actively
implement shareholders returns through continuous andstable dividends and flexible share repurchases, while
securing internal reserves for making investments forcorporate growth in the future and changing businessenvironments and to build a strong financial structure.
The COVID-19 impact is not small for the JAL Group
performance in a short run, yet it is temporally so thatno fundamental change will be caused to our businessWe will shift from the current business structure that relies
on business travel demand to a new business structure thatcan maintain good profitability even with leisure and VFR
demand through enhancement of LCC business. Also, wewill realize new business portfolio with less airline domain.
(4) Accelerated initiatives for social issues facing society
We will contribute to local revitalization with our network.
Also, we will spread the Japanese culture to the rest of theworld. We will aim for zero CO2 emission on an actual basis
through sustainable aviation fuel (SAF), carbon offset andnew generation aircraft.
We will create the new mid-term management plan totackle those matters. We will strive to work altogether tolive up to your expectations.

structure. Thus, we have no plan to change our shareholder
returns policy.
When the spread of the COVID-19 abates and air transportdemand recovers both in Japan and the world, and then we
believe that our performance is on the rise again, we willrealize continuous and stable shareholder return.

situation became tightened. In such circumstances, the JAL
Group has been striving to support logistics domesticallyand globally by operating passenger aircraft for cargoflights. Our fleet turnover and profit will be improved at thesame time.

20

21

JAL GroupCor porate Policy

JAL REPORT 2020

History of the JAL Group

Message fromthe President

JAL Group Value Creation Process

Basic Concept on Value Creation

JAL Group's
Businesses and Strategies
Financial Strategy

Human Resources Strategy

IT and Digital Strategy

JAL Group
Sustainability
JAL Group Business Activities

Financial Data/
Cor porate Information

JAL Group Value Creation

Financial and Non-financial Highlights

Human Resources Strategy
Building environments that help
employees demonstrate their potential
Takuya Oda
Executive Officer
General Manager, Human Resources

New Normal Workstyles
Our emphasis on building environments that help

Promoting Deeper Diversity and
Employee Autonomy (JAL OODA)

the group companies. Women also lead training and human resources
development units. These and other examples demonstrate how more
and more women are leveraging frontline expertise, accumulated as

employees to demonstrate their potential is reflected in

In April 2018, we launched JAL OODA, an initiative geared toward

our Corporate Policy, and is the foundation of the JAL

becoming an organization of individuals with enhanced capacity

Group's human resources strategy. At the same time, thefor autonomous judgment and independent action. To this end,

"new normal" emerging in the wake of the pandemic is

we conducted awareness reform training for managers and, togenerating one new challenge after another.

create opportunities to put training into practice, we implemented

For example, remote work practices spread almost instantly

a wide range of team-based activities. For example, we created theas part of the "new normal." This shift presents us with

Wakuwaku Platform Innovation Team (W-PIT) team under the slogan,multiple challenges relating to those who cannot commute"Bring the startup spirit to JAL!" In the current social distancing

to their worksites amid the current environment, including

environment, the team is giving online presentations of original

how human resources development and health maintenancebusiness ideas generated by employees themselves. We are convincedshould be carried out; how to enable employees to engage

that although these efforts are taking place amid dauting challenges,

With the rise in online conferencing and education, opportunities

in active, effective communication now that in-person

the resulting increase in personnel exchanging independent, diverse

for face to face communication are fewer than before, and we see

opportunities are fewer than before; and how to enable

points of view, with active collaboration from colleagues, will be an

an increasing number of challenges relating to employee health. For

human resources to play an active role in more diverse fields

ongoing driver of new value creation for the JAL Group. We have also

example, presenteeism—employees coming to work even when they

than ever before amid a temporary personnel surplus.

seen cabin attendants with medical certification step forward and,are in poor physical or psychological condition—has been a problem

In response, we reviewed our human resources strategy toin consultation with managers and the company, contribute theirfrom before. In an environment where patterns of worksite use areclarify which aspects of it we would change and which we

expertise on the medical frontline to help ease the burden on carechanging, with fewer opportunities for managers and employees

would maintain. This exercise demonstrated the increasing

facilities that are dealing with COVID-19. These initiatives were notto communicate face to face, we believe that undertaking toimportance of expanding the scope of engagement for eachundertaken at the direction of the company. Employees originatedcommunicate in detail, and treating employees actively as individuals,

individual in the JAL Group's diverse workforce, further

the ideas independently, and by acting on them, expanded theis becoming increasingly important.

enhancing their capacity to think and act independently,

scope of their engagement. It is highly rewarding to see employees

Under its JAL Wellness 2020 health promotion plan, the JAL Group has

and maintaining their mental and physical health.

contributing to society in this way. It brings home again theestablished priority challenges and is promoting efforts to meet thoseimportance of cultivating even more employees capable of taking an

challenges, which are showing steady progress. We are striving to

independent perspective.

enhance lively work environments where employees can demonstrate

Achieving this will certainly require not just more independent

their potential in top health condition. In addition to efforts aimed at

thinking, but also a deeper commitment to diversity. Underpinningpreventing the five major diseases designated by Japan's Ministry ofthis conviction is our belief that diverse human resources will not

Health, Labour and Welfare—cancer, stroke, heart disease, diabetes,

confine themselves to conventional job areas. Instead, by creating aand mental illness—we are incorporating a data health approachcorporate culture that enables them to demonstrate their distinctivethat incorporates stress checks, and considering measures to increasehuman assets in new fields and job areas, they will create significant

engagement levels. We are also accelerating the move toward healthsynergy effects. Active participation in the workplace by women is

management in new workstyles, and will continue striving to enhance

one facet of our diversity efforts, and we recently saw a woman who

environments where employees can maintain healthy minds andbegan as a cabin attendant ascend to the post of president in one ofbodies, and work with energy and motivation.

Promoting Remote Work and Expanding
the Scope of Employee Engagement
The JAL Group has been active in promoting workstyle innovation,for example with the introduction of remote work and super flex
time systems, mainly for support departments. However, until now,these efforts assumed that personnel would regularly commute toa worksite. With the shift to the "new normal," where commuting
to a worksite is not necessarily required, finding the best approachto defining new workstyles has become a challenge. Upgradeddigital environments will of course enable personnel to work fromcabin attendants, to assume leadership roles in other areas.
In addition, employees with impairments are operating cafes andmassage rooms, and otherwise providing important meal and healthsupport to JAL Group employees on a daily basis. It is impressive to
see so many examples of employees with diverse backgrounds being
active in so many areas, and we will accelerate this trend as we build
a company that can generate new value with the power of humanresources.

Health Management

home, but that is just the beginning of workstyle innovation. The
roles that employees play may further diversify—they may shift
their base of activity away from large cities, work in multiple
teams, or hold employment inside the group and have a sideline
occupation outside at the same time.

Practice

JAL OODA Overview

in-person to largely online development. We are also experimenting

Community and Lab members to
expand the scope of innovation
through Human Resources xTechnology(Uses Ki Zwitter communication
tool to propagate ideas)

Leaders promoting healthawareness reform and behavior
change in the workplacewith in-person and online engagement for frontline units.
was to prepare for personnel shortages by hiring and developing
specialists. In the current environment, however, we have apersonnel surplus. This has made it important to expand thescope of employee engagement. By creating more opportunities

Community

Lab members

295

Approx. 100(1) Specific theme-based practice
D&I Lab26

we will promote engagement by our employees across a broader

W-PIT
35 (FY2019 result)

Wings of
Creation
20 (initial screening)

D&I Lab activities aimed at
researching and promoting solutions
to enable diverse personnel todemonstrate their capabilities

An in-house project in which we challenge to create
new value through collaboration with otherindustries, with the key concept of Wakuwaku(excitement) in mind

Business

Crossmen
Approx. 80

CLM
Approx. 60

Regional communities aimed at natural
human resources development andcultivation of an open corporate culture
Communication Leader Meeting

Support for employees working
across boundaries to achieve
results, idea creation community,
cross-functional team member(Crossmen) activities

CLT
Approx. 60

Training activities to cultivate humanresources capable of driving
Communication Leader Training (CLT)New
business(2) Individual theme-based practiceWellness leaders

for them to use their specialized expertise not only in connection
with the aviation business, but for the broader benefit of society,

Efforts to recruit employees who candrive commercialization, to gather
new business domain ideas internally,
and to accelerate entry into new
business domains*Participants as of April 1, 2020

Human resources development has undergone a major shift, from

Until the advent of COVID-19, our approach to human resources(3) Commercialization(develop/apply)

Talk Our Way: Efforts by leaders
themselves to cultivate readinessto achieve results

TOW!

Other

Multiple annually

range of areas than ever before.

22

23

JAL GroupCor porate Policy

JAL REPORT 2020

History of the JAL GroupJAL Group Value Creation Process

Message fromthe President
Basic Concept on Value Creation

JAL Group
Sustainability

JAL Group's
Businesses and Strategies
Financial Strategy

Human Resources Strategy

IT and Digital Strategy

JAL Group Business Activities

Financial Data/
Cor porate Information

JAL Group Value Creation

Financial and Non-financial Highlights

IT and Digital Strategy
Down-to-earth Innovation using Human
Resources and Technology
Tomohiro Nishihata
Managing Executive Officer
Senior VP - Innovation

Human Resources x Technology

Digitalizing Business Processes

Technology is advancing at an astonishing pace with AI,

For over half a century, the JAL Group used a proprietary

IoT, Robotics and other technologies, and this process

passenger service system that we upgraded continuously.

will continue. The JAL Group will not merely utilize these

However, we recently migrated from this legacy systemadvanced technologies but also combine them with its

to a global platform managed by the Amadeus IT Group.

strengths in human resources and facilitate productive

Dubbed the SAKURA Project, this company-wide large-

partnerships with external collaborators. Our aim is toscale system migration, which took over seven years, wascreate innovation through the fusion of human resources

completed on time in March 2019. Our passenger service

and technology.

systems for domestic and international flights have been

To this end, we are pursuing three objectives: maximizing

merged into a single platform to serve the global market

Customer Experience (CX) by offering new value andand will serve as a complete foundation for promoting DX

superior services; innovating employee workstyles andin the passenger domain. This will enhance the convenienceenhancing operational quality and productivity whileof transfers to our domestic and international flights, andmaximizing our Employee Experience (EX) by broadening

boost efficiency by unifying the functions of the domestic

their creative scope; and creating new business areas.

mobile application. Unifying passenger information

To achieve these objectives, the entire Group is working

into a single system will, for example, enable us to offer

toward rapid implementation in three layers: building aappropriate information and services when they are

next-generation IT foundation, digitizing business processes,

needed, and by making more of our system operation costs

and promoting further Digital Transformation (DX).

variable, we can match them more closely to our businessperformance.
At our airports, we are promoting the JAL SMART AIRPORT
concept, which was created using Design Thinking. By

Establishing Next-generation IT
Infrastructure to Support DX

putting people (customers and employees) at the center of
airport experience, from check-in counter to boarding gate.
Moreover, to meet the need for remote and non-contact

information security are increasingly critical for promoting

operations amid the COVID-19 pandemic, we are working

digitalization and DX, and they are essential for conducting

on various measures, including the use of avatars andbusiness. Moreover, we are promoting establishing next-

Ticketing Kiosk's shift to touchless.

generation IT infrastructure that can introduce systems

We are working to bring our operations into the digitalquickly and develop software flexibly. We are also working

domain. For example, we have developed a mobile

to minimize system operation costs by leveraging clouds.

application to unify multiple existing systems and paper-

Under our long-standing efforts to bolster our information

based operations in our aircraft maintenance. This has notsecurity against the ever-expanding challenge of computer

only yielded operational efficiencies but has enhanced ourviruses, and our emphasis on leveraging clouds and mobile

systems infrastructure. In our cargo and mail operations, wecommunications, nearly all of JAL Group employees were

worked with the industry as a whole to realize paperlessable to shift smoothly to a remote work approach, eventracking, automated cargo space location, and dynamic

amid the COVID-19 crisis.

information browsing.

Automation (RPA). For example, our Operations Division

Our objective is to maximize CX and EX and create new
business domains. In the CX domain, we have begun tooffer such new journey options as JAL xR Traveler, which
combines VR with smell and touch feedback, and Online
Trips that combine digital images with the ability to orderfood products from the depicted location.
In the EX domain, we have established a 5G base stationin the JAL Innovation Lab in collaboration with KDDI
Corporation and are conducting joint verification testing.
Currently we are working on verification testing related
to maintenance operations, with a goal of enhancing
productivity and quality by using the capabilities of 5G torealize more advanced remote support for maintenance
operations and forecasting.
In new business domains, we are combining the operations
expertise of the JAL Group with advanced technology, withemphasis on MaaS (Mobility as a Service) and Area Mobility.
In overall recognition of our DX efforts, we were awarded
the IT Grand Prize at the 37th IT Awards for fiscal 2019. The
JAL Group will work in unison to become the most advanced
DX enterprise and realize innovation on a firm footing
through the fusion of human resources and technology.

our technology use, we are realizing a smooth, convenient

Ensuring reliable systems operation and strengthening

We are also promoting the use of Robotic Process

five core technologies: AI, IoT, 5G, xR, and Robotics.

Progressive DX

uses RPA to conduct a detailed analysis of the proper

In April 2018, we established the JAL Innovation Lab nearquantity of reserve fuel for our aircraft. This led toour head office as a setting for ongoing DX. Approximately

maintaining flight safety and reducing fuel costs through250 enterprises are pooling their technology and strengths

more appropriate refueling. Our Sales Division applied RPA

at the Lab, including the 12 members of the Lab Alliance, ato advance seat assignment for group travelers, and topartnership formed to realize open innovation. In addition,issuing our business report at our more than 200 domestic

around 100 employees from a wide range of divisions

and international offices. The result was annual savings ofare Lab members. The Lab collaborates with internal andover 20,000 person-hours of labor.

external parties to carry out detailed simulations of theＭaximize CX

Ｍaximize EX

Create new business domains

Customer journey

Human Resources
Technology
Operation process

Flightoperation

MarketingCabinattendant

Sales
Call centerLab
membership
100 JAL Group
employees

MaintenanceAirportCargo & Mail

Progressive DX
AI

IoT

5G

xR

Robot

12 LabAlliancecompanies

Digitalizing business processes
Constructing a next-generation IT basecustomer journey. Instead of empty discussions, it is creating
and testing actual prototype systems based on strong
awareness of the need for rapid response, with a focus on

24

25

JAL GroupCor porate Policy

JAL REPORT 2020

History of the JAL GroupJAL Group Value Creation Process

Message fromthe President
Basic Concept on Value Creation

JAL Group
Sustainability

JAL Group's
Businesses and Strategies
Financial Strategy

Human Resources Strategy

IT and Digital Strategy

JAL Group Business Activities

Financial Data/
Cor porate Information

JAL Group Value Creation

Financial and Non-financial Highlights

JAL Group Business Activities
International Passenger Operations

Future Strategy
The spread of COVID-19 throughout the world has been
unrelenting, and there seems to be no end to the pandemic

External Environment of International
Passenger Operations

Fiscal 2019 Results
Passenger demand for international flights has seen a decrease

In the midst of growing uncertainty in the future of the world

due to fewer business trips and other reduced business demand

economy due to U.S.-China trade friction and other factors,

accompanying the slowdown of the global economy. By region,

Japan has been buffeted by a succession of large-scale natural

there has been a prominent worsening of the supply-demanddisasters, although their effect on the Japanese economy hasbalance owing to increases in seat availability of competitors on

been negligible, and demand for air transport has overall

European and China routes. Additionally, passenger demandremained strong. However, the spread of COVID-19 sinceon Hong Kong and South Korea routes has fallen due toJanuary 2020 has caused a large downturn in both the worldpolitical instability and a deterioration of Japan-South Korea

and Japanese economies.

relations.

The price of crude oil, which affects both fuel costs andFurther, since January 2020, COVID-19 infections originatinginternational passenger revenue, generally remained within ain China have spread worldwide, and countries have imposed

certain range even while being influenced by such factors as

entry restrictions and heightened quarantine. This has resulted

changes in international affairs. However, since March 2020,

in major constraints on the movement of goods and people.

crude oil prices have been dropping sharply due to failure toPassenger demand, particularly in East Asia, had plummeted

agree on further cuts to oil production among OPEC+ members

sharply by February, and from March onwards, all other regions

and concern over the slowdown of the global economy.

including Europe and North America followed suit. To cope

COVID-19 has spread on a global scale, and drastic measureswith this drop in demand, expedient measures were taken insuch as travel restrictions have been imposed around the world.

the fourth quarter, such as suspension and reduction of flights

As such, the movement of people across borders has dropped

and a change to smaller aircraft.

precipitously, and there has been a dramatic contraction in

On the one hand, on February 28 Japan Airlines became thedemand for travel. This drop is only temporary, and in the mid-first Japanese airline to establish a Narita-Vladivostok route,

to-long term, international passenger demand to and fromhowever from March 29, we postponed the start of mostJapan is forecast to grow. We are continuing to monitor otheroperations on new international routes and international

external factors that impact international passenger traffic,

routes with increased flights at both Haneda and Narita

including natural disasters, inclement weather, terrorist attacks

airports. As a result, available seat kilometers declined by 1.1%

and regional conflicts.

from the previous year, passenger traffic declined by 9.3%,

in sight. Although we have suspended flights and assigned
smaller aircraft, we will proceed with the timely resumptionof flights in accordance with recovery of passenger demand
while keeping an eye on the eventual relaxation of entry
restrictions imposed by the relevant governments. Not
knowing when these entry restrictions will be lifted, we are
currently undertaking measures to enable rebooking acrossall fares in order to provide passengers with peace of mind
when making reservations with us.
Due to the influence of the virus, it is anticipatedthat a slump in demand for international flights will
be unavoidable for the time being. However, we areconstructing an optimized network at both Haneda andNarita airports in anticipation of the recovery in demand,and are also aiming to capture passenger demand over abroad range of customer profiles through synergy achieved
with the newly established LCC, ZIPAIR. Moreover, JAL's
extensive domestic network from Haneda will be utilized inan effort to take inbound tourists to regional areas.
In 2019, a new service, JAL Bid Upgrade was started forinternational flights, using a bidding format for upgradesfrom Economy Class to Premium Economy Class.* Looking
ahead, we have plans to successively unveil other new
services accessible with payment of an additional fee toenable us to further address the various needs of ourColumnResponses to COVID-19
Rescuing stranded citizens on extra flights
The global spread of COVID-19 has resulted in
lockdown in cities, a ban on international flights,
and other measures, leaving many people stranded
overseas. To help them return to their countries, theJAL Group operated extra flights from various cities.
On extra flights between Tokyo (Haneda and Narita)
and Moscow (Sheremetyevo), we were able to assist
persons returning from Russia by switching cargoflights from London and Helsinki to passenger flights
via Moscow rather than making a simple round trip
between the two cities, while securing the necessary
revenue. The Tokyo (Narita)–Bangalore route, which
was scheduled to begin service on March 29 2020,
was postponed, but we operated three extra flights
to repatriate stranded persons from southern India.
These extra flights were used not only by Japanese
expatriates, but also by citizens of other nations, andmany returned home via Japan.
Expatriate employees of Japanese corporations wereunable to return home or were unable to assume new
posts for a prolonged period. In response, JAL acted
in concert with the local Chamber of Commerce andwith the Japan External Trade Organization (JETRO)
to operate extra flights to Guangzhou.

customers.
*For routes on which Premium Economy Class is not available, upgrades toBusiness Class are offered instead.

revenue passenger kilometers fell by 6.2%, and the load factor
was 77.1%. In addition to a decline in outbound business

International Passenger Operations

demand, a decrease in fuel surcharge revenue led to a decrease

FY2019YoY

international passenger revenue of 476.2 billion yen, a decline

476.2- 10.3%

Revenue Passengers(1,000)8,277- 9.3%

Available Seat Kilometers(MN seat km)

54,324- 1.1%

Change in International Passenger Revenue

Revenue Passenger Kilometers(MN passenger km)

41,905- 6.2%(JPY Bn)

L/F (%)

77.1%- 4.2 pts

Revenue per Passenger*1(JPY)

57,530- 1.0%

Yield*2
(JPY)

11.4

- 4.4%

Unit Revenue*3
(JPY)

8.8

- 9.3%of 10.3% from the previous year.

–54.4 (–10.3%)
Checking-in to an extra flight while observing social distancing- Net unit price (–)- Fuel surcharge (–)

530.6
-11.1

*1 Passenger revenue/Revenue passengers (RPK)*2 Passenger revenue/Revenue passenger kilometers*3 Passenger revenue/Available seat kilometers (ASK)26

in revenue per passenger from the previous year, resulting in

Passenger Revenue(JPY Bn)

The boarding gate for the first JAL flight to Vladivostok- Impact of
COVID-19 (–)
-43.3

476.2
FY2018

Revenue perpassenger

Passenger
traffic

FY201927

JAL GroupCor porate Policy

JAL REPORT 2020

History of the JAL GroupJAL Group Value Creation Process

Message fromthe President
Basic Concept on Value Creation

JAL Group
Sustainability

JAL Group's
Businesses and Strategies
Financial Strategy

Human Resources Strategy

IT and Digital Strategy

JAL Group Business Activities

Financial Data/
Cor porate Information

JAL Group Value Creation

Financial and Non-financial Highlights

Domestic Passenger Operations
External Environment of Domestic
Passenger Operations

Fiscal 2019 Results

Future Strategy

Demand for domestic flights of both business and leisure

Since the lifting on June 19, 2020 of restrictions on travel

In addition to moderate economic growth in the lead up

passengers remained strong. In peak demand periods

across prefectural borders, passenger demand hit its lowest

to the Tokyo 2020 Olympic and Paralympic Games and thesuch as Golden Week, which with the beginning of thepoint and has since been slowly recovering. However, we

continuing slump in inbound demand, the expansion of

new Reiwa era in Japan became a 10 day holiday, and theare still in the midst of efforts to restart economic activities

travel needs prompted by the rising trend of experiential

summer vacation period, flights were increased mainly on

while preventing the renewed spread of infections, and it

travel mainly among the younger generation led us toroutes between Haneda and Okinawa (Naha) and between

is expected that more time will be needed until a complete

perceive favorable market conditions for stimulating

Haneda and New Chitose to cope with robust passenger

recovery can be achieved. Given such circumstances, efforts

demand for air travel in Japan.

demand.

are being made to stimulate demand in parallel with

In addition to the increase in inbound demand, business andFrom September 1, the Airbus A350-900 installed with state-measures devised to continuously prevent the spread of

tourism demand in Japan had remained strong, centeredof-the art cabin specifications was put into service mainly

infections so that customers can board JAL flights withon flights departing from Haneda. However, with theon the Haneda-Fukuoka route, and from October 27, thepeace of mind. As an example, we have eliminatedglobal spread of COVID-19, people were asked to refrain

Boeing 787-8 was introduced mainly on the Haneda–Itami

cancellation fees for some fares to facilitate rebooking.

from traveling around Japan and we faced a marked drop

route. In addition, we improved and expanded our products

In addition to stimulation of travel demand in concert

in demand for air travel. Even so, the decrease in domestic

and services such as accepting reservations and purchaseswith the "Go To Travel" campaign being conducted by thedemand from COVID-19 is only temporary, and the forecastof domestic tickets 330 days in advance from September. As

Japanese government, new efforts are underway to identify

for Japanese domestic demand growth remains unchangeda result, despite the impact of Typhoon Hagibis in October,needs that have emerged from the COVID-19 pandemic

in the medium- to long-range.

domestic passenger revenue remained strong up until theand create new demand. For example, we are developing

Looking forward, we are striving to create further passenger

third quarter.

travel products to match lifestyles and workstyles in the

demand through new measures such as those products

However, with the spread of COVID-19 on entering the

new normal, and tapping into new demand that combinesdeveloped in line with the Tokyo 2020 Olympic andfourth quarter, beginning in February, requests from thework and leisure, such as "workation," in which work is

Paralympic Games scheduled to be held in 2021 and withJapanese government calling for self-restraint in organizing

done remotely during a vacation, and "bleisure," in which

the new normal.

events and the shutdown of major theme parks, the request

one takes a holiday while at a business trip destination.

to Tokyo citizens to stay indoors, and other factors broughtAnd, with the recovery of inbound demand, we are striving

about a dramatic drop in passenger demand. In order toto attract foreign visitors to regions across Japan, in

cope with this slump, we quickly suspended and reduced

cooperation with local governments and regional tourism

flights, and assigned smaller aircraft in March in efforts tobusinesses.

minimize the impact on profitability. As a result, available

In the area of products and services, the state-of-the-art

Domestic Passenger Operations
FY2019YoY

Passenger Revenue(JPY Bn)

514.6- 2.6%

seat kilometers rose by 0.2% over the previous year,

Airbus A350-900 has been introduced and airport terminals

passenger traffic declined by 3.1% from the previous year,

are being renovated. In particular, the domestic passenger

Revenue Passengers(1,000)33,783- 3.1%

revenue passenger kilometers fell by 2.9%, and the load

terminal at Haneda Airport has seen a renovation and

Available Seat Kilometers(MN seat km)

factor was 70.3%. Domestic passenger revenue was 514.6

reopening as a JAL SMART AIRPORT, featuring greater

36,199billion yen, a decline of 2.6% from the previous year.

convenience with the installation of a self-bag-drop system.

Revenue Passenger Kilometers(MN passenger km)

25,443+ 0.2%

Going forward, we will continue to provide customers an- 2.9%

environment where they can use our services with a sense of
security through new automated and touchless services andChange in Domestic Passenger Revenue
L/F (%)
Revenue per Passenger*1
(JPY)

70.3%

- 2.2 pts
(JPY Bn)

15,233+ 0.6%

Yield*2
(JPY)

20.2

+ 0.3%

Unit Revenue*3
(JPY)

14.2

- 2.8%

Responses to COVID-19
Touchless Services at Airports and Thorough Cabin
Disinfection
The JAL Group has undertaken various efforts toprovide safe and secure flights to all our customers.
At our airports, all ground staff wear masks.
Transparent partitions have been erected to prevent
airborne infection at counters, reception areas andbetween lounge seats that face each other. Moreover,hand sanitizers have been placed near airport counters
and in lounges, baggage claim areas, and otherlocations, and a search function to locate them has
been added to the JAL mobile application. Cleaning
activities have also been reinforced, and places likely
to be touched by customers, such as self-service checkin kiosks, strollers, wheelchairs, counters, and lounge
areas are periodically wiped with disinfectant. In somedomestic lounges, air sanitization is being performed
with chlorine dioxide sprayers.
In aircraft cabins, fresh air is constantly taken in fromoutside and circulated throughout the cabin before
being discharged outside so that all air is replaced
within approximately two to three minutes. Due tothis excellent ventilation, the cabin environment is
not conducive to infections. Other measures are also
being thoroughly implemented on board aircraft.
During overnight parking, aircraft are carefully
disinfected, and in addition to preparations to greet
customers the following day, cabin attendants always
wear masks and gloves, and also special gowns whencleaning lavatories. Moreover, disinfectant wipes are
distributed to customers, hand sanitizers are provided
in lavatories, and other measures are being taken for
the thorough prevention of the spread of infection.

enjoy personalized services that use digital technology.

–13.4 (–2.6%)- Fare pricing policy (+)- Changes in customer mix (-)

528.0

+2.9

-16.3

*1 Passenger revenue/Revenue passengers (RPK)*2 Passenger revenue/Revenue passenger kilometers*3 Passenger revenue/Available seat kilometers (ASK)- Impact of
COVID-19 (–)

514.6
FY2018

Revenue perpassenger

Passenger
traffic

FY2019The first Airbus A350 to enter service on domestic routes

28

ColumnA self-service check-in kiosk that can be used without touching the screen(undergoing trials)

29

JAL GroupCor porate Policy

JAL REPORT 2020

History of the JAL GroupJAL Group Value Creation Process

Message fromthe President
Basic Concept on Value Creation

JAL Group
Sustainability

JAL Group's
Businesses and Strategies
Financial Strategy

Human Resources Strategy

IT and Digital Strategy

JAL Group Business Activities

Financial Data/
Cor porate Information

JAL Group Value Creation

Financial and Non-financial Highlights

JAL Group Airlines
Domestic Carriers

J-AIR Co., Ltd. (J-AIR)

Lifeline Routes Leveraging JAL Group's Strengths andRegional Revitalization
The JAL Group provides route networks between regional
cities and remote islands as a community-based airline
group. We will continuously contribute to regional
revitalization by successively introducing new aircraft andproviding a highly convenient network and high-quality
services.
Japan Transocean Air Co., Ltd. (JTA)

J-AIR operates more than 30% of the JAL Group's domestic flights,

International Carriers

and performs a principal role in the Group's regional services.

ZIPAIR Tokyo Inc.

Operating Embraer 170 and Embraer 190, the latter provided withIn July 2018, a new LCC was established to provide

Class J service, J-AIR has won favor with a broad range of customers,

diversifying value desired by customers, targeting price-

Uniforms Designed to Be Easy to Work In

whether for business, leisure, homecoming or other purposes,

sensitive customers on international medium- and long-

Drawing on the concept of mixing-and-matching, newthrough its wide range of the regional network. Moreover, by

haul routes, for which future expansion is anticipated. The

uniforms were designed with combinations suited tooffering refreshments particular to each destination as part of inflight

Boeing 787 has been used on the Tokyo (Narita)–Bangkok

the tasks for the day, the weather, the wearer's moodservices, it strives to promote the charm of each region in Japan. J-AIR

route since June 3, 2020, and the Tokyo (Narita)–Seoul routeor physical condition, and other factors. Moreover,will continue to grow and develop with a step with the people ofsince September 12, 2020 (as of the end of September, bothsneakers were introduced to help alleviate fatigue.

such regions, striving to become the best-loved regional airline.

are being operated as cargo-only flights due to the spread

Our believe is that uniforms that can be combinedof COVID-19).

selectively according to the wearer's preferences, in

The name ZIPAIR draws on the English-language mimetic

the same way as everyday clothes, will motivate staff

word "zip," which expresses the swift flight of an arrow,and allow them a more personal workstyle so they

to convey the impression of an airline with flights thatcan focus on their work. This thinking is the basis forseem to zip by. The name also incorporates the concept of

introducing uniforms that achieve practicality in order"movement to various locations" found in the American

to optimize staff performance, and thereby improvephrase "zip code," as well as referencing the ".zip" digital

the service we offer customers.

Since its establishment to connect Okinawa's main island
and remote islands, JTA has worked with integrity tomaintain safe operations and aviation security. It maintains
a record of zero fatalities in the company's history. In
addition to connecting Okinawa's main island and remoteislands, JTA operates routes linking Okinawa and Haneda,

Established

August 1996

Headquarters

Osaka Pref.

Number and typesof aircraft
Number of routes
Number of
employees

18 (Embraer 170)
14 (Embraer 190)
36
724

ColumnChubu, Kansai, Komatsu, Okayama and Fukuoka respectively

Hokkaido Air System Co., Ltd. (HAC)

file format, to suggest an airline filled with creativewith a fleet of Boeing 737 aircraft. As a JAL Group airline,

HAC operates routes connecting Sapporo Okadama Airport with

innovations typical of the Japanese, aimed at meticulously

JTA offers high-quality service with a touch of Okinawa

Hakodate, Kushiro, Rishiri, and Misawa, and linking Hakodate

calculated travel experiences.

culture. JTA is also doing its part to support the regional

Airport with Okushiri. In spring 2020, the carrier began operation

economy by widely promoting Okinawa as an appealingof the ATR42-600, the successor to the SAAB 340B, with plans fordestination for tourists.

successive renewals until fiscal 2021. The ATR42-600 has a solid
Established

June 1967

Headquarters

Okinawa Pref.

Number and typeof aircraft
Number of routes
Number of
employees

13(Boeing 737-800)

12record of operation in cold regions, a spacious cabin, greatly
improved amenities, and 30% more seats. Going forward, HAC willcontinue to contribute to the further development of communities
and society in the region, providing a safe and comfortable travel

Established

July 2018

Headquarters

Chiba Pref.

Number and type of aircraft

2 (Boeing 787-8)

Number of routes

2

Number of employees

154*Data in tables as of the end of March 2020, except for the number ofroutes, which are as of the end of September 2020.

experience and new value and inspiration.

798

Japan Air Commuter Co., Ltd. (JAC)
JAC routes are being expanded, primarily to remote islands
in Kagoshima Prefecture, such as the Amami Islands. In
February 2020, the SAAB 340B, in service for 27 years, was

ZIPAIR uniforms

Established

September 1997

Cabin Features

Headquarters

Hokkaido Pref.

Two types of seats are installed, the premium ZIP Full-

Number and typesof aircraft
Number of routes
Number of
employees

3 (SAAB340B)
1 (ATR 42-600)
5Flat seats and Standard seats. ZIP Full-Flat seats areequipped with a 180-degree reclining function andare designed to emphasize privacy. The seats, which82

also feature a reading light and electric charging

retired, thereby completing a transition to all-ATR aircraft.

Ryukyu Air Commuter Co., Ltd. (RAC)

facility, allow passengers to stretch out as though on

In addition to steadily advancing a cooperative project

RAC operates routes connecting Okinawa's remote islands using

their sofa at home. While Standard seats are not

to share aviation technologies with other companies, in

DHC8-400CC aircraft and strives for safe operations each day as

October 2019 we established Essential Air Service Alliancea trusted airline that contributes to customers and communities

LLP, the first such endeavor in the aviation industry, with

with staff that take pride in connecting the thriving islands. The

the cooperation of other carriers. Through efforts aimed

carrier will continue operations that have been accident-free sinceat maintaining operations on the lifeline routes of remote

its founding, as all employees join together to protect their social

islands, JAC will continue to grow and develop together

mission and role of supporting the lifeline routes of the Okinawa

with local communities, aiming to become a valued andislands. Hewing to the catchphrase, "the islands are linked by thetrusted airline of the region.

sky," RAC will strive to provide safety and peace of mind to its
Established

July 1983
Headquarters Kagoshima Pref.
2 (SAAB340B)
Number and types
7 (ATR42-600)
of aircraft
2 (ATR72-600)
Number of routes
19
Number of389
employees

customers.

Inaugural flight on the Bangkok route

Preparations are underway for the inauguration of flights

equipped with an entertainment monitor, they havea power socket and tablet holder for the passenger touse his or her own smartphone or tablet in comfort.

on Hawaii and North America routes from Narita Airport,
where development is in progress. ZIPAIR will provide
values different from those of full-service carriers in the JAL
Group, and will cater to the diversifying needs of customers.
It will play an important role in the JAL Group network,
while contributing to an increase in overseas tourists, with a

Established

December 1985

Headquarters

Okinawa Pref.

Number and typeof aircraft
Number of routes
Number of
employees

target of 60 million visitors in fiscal 2030.

5(DHC8-400CC)

12132

A ZIP Full-Flat seat

*Data in tables as of the end of March 2020. Numbers and types of aircraft include aircraft scheduled to be retired30

31

JAL GroupCor porate Policy

JAL REPORT 2020

History of the JAL Group

Cargo and Mail Operations
Review of Fiscal 2019

Future Strategy

Message fromthe President

JAL Group Value Creation Process

Basic Concept on Value Creation

JAL Group
Sustainability

JAL Group's
Businesses and Strategies
Financial Strategy

Human Resources Strategy

IT and Digital Strategy

JAL Group Business Activities

Financial Data/
Cor porate Information

JAL Group Value Creation

Airline Businesses

Other Businesses

Contracted service domain

JALPAK Co., Ltd.

Financial and Non-financial Highlights

In the past several years, with increases in the number of foreign

Efforts were made to strengthen dynamic package purchases andContinuing from our work in 2018, we have been endeavoring to maximize

In international cargo operations, in addition to the JAL passenger flightvisitors to Japan, there has been a wave of foreign carriers

to initiate joint business with Rakuten Inc., but owing to a slump

cargo business profitability, increase the value of transport services, andnetwork, we are forming partnerships with other carriers at the same

entering the Japanese market and operating flights to ruralin package tours, the number of overseas travelers handled in

expand into new business domains.

time as providing a stable cargo transport network that meets demand.

regions. The JAL Group supports growth in inbound demand,

fiscal 2019 was 183,202, a decline of 18% from the previous

In international cargo operations, due to trade friction between the U.S.

With the spread of COVID-19, transport services that are even safer andand in order to build a business portfolio that does not depend

year. The number of domestic travelers was 2,606,388, a 4%

and China, the worldwide demand for air freight has declined. However,provide an even greater sense of security are being sought. In response

excessively on air transport businesses (international passenger,

year-over-year decline, in spite of efforts to strengthen dynamic

coordination with overseas carriers owning freighters has been

to such mounting needs, we are improving services at airports, whichdomestic passenger, cargo and mail) on its own network, haspackage price competitiveness and reinforce the supply systemstrengthened, and in August, codeshare with U.S. Kalitta Air for scheduled

include preparing cold storage facilities to enable transport with moreestablished a system to provide foreign carriers with services suchthrough establishment of new business locations. As a result,cargo flights began. From October, we increased capacity by using space

rigorous temperature control, and the expansion of the logistics businessas airport handling, aircraft maintenance, and cargo handling

operating revenue was 2.021 billion yen, a decline of 15.5% fromon China Cargo Airlines, expanded our network, actively captured demand

to support e-commerce, for which speed is at a premium. Moreover, inusing the knowhow on operations accumulated over the years.

the previous year. In fiscal 2020, due to the effect of COVID-19,

for air cargo transport from Asia to North America through Japan, andexisting business domains such as the airport warehouse business, greater

Due to the spread of COVID-19 from early 2020 onward, flights

declines in profitability are expected for all businesses, but

responded to a broad range of customer needs.

efficiency and reduced manpower are being promoted through theby foreign carriers decreased considerably from the previous

through extensive reduction of selling, general and administrative

In domestic cargo operations, demand has dropped due to poor catches

introduction of technology, and efforts are being made to create new

fiscal year, but signs of recovery by European and American

expenses, a review of operations, and re-allocation of humanor bad harvests of perishables owing to inclement weather, but as part ofair cargo demand not only through more extensive physical distribution

carriers are evident, mainly at airports in the Tokyo metropolitan

resources, efforts are being made to maintain productivity andefforts to create new cargo demand, cargo pickup points for agriculturalactivities, but also by promoting overseas exports of local products, whilearea. Going forward, as countries remove entry restrictions andbuild a flexible system while demand recovers. In addition,

products were established at New Chitose Airport and Asahikawa Airport

entering into the domain of product distribution channels.

Japan prepares a system to accept travelers, it is anticipated

JALPAK is working to provide safe and secure travel and achieve

in coordination with Nousouken Corporation. By having producers deliver

As for domestic cargo operations, in April 2020 we reformed businessthat progress toward recovery, albeit gradual, will steadily

its important strategic goals; stronger sales of dynamic packages,

farm products directly to airports, the lead time from harvest to shipment

processes in which cargo information and handling had until then been

be made. The JAL Group, with its record of high quality, will

restructuring of a business model for overseas travel, adapting

was greatly reduced, and by creating a physical distribution network thatmanaged using printed materials, introducing paperless air waybills forrespond reliably to the requests of foreign carriers to support theto digital marketing for the domestic travel business, community

exploits the strengths of air freight, we were able to transport products

the first time in Japan. Moreover, we established reservation portal sites,

recovery of inbound demand, contributing to the revitalization

relations and increasing corporate value, and health andwith their freshness intact.

to improve the customers' convenience for reservations and transport.

of regional economies.

productivity management,

With respect to new business domains, we established JAL Hongyuan Co.,In the future, we will continue to introduce technology and increase the(Service contracts as of January

in an effort to contribute toLtd. with the objective of building product distribution channels between

number of channels we have with customers to help create new demand

2020: In 29 airports in Japan: 23

regional revitalization andJapanese firms and Chinese companies that operate e-commerce websites,

for air cargo.

countries; 52 carriers, approx.

the early recovery of the

8,500 flights monthly)Japanese economy.

as part of the rapidly growing trans-border e-commerce business fromJapan to China. Moreover, with an eye on regional vitalization and future
expansion of air freight, we held demonstration tests for unmanned

ColumnAirport handling of foreign carriers

Overview of JALPAK Co., Ltd.

helicopters to transport cargo between airports in remote islands, the first

Responses to COVID-19

such tests in Japan.

Transporting goods in passenger cabins and

JAL Business Aviation Co., Ltd.

As a result of these efforts, international cargo and mail revenue was 67.3

operating cargo only flights

In January 2019, in response to the increasing demandbillion yen, a decline of 10% from the previous year, transported tonnage was

In order to transport as much medical equipment as possible,

for business jets in Japan, JAL Business Aviation Co., Ltd.

425,000 tons, domestic cargo and mail revenue was 24.3 billion yen, a decline

including urgently needed goods such as masks, protective gear

was founded as a joint venture together with Marubeni

of 4% from the previous year, and transported tonnage was 385,000 tons.

and medical items for treating COVID-19, we loaded passenger

Corporation based on the three pillars of business jet

cabins with masks and protective gear, on satisfying safety andcharters, management of aircraft for owners, and operations

security requirements. Passenger aircraft were operated as cargo-

support and ground handling. Based on knowhow andonly flights, using cargo space to transport both international andbranding cultivated in the airline business, and drawing on

JALCARD., Inc.

domestic cargo. In this way, there has been continuous transport

the marketing ability and industry knowledge of a trading

In fiscal 2019, in addition to intensified efforts to increaseof parcels for home delivery, demand for which has increased ascompany, the company provides handling services for

new online enrollments and aided by moves toward cashlesspeople stay indoors, as well as daily essentials such as medical

business jets and, as a further option for traveling, business

transactions by the public and private sectors, the number

supplies and food. As a result, we were able to improve profitability

jet charter services, thereby maximizing the time value ofof members rose to 3.72 million, an increase of 3.9% overwhile fulfilling our role as transportation infrastructure.

customers, and further contributing to the vitalization of

the previous year. Boosting usage through measures on

the Japanese economy.

social media using the keywords "mile-trips" and "mile-

Changes in International Cargo and Mail Revenue(JPY Bn)-7.3（-10％）
74.6
-3.7

-3.6

67.3

FY2018FY2019YoY (%)

Overseas travelers handled(tens of thousands)

22.2

18.3

-17.8

Domestic travelers handled(tens of thousands)

271.8

260.6

-4.1

Operating revenue (JPY Bn)(before elimination of
consolidated transactions)

182.0

169.6

-6.9

meals," the company introduced an automated readout
FY2018

Unit Price

Weightsystem and chatbot for membership applications to improve

FY2019customer convenience and productivity.

Changes in Domestic Cargo and Mail Revenue

These efforts met with success, and while there was asurge in demand before the rise in sales tax in October-1.1（-4％）(JPY Bn)
25.4

followed by a downward rebound, the volume of

+0.1
-1.2

24.3

Weight

FY2019transactions up to the third quarter was generally solid
compared with the previous year. However, in the fourth

FY2018

Unit Price

Loading medical supplies into the cabinquarter the effect of COVID-19 was felt, and card usage
Example of a business jet available for charter use

32

33

JAL GroupCor porate Policy

JAL REPORT 2020

History of the JAL GroupJAL Group Value Creation Process

JAL Payment Port Co., Ltd.

and restaurants. Moreover, the effect on general

JAL Payment Port Co., Ltd., established in September 2017,consumption trends increased and became a factor inhas been developing a JAL Global WALLET service as a fintech

reduced revenue. As a result of these trends, operating

business in partnership with the SBI Group since November

revenue was 20.1 billion yen, an increase of 3.4% over2018.

the previous year.

JAL Global WALLET is a prepaid card with currency-conversion

Entering fiscal 2020, the business environment isfunctions. In addition to use at stores in Japan and stores andbecoming increasingly harsh, however JALCARD is making

ATMs overseas, the product can be used to convert Japaneseefforts to flexibly accommodate both the environment

yen into 14 different currencies and earn JAL miles. It is now

and changes in customer needs, and lay the groundwork

being used by approximately 200,000 customers.

for recovery in demand.

In April 2020, a JAL NEOBANK service was started exclusively

FY2018
Memberships(tens of thousands)
Operating revenue (JPY Bn)(before elimination of
consolidated transactions)

357.9

FY2019YoY (%)

372.0

+3.9

20.1

+3.4

everyday life in collaboration with partner companies. It uses adigital marketing strategy to better understand personal interestsand preferences and promote closer relationships between themembers, partner companies and JAL Group at touchpoints overwebsites and mobile applications.
Services began at the end of October 2019, and 50,000
customers were welcomed as members. In the future,
while expanding membership and the number of partnercompanies, JAL Digital Experience will strive to offer better
proposals, drawing on JAL Group's knowhow and services,and new proposals based on member feedback to meet thechallenge of evolving into a business that can further enrich

JAL is an official airline partner of the Olympic and Paralympic

On March 20, 2020, JAL and ANA cooperated as Tokyo 2020

Games Tokyo 2020 (Tokyo 2020). The Tokyo 2020 Games are theOlympic Torch Relay Supporting Partners to transport thefirst Games in history to be postponed, however preparations areTokyo 2020 Olympic Sacred Flame (flame) from Athens tounderway for the Games to be held in 2021 as a celebration thatJapan by special transport aboard "Tokyo 2020 Go" (a Boeing

underlines solidarity and cooperation to a degree never before

787-8 aircraft). The flame, which was lit at the Temple of Hera

seen, and as proof of the world's recovery and rejuvenation.*1

in the city of Olympia in Greece, was firmly immobilized in a

Miyagi Prefecture.
In this way, it washeld in 2021 is the provision of an environment that affords safety

transported safely

and a sense of security for all persons, beginning with the athletes

under the watchfuland the spectators. JAL, as an official airline partner of the Games,

eyes of staff who

will undertake as its mission to ensure that persons around the

had undergone

world, and everyone throughout Japan, can feel secure when

special training tothey travel to Tokyo, aiming at providing safety and a sense ofprovide against

security whenever people travel by plane. Through the successaccidents.

of Tokyo 2020, JAL will make full use of the network it has built,

The flame was successfully carried from Greece to Japan

connecting people to people, places to places, and the past to thethrough the efforts and cooperation of many different personspresent and to the future, to contribute to the revitalization not

in relevant government offices and organizations, and remains

JAL Agriport Co., Ltd.

only of Tokyo and distressed areas, but of regions throughout

burning while a new start to the Games is awaited. At airports,

Since the founding of JAL Agriport Co., Ltd. in April 2018, theJapan.

within planes, on the JAL website, via social media, and inmoney using a dedicated mobiletransfers to the JAL Global

2

strawberry picking, and Dining Port Goryokaku, a restaurant
in an old renovated Japanese-style house, both in a suburban
area near Narita Airport. The company makes the most of its
location close to the airport, and in addition to residents of
the area, its facilities are visited by both Japanese and foreign
guests who are using Narita Airport. It also developed andsells as a private brand its original Tsurusora sweet potatoshochu liquor, which is offered in international Business Class*1 Positioning, principles and roadmap to the Games following postponement(Website of the Tokyo Organising Committee of the Olympic andParalympic Games)WEB

https://tokyo2020.org/en/news/positioning-principles-androadmap-to-the-games-following-postponement*2 Tokyo 2020 Games Vision(Website of the Tokyo Organising Committee of the Olympic andParalympic Games)WEB

our customers to convey throughout Japan the magnificenceof the Tokyo 2020 Games and the Tokyo 2020 Olympic Torch
Relay, contributing to realization of the concept "Hope Lights
Our Way"*4 of the Tokyo 2020 Olympic Torch Relay.
*4 Tokyo 2020 Olympic Torch Relay Concept(Website of the Tokyo Organising Committee of the Olympic andParalympic Games)WEB

https://tokyo2020.org/en/torch/https://tokyo2020.org/en/games/games-vision/

service and available for purchase in inflight shopping, andhas earned praise from customers. JAL Agriport will continue
efforts to develop and sell privately branded products that

*3 "Fly for it!" specially prepared website
WEB

https://www.flyforit.jp/en/

use the agricultural produce of the region while utilizing
JAL Group brands and touchpoints, thus contributing to thedevelopment of the regional economy.
JAL and ANA staff
at the ceremonymarking thedeparture of"Tokyo 2020 Go""Tokyo 2020 Go"
upon arrival at the
Matsushima Base of
the Japan Air SelfDefense Force

Strawberry picking at Strawberry Port Ichigonomi

34

Photo from Tokyo 2020

other ways as well, we have used our points of contact withcompany has opened Strawberry Port Ichigonomi, a facility forthe lives of all members.

The Class Explorer logo

As a Tokyo 2020 Olympic Torch Relay
Supporting Partner

The issue with the highest priority in the Tokyo 2020 Games being

to earn miles for banking transactions, such as depositing

JAL Digital Experience Co., Ltd.

company creates ideas not only limited to air transport but also

As an Official Airline Partner of the Olympic
and Paralympic Games Tokyo 2020

the Matsushima Base of the Japan Air Self-Defense Force infor customers.

Mileage Bank members based on AI-based data extraction. The

Financial and Non-financial Highlights

and our future."*3

SBI Sumishin Net Bank, Ltd. The service not only allows users

offered to improve conveniencea keen interest in travel and new experiences from among JAL

JAL Group Value Creation

the sacred flame burns to a seat until the aircraft landed atfurther expand the functions

which invites customers with vigorous consumption habits and

JAL Group Business Activities

2020 Games Vision of "Sport has the power to change the world

the future JAL Payment Port will

February 2019, manages a member organization, Class Explorer,

IT and Digital Strategy

specially fabricated torch cradle to fasten the lantern in which

WALLET from bank accounts. In

JAL Digital Experience Co., Ltd., which was established in

Human Resources Strategy

JAL, with the slogan "Fly for it!,"* is engaged in various efforts toapplication, it also enables
19.4

Financial Strategy

Financial Data/
Cor porate Information

ensure the success of the Games in 2021 and to realize the Tokyo

for JAL Mileage Bank members, acting as a banking agent for

Overview of JALCARD., Inc.

Basic Concept on Value Creation

JAL Group
Sustainability

JAL Group's
Businesses and Strategies

Toward Tokyo 2020 and Beyond

Topicdropped dramatically, particularly for air travel, vacations

Message fromthe President"Everyone's JAL 2020 Jet" No. 1, a jet with special livery

35

JAL GroupCor porate Policy

JAL REPORT 2020

History of the JAL GroupJAL Group Value Creation Process

Message fromthe President
Basic Concept on Value Creation

JAL Group
Sustainability

JAL Group's
Businesses and Strategies
Financial Strategy

Human Resources Strategy

IT and Digital Strategy

JAL Group Business Activities

Financial Data/
Cor porate Information

JAL Group Value Creation

Financial and Non-financial Highlights

JAL Group Value Creation
Safety and a Sense of Security
Review of Fiscal 2019

Specific Initiatives
We strive to deliver enhanced safety and a sense of security

Improvement Order regarding alcohol-related incidents. As an

through the elimination of safety risks caused by alcohol

air transport operator, we are taking this extremely seriously andconsumption, promotion of measures to prevent parts

deeply regret to have received two such orders in a short period,

departing from aircraft,*4 and efforts to ensure a sense of

causing significant damage to the trust of our customers and society.

security for every customer.

Management and staff together are striving to restore this damaged

In addition, we consistently operate the Security Management

trust by rebuilding our safety systems and implementing updated

System introduced throughout the JAL Group and will takeprevention measures against recurrence.

all the necessary steps in preparation for the Olympic and

The JAL Group sets yearly fiscal targets related to safety based on

Paralympic Games Tokyo 2020 (postponed to 2021).

the JAL Group Medium Term Management Plan for Fiscal Years*4 Since July 2020 the confirmed loss of an aircraft part has been referred to as in-flightpart loss, and an aircraft part or ice block that has fallen off an aircraft and been
discovered on the ground has been referred to as an part departing from aircraft.

targets of zero aircraft accidents and zero serious incidents, one
aircraft accident* and three serious incidents* occurred during that12

period. We sincerely apologize once again to those affected for any
inconvenience or concerns caused. The Japan Transport Safety Boardof the Ministry of Land, Infrastructure, Transport and Tourism has
been mandated with the investigation to clarify their causes. The
JAL Group will fully cooperate with the investigating agency andtake the necessary measures.
*1 A situation arising from the operation of an aircraft and resulting in fatalor serious injury, an aircraft crash, collision, or fire, damage to the aircraft
during flight requiring major repair, or other situation classified as an aircraft
accident by the Ministry of Land, Infrastructure, Transport and Tourism.
*2 An incident not amounting to an aircraft accident, but where a recognized dangerof an accident occurring was present, such as runway excursion, an emergency
evacuation or similar incident, fire or smoke on board, abnormal decompression,
encounter with abnormal weather conditions, or other situation classified as aserious incident by the Ministry of Land, Infrastructure, Transport and Tourism.
Aircraftaccident

October 12, 2019
A cabin attendant was injured due to turbulence on Japan Air
Commuter Flight 3763
July 21, 2019Japan Transocean Air Flight 212 experiences runway incursion at
landing*3

Seriousincidents

October 3, 2019Japan Airlines Flight 2163 experiences runway incursion at landing*3
January 8, 2020
Runway excursion of Japan Air Commuter Flight 3830

Eliminating safety risks caused by alcohol consumption
We regard drinking as a safety issue and will eliminate
behavior that affects flight safety caused by alcohol
consumption. Specifically, we will eliminate the effects ofdrinking on safety by implementing alcohol consumption
measures, monitoring the situation through internal audits,and raising awareness among allthat passengers can board with peace of mind.
For details on aircraft accidents and serious incidents please refer
to our JAL Group Safety Report.
JAL Group Safety Report

employees. In addition, we rigorously
enforce safety procedures such as
alcohol tests and third-party checks offitness to commence work.
Alcohol testing before flight

Promoting measures to prevent the parts departing from aircraft
With the enhancements to the functionality of our operations inTokyo metropolitan airports, flight routes traversing the innercity have been brought into operation. In response, we havebeen strengthening measures to prevent parts departing fromaircraft by evaluating the relevant risks of each type of part and bycomprehensively implementing countermeasures for all aircraft types.

and Tourism. The airlines will consider the measures necessary

External Evaluations

to address the recommendations made by the evaluators.

The JAL Group strives to maintain and improve safety by
utilizing the results of audits and evaluations conducted bythird parties.

Providing peace of mind to every customer
In addition to flight safety, we strive to protect customers frominjury and to prevent the interference of unruly passengers, andaddress a wide range of safety issues with a view to restoringcustomer trust and providing peace of mind. We will also use safety
management methods to help resolve issues such as quality control.

Publication of Safety Reports by Domestic Air Carriers). The

By systematically analyzing, evaluating, and managing security

report presents safety initiatives and other relevant datarisks, we maintain high safety levels across the entire JALon six JAL Group airlines in a readily accessible manner.

Group. In fiscal 2020, in addition to monitoring and improving
strengthen the collection, analysis, and utilization of external
company security-related information with a view to reinforcing

In the Fiscal 2019 Safety Management System Status
Checklist, Japan Airlines, J-AIR, Ryukyu Air Commuter,and Hokkaido Air System reported on the status of top
management and safety manager, who are the key persons
in efforts to ensure safety, and on matters such as the status

IATA Operational Safety Audit (IOSA)
Japan Airlines, Japan Transocean Air and J-AIR wereaudited for IOSA renewal in February 2020, and in June
2020 received new certifications from the International Air
Transport Association (IATA).

of yearly initiatives to improve safety management system.
*6 The Secretariat of the Minister of Land, Infrastructure, Transport andTourism evaluates the operational status of safety management systems,
identifies areas for improvement, and issues advice regarding all modesof transportation (aviation, railroad, maritime and road) across the entire
Company.

IOSA is an international safety audit program to ensurethat an airline's safety management system is functioning

Columneffectively. IATA member airlines must take the IOSA audit
every two years. Non-

Renewing our inflight safety video

member airlines can

As part of the restoration efforts surrounding safety

take the examination

and a sense of security, in September 2019 the JAL

voluntarily.

Group renewed its inflight safety video for domestic
and international flights. This new video incorporates
the lessons learned from recent global aircraft
accidents and advice from the Safety Advisory Groupto help passengers ensure safer air travel.

Transocean Air since 2010,

This video demonstrates in specific detail theand J-AIR since 2016. The

potential risks that arise from inappropriate behavior,next renewal audit ispromoting appreciation of the purpose and raisingscheduled for February

awareness of the necessity of compliance with

2022.
IOSA Certificate (JAL)prescribed conduct. To this end, for each perilous
scene in an assumed emergency, the video draws amore realistic image than conventional inflight safety

JCAB On-site Safety Audit
In fiscal 2019, JAL Group airlines underwent a combined total

videos. In line with the growing number of foreignof 81 safety audits and on-site audits* by the Civil Aviation

tourists visiting Japan, the new video supports 11

Bureau of the Ministry of Land, Infrastructure, Transport

foreign languages in addition to Japanese and English.

5

our security management system through audits, we strive to36

Safety Management Evaluation*6 conducted by thesince 2004, Japan

Reliable operation of the Security Management System

https://www.jal.com/ja/flight/report/

Air and Japan Air Commuter underwent a Transportation

through upgrades of our security check equipment.

certification continuously

accordance with the Civil Aeronautics Act (Article 111-6:

WEB

In fiscal 2019, among the Group's airlines, Japan Transocean

to 2021) in cooperation with the Japanese government andbeen accredited IOSAThe JAL Group Safety Report is published yearly in

The JAL Group Safety Report can be downloaded from the following URL (inJapanese only).

the Tokyo 2020 Olympic and Paralympic Games (postponed

Japan Airlines has*3 At present no issues implicating JAL Group have been identified.

The JAL Group proactively discloses safety-related information so

Transportation Safety Management Assessment

Secretariat of the Minister of Land, Infrastructure, Transport

In December 2018 and October 2019, JAL received a Business2017-2020. In fiscal 2019, although we were aiming at numerical

addition, we are taking all necessary steps in preparation for

and Tourism. Concerning matters identified in audits as
inappropriate or recommended for improvement, we analyze
their respective main causes, consider countermeasures, andtake corrective action such as the following.
• Appropriate description of entrusted companies in Regulationsof Management of Entrusted Company• Appropriate approval of entrusted companies operatingprocedures• Appropriate reporting of emergency response-exercises*5 The Civil Aviation Bureau of the Ministry of Land, Infrastructure,
Transport and Tourism accesses airlines' Head Office departments,
flight operations and maintenance bases, and training facility, etc.,
and conducts inspections of the status of safety management systems
formation and the status of operations implementation at eachdepartment such as flight operation and maintenance.

Slide damaged by baggage or high heels

Inflight safety video
WEB

https://www.youtube.com/embed/oW8ciB731n0

security management systems across the entire group. In

37

JAL GroupCor porate Policy

JAL REPORT 2020

History of the JAL Group

Message fromthe President

JAL Group Value Creation Process

Basic Concept on Value Creation

JAL Group
Sustainability

JAL Group's
Businesses and Strategies
Financial Strategy

Human Resources Strategy

IT and Digital Strategy

JAL Group Business Activities

Financial Data/
Cor porate Information

JAL Group Value Creation

Financial and Non-financial Highlights

Customer Satisfaction
Review of Fiscal 2019

Boeing 787 aircraft into operation on domestic flights. Again,

on airport facilities, and airport access information.

Seats at the World Airline Awards 2019. In addition, at thelike the Airbus A350, all seats in all classes will be equipped

Additionally, enhanced flight information of reserved flights

Travelers' Choice™ World's Top 10 Airlines 2020 Awards,

with power and USB power sources, a personal monitor, andand boarding gate notifications make for an even smootherhosted by the world's largest travel site in Tripadvisor®,

complimentary inflight Wi-Fi service. Meanwhile, Hokkaido

boarding experience.

we were chosen as Japan's Best Airline for the fourth

Air System has put into service the state-of-the-art ATR42-

Furthermore, with its

consecutive year. Finally, in the survey of international

600, manufactured by ATR of the Airbus Group, and hasrenovations completed

airline satisfaction conducted by Recruit Lifestyle Co., Ltd.'s

increased seat availability. Cabin space is now even roomierin September 2020, theoverseas travel research institute, the AB-Road Researchthan before, and LED lighting affords a bright and spacious

Haneda Airport Domestic

Center, we received the highest rank in a total of fouratmosphere.

Terminal reopened as

categories; overall satisfaction, service by cabin attendants

For our international flights, the Boeing 777-300ER wasa JAL SMART AIRPORT,

and aircraft equipment and amenities, among various otherintroduced in August 2019, offering full-color LED cabinwith a self-service

awards.

Beginning in fiscal 2017, we have been sharing customer

lighting that creates a relaxing environment, with optimal

baggage drop system

feedback within the Group and using it to improve ourillumination that is always appropriate for the scenario. In

and self-service check-products and services with NPS (Net Promoter Score,

addition, the end of May 2020 saw the completion of thein kiosks, removing theindicating the customers' willingness to recommend atransition to high-speed inflight Wi-Fi, further enhancing

need to visit a service

particular service to others) as a KPI. Although we set an

cabin comfort.

counter when checking

increase of 5.3 points for domestic flights and 4.5 points

On the ground, airport lounges have been renovated andin and providing

for international flights over the beginning of fiscal 2017

expanded to provide greater comfort prior to departure.

enhanced convenience.

as targets to be achieved by fiscal 2020, we were able toSpecifically, in April 2019 the international JAL First Classsignificantly surpass these initial target values ahead ofLounge at Narita Airport was renovated, in August theschedule in fiscal 2019 owing to improvements in comfort,

Sakura Lounge THE DINING was expanded, and in OctoberOn-time operations

convenience and on-time operations.

the JAL First Class Lounge JAL's SALON was renovated andOne basic factor of quality for public transport operators

reopened. At Haneda Airport, the international First Class

is on-time operations with safety as top priority. We have

Lounge was reopened on March 29, 2020.

made a commitment to our customers and to society to

The JAL Group, in aiming to be the world's most preferredand valued airline, attaches the highest value to customer
feedback and is constantly working on the development andenhancement of its products and services. In fiscal 2019, in orderto improve comfort, convenience, and on-time operations, we
implemented various initiatives such as introducing new aircraft
and equipment, and renovating airport lounges.
Pursuing customer satisfaction as KPIFiscal 2019 NPS Results
Customersatisfaction

NPS

Achieve the world's
top customer
satisfaction
by FY2020

FY2017Comparison
with initialscoresA

Gates have been installed with the ability
to read QR codes from mobile devices, etc.

7.6 point improvement

deliver our passengers safely to their destinations. To

on domestic flights

this end, many of our departments, such as reservations,

8.2

airports, cargo, maintenance, flight operations, cabinAnpoint improvement
on international flights

Specific Initiatives
The JAL Group has identified the comfort of customers'
surroundings, the pursuit of convenience through IT anddigitalization, and on-time operations to the customers'
destinations as the three main values contributing to raising

The interior of the Airbus A350, designed in pursuit of comfort

customer satisfaction. Consequently, we have been engaged

Improving conveniencein a wide range of efforts to enhance these values.

Utilizing IT and digitalization, we have worked to enhanceplanning departments, are working to ensure smoothWith the spread of COVID-19, the external environment

communication and cooperation.

of the JAL Group and the products and services that our

In 2019, with the understanding and cooperation of ourcustomers desire have changed significantly. Currently,

customers, we strengthened our efforts towards on-time

to ensure that our customers can use our services with aoperations, entailing reviews of boarding times for somesense of security, we are taking proactive countermeasuresaircraft, as well as changes to the cut-off times at domestic

against infectious diseases, such as disinfecting parked

security checkpoints. As a result, we were recognized andaircraft overnight, distributing disinfectant wipes in aircraft

highly praised by Cirium, a company that analyzes on-timecabins, and installing hand sanitizers in lavatories. Looking

performance of airlines and other indicators, ranking fourthforward, in addition to current improvements in comfort,in the Mainline Airline category in the Asia-Pacific region,

convenience, and on-time operations, we will offer products

and third in the Network category.

and services tailored to the requirements of the New Normal*Cirium: On-Time Performance 2019to ensure that all customers can use our services with asense of security. These will include enhanced hygiene andthe convenience of making reservations, navigating

38

Future Strategy

attendants, sales, support divisions and Head Officecleanliness measures, expanded automation through the use

Improving comfort

our airports and using our mobile apps. Extending the

In September 2019, we introduced the state-of-the-art

reservation and purchasing periods for airline tickets to 330

Airbus A350 to our domestic routes so that our passengers

days prior to boarding, thereby enabling early reservations,

may enjoy their time on board to the fullest, even on

has made planning more convenient for customers

In 2019, for the second consecutive year, we achieved theshort flights. Its cabin ambience features comfortable air

returning from or planning travel.

top 5-Star rating in the World Airlines Star Rating, an airline

pressure and humidity comparable to those at groundIn addition, as part of our efforts to realize timely andquality ranking program introduced by the International

level, while newly-developed engines make for a quieter

personal communication, we have significantly upgraded

air transport rating organisation, Skytrax. Inaddition, ourinflight experience. Furthermore, all seats are equippedthe design and features of the JAL mobile app. From

overall Economy Class service was rated the world's best,with a personal monitor, and power and USB power sources

before boarding until after arrival, passengers using themaking us the first Japanese airline to receive the award.

to provide a relaxing, entertaining, and convenient cabin

new app can bring up useful information about travel

Our Economy Class seats were also recognized as the best ininterior. In addition, beginning in October, we will bring theand transportation such as local climate data, information

the world, being chosen for the Best Economy Class Airline

External Evaluationof IT and digitization, and touchless interface solutions. In
addition, we will enhance the ability of employees to think
and act autonomously and actively utilize IT and digitizationin human services to provide services that meet the needs ofevery customer.
The JAL Group will continue to create value for society by
improving customer satisfaction, with the aim of becoming
the world's most preferred and valued airline.

39JAL GroupCor porate Policy

JAL REPORT 2020

History of the JAL Group

Message fromthe President

JAL Group Value Creation Process

Basic Concept on Value Creation

JAL Group
Sustainability

JAL Group's
Businesses and Strategies
Financial Strategy

Human Resources Strategy

IT and Digital Strategy

JAL Group Business Activities

Financial Data/
Cor porate Information

JAL Group Value Creation

Financial and Non-financial Highlights

Financial and Non-financial Highlights
Financial Data (As of March 31, 2020)
Total return ratio*3■ Operating profit ■ Operating profit before depreciation method change*1■ Net profit attributable to owners of parent
Operating profit margin (%)
Operating profit margin (%) before depreciation method change

5.1 %ROIC (%)

ROIC (%) before depreciation method change

72.8 %■ Net profit attributable to owners of parent■ Total dividends■ Share repurchase
Payout ratio (%)*5
Total return ratio (%)
174.4

11.8%

209.1
174.5
174.4 170.3
164.1
135.4

135.4

14.0%

176.1

10.7%

150.8

47.7%

10.1%

25.0%

(5.5%)
5.1%

53.4

2015

2016

2017

2018

2019 (FY)

2015

2016

2017

2018

2019 (FY)

29.4%

32.3%
53.4

2015

2016

2017

2018

2019 (FY)We determined that our top priority was to secure liquidity on
hand in preparation for the prolonged impact of the spreadof COVID-19. Therefore, we decided not to pay year-end
dividends for fiscal 2019. (Annual dividend per share for fiscal
2019 was 55 yen, which was already paid as interim dividend.)

ROE*6

Shareholders' equity ratio

Free cash flow*8

ROE (%)
ROA*7 (%)
ROA (%) before depreciation method change■ Shareholders' equity

53.4%

21.5%

18.1%

56.2%

972.0
13.3%

Shareholder's equity ratio (%)

57.2%
1,060.3

57.4%
1,165.1

58.9%
1,094.8

13.7%
10.3%

2015

2016

9.7%

2017

9.1%

2018

2019 (FY)EBITDAR margin*9

18.4 %
24.0%

2015

22.2%

22.1%

21.5%

286.2

305.4

320.1

2016

2017

101.3

312.3

2015

2016

2017

2018

2019 (FY)

2015

2016

2017

2018

260.2

2018

2019 (FY)

To date, we have maintained high profitability and steadily
built a strong and sound financial base. Based on this solid
foundation, we will make joint efforts throughout theGroup to overcome this unprecedented crisis.

Domestic

International

80.6%+7.6 pts

83.0%

2015

2016

2017

2018

2019 (FY)

79

73

65

60

83

+2.0 pts +2.2 pts

0

2015

2016

2017

2019 (FY)

2018

0 pts
0 pts

+1.7 pts

2017

2017

Score at startof ﬁscal year

+1.3 pts

2019 (FY)2018

During fiscal 2019, the COVID-19 pandemic led
to a dramatic drop in demand. Due to this andother factors, CO2 emissions decreased 240,000
tons year-on-year. CO2 emissions per revenue
ton kilometer, on the other hand, rose by 2.4%,
making for a 17.0% reduction overall.

The JAL Group is continuing to renew fleet to fuelefficient aircraft such as the Airbus A350 and the
Boeing 787, which produce 15-25% fewer CO2
emissions than previous aircraft. The JAL Group will
carry on systematically changing to newer aircraft
to reduce our impact on the environment.

In order to deliver unparalleled service to ourcustomers, beginning in fiscal 2017, we have been
sharing customer feedback within the Group and using
it to improve our products and services with NPS (Net
Promoter Score, indicating the customers' willingness
to recommend a particular service to others).

Ratio of female managers

Ratio of disablities*1

Monthly average overtime and rest
day work hours per employee■ Female managers

15.6%

799

Ratio of female managers

16.3% 16.3%

846

853

16.8%

882

■ Monthly average overtime and rest day work hours per employee
Ratio of annual paid leave applicants

Ratio of disablities

18.4%

983
2.56%

2.69%

2.69%

85.5%

84.0%

2.62%

2.28%

110.3

89.5%

86.0%

7.9

8.5

2017

2018

79.0%

12.0

11.4

9.5

-161.5-221.560.0

The ratio reached around 60% indicating that
the Company has built a solid financial structure.
Although we project an increase in interestbearing debt in fiscal 2020, we will quickly
rebuild a sound financial position through cost
restructure reform, profitability improvement,
and investment control.

82.2%

2019 (FY)

Cash flow from operating activities decreased,
mainly attributable to the 82.7 billion yen one-time
contribution to the pension fund and a decrease inadvances received resulting from an increase in booking
cancellations prompted by the spread of COVID-19.
In fiscal 2020, in addition to rigorous cash flow
management, we will take all possible measures tosecure liquidity on hand through extensive financing.

2015

2016

2017

*1 Before the depreciation method change, all components attached to aircraft were depreciatedaltogether with aircraft. With the new method, assets are classified to each component, based on
economic lives of components such as engines and cabin interiors, and depreciated separately*2 ROIC (Return on Invested Capital) = NOPAT/Average Fixed Assets (incl. Future Rental Expenses under
Operating Leases) at beginning and end of a fiscal year
*3 Total return ratio = (Total amount of dividends + Amount of share repurchases)/net profit attributableto owners of parent*4*4 Net profit attributable to owners of parent for fiscal 2015–2018 excludes the effects of income taxesdeferred*5 Payout ratio = Total dividends/Net profit attributable to owners of parent*4*6 ROE (Return On Equity) = Net profit attributable to owners of parent/Average of shareholder's equity
at beginning and end of a fiscal year
*7 ROA (Return On Assets) = Operating profit/Average of total assets at beginning and end of a fiscal
year*8 Free cash flow = Cash flow from operating activities + Cash flow from investing activities*9 EBITDAR margin = EBITDAR/Operating revenue
EBITDAR = Operating Profit + Depreciation and Amortization + Aircraft Leases

20182019 (FY)As of March 2020, the percentage of female
managers is 8.4%, and is steadily increasing. The
JAL Group has set itself the target of raising thepercentage of female managers in the JAL Group
to 20% by the end of fiscal 2023, and 30% by
the end of fiscal 2030.

2015

2016

2017

2018

2019 (FY)The JAL Group is actively working to promoteroles for employees with disabilities.
*1 As of June 1 of the year following each fiscal
year. Combined data for Japan Airlines Co., Ltd.
and its special subsidiary JAL Sunlight Co., Ltd.

2016

2015

2019 (FY)In fiscal 2019, there was a decrease in the ratio of actual annual
paid leave applicants and the amount of overtime worked
compared to the previous year. Despite this, as fiscal 2019 had
two fewer work days (16 hours), total work hours decreased by
11.9 hours. The success rate for our target of keeping total annual
work hours down to 1,850 hours rose from 98.7% to 99.4%.

GovernanceCommunities
Nurturing the next generation—JAL SORAIKU®

Number of employees volunteering■ JAL SORAIKU ® participants (thousands)*2■ Number of employees volunteering

Composition of each committee
Chairperson

202

EBITDAR margin (%)

18.4%
321.1

37.5

(5.6%)
5.2%
4.7%

ROE was 4.7% due to a significant decreasein net profit from the spread of COVID-19 andincome taxes-deferred.

■ EBITDAR■ Cash flow from operating activities ■ Cash flow from investing activities
Free cash flow

296.7
281.5
253.1
-215.5-207.2-186.3-180.1

843.0

13.6%

-¥161.5 billion
105.1

84.6%

35.3%

ROIC was 5.1% due to the significant decline inprofit resulting from the global spread of COVID-19.
To survive this unprecedented situation, we will
review our investment plan for fiscal 2020 and scaleback on investments by approximately 80 billion yen.

58.9 %

85.1%

49.2%

The spread of COVID-19 infections since January 2020
caused a rapid decline in demand for both internationaland domestic flights. As a result, both revenue and profit
decreased in fiscal 2019 from the previous year. The
operating margin fell from out target of 10% to 7.1%.

4.7 %

40

25.1%

Fuel-efficient aircraft+8.2 pts

50

44.5%

9.5%

(108.6) 100.6

150.8

38.3

(7.7%)
7.1%

38.7

12.6%

33.2 30.0

13.2%

Non-fuel-efficient aircraft

People
NPS

（%）
100

72.8%

43.5

15.7%

164.1

Percentage of fuel-efficient aircraft

CO2 emissions per revenue ton kilometer (vs. fiscal 2005)

18.8 20.0

7.1 %Non-financial Data (As of March 31, 2020)
Environment
CO2 reductions

20.0

ROIC*220.0

Operating profit margin(JPY Bn)

197

192

8,140

7,745

6,826

152
121

Nominating
Committee
Compensation
Committee

1,705

2015

Corporate GovernanceCommittee

2016

2017

2018

2019 (FY)

Hands-on experiences of the wonder of the skies gives
JAL SORAIKU® participants an opportunity to think
about their own futures, and about the future of theworld and the environment. That is the goal behind theactivities that we provide, which include JAL Origami
Plane Classes and JAL Career Talks for Students.
*2 The name JAL SORAIKU® has been in use since fiscal 2016.

2015

Personnel
Committee

2,169

Officers Disciplinary
Committee
2016

2017

2018

2019 (FY)The JAL Group is proactively supporting volunteer
activities, which give every JAL employee theopportunity to connect directly with society.

＝External director＝Internal director

To build a corporate governance system that results inhigh management transparency and strong managementmonitoring, various committees have been establishedunder the Board of Directors. External Directors makeup the majority of each of the committees, ensuring
independence from JAL's executive management.

41

JAL GroupCor porate Policy

JAL REPORT 2020

Sustainability Management

Sustainability Management

Environment

Basic Concept

Basic Concept

JAL Group's
Businesses and Strategies

PeopleGovernanceCommunities

JAL Group
Sustainability

Financial Data/
Cor porate Information

Environmental Management
Environmental Management System

With the aggravation of events that threaten the sustainability of society itself, such as changing population dynamics andIn the JAL Group Code of Conduct "Commitment to

The JAL Group builds and operates an Environmental

global climate change, the JAL Group recognizes the need to accelerate the speed of our sustainability initiatives. Thus, we have

Society," we state that we are facing the fact that the air

Management System (EMS) and strives to achieve ouridentified priority areas we need to tackle to resolve social issues through our business operations and are working to reflect thesetransport business significantly impacts the environment,

environmental goals.

in our management strategy. In fiscal 2019, through the process described below, we set out four priority areas: Environment,

and, that in order to fulfill the responsibility of passing

Human, Communities, and Governance, and classified 22 issues to be tackled by these respective priority areas in order to achieveon this precious Earth to the next generation, we are

the Sustainable Development Goals (SDGs). Targets to achieve the SDGs have been set for all divisions, from frontline divisions

endeavoring to raise the awareness of every employee andinvolved in flight operations to support departments, and initiatives are underway. For further details, please visit our website.

strive to preserve the environment in every aspect.

WEB

Priority Areas

E

Environment

PeopleJAL Group Code of Conduct andEnvironment Policy

Issues we are Tackling

Related SDGs

G

GovernancePrevention ofEnvironmental Pollution

JAL Group Code of Conduct "Commitment to Society"

Address to Climate Change

Effective Use of Limited
Resources

Noise Reduction

Biodiversity Conservation

Prevent the Spread of
Infectious Diseases

Health and Productivity
Management

Human Resources
Development

Promotion of D&I

Improving Accessibility

Respect for Human Rights

those issues in the JAL Group Environmental Policy released

Workstyle Innovation

on August 1, 2019.

S
Communities

Route Network Expansion
Improving Conveniencein Travel

Increase Inbound Tourism

Regional Revitalization

Disaster Restoration AssistanceCommunity Relations

Promotion of BCM

Fair Business Practices

Responsible Procurement

Disclosure

Passing on the Precious Earth to the Next Generation
Under the Code of Conduct, we have clearly stated ourcompiled a program of specific initiatives designed to solve(General Manager, General Affairs Division)
ReportSecretariat

Instruction(ESG Promotion Department)
ReportGroup companies

Divisional EMS Managers(Vice Presidents of Administration)
EMS
supportReportAppointment/
Instruction

Divisional EMS Staff in charge(appointed in each division)

The environment must be safeguarded so that all living*Set up and operate Secretariat within
division, as necessary

creatures may grow and live on this planet. In order torealize the policy advocated in 'Passing on our precious
Earth to the next generation' within the JAL Group
Code of Conduct "Commitment to Society," the JAL

2. Define priorities

3. Decide and incorporate

Based on our stance that Group-wide
action should be taken to achieve theSDGs rather than action by specificdepartments, all officers identified andre-organized existing measures andcreated new plans, with reference to
the ATAG*1 guidelines that highlight
SDG initiatives in the aviation industry,
with the aim of contributing toachieving those of the 17 goals/169
targets of the SDGs that are applicableto their particular business area.

To achieve the SDGs,
approximately 420 initiatives
submitted by JAL divisions weregrouped into similar topics basedon their degree of importancefor JAL Group businesses andstakeholders, and discussions
and recommendations by the
Board of Directors. Four priority
areas were then established,
namely, Environment, Human,
Communities, and Governance,and 22 issues were classified into
these respective priority areas.

Initiatives for each of the four priority areas and 22
issues were decided upon, followed by action itemswith reference to inputs such as international standards
guidelines (such as ISO 26000), applicable domestic andinternational laws, industry targets and questions set by
the Dow Jones Sustainability Indices (DJSI) and Financial
Times Stock Exchange (FTSE). Next, quantitative targets for2023 and 2030 were set for each initiative. We incorporated
requests from society regarding the issues to be solved, byreflecting the content of dialogue with outside experts into
our sustainability management framework to ensure thatit encompasses all matters of importance to stakeholders
in relation to the issues to be tackled, the action items foreach issue, and the level of the goals set.

sustainably conserve the environment as a member ofthe society, and undertake all preventive measures forany counteracting phenomena, based on this Policy.

Compliance with laws and regulations
Mitigating impacts of operations on the environment(1) Address to climate changeGroup Management
Council(EMS cases discussed at least biannually)

Members: President, all officers
including EMS Director
Agenda topic of discussion:
Approval of medium- and long-term
environment goals, deliberation on
EMS operational status, etc.

Sustainability Promotion
Committee(EMS cases discussed at least biannually)

Members: Relevant officers, EMS
Director
Agenda topic of discussion: EMS
progress management, problem
sharing, etc.

(2) Effective use of limited resources(3) Prevention of environmental pollution(4) Noise reduction

EMS Managers
Meeting(meets biannually)

Members: Divisional EMS Managers,
Chief of Secretariat
Agenda topic of discussion:
Establishing and reviewing divisional
annual targets etc.

EMS Staff Meeting(meets biannually)

Members: Divisional EMS staff,
Secretariat
Agenda topic of discussion: Concrete
initiatives, progress and problem
sharing, etc.

Pursuit of environment-friendly technologies

Board of Directors

Enhancing awarenessPresident

Information disclosureGroup Management Council

Meets twice a year in principle, andwhenever necessary to the agenda

Sustainability Promotion Committee

Meets once a month in principle

Sustainability Promotion Vice Presidents Meeting

Meets once a month

Sustainability Staff Meeting

Meets once a week

Progress Management Method

EMS Committees

Group will set up its own driving force and strive to(5) Biodiversity conservation

Promotion System- A managing department is appointed for each initiative toproactively manage the numbers.
- The ESG Promotion Department compiles the results every six months, andprogress is shared and discussed by all officers at Group Management Council.
- The Sustainability Promotion Committee (Secretariat: ESG Promotion Department)
checks progress and holds discussions with relevant officers at its meetings.

Management
review
Decision-making,appointment

EMS Director

Internal Audit Team

Environmental Policy (excerpt)

1. Increase knowledge

Numerical targets and KPIs for initiatives in each of the 22 issues
were established in accordance with our medium- to long-term
policy on sustainability. The initiatives are looped through a PDCA
cycle which is in operation under the following promotion system.

Reportawareness of contemporary environmental issues andProcess for Identifying Priority Areas and Issues to be Tackled*1 Air Transport Action Group (ATAG): A not-forprofit association in the air transport industry

EMS Promotion Structure

President

https://www.jal.com/en/sustainability/sustainability-management/

Priority Areas and Issues to be Tackled to Achieve the SDGs

42

Environment

Message fromthe President

Continual Improvement
Full text of the JAL Group Environmental Policy
https://www.jal.com/en/sustainability/environmentWEB
management/policy/

43

JAL GroupCor porate Policy

JAL REPORT 2020

Sustainability Management

Environment

Message fromthe President

JAL Group's
Businesses and Strategies

PeopleGovernanceCommunities

JAL Group
Sustainability

Financial Data/
Cor porate Information

Total CO2 emissions

Demand growth

Address to Climate Change
Basic Concept

CO2 Emissions Reduction Targets and Progress

The JAL Group is aware that as the world faces a variety of issues

prices, and changes in the percentages of each type of fuel used,

including climate change, resource shortages, demographic

among others.

changes, and rapid urbanization, addressing to climate changeWith the trend to decarbonize based on the Paris Agreement

is a particularly important challenge. Not only does climate

and Intergovernmental Panel on Climate Change (IPCC) reports,change have a major impact on our business, it also leads to thethe financial impact that climate change related risks andaggravation of social problems, such as poverty and famine, which

opportunities have on business, shown on the table below, isstem from the aforementioned issues. Based on this perception,

expected to keep increasing. We are responding by exploring ways

it is our corporate responsibility to steadily drive our initiatives toto deal with the conceivable changes in advance and begin theaddress climate change starting with reducing our CO2 emissions.

necessary preparations, and we will then widely provide disclosure.

(Control index)
110 ％
100％

change. At the general assembly of the International Civil Aviation

The JAL Group is aware that the risks and opportunities relating toOrganization (ICAO) convened in 2010, two global CO2 reduction

climate change are an important management challenge. The Groupgoals were agreed on: "Improvement of fuel efficiency by 2%

Management Council, with the President as chair and all officers as

annually," and "carbon neutral growth for international flights

members, is the forum at which we supervise and manage thosefrom 2020 onwards." Additionally, at the general assembly

risks and opportunities. At this forum we work to minimize climate

convened in 2016, the Carbon Offsetting and Reduction Scheme

change risks based on the global laws and regulations and politicalfor International Aviation (CORSIA), which mandates that fromtrends relating to climate change, and also examine projects that2021 onwards, airlines operating international flights purchasemake the most of the business opportunities. Furthermore, theCO2 emission credits for any excess CO2 emissions over their 2019

Sustainability Promotion Committee, which promotes efforts tovolume, was adopted.

achieve the Sustainable Development Goals (SDGs), was formed

The JAL Group is taking steps to reduce CO2 emissions based on

below this Group Management Council, with the officers in charge

the four major pillars of: Upgrading to Fuel-efficient Aircraft,

80%

20 05

20 09

2011

2012

2017

2018

IATA start
reductions–1.5%/yr

JAL operated
the world’s
first test flight
powered with
SAF derived
from plantmaterial

Boeing 747
and Airbus
A300
retirement
completed

Boeing 787
introducedoninternationalroutes

Chicago-Narita
SAF-poweredflightInvests
approx.
JPY0.9 Bn in
US SAF
producer(Fulcrum)

San FranciscoHaneda
SAF-powered flight

Made-inJapan SAF
Project

Airbus A350
delivery flights
using SAF

Specific Initiatives from fiscal 2020

Upgrading to Fuel-efficient
Aircraft

Supporting the Development
and Use of SAF

CO 2 Emissions Reduction Targets

2019

2020

2030

2050
Total CO2 emissions

Net zero

Airbus A350
introduced on
domestic routes

Reducing CO² Emissions in
Daily Operations

Engaging in Emissions
TradingSpecific Initiativesof playing a central role in driving our climate change response.

Supporting the Development and Use of SAF, Reducing CO2

The short-term target has been set as, "by fiscal 2020, reduce

Specifically, the JAL Group, as an emitter of large amounts of CO2

Emissions in Daily Operations, and Engaging in Emissions Trading.

the amount of CO2 emitted per revenue ton kilometer by JAL

in its daily flight operations, is aware of the significant financial

In June 2020, we set a new long-term goal of Zero CO2 Emissions

Group aircraft by 23% compared to the fiscal 2005 level."

The JAL Group is upgrading its fleet to more fuel-efficient

impact that climate change will have on business due to restrictions

with the aim to achieve net zero CO2 emissions by 2050.

To achieve this short-term target, we have steadily implemented

aircraft in order to mitigate impacts of operations on theon CO2 emissions as well as increases in the price of fuel-efficientmeasures by upgrading to fuel efficient aircraft such as theenvironment. In September 2019, we introduced the Airbus

aircraft, changes in crude oil and Sustainable Aviation Fuel (SAF)

Airbus A350 and the Boeing 787, and reducing fuel consumption

A350 on domestic routes, and in October 2019, we introducedin daily flight operations. As a result, CO2 emissions in fiscal

the Boeing 787, which was in service on international routes

2018 were 1.6% lower than the previous year, and we havesince 2012, on domestic routes as well. These aircraft areachieved 19.4% of cumulative total reduction since fiscal 2005.

low-noise in addition to being fuel efficient and are capable

Due to a major fall in demand with the spread of COVID-19,

of providing CO2 emissions reductions of around 15 to 25%

which occurred in the fourth quarter, total emissions in fiscal

compared to conventional aircraft. The JAL Group will

2019 were 240,000 tons lower than the previous year. However,continue to contribute to mitigate environmental impact

Risks and Opportunities Related to Climate Change
Climate Change Risks

Impact Summary

Targets /regulations on the aviation - Cost increases from purchasing CO 2 credits with the adoption of the CORSIA
industry to reduce carbon emissions and scheme- Increased capital outlay on aircraft with improved fuel efficiency
Government improve fuel efficiency
Regulations Targets/policies on carbon missions and - Increased operating costs due to restrictions at airports used and payment of newenvironmental taxes, etc.
fuel efficiency of each country
Transition
Risks

Marketthe amount of CO2 emitted per revenue ton kilometer increased

through our planned program of upgrading to new aircraft- Increased operating costs due to soaring carbon prices

by 2.4%. As a result, the cumulative reduction was only 17.0%.

types.

High fuel prices- Increased costs due to price rises in line with further increases in air travel demandand increased demand for crude oil- Increased capital outlay in upfront development investments for switching toalternative fuel- Slowdown in aviation demand growth due to modal shift acceleration to rail andmaritime transport- Periods when aircraft are unable to takeoff/land at certain airports during weather
disasters such as floods- Reduced aircraft takeoff performance due to abnormal temperature rises in summer- Increased pandemic risks due to infectious diseases arising from changes inecosystems etc.
- Costs of infrastructure modifications, such as construction works to increase theheight of breakwaters at airports to handle rising sea levels, reflected in landing fees
- Impact on flight operations such as cancelling countless flights due to tropical
cyclones, typhoons, and natural disasters, among others- Costs incurred due to aircraft damage and operating facilities disaster recovery
costs, and supply chain disruptions- Secure competitive advantage by procuring new SAF- Minimize the degree of price fluctuations by diversifying aviation fuel sources

The medium- to long-term target is to achieve growth without

Assessment Changing demand
Changing rain and weather patterns
Chronic
Increasing average temperatures

Physical
Risks
Acute

Extreme weather
Adoption of alternative fuels

Opportunities

Upgrading to Fuel-efficient Aircraft

Carbon pricing

Technology Adoption of alternative fuels

44

FY2019 total emissions

90%

The international aviation sector is working to address climate
Governance, strategy, risk management, indices and goals

CO2 /RTK (vs FY2005)

Technology Improved fuel efficiency- Profit potential with improvement in fuel efficiency through technical improvementof each aircraft, improvement in flight status and use of infrastructure facilities,
Development of next-generation aircraft among others

increasing CO2 emissions beyond 2020. We will achieve thisProgress in Increasing the Percentage of Fuel-efficient Aircraft

target by upgrading to fuel-efficient aircraft and reducing fuel（%）

consumption in daily operations, supporting the development

100

and use of SAF in accordance with the CORSIA scheme, andengaging in emissions trading. In addition, we are striving73

to reduce total CO2 emissions through our long-term goal of
Zero CO2 Emissions, aiming to achieve net zero CO2 emissions

50

79

83

85

2019

2020（FY）

65

by 2050. In addition, the oneworld alliance, of which the JAL
Group is a member, announced in September 2020, that all 13
member airlines have committed to net zero CO2 emissions by
2050.

0

2016

2017

Non fuel-efficient aircraft

2018

Fuel efficient aircraft (planned figure for FY2020)45

JAL GroupCor porate Policy

JAL REPORT 2020

Sustainability Management

Supporting the Development and Use of Sustainable Aviation Fuel
Until now, the airline industry has been working to reduce CO2
emissions by cutting the quantity of fuel used. However, to achieve
further reductions in CO2 emissions in future, we need to change
the quality of the fuels we use. The development and practicalapplication of Sustainable Aviation Fuel (SAF) is underway inEurope, the U.S., and other countries around the world, and it isexpected that use of SAF will become widespread after 2030. Given
this trend, the JAL Group is also actively investing in SAF, using it
on scheduled flights, and disseminating information in order tobecome the leading airline in the adoption of SAF.

Efforts towards the Adoption of Domestically Produced SAF

In 2009, we conducted the first test flight in Asia using SAF madefrom non-edible raw materials. We also operated our flights
powered by SAF from Chicago O'Hare International Airport
to Narita Airport in November 2017 and from San Francisco
International Airport to Haneda Airport in January 2019. In
addition, since June 2019, upon receipt of Airbus A350 aircraft,
we have used SAF on the delivery flights from Airbus' plant inToulouse, France to Haneda Airport.

as the "Roadmap Study Committee"), which has been studying
use in time for the milestone of the Tokyo 2020 Olympic andStudy Committee, is working to operate our flights using
domestically produced SAF, and we are also contributing as amember of this "All Japan" effort to develop the SAF supply

マーク半径

Analysis on the characterization,
supply chain and pre-treatment offeedstockthroughout Japan, and succeeded in doing so in late March
2020. Although commercialization of SAF is progressing
worldwide, this is the very first time SAF has been fully produced
in Japan. In this project, about 50 companies cooperated andapproximately 250,000 garments were collected across thecountry over the course of three months in 2018. Starting

Development (JOIN) and Marubeni Corporation, acquired a stakeproduce SAF using Japanese technological capabilities.

Managing entire project, introducing Fulcrum's process and technology into Japan market, LCA analysis

Working to build a domestic supply chain
CO2 reduced
in FY2019

From February 2020, we have started a feasibility study
on SAF production and sales in Japan through the use ofindustrial and municipal waste, including plastic wastewith Marubeni Corporation, ENEOS Corporation, JGC Japan

Reduced20,100 tons

During Regular
MaintenanceEngine washing

Corporation, Taisei Corporation and TAKEEI CORPORATION.
Based on the results of this joint study, all parties will aim
to install demonstration equipment and conduct tests in theearly 2020s, and start construction of commercial equipment
around 2025.

Reduced800 tons

While
Parked inSpot

Toward the future

PHOTOGRAPHY BY SACHIE ABIKOReduced Auxiliary
Power Unit (APU) usage(Closing cabin window
shades, etc.)

The JAL Group is conscious of the need to establish SAF

USA. This was the first investment by a Japanese company in an■The Manufacturing Process Used to Produce Japan's First SAF
Phase 1

production and supply systems within Japan, as well as toensure that SAF is available within a sustainable price range
arriving in and departing from Japan.
The JAL Group is contributing to reducing environmental
impact by proactively working in collaboration with a broadplant is currently under construction in Nevada and is expected toPhase 2

range of stakeholders as we strive to solve these challenges

A sugar solution ismade by converting
cotton fibers to sugar

Phase 3

refueling our aircraft with SAF supplied by Fulcrum, mainly on

At Takeoff

Corynebacterium is used
to convert and condense
the sugar solution into
alcohol (isobutanol)

Reducing CO2 Emissions in Daily Operations

During theDescent Phase

We are conducting various activities to improve fuel economy
in our daily operations at each of our workplaces with "Safety

emissions.
A catalytic reaction of
alcohol (isobutanol)
creates SAF

First" as our top priority, such as eco-flight initiatives throughaircraft operating techniques, reducing aircraft weight andPhoto: KOATSU CHEMICAL INDUSTRIES, LTD.

Finished product –Japan's first domestically
produced SAF

Using lighter weightcargo containers, etc.
Optimized flight plans

Reduced9,600 tons

deployment of SAF in the future in Japan and overseas.

flights departing from North America, in order to reduce CO2

Phase 4

Reduced7,100 tons

Optimized ascentroute

one by one, with the objective of the commercialization androllout of multiple plants in future, including already announcedplans for plant construction in Indiana. Therefore, the JAL Group

BeforeDeparturein order to promote the use of SAF on every aircraft both

Clothing collectedwith the supportof JEPLAN, Inc.

and standards-setting organization. Fulcrum's first production

Fulcrum's currently
under construction SAF
production plant(as of Jun 2020)

SAF offtake and
CORSIA related issues

to produce domestic SAF using cotton from clothing collected

Earth Institute, Co., Ltd. This success proved that it is possible to*3 The world's largest private sector international standardization andstandards-setting organization

マーク半径

As part of this effort, in October 2018, we launched a projectwith technical support from biotech venture company Green

will strengthen its relationship with Fulcrum and proceed with

マーク左右中央

Analysis on refinery
process and
SAF logistics

with the aim of achieving the government's objective of theInfrastructure Investment Corporation for Transport & Urban

companies to achieve mass production of SAF, with plans for a

SAF
Production

chain from production to use, linking the various stakeholders,in Fulcrum BioEnergy, Inc. ("Fulcrum") located in California,

46

マーク直径

Paralympic Games. The JAL Group, as a member of the Roadmap

In September 2018, the JAL Group, together with Japan Overseas

be completed in early 2021. The company is one of the most likely

Engineering and technicaladviceクリアスペース

マーク半径

Research Institute of Innovative Technology for the Earth (RITE),

standard by ASTM International, an international standardization

Financial Data/
Cor porate Information

the feasibility of producing SAF in Japan and introducing it for

Investment in SAF production company

landfill. The production technology has also been certified to fuelGovernanceCommunities

Technical and economical analysis
on SAF production process2020 Olympic and Paralympic Games" (commonly referred tothen turned into SAF through a bioprocess developed by the

produce SAF from general waste that is normally disposed of in

PeopleJAL Group
Sustainability

Companies Participating in the Feasibility Study and Their Roles

Committee for the Introduction of Bio-Jet Fuel for the Tokyo

from January 2019, cotton from the collected garments was

SAF manufacturing business. Fulcrum has developed a process to

JAL Group's
Businesses and Strategies

The Japanese government has established a "Roadmap Studywidespread adoption of domestically produced SAF by 2030.

Use of SAF on JAL flights

Environment

Message fromthe President

At Landing

Reduced37,900 tons
Optimized landing patterns
Continuous descentoperations

Reduced
5,900 tons
Idle reverse thrust

washing engine interiors regularly. We are also implementing
and driving CO2 emission reduction initiatives crossorganizationally and continuously looping through the PDCA
cycle to drive each of these initiatives forward as we monitor
and share progress within the organization in order to achieve

After
Landing

Reduced5,000 tons
Single-engine-taxi-in

CO2 emission reductions from a daily operations perspective.

47

JAL GroupCor porate Policy

JAL REPORT 2020

Sustainability Management

Environment

Message fromthe President

JAL Group's
Businesses and Strategies

PeopleGovernanceCommunities

JAL Group
Sustainability

Financial Data/
Cor porate Information

Effective Use of Limited Resources
Engaging in Emissions Trading

ColumnBasic Concept

Recycling cabin waste

To reduce its environmental impact and contribute to realize■ Purchasing Carbon Credits
The JAL Group is implementing initiatives designed toreduce our CO2 emissions including upgrading to fuelefficient aircraft and supporting the development and useof Sustainable Aviation Fuel (SAF). In addition to these
initiatives, we have been reducing our CO2 emissions bypurchasing various emission credits designated in March
2020. These carbon credits are designed to help cut global
CO2 emissions efficiently by allowing companies to purchase
CO2 emission reductions made by companies in industries
other than aviation. In future, the JAL Group will continue
to select and purchase the above-mentioned credits andwork together with other non-aviation industries to devise
measures that will help further reduce CO2 emissions.

ColumnJAL Carbon Offsets
Carbon offsets are a mechanism of compensating forCO2 emissions using carbon absorptions or reductions
made elsewhere. In response from feedback from
customers who have a keen interest in protecting
the environment and preventing global warming,
the JAL Group, in collaboration with blue dot green
Inc., offers passengers the option to offset the CO2
emitted by the aircraft they fly on through our JAL
Carbon Offsets program. Passengers can choose tooffset the carbon emissions for the distance they
fly against either a Japanese government-certified
responsible forest thinning and management projectin the town of Oguni in Kumamoto Prefecture, or adeforestation prevention project in the Rimba Raya
Biodiversity Reserve in Indonesia.
WEB

https://www.jal.bluedotgreen.co.jp/en/home

CONTRAIL Project

resource-recycling society, the JAL Group promotes the 4Rs*1

The JAL Group began working on atmospheric observation
using aircraft in cooperation with the MeteorologicalResearch Institute (MRI) and the Japan Airlines Foundation(now the JAL FOUNDATION) in 1993. In 2005, the National
Institute for Environmental Studies (NIES) and aircraft
parts manufacturer JAMCO Corporation joined the efforts
to expand and enhance the scope of these atmosphericobservations, and with each party putting their expertise touse, the CONTRAIL Project was born. The CONTRAIL Projectis the world's first planned ongoing, global-scale continuous
measurement of greenhouse gases using equipment
installed on scheduled passenger flights, and this joint
public-private project continues its activities today.
The project involved the development of two original typesof equipment for atmospheric observation: Automatic air
Sampling Equipment (ASE) and Continuous CO2 Measuring

in all aspects of its business, particularly through initiatives

Equipment (CME), which then underwent stringent
environmental testing before obtaining certification to
be installed on commercial aircraft. These two kinds ofobservation equipment are currently in service on Boeing
777 aircraft owned by the JAL Group.
The observed data for atmospheric greenhouse gases,
mainly taken from samples on international routes,
are used under the quality control by MRI and NIES, in
research being conducted not only for understanding the
global carbon cycle, but also for atmospheric transport,
validation of satellite observations and validation fortransport models. Today, in line with the advancement of
the open science movement, observed data are opened
to public, and are playing an important role in various
research throughout the world.
Since its commencement in 2005, CME has been usedon over 23,000 flights, and in fiscal 2019 alone, thepublished data was used in three peer-reviewed papers,
11 presentations in international conferences, and threepresentation in domestic conferences. In March 2019,
the CONTRAIL Project won the Environment Minister
Award at the inaugural Japan Open Innovation Prize.

to minimize use of new resources onboard aircraft and at
airports.

The JAL Group has worked to recycle cabin waste since 1993.
Cabin attendants separate aluminum cans, glass bottles,
and plastic bottles onboard before handing them over toa recycling specialist. Each year these efforts lead to morethan 25 tons of recycled plastic bottles and around 30 tonsof recycled aluminum. We also recycle newspapers, inflight*1 Refuse, Reduce, Reuse, Recycle

magazines, and other recyclable materials used on our flights.

Reduction of Plastic Usage

Recycling old uniforms

In order to address global issues caused by the massive use

When we renew our uniforms, old maintenance and groundof plastics, such as ocean pollution from waste plastics, thehandling staffs' uniforms are recycled into soundproofing

plastic working group meets monthly to discuss reduction

materials for use in cars and cloths used to wipe grease andmethods and targets for plastic products, etc. In September

dirt from machinery. Some employees also came up with2019, JAL stopped providing plastic straws and stirrers in its

the idea of reusing these old uniforms to make bags for

inflight service and in all lounges. We reduced approximately

onboard documents and tote bags to be used in the office2 million plastic straws and 4 million plastic stirrers per year

for shopping and buying lunch.

respectively, which is equivalent to around 3.6 tons in total.
In fiscal 2018 approximately 887.6 tons of disposable plastics
were used onboard aircraft, which dropped in fiscal 2019by around 10 tons to 877.4. Also from October 2019, Japan
Transocean Airline (JTA) introduced wooden straws on
Class J seats on flights from Naha to Fukuoka. JTA is using
timber from Okinawa to
help conserve local forests
and revitalize sustainable
forestry.

Saving Water Resources
Wooden straws

RecycleAs part of our water-saving and recycling efforts, we gauge
and manage the amount of water we use and strive to reuse
the large amounts of pure water used to clean components.

Recycling polyethylene sheets
When transporting daily essentials such as pharmaceuticals
and food products, the JAL Group uses polyethylene sheets
to protect the products from water damage. To ensure theseplastics are not disposed of as waste, for around 40 years wehave supplied them to RIPRO Corporation, a company that
manufactures and sells recycled land markers used in land
registry investigations and other products Information eco
markers are one such example. Equipped with RFID tags,
they have been installed in a number of tourist spots toprovide information related to the spot to visitors via theirsmartphones, which is contributing to regional revitalization.

Reducing Food Loss & Waste
Disposing food that could have been eaten is not only
"Mottainai", it also damages environment. The greenhousegas emissions from food product supply chain, including
production, distribution, and processing is estimated to be
between 21% and 37% of the world's total.*2 In addition
to controlling CO2 emissions generated in flight, the JAL
Group also takes steps to reduce emissions from food waste
on board aircraft and in airport lounges. Although aroundthree tons of offcuts and scraps are generated each monthwhen preparing inflight meals for departure flights from
Narita Airport, we recycle them into animal feed instead ofsimply burning them.
Looking ahead, we will seek to effectively use our foodresources and mitigate global warming by offering an mealcanceling service for our passengers and examining ways to

JAL Carbon Offsets carbon calculator web page48

JAL Group aircraft equipped with atmospheric observation instruments

Cargo covered with
polyethylene sheets

Information eco marker in frontof the Miracle Lone Pine Tree(which alone survived the 2011
tsunami) in Rikuzentakata

use offcuts from the food preparation process.
*2 IPCC (Intergovernmental Panel on Climate Change) Special Report on
Greenhouse Gas Fluxes (August 2019)49

JAL GroupCor porate Policy

JAL REPORT 2020

Sustainability Management

Environment

Message fromthe President

JAL Group's
Businesses and Strategies

PeopleGovernanceCommunities

Prevention of Environmental Pollution

Noise Reduction

Biodiversity Conservation

Basic Concept

Basic Concept

Basic Concept

JAL Group companies in Japan manage hazardous chemical

To fulfill its responsibility as an organization that sustains

The JAL Group recognizes the direct and indirect impact

substances and strive to reduce amounts handled andsocial infrastructure, the JAL Group proactively worksof the air transport business on biodiversity conservation.

released, according to the Act on Confirmation, etc. ofto reduce noise so that it can exist in harmony with

By minimizing our impact on ecosystems, we will strive to

Release Amounts of Specific Chemical Substances in thecommunities in the vicinity of airports and flight paths.

protect biodiversity.

Environment and Promotion of Improvements to theManagement Thereof (PRTR Law).

Specific Initiatives

Specific Initiatives
UNESCO World Natural Heritage sites

source" and "noise abatement operational procedures" which

Several million years ago, the Amami archipelago, namely

In April 2020, in agreement with the Tokyo Metropolitan

are principal elements of the Balanced Approach, adopted

Amami-Oshima Island, Tokunoshima Island, Iriomote Island

Government, Bureau of Environment project to improveby the International Civil Aviation Organization (ICAO) thatand the northern part of Okinawa Island, drifted fromthe air environment, JAL Engineering signed up to be aairlines should follow. 100% of JAL Group's aircrafts, except

the continent resulting in a rich repository of rare species

ClearSky Supporter. Aiming to create clear, pollution-free

for turboprop, are compliant to ICAO Chapter 4 standard,such as Amami rabbits and Iriomote cats. A movement isskies, JAL Engineering is currently engaged in efforts towhilst 46% of them are compliant to ICAO Chapter 14

emerging to register and conserve the biodiversity and rich

reduce its emissions of nitrogen oxides (NOx) and volatile

standard.

nature of these islands as a Natural World Heritage site, andorganic compounds (VOCs), both of which contribute to air

As part of our noise abatement operational procedures, we

the JAL Group is actively involved in this movement.

pollution. To reduce emissions of NOx contained in exhaust

follow noise abatement procedures at take off, and at Haneda

Japan Transocean Air (JTA), Ryukyu Air Commuter (RAC),

gases from motor vehicles, JAL Engineering has formulated

Airport and Itami Airport in particular, which are close tobased in Okinawa, and Kagoshima-based Japan Air

its own NOx reduction plan, which includes switching

residential areas, we operate under even stricter procedures.

Commuter (JAC) and JAL Kagoshima-office are engaged

to EVs, light vehicles, and other low-pollution, low-fuel-Noise abatement procedures during landing include reduced

in explaining and protecting the natural

consumption vehicles, and promoting eco-friendly driving.

flap, delayed flap and idle reverse operations.

environment together with the region,

Moreover, as some of the paints, cleaning agents, and

At Helsinki Airport and Kagoshima Airport, we also follow

participating in liaison meetings onadhesives used in aircraft maintenance contain VOCs, JALcontinuous descent operations (CDO), which dramatically

preventing poaching and smuggling ofEngineering has also formulated a VIC emissions reduction

reduce noise and CO2 emissions.

animals, erecting road signs to prevent

plan for VOC emission. It details how, during chemical smog
alerts, employees will temporarily stop their painting work
to minimize emission of VOCs, which cause photochemicalsmog, into the atmosphere.

roadkill of endangered species, and establishing andRatio of ICAO standard compliant aircraft

promoting the Amami Trail that explores the Amami
archipelago.

（%）
100

100

97

JAL Group is also working to prevent air pollution by100

In 2019, they initiated a joint venture to promote world100

heritage sites in Okinawa and a community to promote

92

minimizing the amount of CO2, NOx, CO, HC, and otherworld heritage sites in Kagoshima by engaging local

pollutants released from aircraft. Specifically, engines usedcommunities. All participating organizations are making

on JAL Group aircrafts comply with all regulations and50

ICAO CAEP6/CAEP8 standards stipulated by NOx regulations

38

37

35

46

46

good use of their strengths to protect and promote the local
natural environment.
Protecting the red-crowned crane0

The JAL Group is engaged in activities to protect red2016

2017

2018

Chapter 3 standard compliant aircraft

20192020 (FY)

Chapter 4 standard compliant aircraft

Chapter 14 standard compliant aircraft

Smooth descents using low
engine thrust reduce noise
and CO2 emissions

extinction. Every year since 2016, Group employees havegrounds in Tsurui Village, Hokkaido. Tsurui Village is famousfor being a wintering ground for red-crowned cranes, with

HeightContinuous descentoperations

crowned cranes, a special natural monument in danger ofvolunteered to clean and maintain the crane's feeding

Continuous Descent Operations

In June 2018, the JAL Group signed the Buckingham Palace
Declaration by the United Wildlife Transport Taskforce to reduce
illegal wildlife trade promoted by the International Air Transport
Association (IATA).
drugs and human traffic, where the trade amounts to several
trillion yen. The JAL Group has helped to protect endangeredor rare species. For example, Ishigaki Airport staff found andprevented coconut crabs, an endangered species, from being
taken outside the island, and Amami Airport staff noticed thatrare frogs and snakes were about to be taken outside the island.
The most important stage at which to stop illegal wildlife tradeis during transportation. As such, to fulfill our duty as an airtransport operator, in February 2020 we invited a speaker fromthe World Wide Fund for Nature Japan to hold a workshop
and talk about, among other topics, the current state of illegal
wildlife trade, and what to do when we discover live animals
during the transportation process.
The JAL Group will continue to provide opportunities to raise
staff awareness and will strengthen our activities by cooperatingwith other related parties to share information and to eradicate
illegal wildlife trade.
Official Supporter of International Year of Plant Health 2020
The United Nations General Assembly declared 2020 as theInternational Year of Plant Health (IYPH) to raise global awarenesson the importance on how to protect plants from the spread ofpests and diseases. The JAL Group is communicating internally andexternally about the importance of plant quarantine as the Official
Supporter of International Year of Plant Health 2020 certified by the
Ministry of Agriculture, Forestry and Fisheries (MAFF).
Not only is it a must to take care when taking plants in and out ofJapan but there are also regulations in transporting plants within(applicable standards vary according to the type certification
period).

Preventing illegal wildlife trade

Illegal wildlife trade is a crime with a global scale, following

Specifically, we are committed to "reduction of noise atSpecific Initiatives

Financial Data/
Cor porate Information

JAL Group
Sustainability

over 600 of them arriving each year. To create a natural
winter feeding ground for the cranes, a spot where they canfind their own foodJapan. For example, it is prohibited to take sweet potatoes andother plants from the Nansei Islands, namely the Amami archipelago
in Okinawa and Kagoshima Prefectures, and Ogasawara Islands.
In February 2020, the JAL Group invited an official from MAFF to
hold an in-house workshop and address damage by plant pests,
plant quarantine and its relationship with the aviation industry. It
is critically important to stop the invasion and outbreak of pests
because enormous eradication costs are incurred. We have alsoteamed up with MAFF to create a video about plant protection,
which will be shown on our flights between September andDecember 2020.

naturally, the JAL
Group works with
Tsurui Village andhelp the Wild Bird

JAL Engineering is a
Clear Sky Supporter

Normal descent operations

Society of Japan

High engine thrust during level flight generates
loud noise and high CO2 emissions

to remove fallen

Distance

An EV used at the Haneda Maintenance Zone

50

trees and prune
branches.

Maintaining the wintering ground of red-crowned cranes

A workshop about preventing illegal
wildlife trade and plant protection

51

JAL GroupCor porate Policy

JAL REPORT 2020

Sustainability Management

PeoplePrevent the Spread of Infectious Diseases

Basic Concept
The JAL Group is responsible for transport infrastructure andimplements measures to ensure safe and secure travel and deliverpeace of mind to every customer. We will make continuous
efforts to provide air transport in accordance with guidelinesof the International Civil Aviation Organization (ICAO) and theInternational Air Transport Association (IATA), and play a leadingrole in preventing the spread of infectious diseases across theindustry through the Scheduled Airlines Association of Japan.

Preventing infection among our employees
Understanding that preventing the spread of infectionof our employees can stop the virus from spreading tocustomers, the JAL Group is making every effort to minimize
risk of in-house infection. In addition to taking employees'

JAL Group's
Businesses and Strategies

PeopleGovernance

Environment

Communities

JAL Group
Sustainability

Financial Data/
Cor porate Information

Improving Accessibility
Basic Concept

Expanding travel options
For customers using wheelchairs, we have set up a dual

The JAL Group strives to improve accessibility and create asociety in which all can enjoy travel, sports, and culture.

skiing tour so that they can enjoy skiing while seated, as
well as an accessible surfing tour to Hawaii.

temperatures when they come to work, we are thoroughly
disinfecting aircraft cabins and cockpits. For JAL employees
working in the office, we are limiting the number of days
they come into work, where possible. For staff who cometo work, we take steps to maintain social distancing andminimize contact through diagonal seating plans and

JAL Group Service Policy on Accessibility
Based on the JAL Philosophy which constitutes the basic
mindset of employees, we will:
1. Provide a stress-free travel experience for all ourcustomers.

installing table partitions made by our maintenanceSpecific Initiatives

Message fromthe President

engineers. In these ways, the entire JAL Group is coming

2. Offer various travel options to all our customers.

together to minimize the risk of infection.

3. Co-create well-being through travel, with ourcustomers and society.

Preventing infection among our customers
To prevent the spread of infection of customers, theJAL Group is thoroughly disinfecting aircraft cabins andDual skiing tour

Specific Initiatives

installing hand sanitizers in airports. Further, to ensurethat passengers can use onboard lavatories with peace

Employee education
We held lectures for all JAL Group employees to increaseof mind, we are improving our cleaning measures. We

Accessible environments

their understanding of people with disabilities. Staff withalso understand that avoiding direct contact can prevent

Up until now, the JAL Group has implemented a range ofhearing impairment are teaching how to communicate ininfection of our customers; therefore, we are installingmeasures to create accessible environments for customers who

sign language in order to improve the skills of all staff.

baggage drop points and self-service check-in kiosks. We

feel barriers in transport. These include our provision of wooden

will continue to proactively make use of IT and digital

A table partition in an officetechnologies to promote touchless services.
Meanwhile, we are also actively communicating information
regarding hygiene management. Specifically, we provide
key points on our website (see below) on making

wheelchairs to ensure stress-free passage through metal detectors
at security checkpoints, use of the Mirai Speaker to ensure clear

Toward the Futurecommunication without having toraise our voices, and introduction

The COVID-19 pandemic continues to have globalof remote sign-language services

repercussions. For the aviation industry, which supports thewhen making flight reservations atmovement of people and goods, it is vital that we continue

our JAL PLAZA Yurakucho Ticket

operations while thoroughly implementing infection

Office. In July 2020, we teamed up

prevention measures. Since before the pandemic, the JAL

with Japan Airport Terminal Co.,Group has considered thorough cleanliness as a key element

Ltd. and WHILL, Inc. to launch theof customer comfort and has continued to maintain theworld's first autonomous driving

A new travel experience with safety as our number one

highest standards. As a result, at the Skytrax World Airline

personal electric vehicle (EV) service

priorityAwards in 2019, we were awarded second place in theat Haneda Airport. In this way, weWorld's Best Airline Cabin Cleanliness category. We will

are proactively implementing thecontinue to make improvements as we seek to claim top

latest technologies.

preparations at home, check-in procedures at the airport,
boarding, spending time onboard, and cabin ventilation
measures so as to ensure an enjoyable and relaxing flight.
Looking ahead, we will take heed of customer feedback of
our infection prevention measures and continue to work to
make improvements.

WEB

https://www.jal.co.jp/jp/en/info/2020/other/flysafe/index.html

spot.
In addition, we are working to build smooth check-in
procedures that reduce congestion and minimize closecontact among passengers. Examples include our JAL
Touch & Go service of checking in online or over our app
and boarding with a QR code they receive, and also selfservice check-in kiosks and baggage drop points. We will
make further use of IT and digital technologies to promote
touchless measures and eliminate any worries our customers
might have.

Staff with hearing impairment teaching sign language

External Evaluation
In September 2019, the JAL Group won the FTE Accessibility
Leadership Award at the Future Travel Experience Global
Mirai speakerAwards, a ceremony that recognizes international airlines
and airports that undertake outstanding work to improve

Enhancing information

the customer experience both on the ground and in the

To eliminate any worries before traveling, we haveair. To further our efforts, in December 2019 we joined The

improved the quality of information we provide. For

Valuable 500, a global initiative that promotes the social

customers that require special assistance, we have set up aadvancement of people with disabilities, and announced

dedicated website where they can view videos on how to

our commitment to become a company, which provides anboard and use aircraft. To motivate customers to travel, we

accessible cabin environment

are publishing articles on accessible tourism* and interviews

and where employees with

with athletes with disabilities.

disabilities can work with a sense*An initiative that seeks to ensure everyone can enjoy traveling without
coming up against any barriers to movement or communication.

of fulfillment.

The JAL Group will continue to implement rigorous infection
prevention measures, and ensure that its customers can fly
Cabin air is replaced approximately every 2 to 3 minutes

52

WEB

https://www.jal/en/jalpri/

in safety and with a sense of security.

53

JAL GroupCor porate Policy

JAL REPORT 2020

Sustainability Management

Respect for Human Rights
Basic Concept

Environment

Message fromthe President

JAL Group's
Businesses and Strategies

PeopleGovernanceCommunities

Financial Data/
Cor porate Information

Promotion of D&I
Specific Initiatives

Basic Concept

Opportunities for People with Disabilities

To eliminate discrimination against gender, age, nationality,

To promote ethical, responsible business practices at Japan

In 2014, the JAL Group declared its commitment to diversity.

In fiscal 2019, a massage room run by staff with vision

race, ethnicity, religion, social status, impairment, sexual

Airlines and throughout the supply chain, as well to strengthen

Since then, we have aspired to be a company where

impairment was opened in JAL Head Office, and theorientation, gender identity, career, or other personal

our risk management structure, in fiscal 2018 we evaluatedeveryone can work in a positive atmosphere. Leveraging

coffee shop "SKY CAFÉ Kilatto" is run by staff with mild

attributes, the JAL Group believes that thoroughhuman rights-related risks at all of our Group companies,

diverse ideas generated by diverse individuality, we will

intellectual impairments, expanding their range of activities.

understanding of human rights is essential. As such, weand uncovered hidden risks in each stage of our value chain.

promote new value creation, provide unparalleled service toare allocating time during Seminars for New Employees,

We then sought the advice of outside experts to prioritize

our customers, and contribute to the betterment of society.

Seminars for New Managers and other courses to deepenrisks based on their severity and likelihood, and we are

the understanding and raising awareness of human rights.

incorporating these findings into our human rights initiatives.
Of the issues uncovered, perhaps the most important for the

Code of Conduct and
JAL Group Human Rights Policy

JAL Group is its potential contribution to human trafficking
via air transport. As such, in fiscal 2019, we held seminars
on the prevention of human trafficking, mainly at divisions
that could potentially be involved. In addition, in line with

Based on the view that respect for human rights is ameasures currently under consideration by international

universal value and is consistent with the realization of theinstitutions, we established reporting procedures for

Corporate Policy, in fiscal 2019, the JAL Group stipulated

suspected human trafficking incidents.

"Respect for human rights and job satisfaction (humanrights and labor)" in the Group's Code of Conduct in order

Career Opportunities for Female Employees
The JAL Group has set itself the target of raising theunderstanding of the LGBTQ community. In fact, for four

percentage of female managers in the JAL Group to 20% byconsecutive years, Japan Airlines has received a gold

the end of fiscal 2023, and 30% by the end of fiscal 2030.

rating on the Pride Index of "work with Pride," a private

As of March 2020, the percentage of female managers isorganization which recognizes companies and organizations

18.4%, and is steadily increasing.

that foster awareness of LGBTQ and other sexual minorities.

Moreover, in fiscal 2019, we teamed up with Waris Co., Ltd.

In particular, the LGBT Ally Charter flight we operated into launch the Work Again Program and support the

fiscal 2019 was well-received, and among the companies

reemployment of women with career experience.

recognized by Work with Pride, JAL was selected as a "bestpractice" company for our particularly advanced activities inindividuals.

■ No. of female managers

the LGBTQ field. In September 2020, our activities were also
Percentage of female managers

Further, in line with the International Bill of Human Rights,
the International Labor Organization's (ILO) Declaration
on Fundamental Principles and Rights at Work, and the

15.6%

16.3% 16.3%

16.8%

UN Guiding Principles on Business and Human Rights, wehave put together the JAL Group Human Rights Policy to799

announce our efforts to prevent or reduce any negative
impacts on the rights of our stakeholders.

JAL Group Human Rights Policy (excerpt)

Looking ahead, the JAL Group will continue to specify humanrights risks that pose the biggest threat and implement measures

adverse impacts on human rights of all stakeholders

to prevent and reduce these risks. In particular, to specify,

including our customers and business partners, people

assess, and counter the potential violation of workers' humanin regions where we conduct business, and JAL Grouprights in our supply chain, we will strengthen our PDCA cycle

employees. In addition, all JAL Group officers andand implement more efficient measures. We will also create

employees fulfill their responsibilities to respect theopportunities for dialogue with external experts on human

human rights of all people.

rights, and while taking on board their opinions, examine andAs an air transport operator, we strive to prevent

continuously make improvements to our risk assessment processes,

physical and mental pain to customers when providing

countermeasures, and education.

products and services, prevent human trafficking

We also request our partners and suppliers in our
corporate activities to support this Human Rights
Policy and respect human rights of their stakeholders.
Full text of the JAL Group Human Rights PolicyWEB

ht tps://w w w.jal.com/en/sustainabilit y/codeofconduct/pdf/human-rights_en1908.pdf

853

882

2016

2017

2018

18.4%

983

Toward the Future

The JAL Group takes steps to prevent and mitigate

where we conduct business.

846

recognized at the 6th Japan Tourism Awards.

Human trafficking prevention training

What we aim forusing aircraft, and human rights violations in regions

Promoting Understanding of LGBTQ
The JAL Group is continuing with activities to promote

to fulfill its responsibility to respect the human rights of all

54

JAL Group
Sustainability

Modern Slavery Act Statement

20152019 (FY)

Cultivating Global Human Resources
In fiscal 2018, to ensure that all our employees can play
active roles on the global stage, we established the new
Global Promotion Office in the Human Resources Strategy
Department. We are expanding opportunities for young andmid-career employees to experience working in different
cultures, and holding regular international exchange
sessions to interact with employees who are playing activeroles in various countries and regions. Initiatives like theseIn accordance with the provisions of Section 54 (1) of the UK's

have increased the number of employees finding successModern Slavery Act, the JAL Group has disclosed steps taken to

beyond their home country or region. In 2020, one of our

prevent modern slavery and human trafficking in the JAL Group

female employees in Singapore was selected among theand its supply chains. We disclosed our third consecutive statement

Women to Watch 2020 by Campaign Asia-Pacific, one ofin fiscal 2019. Going forward, the JAL Group will continue

Asia's most popular marketing and advertising magazines.

working to prevent modern slavery and human trafficking, in line

The work of our global employees is steadily creating value

with the laws and guidelines of other countries.

for the JAL Group.

LGBT Ally Charter flight

Passing on the Experience andExpertise of Senior Employees
In fiscal 2019, 72% of senior employees over the retirement
age continued to play an active role in various workplaces,
utilizing their long-accumulated experience and expertise,and passing on their techniques to the younger generation.

55

JAL GroupCor porate Policy

JAL REPORT 2020

Sustainability Management

Environment

Message fromthe President

JAL Group's
Businesses and Strategies

PeopleGovernanceCommunities

Human Resources Development

Workstyle Innovation

Basic Concept

Basic Concept

In line with its Corporate Policy, the JAL Group is committed
to developing professionals throughout the Group who
accomodate different cultures and actively engage in aworld of diversity.

Specific Initiatives

made similar arrangements in Fiji and Nepal. We aim totrain overseas airline personnel by providing education on
the airline business and JAL Group's operating system andbusiness through online lessons, e-learning and instructors
sent to local schools. We hope that the active participationof overseas human resources in the aviation industry willlead to increased corporate diversity and inclusion as well as
the creation of new business ideas.

Remote work, workations and bleisure
In order to realize workstyles unconstrained by time andWe have been quick to introduce measures to develop afoundation to improve employee motivation. Innovations
include the use of IT tools that give people more freedom inworkstyles, improvements to offices and work environments,
and the introduction of "workation," "bleisure" thatleverage the features of an airline, thus encouraging
employees to take long vacations. We will continue to move
forward with a range of initiatives to innovate workstyles.

In-house training and workshops
In 2012, we established "qualities expected of JAL Group

Optimizing work hours

employee orientation began in 2013, where they together,

The JAL Group seeks to cultivate a climate where employees

learn, despite the company they belong to, the mindset andwith time limitations due to parenting, nursing care or

knowledge needed to provide unparalleled service to ourother obligations can work in a fair manner and achievecustomers while maintaining flight safety.

professional advancement. We feel that increasing work

In addition to new employee education seminars, we

efficiency and productivity will generate more free time forNot only does the Group provide standardized educationin fiscal 2014, we have gradually improved and updated it,
resulting in the system that is in place today. In July 2017, weintroduced "workation," which permits employees to work
remotely while on vacation. This enables employees to attend
sudden meetings without requiring them to alter their longwith diversifying ways of taking leave.

and to achieve self-development, and that feeding backtheir experience and values to the company will lead to

Toward the Future

and training programs, we also provide specialized job

corporate growth. Therefore, we are taking measures to

A Hawaii "bleisure"encourage employees to take annual paid leave under aplan and to optimize work hours.

training and company-specific education and training

In 2020, we made at-home online learning possible in order

In fiscal 2019, the rate of annual paid leave taken was 15.8

courses to develop leaders and safety and service

to help prevent the spread of COVID-19. By incorporatingdays, or 79% of the total entitlement, and the average

professionals. In fiscal 2019, the average training hours per

online learning, we have not only made education available

monthly overtime and rest day work hours was 9.5 hours

employee was 72.3 hours.

regardless of location or region, but also created greater(excluding general staff on shift work). The actual work

opportunities for conversation on work, culture andhour total in fiscal 2019 was 1,862 hours, against our target

Developing professionals beyond company walls

customs, deepening mutual understanding amongof 1,850 hours, representing a 99.4% achievement of the

The JAL Group is also focusing on education to transmit

employees beyond borders and regions, prompting manytarget.

knowledge and experience cultivated in the aviation

employees to voice their appreciation of this progress inbusiness to university students, who will become the next

diversity and inclusion.

generation of leaders. Through education, we aim to

The JAL Group plans to continue to make maximal use

deepen understanding of the aviation industry, developof digital technology to enable employees to be actively

human resources for the tourism industry and contribute

involved while enjoying greater freedom of lifestyle andto vitalizing regional economies and industries. We offer

workstyle options to provide ever better instruction andlectures at universities on the airline business that introduce

training, and to fulfill its Corporate Policy.

Communication space
As well as providing more freedom in workstyles, we believe
in expanding communication spaces that spark cross-section
communication. In March 2019, we launched the SKY
TERRACE communication space at JAL Head Office.

Monthly Average Overtime and Rest Day Work Hours per Employee

85.5

89.5

86.0
79.0

Communication space SKY TERRACE

12.0

the industry's history, features and latest business models,

7.9

and hospitality management to understand the meaning of

8.5

9.5

Toward the Future

hospitality while sharing JAL's approaches. In addition, we

We accelerated streamlining with a review of business processes

hold problem-solving classes where we discuss issues in thein fiscal 2019, introducing Robotic Process Automation (RPA)

aviation industry, explore solutions through the students'that incorporates AI and robotics. As a result of advancements

flexible and creative thinking, and use group discussions tobuilding. These activities broaden the career options ofuniversity students.
The JAL Group is also actively working on human resources
development overseas. We initiated a partnership with avocational training school in Myanmar in 2018 and have2019 (FY)in our IT infrastructure making remote work possible for all

Monthly average overtime and rest day work hours per employee

employees, we were able to reduce attendance at support

Ratio of annual paid leave applicants

departments to 20% or less following the outbreak of2016

help them reach conclusions, thereby improving teamwork-56

reason. Since beginning trials of our work-from-home system

employees to refresh themselves physically and mentally
Partnership with Myanmar vocational training schools

Philosophy Workshops, seminars for new managers, andseminars on career building and business skills.

employee is eligible to apply for it, regardless of position orat business trip locations. In these ways, we are progressing

entrance ceremony for new employees and joint newcompanies and job types, such as Leader's Workshops, JALcharacteristic of our remote work system is that everyof "bleisure" has allowed employees to take vacations while

education and training programs. The JAL Group joint

conduct training programs to promote interaction beyond

space, the JAL Group is promoting remote work. The defining

vacation plans. In addition, since May 2019, the introduction

Specific Initiatives

staff" based on the JAL Philosophy and introduced new

Financial Data/
Cor porate Information

JAL Group
Sustainability

Joint online instruction in Japan and overseas regions

2017

2018

*In fiscal 2019, there was a decrease in the ratio of actual annual
paid leave applicants and the amount of overtime worked
compared to the previous year. Despite this, as fiscal 2019 had
two fewer work days (16 hours), total work hours decreased by
11.9 hours. The success rate for our target of keeping total annual
work hours down to 1,850 hours rose from 98.7% to 99.4%.

COVID-19. We have reduced the number of employees coming
to work to a minimum in fiscal 2020 through remote work andother initiatives, and we continue to adapt our communication
and business processes to those tasks suitable for remote work.

57

JAL GroupCor porate Policy

JAL REPORT 2020

Sustainability Management

Message fromthe President

JAL Group's
Businesses and Strategies

PeopleGovernance

Environment

Communities

JAL Group
Sustainability

Financial Data/
Cor porate Information

Health and Productivity Management

Communities Route Network Expansion

Increase Inbound Tourism■ Basic Concept

Basic Concept

Basic Concept

Specific Initiatives

The JAL Group recognizes that the mental and physical health of all

The JAL Group prioritizes the health of women, who makeAs the Wings of Japan, the JAL Group fosters interaction of

The JAL Group is promoting initiatives to help make Japan aemployees is essential to follow its Corporate Policy to pursue theup over 50% of our employees and play a central role inculture and economy, making use of its network and extensive

tourism-oriented nation, which is one of the pillars of thematerial and intellectual growth of all our employees and deliver

their workplaces. As a result of complete coverage forknowledge of the air transport business. Not only do weJapanese government's growth strategy. To further increase

unparalleled service to our customers. This thinking was behind thegynecological exams, increased opportunities for check-ups,

contribute to economic and social development, we also

inbound demand and attract more visitors to regions across

JAL Group's launch of the JAL Wellness health promotion program

seminars for both men and women and e-learning initiatives

connect the international community and share the JapaneseJapan, we are working with our partner airlines to expand thewith initiatives addressing five major health issues: lifestyle diseases,

to increase awareness, we have met our screening rate targets

culture with the world. We will continue to contribute toGroup's international route network, offering special fares forcancer, mental health issues, smoking, and women's health.

for employees and we are working toward increasing thosesociety by making connections and possibilities a reality

exclusive use by foreign visitors to attract them to Japan, andnumbers, including for family members, throughout the Group.

through the air transport business, and in an contingency,

making efforts to contribute to solving social problems throughIn the event of an illness, our substantial support systems help

maintain operations as a transport infrastructure to fulfill ourour business activities. Furthermore, to maintain regional

employees to continue working.

responsibility as a pubic transport service provider.

economies, communities and environmental sustainability

JAL Wellness 2020 Targets
Ideal weight maintenance rate

Lifestylediseases

80% or more

(Target: all employees) (BMI of at least 18.5 and less than 25)

Specific medical check-up rate

(Target: families and retired employees)

60% or more

Stomach cancer screening rate

Cancer

100%
50% or more

Colorectal cancer screening rate

Mental healthStress check rate

Smoking rate
(Target: male employees)

Smoking*(Target: female employees)

Breast cancer screening rate
(Target: female employees, their family members,
and retired employees aged 18 and over)

Women'shealthUterine cancer screening rate

(Target: female employees, their family members,
and retired employees aged 18 and over)

Women underweight (young age group)(Target: female employees aged 34 and below)

prevention measures to keep
members, and all customers
reassured and safe from

50% or more

(Target: employees in workplaces wherestress checks are conducted)

are committed to thoroughour employees and their family

100%(Target: employees aged 35 and over)(Target: family members and retired
employees aged 35 and over)to the rest of the world and apublic transport operator, we(Target: employees aged 35 and over)(Target: family members and retired
employees aged 35 and over)Furthermore, in order to carry out our mission as a gateway

COVID-19 and other infectious
diseases.

100%

and promote sustainable tourism, we are collaborating with

Specific Initiatives
Tokyo metropolitan area network
The JAL Group is working to build the optimal networkby expanding its route network following developmentof airports in the Tokyo metropolitan area and promoting
airline partnerships.
At Haneda Airport, JAL will offer more international
flights to improve convenience for customers in the Tokyo
metropolitan area, and improve connectivity to ourthe public and private sectors, NGOs and NPOs to help create
region-specific content, develop a welcoming environment for
visitors, and attract more travelers to these regions.
Because of travel restrictions due to the spread of COVID-19,
we expect that travel by people across borders will be limited
for the time being. However, we have partnered with the Japan
Tourism Agency and the tourism agencies of other countries torevitalize tourism when the demand recovery phase begins. We
are also contributing to reach the Japanese government's targetof 60 million international tourists in 2030.

domestic network for both customers in regional cities and
20% or lessforeign visitors traveling across Japan, as part of efforts tocontribute to regional revitalization. At Narita International

5% or less
40% or more

Toward the Future(All ages. 50％ or more
for those age 35 and over)We will increase health awareness and promote the well-

40% or more

being of every employee so that they can work cheerfully(All ages. 30％ or more
for those age 34 and below)

20% or less

(Underweight: BMI of 18.4 or less)*Due to gender differences in physical impacts of smoking, male and female
targets are set separately. At the end of fiscal 2019, the male smoking rate
was 27.9% and the female smoking rate was 5.0%.

Health Promotion Programand energetically, which in turn will lead to improvementin productivity and corporate value. To achieve this, we willcontinue to improve on health and productivity management,
effectively using health data to provide every employee andfamily member with the tailored support they need for theirhealth.

We continue to advance health and productivity
management under the strong leadership of the Chief
Wellness Officer (CWO) and initiatives led by wellness
leaders in each workplace.

We are also working hard to help society and our customers
through health and productivity management. We launched
in June 2020 the JAL Wellness & Travel service, awarding
miles for wellness activities, as we increase the level of
support we provide for customer health.

Specific Initiatives

Airport, we will expand the Group's international route

Multilingual websites

network, including ZIPAIR, and improve Narita's standing as

We have developed a website that caters to 26 regions

a hub for international connections.

around the world in order to provide services that meet

We will cater to all air travel markets both as a full-service

the needs and preferences of international customers.

carrier and an LCC and expand our global network throughCustomers can now view the JAL website to makeairline partnerships.

reservations, purchase tickets, check in and find out about
onboard services in 16 languages, including Japanese,

Japan regional network

English, and Chinese.

The JAL Group has regional airlines that operate routes
connecting regional cities and outlying islands. We will
maintain sustainable lifeline routes essential to them, fulfill
our function as a transport infrastructure, connect regions
and the world, expand the movement of people andthe distribution and consumption of goods, and thereby
contribute to regional revitalization.

Wellness Promotion Program Chart
Establishment of Essential Air Service Alliance Limited
Executive President

Chief Wellness Officer(CWO)

Department managers
Wellness Leaders58

Department managers
Wellness Leaders

JAL Wellness
Promotion
Committee(Office: JAL HealthManagement Dept.,
JAL Health Insurance
Association)

Department managers
Wellness Leaders

Liability Partnership
Five airlines, namely, Amakusa Airlines, Oriental Air Bridge,

Multilingual websites

Japan Air Commuter, All Nippon Airways and Japan Airlines,
established in October 2019 theSupport for overseas airlines operating to Japan

Essential Air Service Alliance

JAL established the Ground Handling Strategy Department in

LLP (EAS LLP), a limited liability

the Airport Operations Division in November 2019 to optimize

partnership to maintain essential

the JAL Group's network and know-how, support foreign

and lifeline air links to Japan's

carriers serving hub and regional airports in Japan andoutlying islands.

contribute to the expansion of inbound demand.

59

JAL GroupCor porate Policy

JAL REPORT 2020

Sustainability Management

Environment

Message fromthe President

JAL Group's
Businesses and Strategies

PeopleGovernanceCommunities

Regional Revitalization

Improving Convenience in Travel

Basic Concept

Basic Concept

Tourism promotion

The environmentally friendly electric Vertical Take-Off and

To increase interaction of

The expansion of Mobility as a Service (MaaS)* ispeople and products between regions, and we coexist with thosevarious networks, we provide

anticipated to provide a new means of transportation andregions. However, these regions face numerous problems, such assupport for the creation andtransport for regional areas undergoing depopulation, anddepopulation, due to declining birthrate and an aging population,

promotion of unique regionala solution to traffic congestion in cities.

and concentration of population in the Tokyo area. While thecontent, formulation of inbound

JAL Group has begun MaaS initiatives in order to create

outbreak of COVID-19 has resulted in a decline in demand forstrategies, and development ofenhanced transportation experiences by providing seamlesstourism, a shift to the new normal is anticipated in communities

tourism infrastructure.

movement and personalized services at the destination. We

not limit ourselves to continuing our regional contribution orrevitalization activities but will promote a multilateral, sustainable

JAL is a special sponsor of the Ninja Trial Running Race, part of the Shinobi
no Sato Iga ninja theme village project, held in November each year since2017 in collaboration with the city of Iga, Mie Prefecture, and Mie University.
(The race was canceled in 2020 due to COVID-19.)

approach. Even in this new age, we will work closely with
communities, thinking and acting together, to bring out and raise
the attractiveness and value of the region, expand the movement
and circulation of people and goods, and create more vibrant

We will support regions

regions.

in increasing the value

Specific Initiatives
Furusato (Home town) Ambassadors
In fiscal 2020, we moved some of the headquarter functions to oursatellite offices in the Hokkaido, Tohoku, Chugoku, Shikoku and Kyushu
regions, and assigned cabin attendants from these regions as Furusato(home town) Ambassadors as part of our efforts to revitalize regional
areas. With their experience and perspective as cabin attendants, they
will play a role in planning and designing new regional revitalizationplans for the COVID-19 pandemic period and post COVID-19.

1will continue to contribute to solving social issues in termsof mobility and transport through the development of nextgeneration air mobility services including flying cars, andprovide seamless transportation solutions in the field of aviation.

Regional industry supportof regional specialties,

OriginA ir route net w ormeals using food from the area,

expertise and networks to increase the number of travelers and theand promote the area throughmovement of products, support the revitalization of tourism andvarious JAL Group media eachregional industries, and thereby develop sustainable regions and create

month. In March 2020, we

new demand for air travel. Our plan is to partner with community

introduced our 107th feature.

residents to uncover and create hidden regional products, promote
sixth sector industrialization and expand distribution channels. Based

Kitami First Class dinner. The first class dinner from our domestic flight, whichfeatured regional specialties from Kitami, Hokkaido, July 2020.

on the concept of "Growing together with the community," we will
work in hands together with the regions, people and products to build

Collaboration

a better future together.

We collaborate with otherWEB

http://japan.jal.co.jp/index.html (in Japanese only)

companies and organizations
who share the same drive torevitalize regions by holding
events, creating travel products,
and expanding sales channels forregional specialties in order toenergize those regions.

NEW JAPAN PROJECT website

60

For example, together with Kagawa Nutrition University, we developed
products using a Kagawa Prefecture specialty, Obarabeniwase tangerines.
Sales were launched in March of 2020 and the products completely sold out.

services using the eVTOL developed by Bell. We are moving
into the future with the construction of a next-generation air
mobility operations platform with a flying car, building on our
expertise in safe and secure air transit operations.
*2 Small aircraft with multiple propellers.

k

Toward the Future

In our Regional Area Promotion,

videos, and meals on domestic flights, but also use the Group'sand Bell Textron Inc. and has begun studies into providing

The much-anticipated Bell eVTOL flying car

Regional Area Promotion

regional areas, serve inflighteasily. The JAL Group has partnered with Sumitomo Corp.

Coordination with
dal transpo
multimo rvices rtseThonglor Market "Directly from Japan Special."
A "food special" which was held at Thonglor market, in Bangkok Thailand, where
fresh fish, vegetables, and fruits were sent directly from Kyushu to the store.

We reveal the allure of individual

travel short and medium-length distances inexpensively andation with trav
Coordin style serv el
ices
and lifeenergizing local industries.

promote popular local delicacies through our inflight magazine,

with its ability to land and take off without a runway and

Destination/
Activity

Mobility

conducting promotions, andThrough the NEW JAPAN PROJECT, launched in 2015, we not only

in recent years, is anticipated to provide air mobility solutions

The JAL Group's Aviation Network is the Core of its
MaaS Concept

expanding sales channels,

which we began in May 2011.

Landing (eVTOL)*2 'flying car,' which has been in the spotlight*1 Mobility as a Service (MaaS) is the integration of various forms of transport
services into a single mobility service accessible on demand.

developing products,

NEW JAPAN PROJECT

Financial Data/
Cor porate Information

Aiming toward flying cars for air mobility

The JAL Group's business activities are supported by exchanges ofsuch as a rapid migration from rural to urban areas. We will

JAL Group
Sustainability

Res

erv a

tio n

ion
and p
alizataymentPersonCoordination with other platforms

MaaS platform

Specific Initiatives

We are innovating with medium- and long-term strategies
to improve the convenience of mobility. In 2020, in lightof COVID-19, we are moving forward with drone logistics
demonstration tests and environmental surveys for flying
cars as we aim toward providing MaaS and next-generation
air mobility services. By providing comprehensive air
mobility services offering seamless movement and transport,

Introduction of autonomous personal driving electric

the JAL Group is shortening distances between people,

vehicles at Haneda Airport

goods and activities around the world and contributing to

The JAL Group has introduced the world's first autonomous

the realization of a sustainable society.

personal driving electric vehicles as a personal mobility
service at Haneda
Airport. The service,
one of the new JAL
SMART AIRPORT
services, provides
safe, comfortable
and seamless
mobility to all airport
users.
WHILL autonomous personal driving electric vehicles introduced at Haneda Airport

61

JAL GroupCor porate Policy

JAL REPORT 2020

Sustainability Management

Disaster Restoration AssistanceCommunity Relations

Basic Concept

Basic Concept

In addition to the swift resumption of air transport and cooperation
with transport for recovery efforts, we provide continuous support
to boost the morale of disaster victims as part of our mission andresponsibility as a transportation infrastructure operator.

Topic

As an upstanding corporate citizen, the JAL Group uses its
strengths in various activities to contribute to the bettermentof society in collaboration with a range of stakeholders.

Specific Initiatives

Environment

Message fromthe President

JAL Group's
Businesses and Strategies

PeopleGovernanceCommunities

JAL Group
Sustainability

Financial Data/
Cor porate Information"What we can do now" during the COVID-19 pandemic

Physical Support on Medical andAgricultural Frontlines

Manufacture of Face Shields and Eco-bags
Maintenance engineers have designed face shields using

We have introduced a system for employees with medical

maintenance scrap materials. Approximately 1,200 facequalifications to take concurrent jobs in medical orshields have been made and donated to medical facilities

caregiving, driven by their desire to support medicalwith a personal message. Employees in Japan and aroundfrontlines. Three cabin attendants made use of thisthe world have also participated in making masks andNurturing the next generation—JAL SORAIKU®

program to work in health centers and care facilities. In

donating them to kindergartens in their towns.

Hands-on experiences of the wonder of the skies gives JAL

the Narita area, we assisted with carnation wrapping and

Furthermore, fabrics for uniforms that became unnecessary

SORAIKU® participants an opportunity to think about their own

packaging at farms to help with the Mother's Day rush,with the April 2020 uniform makeover were used tofutures, and about the future of the world and the environment.

and with harvesting green onions, a local specialty ofmake approximately 850 tote bags, and used as gifts toThat is the goal behind the activities that we provide, which include

Yokoshibahikari town near Narita Airport. This activity

employees who made donations. The donations were given

relief personnel and supplies to areas struck by disaster,

JAL Origami Plane Classes and JAL Career Talks for Students.

not only taught lessons about hourly productivity but also

to local governments, while the tote bags contributed to acontributing to the speediest possible recovery. Also, in■JAL SORAIKU Participants

enabled employees to earn extra income.

reduction in the use of plastic bags in company facilities.

Specific Initiatives
From post disaster to the recovery stage
By coordinating with a network of government, localorganizations, NGOs and NPOs, we transport disaster®

addition to making charitable contributions directly to theseareas, we enable JAL Mileage Bank members to help bycontributing miles through our Charity Miles program.

FY

FY2016FY2017FY2018FY2019Participants

152,323

201,983

197,469

191,840

WEB

Fiscal 2019 Charitable Contributions
Contributions

Donations

Charity Miles Employee Donations

http://www.jal.com/ja/csr/soraiku/ (in Japanese only)(Unit: JPY)

Other

Support for sports
We have implemented the JAL Next Athlete Project, which includes

2,739,000
615,866
Typhoon 5,000,000 A total of
Personnel(to Chiba(to the Central
support andFaxai (to Chiba (to7,000,000
community chest Community Chest
9unicipalities
supplies(Typhoon 15) Pref.) in the Narita area)society)of Japan)

activities to evaluate the sporting abilities of children in the 47

5,000,000 A total of
1,206,472 Transport of
Typhoon (to the Central 11,000,000 6,469,500(to the Central (to the Central
emergency
Hagibis Community (to 8 refectures Community
Communityand(Typhoon 19) Chest
Chest of Japan) Chest of Japan) relief supplies

School "Asuchalle," where para-sports are offered to children to try

of Japan)

prefectures and advise them on the sport most appropriate forthem. In addition, we co-sponsor the Challenge for Tomorrowby staff from the Nippon Foundation Paralympic Support Center.

3 municipalities)

Green onion harvesting to support agriculture

Recovery stage

Home-made Videos Introduce Aircraft Trivia

We support economic recovery through industrial development
and creation of tourism demand in disaster areas. We also consider
supporting the morale of disaster victims to be an important
responsibility; therefore, we support sales promotions of local
products in coordination with local governments and conduct
training to support restoration, in which employees visit affected

Sports Abilities Evaluations for the Next Generation

New Chitose Airport staff who proposed to make tote bags

Donations of Food and Supplies

We began streaming aviation video lessons made by

Due to the reduction in visitors to the JAL Agriportmaintenance engineers in order to bring people staying at

Strawberry House, we sent gifts of 10 kg packages of freshly

home closer to aviation. The videos give explanations on the

picked strawberries to facilities for children with disabilities

mechanisms of plane flight, lavatories and other topics ofin Narita to help boost morale. JAL employees also joinedinterest. We also made other videos available, such as a flightwith American Airlines employees in collecting food,areas and listen to real-life stories from disaster victims. In

Sponsorships, donations, international cooperation, etc.

addition, we conduct Donation Tours, where a portion of the tour

crew choir singing their support for professional healthcare

disposable diapers, antiseptic solution, masks and medical

In fiscal 2019, the JAL Group made donations for the reconstruction

cost is donated to affected areas to support restoration.

workers and stretching classes by cabin attendants.

supplies, donating them to welfare facilities in Taiwan.

of Notre Dame and Shuri Castle. The JAL Group supports education
for children impacted by the Great East Japan Earthquake throughChance for Children, providing education coupons through Charity Miles
donations from customers and matching the amount with donations
from JAL. The JAL Scholarship Program conducted by the JAL Foundation
invites university students from Asia and Oceania to Japan to a threeweek study program to further mutual understanding and theirunderstanding of Japan. (A total of 1,641 students have participated in
the 50 times the program has been held through to fiscal 2019.)
Fiscal 2019 Charitable Contributions
Notre Dame Cathedral in Paris

Shuri Castle

Chance for Children

40,000 EUROJPY 10 million(Charity Miles and JAL contributions
make up 50% each)(approx. JPY 5 million)
Harvesting mustard seeds to support restoration efforts in Kumamoto

62

Flight crew choir singing with enthusiasm

Donations of freshly picked strawberries

A total of JPY 6,342,00063JAL GroupCor porate Policy

JAL REPORT 2020

Sustainability Management

Environment

Message fromthe President

JAL Group's
Businesses and Strategies

PeopleGovernanceCommunities

JAL Group
Sustainability

Financial Data/
Cor porate Information

Governance Corporate Governance
Basic Concept

Board of Directors and Directors

We maintain an awareness that our corporate group isestablishing a corporate governance system that results inBoard of Directors

Directors

a member of society at large with the duty to fulfill ourhigh management transparency and strong management

The Board of Directors ensures strong management

Directors' term of office is set at one year to ensure theircorporate social responsibility and contribute to society

monitoring.

oversight based on a high level of management

accountability each fiscal year.

transparency through the election of candidates for theExternal Directors are appointed from among persons with

as we develop our business, in addition to fulfilling ourfinancial responsibility of earning adequate profits by

The Board of Directors has established a robust corporate

positions of Director, Audit and Supervisory Board member

vast knowledge and experience in various fields to ensure

providing high quality products through fair competition

governance regime that adheres to the Fundamental

and Executive Officer, decides their remuneration, anddiversity, to offer practical advice from multiple standpoints

while maintaining flight safety, which is the core of our

Policies of Corporate Governance as important policies inmakes important decisions.

regarding management, and to provide appropriate

business, and providing the finest service to our customers.

accordance with the Companies Act and relevant laws andTaking this into account, we have established JAL

regulations. It is subject to regular review.

Philosophy in accordance with the JAL Group Corporate

For the Fundamental Policies of Corporate Governance andof three or more External Directors who qualify as highly

Directors is appointed Lead Independent External Director

Policy, and engage in speedy and appropriate management

the Corporate Governance Report, please refer to the JAL

independent and appoints a Director who does not

to improve coordination with the Audit and Supervisorydecision making. At the same time, we will strive to

website.

concurrently serve as Executive Officer as Chairman inBoard members and internal divisions. Those who do notorder to separate the management monitoring function

qualify as highly independent as defined by the Standards

and business execution function.

for Independence of External Directors established by theincrease corporate value and achieve accountability byWEBoversight regarding the execution of business.
(1) The Board of Directors appoints an appropriate number

https://www.jal.com/en/outline/governance/(2) To carry out efficient decision-making, the Board may

Corporate Governance System

Furthermore, one External Director among the External

Company are not appointed.

delegate decision-making concerning matters set forth

For the standards used in determining the independence

in the Administrative Authority Criteria Table to theof External Directors, please refer to the JAL Group's

President pursuant to Regulations for Kessai (written

Fundamental Policies of Corporate Governance.

approval) and Administrative Authority approved by the
Board. The Executive Management Committee has been

General Meeting of Shareholders

established for contributing to appropriate and flexible

Appointment/Dismissal
Appointment/Dismissal

Corporate GovernanceCommittee
Nominating Committee

Advisory/
Recommendation

Compensation Committee

Appointment/
Dismissal/
Instruction

Personnel Committee
Officers Disciplinary
Committee
Executive Management
Committee

Board of Directors

Advisory/
Recommendation

President
Instruction/
Delegation of Authority

Executive Officers Board
Audit

Audit

Appointment/Dismissal/
Supervision/Instruction/
Delegation of Authority

Decision on
Appointment andDismissal of Members

Accounting Auditor
Collaboration

Internal Audit

Collaboration

Audit

Departments andSubsidiaries*1 Established as follows as a management body directly under the President.
JAL Philosophy Council, Group Earning Announcement Session, Group Safety Enhancement Council, Group Risk Management Council,*2 Group Management Council.*3*2 Established Risk Management Committee and Financial Risk Committee under this.
*3 Established Sustainability Promotion Committee, JAL Wellness Promotion Committee, Committee for Tokyo 2020 Olympic Paralympic Promotion Committee, Investment
Monitoring Committee under this.

Medium-to-long-term strategies• Review of FY2017 and FY2018

the Board of Directors. External Directors make up• Progress toward achieving Grand Design

the majority of each of the committees, ensuring• Business strategies, production framework, revenue
and expenditure plans

Corporate Governance Committee, which comprises the
Chairperson of the Board and External Directors, reviews

Instruction/Report

Executive Management Committee
body and committees*1

Board of Directors and the President.

independence from JAL's executive management. The

Collaboration

Main Subjects of Deliberation at Board Meetings

decision-making concerning management issues by the(3) We have established the following committees under

Financial Audit

Instruction
ReportAudit andSupervisory Board

Appointment/
Dismissal

the Fundamental Policies of Corporate Governance every
year.
(4) The Committee evaluates Board effectiveness in terms of
its make-up, operation, culture, oversight, management

Corporate governance• Formulating the JAL Group Code of Conduct"Commitment to Society"• Evaluating Board effectiveness• Officers' remuneration

strategies and dialogue with shareholders, takes
appropriate action and discloses its findings.

Risk management• Dealing with alcohol-related incidents• COVID-19 vigilance and response
Shareholders• Shareholder returns policy

64

65

JAL GroupCor porate Policy

JAL REPORT 2020

Sustainability Management

Environment

Message fromthe President

JAL Group's
Businesses and Strategies

PeopleGovernanceCommunities

JAL Group
Sustainability

Financial Data/
Cor porate Information

Corporate Governance
Establishment of Various Committees

Audit and Supervisory Board and Audits

Support and Training Policy for Directors
and Audit and Supervisory Board Members

To build a corporate governance system that results in high management transparency and strong management monitoring,

Audit and Supervisory Board

various committees have been established under the Board of Directors. External Directors make up the majority of each of

Audit and Supervisory Board makes objective, appropriate

Legal considerations are explained to Directors to ensure

the committees, ensuring independence from JAL's executive management.

judgments from an independent perspective, based onthat they are aware of their responsibilities including thetheir fiduciary responsibilities to the shareholders, whenfiduciary duty of loyalty and the duty of care as a prudent

fulfilling their roles and responsibilities, such as auditing

manager, and opportunities are provided for continuous

the execution of Directors' duties, appointing or dismissing

participation in external training, affiliated organizations

accounting auditors and executing rights concerningand such. In fiscal 2019, directors and Executive Officers

auditors' remuneration.

attended three external training courses, including one(FY2020)

Committee
Chairperson

Board
members

Functions

Corporate GovernanceCommittee

Nominating
Committee

Compensation
Committee

Personnel Committee

Eizo Kobayashi

Masatoshi Ito

Eizo Kobayashi

Yuji Akasaka

Yoshiharu Ueki
Masatoshi Ito
Sonoko Hatchoji
The Corporate
Governance Committee
checks whether activities
comply with JAL Group
Fundamental Policies ofCorporate Governance,
conducts analyses
and evaluations todetermine whether suchactivities contributeto sustainable growthand enhancement of
medium and long term
corporate value, andprovides necessary
findings and reports to
the Board of Directors.

2 meetings held

No. ofmeetings,
key topics of
discussion in
FY2019• Deliberations andrecommendations
regarding Board
effectivenessYuji Akasaka
Shinichiro Shimizu
Eizo Kobayashi
Sonoko Hatchoji

Yuji Akasaka
Shinichiro Shimizu
Masatoshi Ito
Sonoko Hatchoji

When submitting a
proposal to the general
meeting of shareholders
concerning theappointment of candidates
to the positions of Directorand Audit and Supervisory
Board Member, theNominating Committee
comprehensively judges the
personality, knowledge,
ability, experience,
performance and otherattributes of eachcandidate based on an
inquiry from the Board of
Directors and reports back.
Furthermore, it defines
qualifications required of
the President, etc., andmanages the early training
status of those candidates.
It also reports investigation
results to the Board of
Directors in the event thata situation occurs where
the qualifications of senior
management should becalled into question.

The Compensation
Committee reports backthe Board of Directors
concerning the amountof compensation for
Directors, Executive
Officers and Audit
and Supervisory Board
Members based on an
inquiry from the Boardof Directors.

2 meetings held

7 meetings held

• Candidates for the
positions of Directorand Audit andSupervisory Board
memberShinichiro Shimizu
Eizo Kobayashi
Masatoshi Ito
Sonoko Hatchoji
When appointing or
dismissing an Executive
Officer, the Personnel
Committee reports backto the Board of Directors
based on an inquiry
from the Board.

4 meetings held

• Officer remuneration• Structure of Executive(basic remuneration,
Officers
annual incentives, longterm incentives)

Officers Disciplinary
Committee*

on corporate governance, and participated in a variety of

Sonoko Hatchoji
Yuji Akasaka
Shinichiro Shimizu
Eizo Kobayashi
Masatoshi Ito
When taking disciplinary
action against Directors
and Executive Officers,
the Officers Disciplinary
Committee makes
decisions.

4 meetings held
• Disciplinary actions
against officers

Audit and Supervisory Board members

finance industry committees.

Audit and Supervisory Board members monitor important

We provide opportunities to External Audit and Supervisory

matters concerning corporate management, business

Board members for continuous participation in external

operations and the execution of duties by reviewing

training, affiliated associations, etc., in addition to providing

important Kessai (written approval) documents, as well

corporate information.

as participating in Board meetings and other important

To deepen their understanding of the Company, External

meetings. Furthermore, Audit and Supervisory Board

Directors and External Audit and Supervisory Board

members and staff members conduct an annual audit ofmembers are provided safety education such as a memorial

each business site, subsidiary and affiliated company andclimb up Mt. Osutaka and visits to the Safety Promotion

report the results to the Representative Directors. They also

Center, in addition to visiting frontlines. We also offer acooperate with internal audit departments and accounting

variety of opportunities for deepening understanding of theauditors and hold regular meetings with corporate auditors

JAL Group's history and Philosophy. Elsewhere, we provide

of subsidiaries to improve and strengthen auditing within

advance explanations on agenda items to be submitted for

the JAL Group.

deliberation at the Board of Directors and other meetings,

Audit and Supervisory Board members are provided withas necessary, and opportunities to explain other matters at

company information, and opportunities to participate intheir request.

external training and external associations, etc. External

In addition, the Forum of Independent External Officers,

Audit and Supervisory Board members are appointed fromwhich meets several times per year, is comprised of Externalamong persons with vast knowledge and experience inDirectors and External Audit and Supervisory Board

various fields to ensure sound management by conducting

members, and sponsored by the Lead Independent External

audits from a neutral and objective standpoint.

Director, held four meetings in fiscal 2019. The participants

Successors to the President
and Other Leaders
The Nominating Committee holds ongoing discussions on

interview people from pertinent departments in relation to
JAL's international network strategy, competition strategy,
human resources strategy, and risk management, in order todeepen their understanding of the Company's business.

potential successors to the President and other company
leaders responsible for reforming the Group and driving
growth to ensure the Corporate Policy and management• Revision of theFundamental Policies of • Responses to the
Corporate GovernanceCorporate Governancein accordance with
Code and to the
updates to theevaluated Board
Corporate GovernanceeffectivenessCodestrategies are maintained.
The Company defines the President and other Board
members as persons with qualities to steadily get positive
results toward realizing the Corporate Policy by working*Eizo Kobayashi was chairperson of the Officers Disciplinary Committee until FY2019.

together with every staff based on a firm commitment toflight safety, which is the foundation of the JAL Group, anddisplay of initiative in practicing the JAL Philosophy. The
Company assists candidates for President and other posts
to quickly acquire grounding and discipline necessary for
management through practical and diverse experiences.

66

67

JAL GroupCor porate Policy

JAL REPORT 2020

Sustainability Management

Message fromthe President

JAL Group's
Businesses and Strategies

PeopleGovernance

Environment

Communities

Financial Data/
Cor porate Information

JAL Group
Sustainability

Corporate GovernanceEvaluation of Effectiveness of the Board of Directors
Under the Fundamental Policies of Corporate Governance, every year the Group assesses the effectiveness of the Board andRemuneration of Directors

Framework for incentive remuneration
1. Annual incentives (performance-linked bonuses)

Policy Regarding Directors' Remuneration, etc.

The amount to be paid every fiscal year as an annual incentive

reviews operation, etc. appropriately, while referring to self-assessment by each Director and Audit and Supervisory Board
Member.

will vary from approximately 0 to 200 depending on the

Basic policy
1. The JAL Group will encourage the performance of duties consistent
with our Corporate Policy and management strategies and provide

Fiscal 2019 Effectiveness Evaluation Processtargets, with the aim of sustainable and steady growth of the
Chairperson is an External Director.) decided the way to proceed with the effectiveness evaluation, which includes

Company and the Group and of medium to long-term improvement
in corporate value.
2. The Company will establish appropriate proportions for annual

the details of the questionnaire.

• Net profit attributable to owners of parent• Indices related to safe flight operations• Individual evaluation indices for each officer, etc.
Performance evaluation indices will be considered for review as

incentive (performance-linked bonus) linked to fiscal year

necessary in accordance with changes in business conditions, the roles(2) To maintain anonymity, the Secretariat of the Board sent the questionnaire to the members of the Board. Primaryperformance and, for the purpose of further promoting the aligningof each officer and other factors. Payments were made in July 2020

items for evaluation in the questionnaire were board composition, operations, culture, oversight, and discussion onof interests with shareholders, a long-term incentive (performance-

based on fiscal 2019 outcomes relating to net profit attributable

management strategies, as well as free description.

linked share-based remuneration) linked to corporate value into owners of parent, indices related to safe flight operations, andaccordance with medium to long-term performance, in order toindividual evaluation indices for each officer. The target for net(3) The Secretariat of the Board reported to the Board of Directors on the results of assessment and individual opinions
provided in the free description column. Then, the Board of Directors discussed the Board's issues and measures.
(4) Later, the Corporate Governance Committee compiled proposals, based on which further discussion was held by the
Board of Directors and decisions for future initiatives were made as below.

contribute to the demonstration of sound entrepreneurial spirit.

profit attributable to owners of the parent was achieved.

3. The Company will provide treatment that is appropriate to the

2. Long-term incentives (performance-linked share-based remuneration)

management team of the Company, in accordance with the

The number of shares to be granted every fiscal year as a long-

Company's business performance.

term incentive will vary from approximately 0 to 220 depending on

Remuneration levels and remuneration composition ratios

the degree of achievement, with 100 representing the number to

1. The Company will set appropriate remuneration levels with

be granted when achievement is in line with performance targets.

reference to objective data on remuneration in the marketplace,

The performance evaluation period will be three years, withand based on the business conditions of the Company.

performance for three consecutive fiscal years evaluated every year.

2. Taking into account factors including the content of the Company's
business and the effectiveness of incentive remuneration, thePerformance evaluation indices
Indices prioritized in the Medium Term Management Plan:

Overview of the results of assessment

Overview of future initiatives

The Board of Directors conducts free and open-minded

The Board has identified the following challenges, andremuneration,* (B) amount of annual incentive (performance-linked

discussions, while receiving an audit of execution ofwill endeavor to overcome them through the initiatives

bonus) to be paid according to degree of achievement against

duties from Audit and Supervisory Board Members,

set forth below.

targets, and (C) amount of long-term incentive (performance-linked

with the opinions of External Directors respected(1) Deepen discussions on long-term issues and visions

share-based remuneration) to be issued according to the degree of

Performance evaluation indices will be considered for review for eachby Directors who have been assigned from withinfor sustained improvement in corporate value in aachievement against targets, as follows.

Medium Term Management Plan period. With respect to common

the Company and accordingly appointed in a good

rapidly changing business environment.

balance including from frontline divisions given the(2) Enhance monitoring by the Board in order to

Guideline for the case of 100% achievement against targets

importance of flight safety. In addition, External

strengthen the management of risks such as(A):(B):(C) = 50%:30%:20%

Directors have been highly accessible to information

investment in new businesses.

as requested, and the roles of External Directors are(3) Deepen discussions on strategy for human resource

being appropriately fulfilled. As a result of promoting

diversity, including the promotion of female

the shift toward strategic discussions and engaging

advancement.

in constructive dialogue with shareholders in FY2019
based on the previous effectiveness assessment, overall
evaluation has improved from the previous year.

Company sets the proportions of (A) amount of fixed basic

The above ratio is meant to be a guideline only, andchanges may be made to reflect changes in the shareprice of the Company's shares or for another reason.

Audit and Supervisory Board Members*1
Number of Directors andAudit and Supervisory
Board Members
Directors(Of which, External Directors)
Audit and Supervisory Board members(Of which, External Audit and Supervisory Board Members)
Total• Consolidated operating profit margin• Consolidated ROIC
• Customer satisfaction, etc.

stock granted to eligible Directors and Executive Officers through theshare-based remuneration plan, the Company will establish a target
number of held shares for each position and impose limits on share* The amount excludes the amounts of allowances in cases inwhich an Executive Officer serves concurrently as Director, andthe amounts of allowances when the Executive Officer has
representative authority.

Fiscal 2019 Actual Remuneration Paid to Directors and68

be paid when achievement is in line with performance targets.
Performance evaluation indicesstrong incentives for the achievement of specific management(1) The Corporate Governance Committee (Comprised of External Directors and the Chairman of the Board of Directors.

degree of achievement, with 100 representing the amount to

12
(3)
6
(3)
18

sales to further promote the aligning of interests with shareholders.
Procedures for determination of remuneration, etc.
Matters related to remuneration of Directors and Executive Officers
will be decided by the Board of Directors, following deliberation andreporting within a Compensation Committee arbitrarily establishedby the Company. A majority of the members of the Compensation
Committee will be External Directors, and its Chairman will be
appointed from among the External Directors.
Total amount paid
(Millions of yen)
340
(35)
78
(29)
418

Total amount paid by type (Millions of yen)Basicremuneration
281
(35)
78
(29)
359

Bonuses*2

Share-based
remuneration, etc.*3

25
(-)
(-)
25

34
(-)
(-)
34

*1 With regard to short-term incentives, the portion based on evaluation of net profit was not paid due to the effects of COVID-19. With regard to long-term
incentives, the decision was made to cancel payment of the portion started in 2017 and payable in 2020.
*2 Annual incentive (performance-linked bonus)*3 Long-term incentive (performance-linked share-based remuneration)

69

JAL GroupCor porate Policy

JAL REPORT 2020

Sustainability Management

Robust Risk Management (Promotion of BCM)

Environment

Message fromthe President

JAL Group's
Businesses and Strategies

PeopleGovernanceCommunities

Financial Data/
Cor porate Information

BCM: Business Continuity Management

Basic Concept

Risk Management System

The JAL Group recognizes that trust from society is a

Risk Categories

managerial resource for aviation infrastructure, where

Operational risks

safety is the basic foundation of business continuity. To

Board of Directors

risk management of our business activities to achieve stable

Risks which directly bring about delay, suspension, or
stoppage of products and services provided, accidents, or
quality or safety problems in the air transport business

management of the entire Group and promote activities toBusiness risks

protect and enhance that trust, we conduct comprehensive

fulfill our corporate social responsibility.
in air transport, we are coordinating within the Group to

PresidentGroup Council for Safety
Enhancement General MeetingGroup Risk Management Council

Group Safety Enhancement
Council

Risk Management Committee

Business risks

1

Specifically, we have a standardized Risk Management

Changes in the business environment
domestically and internationally

Manual for the JAL Group, based on JAL Group Basic Policies

7

on Risk Management, to control risks in order to achieve our

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

management goals. Organization leaders bear responsibility
for risk management. Risk is defined as "events or behaviors
which threaten the achievement of the missions, goals, ortargets of individuals or organizations," and is classified
into two types: operational risks and business risks. Priority

6

risks are selected from among the risks confronting each

Dept.
A-1

Confirm the mission, goals,
and targets of eachorganization

Entire JAL Group

Dept.
A-2

Group Risk Management Council
This Council is chaired by the President, and primarily
comprises responsible General Managers of frontline
divisions. The Council comprehensively manages operational

Overseasregional
headquarters

Division A

Risk Management System

2

Group
airlinerisks and business risks to stabilize Group management.
It also functions as a venue for providing progress reports,
3Group
company

Responserisks

Identify risks

sharing information and making decisions on various
matters, such as establishment of JAL Group Basic Policies on
Risk Management, regular risk assessments, implementation

dealt with by effectively allocating resources. All priorityof measures when risks eventuate, and risk auditing.

risks of the JAL Group are aggregated, and critical risks are

5

4

Clarifypriority risks

Update therisk map

identified and treated intensively.

Risk Management Committee
Operating under the Group Risk Management Council, theWe execute regular risk management cycles
so that each organization can achieve their goals.

committee is chaired by the General Manager of General
Affairs and comprises General Managers of relevant
divisions. Its role is to conduct administrative work in

Risk Map (For details on each risk, and examples of responses, see pp. 94-95)

support of the Group Risk Management Council, including

After classifying risks based on four characteristics (repeated, sporadic,

any preparations that will contribute to making andexternal factor, internal factor), a risk map is prepared by evaluating risk

executing decisions.

probability and severity in each category.

The committee also serves as the committee for personal

Sporadic

Priority risk

Low Medium High Extreme

Priority risk

Probability

Probability

External factors

Internal factors

Priority risk

Low Medium High Extreme

ProbabilityGroup Safety Enhancement Council
This council is chaired by the President of Japan Airlines
and comprises officers and presidents of Group airlines
appointed by the general safety manager and Chair. The
role of the committee is to ensure safety of the entire Groupand promote safety management by establishing important
policies on safety management, clarifying the status ofcorporate activities, and reviewing organizations, systems
and measures, as necessary.
Group Operational Safety Promotion Committee
Operating under the Group Safety Enhancement Council,
the committee maintains and strengthens collaborative,
safety measures among departments, divisions and Groupairlines with the aim of enhancing overall air transport
safety of the Group. The committee comprises the General
Manager of JAL Corporate Safety and Security (Chair),General Manager of safety management at JAL appointed
by the Chair, and the general safety manager or responsible
officer of safety of each Group airline.

Managers of relevant divisions and chaired by the General
Managers of the General Affairs and the IT Planning.

Information Security Measures

The committee continuously looks at ways to strengthen

The JAL Group fell victim to a data security breach in 2014. Hackers

information management.

attacked JAL Mileage Bank systems and gained illegal access tothe customer information management system. We deeply regret

Low Medium High Extreme

Very large Large Medium Small
Severity

Operational risksLong-term shutdown of Integrated Operations
Control (IOC) responsible for flight dispatch
and scheduling of aircraft all over the world,
aircraft accidents, etc.

Very large Large Medium Small
Severity

Operational risks
Earthquakes, volcanic eruptions and otherlarge-scale disasters, terrorist attacks,
regional conflicts, wars, outbreak and spreadof infectious diseases, etc.

Operational risks
Aviation safety problems, shortages of
JAL Group personnel with qualifications
and skills needed for operations, strikes,
computer program glitches, etc.

Very large Large Medium Small
Severity

Business risks
Changes in foreign laws or regulations, suchas consumer protection and antitrust laws,
litigation, etc.

Business risks
CO2 emissions, noise, harmful substances,and other environmental issues, mishandlingof JAL Group customer data, human rightsbased harassment, etc.

Internal factors

External factors

Operational risks
Changes in fleet plans attributable to aircraft
manufacturers, changes in laws, regulations andinternational conventions relating to the air transportbusiness, adverse weather, effects of services provided
by third-parties, large-scale infrastructure failures such as
outages of power and communication network systems
that supporting information systems, for example,
cyberattacks by computer viruses, etc.

Very large Large Medium Small
Severity

Business risks
Economic trends, fuel price and exchange rate
fluctuations, funding and financial market trends,
credit score fluctuations, changes in the competitiveenvironment, workstyles, taxes and public dues suchas landing fees, etc.

Operational risks

information and information security, comprising General

Repeated

Repeated

Financial Risk Committee(Also serves as the committee for personal
information and information security)

Risk Management Cycle

enhance the risk mindset and risk practices of all employees.

organization with reference to risk assessment criteria, andPromotion of Safety and Security

Other risks excluding operational risks

Even at Group companies which are not directly involved

70

JAL Group
Sustainability

Priority risk

Low Medium High Extreme

Probability
Sporadic

For priority risks, we implement PDCA of risk
prevention measures.

Financial Risk Committee

the inconvenience and concern caused to customers and all thoseThis committee is chaired by the General Manager of Financeaffected by this incident. In response, we are strengthening

and Accounting and comprises the President, Executive Vice

information security as a top priority issue and taking steps to

President and General Managers of relevant divisions. The

prevent recurrence. These steps include creating up a JAL Group

committee identifies financial risks appropriately and strives to

Handbook on Protecting Personal Information, and revisingfacilitate improvements in corporate management. Specifically,

information handling categories to strictly distinguish between

it conducts regular simulations of financial conditions and checks

customer information and other information and thereby ensure

the content.

proper management. The Risk Management Committee also plays

In case of a risk event which the committee determines will have athe role of a committee for personal information protection andserious, quantifiable impact on the Group’s business performance,

IT security in order to reduce those risks. A robust system hassuch as a major financial crisis or large-scale disaster, it will

been established to detect and monitor increasingly sophisticatedcalculate the estimated financial impact and deal with the risk

and complex cyberattacks, and preventive measures will bejointly with the Risk Management Council, as necessary.

continuously upgraded to the highest level.

71JAL GroupCor porate Policy

JAL REPORT 2020

Sustainability Management

Environment

Message fromthe President

JAL Group's
Businesses and Strategies

PeopleGovernanceCommunities

JAL Group
Sustainability

Financial Data/
Cor porate Information

Fair Business Practices
Crisis Management System

Business Continuity Plan (BCP)

Basic Concept and Promotion System

In-house Reporting System

When risks (operational risks) associated with aviation safety,

To respond to specific risks that threaten our ability to

To promote compliance with all applicable laws, regulations

We have established Group Hotlines internally and at

aviation security and other issues related to the air transportfulfill our responsibilities as a public transport service

and rules governing our corporate activities, we focus on

outside the Group (open 24 hours a day) as contact points

business eventuate, or are suspected or confirmed, they areprovider such as pandemic influenza, unidentified infectious

elevating compliance awareness through various measures,for anyone working for the JAL Group with the aim toreported quickly (within 15 minutes as a general guideline)diseases or earthquakes, we have established a businesswith General Affairs Department of Japan Airlines

uncover unlawful acts, power harassment and otherto Integrated Operations Control (IOC). In JAL Group,

continuity plan (BCP) that enables us to continue businessoverseeing all compliance matters.

misconduct, take corrective action and reinforce compliancethe person responsible for determining the level of risk

effectively in a contingency based on guidelines establisheddecides the applicable risk management level (from Levelin collaboration with regulatory bodies and other relevant

Uploading the regulations and handbooks to the Intranet

I to Level III) according to the situation and risk response isinstitutions. The BCP covers basic matters such as policies

Every JAL Group employee is encouraged to practice theimplemented. Exercises, reviews, education, and training

and procedures necessary to ensure the safety of customers,

JAL Philosophy in their day-to-day work and can view theWith the global tide of business scope expansion and efforts

are conducted regularly for each type of disaster or purpose

JAL Group staff and their families, and other affectedfollowing regulations and handbooks related to complianceto prevent bribery and prevent money laundering, thein order to increase risk management awareness of every

persons, and to maintain air transport operations essential

on the intranet.

JAL Group has stipulated corruption prevention as part of

employee.

to the Group, including reservations, information provision,Level I Response by the person responsible for handlingthe risk• The responsible person (leader of organization where the risk has
eventuated) responds by assembling people deemed necessary.
• The responsible person advises the person responsible fordetermining the level of risk to shift to Level II or III according to
the severity of the situation.

Level II Response by special committee• A committee is formed by Vice Presidents of main departmentswith Vice President of General Affairs as Secretariat and risk
response is implemented. Vice President of General Affairs advises
the person responsible for determining the risk level to shift toLevel III or I according to the situation.

Level III Response by Command Office• A Head Office Command Office chaired by the President (orExecutive Vice President) is set up and normal operations quickly
shift to the crisis management system.

Flow for Determining Risk Level
Aircraft accident
orincident occurs

Operational risk
eventuates

Anti-Corruption Policy

the JAL Group Code of Conduct "Commitment to Society"payments, and settlements. The plan is reviewed regularly• JAL Group Regulations on Preventing Insider Tradingin order to pursue profit in a fair manner. The Company

and revised as required to improve its application.

• JAL Group Handbook on Protecting Personal Information

complies with anti-corruption laws and regulations inDuring the outbreak of Ebola hemorrhagic fever in West• Information Security Action Handbook

countries and regions where it conducts air transport

Africa in 2014, we activated our BCP regarding responses• Guide to the Antimonopoly Act

business, such as Japan's Unfair Competition Prevention

to pandemic influenza or unidentified infectious diseases.

• Group Hotline Regulations

Act, the U.S. Foreign Corrupt Practices Act, the British

We coordinated our actions with relevant government

Bribery Act, and the Chinese Commercial Bribery Act, andbodies, developed necessary systems and added the Policy

Various activities

proactively prevents bribery and corruption which couldfor Handling the Ebola Virus Disease (International Flights)

The following diverse initiatives are implemented for Grouplead to suspected bribery to prevent corruption as a member

to our BCP. The same BCP was activated on January 21, 2020

employees. Furthermore, we conducted alcohol-relatedof society.

for the COVID-19 outbreak, and is continuing at present.

training throughout fiscal 2019 and took various steps such

In fiscal 2018, we reviewed regulations related toas setting up a new external hotline for employees seeking

earthquakes and expanded our strategies and BCP to

consultation.

include, in particular, a potential earthquake striking Tokyo.
In fiscal 2019, we updated the JAL Group Risk Management
Manual, including the establishment of regulations onfrontline staff• Quarterly publications of compliance newsletters

Japan Airlines Co., Ltd. was certified on November 30, 2019

• Seminars on laws and ordinances by Legal Affairs

as an Organization Contributing to National Resilience• Training based on actual incidents such as target email

Council. On March 30, 2020, we received an A rating for

JAL Group Code of Conduct "Commitment to Society"— Anti-Corruption —• Talks and face-to-face dialogue on compliance withbusiness continuity management as the basis of each BCP.

(Resilience Certification) by the Resilience Japan Promotion

Notification by discoverer

management.

attacks

We do not give or accept bribes of any form,
whether direct or indirect, in our business activities
domestically or internationally. In addition, we do notgive or accept undue cash, gifts or entertainment or
any other benefits in excess of social norms.

• Biannual information security training through e-Learning

BCM (special interest rate II) from the Development Bank ofThrough these activities, we aim to foster a culture ofJapan.

IOC

compliance across the entire JAL Group, ensure businessContacts

activities are in tune with accepted social standards andreduce legal risk.
In addition, a officer from each JAL Group company is given

Person responsible for determining risk level

overall responsibility for compliance at their respective

Determines levelcompany. These officers comprise the JAL Group Compliance
Level I

Level II

Level III

Network, which is responsible for swiftly sharing relevant

Response by the person
responsible for handling the risk

Response by special
committee

Response by crisis
management teaminformation and strengthening the compliance framework
in each Group company. This includes sending quarterly

Response by level

email newsletters containing useful information, such as

Flow of BCP Activation
Risk
eventuates

Response by crisis
management system
Crisis management72

Normal level

Target recovery time
Business continuity
BCP

Business
continuity
targetIn March 2020, we received a DBJ
BCM rated loan from the Development
Bank of Japan (DBJ), and the rating
results commended Japan Airlines
for "particularly advanced business
continuity initiatives."

news about compliance developments inside and outside
the Group and compliance case studies.

Return to normal operations73

JAL GroupCor porate Policy

JAL REPORT 2020

Sustainability Management

Environment

Message fromthe President

JAL Group's
Businesses and Strategies

PeopleGovernanceCommunities

JAL Group
Sustainability

Financial Data/
Cor porate Information

Responsible Procurement
Basic Concept —With Our Suppliers—
The JAL Group is aware of the need to gain the cooperationand support of many suppliers to operate its flights andprovide products and services to customers on a daily
basis. Therefore, we strive to build strong partnerships
with suppliers based on mutual trust by ensuring fair
and transparent procurement activities and showing ourappreciation for their support, as explained below.
1. Fair and transparent procurement
When selecting suppliers, we comprehensively assess abroad range of factors, such as product and service quality,
costs and delivery periods, the company's reputation, andits corporate social responsibility (CSR) and sustainability
initiatives. We also ensure fair and transparent procurement
activities by offering numerous opportunities for domestic

and substitutability. Since fiscal 2018, we have screened all
products procured by the JAL Group, and to ensure that we
provide safe and secure services, we have identified products
posing especially high risks to our commitment to sustainability inareas such as the environment, human rights, and labor conditions.

Cooperating with Suppliers andMonitoring
To verify compliance with the JAL Group Supplier Code of
Conduct, we utilize Sedex Information Exchange Limited(Sedex),*1 which we joined in 2015.
Using the CSR information platform provided by Sedex, we

Rainforest Alliance certification

Nowadays, responsible procurement requires environmental
and social impacts to be considered, and an objective means forthis is certification programs. In the JAL Group, we compare thestandards of each certification program, and adopt third party
certification programs with a global presence as our procurement
standards. These programs must have certification requirements
ensuring high standards, and must satisfy the three elements ofEnvironment, Society and Governance, and the four elementsof safety for food material. We then promote the use of raw
materials which have acquired these certifications.

select certain Group suppliers regardless of product type

About the use of certified products

or domestic/overseas location, ask them to become Sedex

WEB

In 2011, we became the first airline to offer sustainably produced
coffee. At some stage in 2020, we are planning to begin using
coffee beans that have received Rainforest Alliance certification
both inflight and in our lounges.
GOTS certification
Our First Class loungewear is made entirely
from organic cotton that has received GOTS certification, aninternational standard for organic fibers.
ST Standard (Japan Toy Safety Standard)
We are continuing our effort to provide toys for children that havehttps://www.jal.com/en/sustainability/certified-products/

members and to respond to a self-assessment questionnaire. By

passed the inspections for and conform to the ST ("Safety Toy")
Standard. Currently, all of the toys we provide have passed these
inspections as performed by third-party institutions.

fiscal 2019, responses had been received from 293 suppliers.
We will continue to conduct supply chain risk assessments

FSC® certification

Group.

based on the results of verification with self-assessment

Since September 2018, we have adopted FSC® certified goods

questionnaires and other tools, and request improvements

as service products offered

2. Providing safe and secure services to customers

as needed. When a serious issue is confirmed, we conduct an

to customers inflight. We are

SMETA audit*2 and other necessary auditing of the supplier.

requesting that our suppliers

In order to provide safety and a sense of security when enjoying a

Going forward, we will also further achieve sustainableacquire FSC® CoC (Chain-of-

meal with us, we are conducting food safety management alongprocurement by consulting and engaging in dialogue with

Custody) certification, and we haveevery step of the process from a meal's conception up to theexperts and NPOs.

already adopted FSC certified

moment it is served. Food safety auditors with knowledge andproducts for the majority of ourexpertise on FSSC 22000 food safety management systems conduct

paper products, such as paper cups,

food hygiene audits at all of our inflight catering companies andand international suppliers to do business with the JAL

To deliver a sense of security to customers when theyboard our flights, we cultivate a culture of safety as toppriority with our suppliers and conduct rigorous quality
management to offer the finest hospitality.
3. Promoting sustainable procurement

Build mutual
understanding
and trust

We work with suppliers to build sustainable supply chains,
including initiatives aimed at legal compliance, global
environment preservation, respecting of human rights,
appropriate labor practices, and fair business practices.

Suppliers

Dissemination of the JAL Group Supplier
Code of Conduct®

View supplier data
and monitor
improvements
Provide CSR data
based oninternational
standards*

ASIAGAP certification

Provide CSR data,submit reports on
improvements

Since December 2018, we have been providing ASIAGAP-certified
lounge meals. In November 2019, our group company JAL
Agriport acquired ASIAGAP certification for its independently-*International standards: ISO 14001, SA 8000, OHSAS 18001,
ETI (Ethical Trading Initiative) Base Code, etc.

We ensure that our suppliers understand the JAL Group's

quality assurance, (2) human rights and labor, (3) safety andbasic concept towards procurement, and we periodicallysanitation of work environment, (4) global environment,

hold conferences to liaison with our(5) business management, (6) expansion to suppliers, (7)suppliers as forums for information

contribution to regions and society, and (8) establishment

sharing and exchange. In fiscal 2019,of internal promotion systems. Commentary on social

we invited outside lecturers to raisebackground and examples of specific initiatives have also

awareness of ESG and SDGs forbeen added. We ask all our suppliers to understand andparticipants from 41 companies.

comply with the Supplier Code of Conduct, as we aim

Identifying High-Risk Products and Key
Suppliers
The JAL Group identifies key suppliers by considering factors suchas procurement cost, procurement volume, product importance,

all of our lounges around the world to thoroughly ensure thatmanagement standards and processes are being observed, andoperated farms, and the company provides ingredients for
inflight and lounge meals.

risks. In accordance with these assessments, they offer guidance on
any areas for our improvement.
In addition, although there is an inevitable amount of time
between when a meal is prepared and when it is consumed
inflight, we conduct inspections of temperature control, thehygiene of staff members and the sanitation of utensils in order tomaintain safety.

MSC/ASC certification
Since June 2019, we have been purchasing MSC/ASC certified
marine products through AEON Co., Ltd., for use in Business Class
inflight meals. In February 2020, we were the first airline to acquire
MSC/ASC CoC (Chain-of-Custody) certification. We have establisheda traceability management procedure for our inflight meal kitchens

Supplier liaison conference (Nov 2019)*1 Sedex, the Supplier Ethical Data Exchange, is a non-profit organization that provides
a platform for managing and sharing corporate ethical information with the aim of
ensuring responsible business practices on supply chains. Established in the U.K. in 2004.

*2 SMETA (Sedex Members Ethical Trade Audit) is an auditing scheme designed to
improve corporate ethics in global supply chains and is widely accepted as aninternational standard. It enables strengths and weaknesses (non-conformities) ofcompanies to be identified against international standards and clarifies necessary
action to further improvements. For further details, please see the official Sedex
website (English only).
WEB

Food Safety Management for In-flight andLounge Meals Provided by FSSC 22000

that appropriate precautions are being taken against potential

eight key areas on the major premise of securing safety: (1)sustainability to achieve the Sustainable Development Goals.

The mark of
responsible forestry

ingredients for Business and Economy Class inflight meals andGroup Supplier Code of Conduct. The revised code covers

to establish sound supply chains with considerations formenu cards, and inflight magazines,
as well as for wooden toys.

Evaluate CSR activities,
advise improvements,
monitor progress

In July 2019, the JAL Group made major revisions to the JAL

74

Use of Certified Products

https://www.sedex.com/our-services/smeta-audit/

to ensure ingredients are sourced from responsibly-managed
fishing grounds and aquaculture farms, and we have developed
an operational structurethat ensures the caterers
who prepare inflight meals
strictly comply with thatprocedure.
Inflight meal using MSC-certified
and ASIAGAP-certified ingredients

ASIAGAP certificate

MSC CoC certificate

ASC CoC certificate

75

JAL GroupCor porate Policy

JAL REPORT 2020

Sustainability Management

Environment

Message fromthe President

JAL Group's
Businesses and Strategies

PeopleGovernanceCommunities

JAL Group
Sustainability

Financial Data/
Cor porate Information

Disclosure
Basic Concept

A New Line of Uniforms Created Together with Staff

The JAL Group emphasizes disclosure in management, and to ensure that all stakeholders understand the Company's stance,

In August 2018, we launched a New Uniform Project Team,the rules on shoes so that staff can freely choose heel height

posts a wide range of information on the corporate website, including Fundamental Policies of Corporate Governance,

made up of employees who wear uniforms. As part ofand shape.

Corporate Policy, the company profile, safety and quality information, sustainability information, and IR information.

the uniform selection process, we gathered opinions on

We adopted uniforms that allow each employee to be

In the JAL Group Safety Report, we report on the Group's safety stance and safety initiatives. We also issue this report, theuniforms for cabin attendants and ground staff from aenergetic and active while at work, taking into accountintegrated JAL REPORT, every year to provide comprehensive coverage of financial information, sustainability information,broad range of employees through a questionnaire for JAL's

employee safety, health, and diversity. These uniforms

and other topics. On our corporate website, we promptly disclose a wide range of information, and our consolidated report2020 New Uniform Project, the first time JAL has ever used

include polo shirts for ground handling staff to help themconcisely describes matters of particular importance.

one.

cope with intense heat, and outerwear with improved

We received a total of more than 50,000 responses,

functionality and durability for protecting the body from

including comments on the design concept, and createdsevere weather conditions such as torrential rains andthe new uniforms together with many employees, thus

snowstorms during outdoor work. Our aim is to create

embodying the slogan "Fly for it!," the prime mover of the

fresh and inspiring values and provide unparalleled service

project. Inspired by feedback that we should allow trousers,

through the joint efforts of JAL Group staff wearing their

we designed trousers for female JAL cabin attendants for

new uniforms with pride in order to become the world's

the first time.

most preferred and valued airline.

JAL corporate website
WEB

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

JAL Group Safety Report (in Japanese only)WEB

http://www.jal.com/ja/flight/report/

External Evaluation
To provide our stakeholders with a deeper understanding of updates, we are working to improve the2019 Award for
Excellence inCorporate Disclosure

quality of disclosures and build relationships of trust through interactive communication. Our proactive
efforts to disclose information have been highly evaluated and have given us the honor of receiving the

For flight crew, we introduced uniforms with a new designfor female pilots. In customer service divisions, we changed

top rating of Excellence in Corporate Disclosure in the Transportation Industry from the Securities Analysts
Association of Japan for the second year in a row.
Despite the extreme difficulty of disclosing our earnings forecast for fiscal 2020 due to COVID-19, we havebeen commended for our stance on disclosure. For example, the announcement of the Company's firstquarter financial results was highlighted as an example of good disclosure by the Tokyo Stock Exchange forproviding detailed information on the extent of the impact of the virus.
Going forward, we will continue our efforts to improve disclosure and information quality so that we may
realize better dialogue with stakeholders.

Topic

Embracing New Challenges in Renewing Uniforms

On April 1, 2020, the JAL Group renewed uniform designs in
all air transport-related divisions.

New SDGs-Friendly Uniforms Meeting
Quality and Functional Needs

Unveiling ceremony of new uniforms on June 23, 2019

We kept in mind the SDGs from the development andShowcasing the Appeal of Okinawa with Kariyushi Wearsewing stages. The fabric for the new uniforms was recycled
polyester made from collected PET bottles and used fiber

Kariyushi wear, worn in the summer by JAL Group staff in

products. Considering the durability of polyester, thethe Okinawa area, have been expanded to pilots, in addition

uniforms will be usable for a long time, which will also

to cabin attendants and ground staff. The wear design

promote reuse. When providing cabin attendants andfeatures colorful flowers from Okinawa, including the Diegoground staff with their first set of uniforms, we also use(Erythrina variegata, the prefectural flower of Okinawa

reused items.

Prefecture), which express Okinawa-style cheerful and warm

Our suppliers are asked to join Sedex, and any instances of

utuimuchi ("hospitality" in the Okinawan dialect). The wear

child and unpaid labor are investigated with the SMETA

also has a fresh, modern sensibility.

audit system. As a result of audits conducted in Vietnam andBy wearing Kariyushi wear sewn entirely in Okinawa, we

China, where the new uniforms were sewn, we have verified

embody utuimuchi , and showcase the appeal of Okinawa.

that there were no problems in terms of sustainability
at the sewing factories. Local production sites were also
visited by the responsible officer, who confirmed that the
manufacturing plants were committed to maintaining ahuman rights-based labor environment.

76

A production site in Vietnam

Kariyushi Wear

77

JAL GroupCor porate Policy

JAL REPORT 2020

Sustainability Management

Message fromthe President

JAL Group's
Businesses and Strategies

PeopleGovernance

Environment

Communities

JAL Group
Sustainability

Financial Data/
Cor porate Information

Messages from External Directors

Management Planning for a Sustainable Future
Following incidents of inappropriate alcohol consumption by flight crew members andan on-duty cabin attendant in fiscal 2019, in October, President Akasaka took overthe position of general safety manager responsible for safety issues. I feel that his
unifying capabilities have proven effective in promoting Group-wide reforms and newmechanisms for flight safety. I would also like to praise the company for its capital
investments in environmentally-friendly flight equipment such as the Airbus A350.
However, COVID-19 has transformed the operating environment. The state of
emergency declaration led to travel restrictions, which greatly impacted airline

Masatoshi Ito
External Director
Attendance at Board of Directors
meetings: 100% (20 of 20 meetings)

JAL Group Governance for the New Normal
The JAL Group has three independent External Directors. They contribute actively to meetingsof the Board of Directors and voluntary committees and bring their experience and knowledge
to management when formulating Group strategies and making management decisions. In
these highly uncertain times, we will continue to realize sustainable growth for the JAL Groupby incorporating management objective advice offered by the External Directors.

Eizo Kobayashi
External Director

78

strong impression of a sense of unity among organizations in the Company.
It is difficult to plan for medium- to long-term growth under unforeseeable conditions.
There are optimistic views that air travel will return to pre-COVID-19 levels, whileothers expect the current restricted lifestyle to stay. In view of recent developments,
the latter view is becoming stronger, and perhaps this is natural when considering weare working toward a sustainable society as described by the SDGs.
Before planning actions to achieve medium- to long-term growth, we need toconsider what the world will be like in the future and build businesses in line withsocial developments. I will continue to provide advice by backcasting from 10 to 20
years in the future to support management planning.

In fiscal 2019, management conditions through to January were extremely favorable, but

In experiencing the COVID-19 pandemic, I am struck by the changes in values. This experience has

were severely impacted by COVID-19 in and after February. There are numerous ways

demonstrated the truth in a realistic and concrete way that only when society is healthy can companies

to regard this situation, but from the standpoint of treating change as a management

conduct business activities. Stakeholders are progressively changing their values and are more attentive

opportunity rather than a risk, the pandemic can be an opportunity to take a leap

than ever from a variety of perspectives to responses by companies toward a sound society and theforward.

achievement of the SDGs. We are truly entering an era where integrated management will be essential

To seize this opportunity requires strengthened governance, and I believe the following

to balancing economic advancement with the resolution of social problems.

three points will be important: effective use of managerial resources, that is, capitalIn this era of change, organizations will need systems to understand diversifying values, requiringand human resources; risk management, which is inevitably more important thanthem to assign human resources with diverse thinking and experience to important positions andever; and stringent monitoring of new challenges and developments, and effective
countermeasures at the right time.

Sonoko HatchojiCompanies do business through the movement of people, products, capital, andExternal Director

Attendance at Board of Directors meetings:
95% (19 of 20 meetings)

countries such as the United States possess an advantage in capital and information,

Chairperson, Compensation Committee

raising capital. Seeing these responses to the unprecedented situation, I received a

An Era Where Integrated Management will be Essential

information, but the pandemic has halted the movement of people and products. Other

Chairperson, Corporate Governance Committee

Chairperson, Nominating Committee

in markets and implemented countermeasures speedily such as reducing flights andIn an Era of Change, Strengthen Governance

Lead Independent External Director

Main concurrent positions: Senior
Representative for Business Community
Relations of ITOCHU Corporation, Director(Outside), OMRON Corporation, Outside
Director of Japan Exchange Group, Inc.

Main concurrent positions: Chairmanof the Board of Ajinomoto, Chairmanof the JAA Council, Japan Advertisers
Association, NEC Outside Director of NEC
Corporationcompanies. Under these conditions, the Company reacted quickly to the rapid changes

while human resources are an asset for Japanese companies. It is important to develop
strong human resources and nurture them into competitive assets. Considering thatpeople who flexibly use resources make innovations, I feel it is necessary to cultivate aculture of continuously challenges in business management while accepting failure.
Finally, in highly uncertain times, it is most important that the organization moves ahead
firmly with eyes on the future. I will continue to provide support as an External Director

Attendance at Board of Directors
meetings: 100% (20 of 20 meetings)
Main concurrent positions: Special
Advisor to the President of Tsuda
University, External Director of Daicel
Corporation, External Director of Maruha
Nichiro Corporation
Chairperson, Officers Disciplinary Committee

combining diversified wisdom. The JAL Group has already achieved an 18.4% representation of
women in managerial positions (13.2% as directors), with goals of 20% by fiscal 2023 and 30% by
fiscal 2030. These are high levels for a Japanese enterprise, but when considering the diversity of ourcustomers, I feel it is necessary to appoint even more women to higher level positions, and create more
opportunities for non-Japanese employees and employees with disabilities to participate.
I often hear comments that in conditions where people must exercise self-restraint on outings andobserve travel restrictions in the long term, all the more they will begin to notice the importance oftraveling for business and for purposes other than work (trips). I hope the Company's diverse humanresources will sense the customers' needs precisely, make efforts to become the customers' airline of
choice through efforts based on the JAL Philosophy, and further improve integrated management,
which it has already been initiated.

and will make my expertise available to the best of my ability.
*Figures for attendance at Board of Directors meetings are from fiscal 2019.

79JAL GroupCor porate Policy

JAL REPORT 2020

Sustainability Management

Board of Directors

Environment

Message fromthe President

JAL Group's
Businesses and Strategies

PeopleGovernanceCommunities

JAL Group
Sustainability

Directors

Yoshiharu Ueki

Tadashi Fujita

Yuichi Kitada

Eizo Kobayashi

Director, Chairperson

Director, Vice Chairperson

Director, Managing Executive Officer

External Director

Chairman of the Board

Chief Wellness Officer,

General Manager of Engineering &Maintenance, Representative Director andPresident of JAL Engineering Co., Ltd.

(DOB: September 16, 1952)(DOB: October 25, 1956)(DOB: June 22, 1960)

Chair of the Tokyo 2020 Olympic
Paralympic Promotion Committee(DOB: January 7, 1949)

Governance
Personnel

Governance

Since joining the company, Chairman Ueki has acquired exceptionally high levels
of insight into flight safety and frontline experience as a pilot. As Representative
Director and President since 2012, he has demonstrated strong leadership anddecision-making capabilities, overseeing the preparation of the Medium Term
Management Plan and executing it responsibly. He continues to help strengthen
the oversight function of the Board as Chairman of the Board, a memberof the Corporate Governance Committee, the Nominating Committee, theCompensation Committee and other committees since 2018, and as Chairman of
the Board and a member of the Corporate Governance Committee since 2020.

Since joining the company, Director Kitada has acquired very
high levels of insight into aircraft maintenance and frontline
experience in the Engineering & Maintenance Division. Since
2018, he has served as Executive Officer in the roles of General
Manager of Engineering & Maintenance and as Representative
Director and President of JAL Engineering Co., Ltd., during
which time he used his precise analytical skills and ability tomake decisions and take action to contribute significantly to themaintenance of flight safety.

Compensation

Disciplinary

As top management of a global general trading company,
External Director Kobayashi has extensive experience andvast business insight into global business management
and leadership of diversified group companies. He brings
practical and diverse perspectives to JAL management
and provides sound business supervision for the Company.

Shinichiro Shimizu

Masatoshi Ito

Sonoko Hatchoji

Representative Director, Executive President

Representative Director,
Executive Vice President

External Director

External Director(DOB: January 3, 1962)(DOB: December 13, 1962)

General safety manager, Oversees JAL SDGs,
Chair of the Executive Management Council,
Chair of the Group Safety Enhancement Council,
Chair of the JAL Philosophy Council,
Chair of the Group Risk Management Council,
Chair of the Group Management Council
Compensation

Personnel

Disciplinary

Since joining the company, President Akasaka has served mainly in the Engineering &Maintenance Division and has acquired extremely high levels of frontline experienceand insight into flight safety. He also gained extensive knowledge and a network ofconnections in the airline maintenance industry. From 2014, he has brought his strong
leadership and decision-making capabilities to JAL Engineering Co., Ltd. as President
and has strengthened the foundations of flight safety. As Representative Director andPresident since 2018, he aims to realize the Corporate Policy through joint efforts withall employees by maintaining flight safety, the basic foundation of the JAL Group, andguiding employees in practicing the JAL Philosophy by leading by example.

GovernanceNominating

Compensation

Personnel

Disciplinary

Since joining the company, Executive Vice President Shimizu has held successive
positions in personnel and industrial affairs divisions related to flight crews andcabin attendants, and has exercised strong leadership and planning and coordination
capabilities to achieve positive results. As General Manager of Human Resources since2013 and the Secretary's Office since 2016, he has made considerable contributions
to improving and stabilizing JAL's presence through precise evaluation of JAL's
position from a high-level perspective. Since April 2020, he has been Aide to the
President as Representative Director and Executive Vice President, and is contributing
to improving and strengthening JAL's management structure.

Ryuzo Toyoshima

Representative Director,
Senior Managing Executive Officer

Director, Senior Managing Executive Officer

General Manager of the
Finance&Accounting Division

Since joining the company, Representative Director Kikuyama has held successive
positions in IT systems, passenger reservations, human resources and industrial affairs,
corporate planning and other divisions at Head Office and branch offices in theAmericas and other regions, and has exercised exceptional leadership and strong
planning and coordination capabilities to achieve positive results. As General Manager
of Managing Division Route Marketing since 2016, he has contributed greatly tomaximizing route profitability. As General Manager of the Finance & Accounting
Division since 2019, he has assured highly transparent disclosures comprehensible
to shareholders and investors, and has demonstrated precise management decisionmaking capabilities that support the shareholders' interests.

(DOB: September 12, 1947)(DOB: January 15, 1950)

Independent

Independent

Aide to the President

Hideki Kikuyama(DOB: March 19, 1960)

80

Since joining the company, Vice Chairman Fujita has worked
mainly in the sales and marketing division at Head Office.
As General Manager of Managing Division Passenger Sales,
he assumed overall responsibility for the entire passenger
sales division and achieved positive results. As Representative
Director and Executive Vice Chairperson since 2016, and as
Director and Vice Chairperson since 2020, he has served as
Aide to the President and is contributing significantly tofurther improving and strengthening the management team.

Nominating

Independent

Yuji Akasaka

Nominating

Financial Data/
Cor porate Information

Personnel

Nominating

Compensation

GovernanceDisciplinary

Personnel

As the head of global enterprises, External Director Ito
has strong business insight and extensive experience inmarketing and business strategy. He brings practical anddiverse perspectives JAL management and provides soundbusiness supervision.

Nominating

Compensation

Disciplinary

External Director Hatchoji has experience in financial
product development, loans and risk management atbanks, and vast knowledge and extensive experience incustomer-centric marketing and management strategy
in hotel management. She also possesses diverse
perspectives in areas such as education reforms atuniversities. She draws on this experience to provide JAL
with management advice and sound business supervision.

(DOB: August 17, 1959)

General Manager, Managing Division RouteMarketingSince joining the company, Director Toyoshima has held
successive positions in industrial affairs including Vice
President, and has exercised exceptional leadership andstrong planning and coordination capabilities to achieve
positive results. As General Manager of Corporate
Control since 2015, he has contributed significantly to the
expansion of the amoeba management system within
the JAL Group. Since 2019, Director Toyoshima is making
great contributions to maximizing route profitability as
General Manager of Managing Division Route Marketing.

GovernanceCorporate Governance Committee

Nominating

Nominating Committee

Compensation

Compensation Committee

Personnel

Personnel Committee

Disciplinary

Officers Disciplinary Committee81JAL GroupCor porate Policy

JAL REPORT 2020

Sustainability Management

Audit and Supervisory Board Members

Topic(As of July 1, 2020)

Yasushi Suzuka
Audit and Supervisory
Board Member

Environment

Since joining the Company, Mr. Suzuka has engaged in maintenance-related
operations such as maintenance project and engineering and acquired insight
related to aircraft maintenance at the Engineering & Maintenance Divisionat an extremely high level as well as contributed to safety operation. He hasserved as Audit and Supervisory Board Member since July 2012 and has
extensive experience in the Company's operations and production-related
insight. Accordingly, the Company hereby proposes that you elect him as
Audit and Supervisory Board Member.

Message fromthe President

JAL Group's
Businesses and Strategies

PeopleGovernanceCommunities

JAL Group
Sustainability

Financial Data/
Cor porate Information

JAL and Athletes: Soaring into the Future

The JAL Group supports athletes under the slogan "Fly for

Naoto Tobe (joined JAL in 2019): High Jump

it!," identifying athletes, who believe in themselves andAfter setting a new Japanese record, unbroken for 13 years, with

their colleagues as they take on new challenges, with JAL,

2.35 meters at a competition in Germany on February 2, 2019,

which aims to become the world's most preferred and valued

Tobe is currently the Japanese men's high jump record-holder. He

airline. The Company is sharing this thought with the people

also conducted researchof Japan, hoping that everyone will also think positively andinto the high jump as

challenge themselves to do what they can. JAL's dream is topart of his PhD research.

support athletes and to spread our wings and fly.

As someone who is not
only an athlete, but also

Important positions concurrently assumed outside the Company: none

Norikazu Saito
Audit and Supervisory
Board Member

Osamu Kamo
External Audit andSupervisory Board Member
Independent Officer
Attended 20 of 20 Board of
Directors meetings
Attended 13 of 13 Audit andSupervisory Board

Shinsuke Kubo
External Audit andSupervisory Board Member
Independent Officer
Attended 20 of 20 Board of
Directors meetings
Attended 13 of 13 Audit andSupervisory Board

Joji Okada
External Audit andSupervisory Board Member
Independent Officer

Since joining the Company, Mr. Saito has engaged mainly in finance andaccounting departments over the years and has significant knowledge offinance and accounting, investor relations activities, etc. Since 2014, serving as
Director, Senior Managing Executive Officer and General Manager of Finance &Accounting, he has been striving to conduct transparent information disclosure
understandable to shareholders and investors and considerably contributing
to proper management decisions that make for shareholder returns. He has
extensive experience in the Company's operations and deep insight, so theCompany hereby proposes that you elect him as Audit and Supervisory Board
Member.
Important positions concurrently assumed outside the Company: none
Mr. Kamo has given guidance to government and companies aboutcompliance and successively held positions as member of an investigationcommittee on misconduct cases since registered as attorney at law in April
1973 and has extensive experience in and insight into compliance andcorporate governance. As an Audit and Supervisory Board Member of theCompany, he provides audit and advice on legal and other aspects.

a researcher, Tobe is a

Five JAL Athletes

one-of-a-kind jumper.

Anna Doi (joined JAL in 2018): Sprint
Doi was a Japanese record-holder at junior high school andHaruka Kitaguchi (joined JAL in 2020): Javelin Throw

high school level for the 100-meter sprint and, at the 2012

Kitaguchi set a Japanese record for the javelin throw on May 6,

Olympics in London, she was selected to represent Japan

2019, and then went on to beat her own record later the same year,

and Japanese athletics

on October 27. Currently, she holds the national women's javelinin the women's 4 x

record, which stands at

100 m relay. Doi has

66 meters. As an athlete,

one of the all-time

she is continuing to grow

top times for the 100

as the queen of Japanesem sprint and leads

javelin throwing, andthe competition foris looking to move

women's sprinting.

into international
competition.

Ryoma Yamamoto (joined JAL in 2018): Triple Jump
In his third year of high school, in 2013, Yamamoto took the

Koki Kano (joined JAL in 2020): Fencing (Épée)

triple crown of victories in the Inter-High School Sports Festival,

At an international competition held in Vancouver on

Important positions concurrently assumed outside the Company: Attorney atLaw, Managing Partner of Ginza Sogo Law Office. External Audit and Supervisory
Board Member of Azearth Corporation

the National Sports Festival, and the Japan National Junior andFebruary 9, 2019, Kano achieved his first victory in individual

Youth Championships, setting a new Japanese high school record

competition. On March 24 of the same year, he claimed

in the process. In 2017, he achieved the sixth-longest jump in

his first victory inSince joining Sanwa & Co. Tokyo Marunouchi Office (currently Deloitte
Touche Tohmatsu LLC), Mr. Kubo has gained a wealth of experience andaccomplishments and deep insight into accounting through practicalexperience in corporate audits, share listings, corporate revitalization, M&A
and other cases. The Company has high expectations he will play his role in
the internal audit function appropriately as an External Audit and Supervisory
Board Member, who meets the Company's Independence Standards forExternal Officers.

Japanese history with 16.87 meters, and was selected to represent

the team event at aJapan at the IAAF

competition in Buenos

World Championships

Aires. He is one of thein London. Yamamoto

Japanese athletes in

is an athlete you canthe fencing world that

expect to see hop,carries the hopes ofskip, and jump into thethe nation.

Important positions concurrently assumed outside the Company: Managing Partner of Kyoei
Accounting Office. Representative Director of Japan Enterprise Sustainable Transformation AdvisoryCo., Ltd. External Audit and Supervisory Board Member of KAWASAKI KISEN KAISHA, Ltd.

limelight.

Mr. Okada possesses rich experience and track record along with expertise asa manager in the administration and the finance & accounting department ofa general trading company. In addition, through his professional experience
as a Full-time Audit and Supervisory Board Member of a general trading
company and Chairperson of the Japan Audit and Supervisory Board Members
Association, he has significant insight into all aspects of audit work including
governance and risk management.
Important positions concurrently assumed outside the Company: Member,Business Accounting Council of Financial Services Agency. Governor (Outside),
Japan Exchange Regulation

Note: The number of Board of Directors meetings and Audit and Supervisory Board attended by External Auditors are the actual attendances for fiscal 2019.
Mr. Joji Okada was newly appointed at the 71st Ordinary General Meeting of Shareholders on June 19, 2020.
From left: Haruka Kitaguchi, Koki Kano, Naoto Tobe, Anna Doi and Ryoma Yamamoto

82

83

JAL REPORT 2020

JAL Group
Cor porate Policy

Message fromthe President

Financial Data — Eight-year Summary

Evaluation and Analysis of Financial Conditions

JAL Group's
Businesses and Strategies
Consolidated Financial Statements

Consolidated Subsidiaries

JAL Group
Sustainability
ESG Data

Financial Data/
Corporate Information

International/Domestic Route Maps

Stock/Corporate Information

Financial Data — Eight-year Summary
Billions of yen

FY2012FY2014FY2015FY2016FY2017FY2018FY2019*Thousands of U.S. dollars*1

FY2019Years ended March 31
Operating revenue
Operating expenses
Operating income
Ordinary income
Net profit attributable to owners of parent
Cash flow from operating activities
Cash flow from investing activities
Cash flow from financing activities
Free cash flow*3
Depreciation and amortization
EBITDA*4
EBITDAR*5
Capital investment (Purchase of non-current assets)

1,238.8
1,043.5
195.2
185.8
171.6
264.8
(129.0)(60.6)
135.8
81.0
276.2
307.1
121.8

1,309.3
1,142.5
166.7
157.6
166.2
247.9
(166.7)(61.9)
81.2
82.7
249.5
281.0
164.5

1,344.7
1,165.0
179.6
175.2
149.0
261.1
(199.2)(67.3)
61.8
85.8
265.5
292.7
198.6

1,336.6
1,127.4
209.1
209.2
174.4
312.3
(207.2)(49.6)
105.1
88.5
297.7
321.1
210.6

1,288.9
1,118.6
170.3
165.0
164.1
253.1
(215.5)(53.5)
37.5
95.7
266.1
286.2
233.1

1,383.2
1,208.6
174.5
163.1
135.4
281.5
(180.1)(55.8)
101.3
110.8
285.4
305.4
208.0

1,487.2
1,311.1
176.1
165.3
150.8
296.7
(186.3)(37.0)
110.3
124.1
300.2
320.1
222.1

1,411.2
1,310.5
100.6
102.5
53.4
60.0
(221.5)(30.1)(161.5)
138.0
238.6
260.2
239.6

12,967,288
12,042,607
924,671
942,488
490,737
551,594(2,035,955)(276,899)(1,484,361)
1,268,354
2,193,025
2,391,059
2,201,699

As of fiscal year-end
Total assets
Net assets
Interest-bearing debt
Shareholders' equity

1,216.6
583.1
160.1
565.0

1,340.1
711.0
134.2
690.2

1,473.3
800.7
100.5
776.4

1,578.9
870.5
92.6
843.0

1,728.7
1,003.3
116.0
972.0

1,853.9
1,094.1
125.7
1,060.3

2,030.3
1,200.1
142.3
1,165.1

1,859.3
1,131.8
191.7
1,094.8

17,085,013
10,400,036
1,762,188
10,059,836

Per share data (yen, U.S. dollars)*6
Net profit attributable to owners of parent
Net assets
Dividends
Average number of shares during the fiscal year (thousands of shares)
Key performance indices
Operating margin (%)
ROE (%)ROA (%)
Equity ratio (%)
D/E ratio (times)
EBITDA margin（％）*7
EBITDAR margin（％）*8
Unit cost (yen)*9
Unit cost (yen) (Including fuel cost)
Dividend payout ratio (%)
Number of employees
Business data
International passenger operations
Passenger revenues
Available seat kms (million seat kms)*10,12
Revenue passenger kms (million passenger kms)*11,12
Revenue passengers carried (1,000)*12
Revenue passenger load factor (%)*12
Yield (yen)*12
Unit revenue (yen)*12
Domestic passenger operations
Passenger revenues
Available seat kms (million seat kms)
Revenue passenger kms (million passenger kms)
Revenue passengers carried (1,000)
Revenue passenger load factor (%)
Yield (yen)Unit revenue (yen)International cargo operations
Cargo revenue
Revenue cargo ton-km (million ton kms)
Domestic cargo operations
Cargo revenue
Revenue cargo ton-km (million ton kms)

84

FY20132

473.36
1,558.15
95.00
362,671458.45
1,903.53
80.00
362,639411.06
2,142.00
104.00362,584481.292,325.79
120.00362,500

456.56
2,749.71
94.00
359,594383.233,019.52
110.00353,334

432.103,340.15
110.00349,006

155.66
3,249.27
55.00
343,101

1.43
29.85
0.50

15.8
36.0
16.9
46.4
0.3
22.3
24.8
8.4
11.5
20.1
30,636

12.7
26.5
13.0
51.5
0.2
19.1
21.5
8.6
12.2
17.5
31,020

13.4
20.3
12.8
52.7
0.1
19.8
21.8
8.7
12.3
25.3
30,978

15.7
21.5
13.7
53.4
0.1
22.3
24.0
9.1
11.7
24.9
31,331

13.2
18.1
10.3
56.2
0.1
20.6
22.2
9.4
11.7
20.6
32,047

12.6
13.3
9.7
57.2
0.1
20.6
22.1
10.1
12.5
28.7
33,038

11.8
13.6
9.1
57.4
0.1
20.2
21.5
10.4
13.1
25.5
34,003

7.1
4.7
5.2
58.9
0.2
16.9
18.4
10.6
13.2
35.3
35,653

­
­
­
­
­
­
­
­
­
­
­

406.6
44,74534,036
7,525
76.1
11.9
9.1

437.5
46,23535,390
7,723
76.5
12.4
9.5

454.8
47,696
36,109
7,793
75.7
12.6
9.5

448.7
50,56340,305
8,460
79.7
11.1
8.9

415.2
50,621
40,633
8,394
80.3
10.2
8.2

462.9
51,83642,013
8,585
81.0
11.0
8.9

530.6
54,92544,659
9,128
81.3
11.9
9.7

476.2
54,324
41,905
8,277
77.1
11.4
8.8

4,375,907

485.2
36,44323,01230,020
63.1
21.1
13.3

487.4
37,08423,74531,218
64.0
20.5
13.1

487.5
36,30623,99331,644
66.1
20.3
13.4

501.2
35,86924,341
32,114
67.9
20.6
14.0

498.6
35,42324,55032,570
69.3
20.3
14.1

518.2
35,71425,64334,033
71.8
20.2
14.5

528.0
36,11626,19534,859
72.5
20.2
14.6

514.6
36,19925,44333,783
70.3
20.2
14.2

4,728,650

50.4
1,378

54.2
1,512

60.3
1,754

54.2
1,724

43.3
1,887

56.0
2,233

65.4
2,429

59.7
2,407

548,966

25.0
360

25.4
366

24.2
356

23.3
363

22.2
357

22.4
364

21.8
343

20.7
328

190,425

­

­
­
­
­
­
­

­
­
­
­
­
­

­

­

*1 US dollar amounts are provided
for convenience only, based on
the exchange rate of ¥108.83/
USD on March 31, 2020.
*2 The depreciation method waschanged in FY2019. Before thedepreciation method change,
all components attached toan aircraft were depreciatedtogether with the aircraft. With
the new method, asset value isassigned to each component,such as engines and cabininteriors, and depreciatedseparately.
*3 Free cash flow = Cash flow fromoperating activities + Cash flowfrom investing activities*4 EBITDA = Operating income +Depreciation expense*5 EBITDAR = Operating income +Depreciation expense + Aircraft
lease*6 Japan Airlines Co., Ltd.
conducted a 2-for-1 stock split
on October 1, 2014. Figures forprofit per share, net assets per
share and dividend per share
have been calculated assuming
the stock split was conducted at
the start of fiscal 2011.
*7 EBITDA margin = EBITDA/
Operating revenue*8 EBITDAR margin = EBITDAR/
Operating revenue*9 Unit cost = Consolidated airtransport cost (excluding fuelcosts) / ASK*10 ASK (available seat kilometers).
A unit of passenger transportcapacity: Total number of seatsx Distance flown (kms)*11 RPK (revenue passenger
kilometers). Total flight distancecovered by revenue passengers:
Number of revenue passengers
x Distance flown (kms).
*12 From FY2015, revenue
passengers carried, revenue
passenger kilometers, available
seat kilometers and load factor
include codeshare tickets soldby other companies for JALoperated flights.

85

JAL REPORT 2020

JAL Group
Cor porate Policy

Message fromthe President

Financial Data — Eight-year Summary

Evaluation and Analysis of Financial Conditions

JAL Group
Sustainability

JAL Group's
Businesses and Strategies
Consolidated Financial Statements

Consolidated Subsidiaries

ESG Data

Financial Data/
Corporate Information

International/Domestic Route Maps

Stock/Corporate Information

Evaluation and Analysis of Financial Conditions
Economic Conditions

Analysis of Consolidated Operating Results

Number of Visitors to Japan(Millions of visitors)

Amid rising uncertainty in the global economy caused by U.S.-

35

China trade frictions and other factors, Japan went through a30

series of natural disasters and the consumption tax increase in

25

October, but their impact on the economy was not significant

20that it remained steady.

15

Then, as COVID-19 spread, the world economy and the Japanese

10

economy largely decreased in and after January 2020, and the0significantly affected. Global infection triggered world travel

2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019

5

airline industry including the JAL Group has been globally and(Year)

Source: Japan National Tourism Organization

restrictions, which eliminated international travel demands. In
Japan, a state of emergency has been declared and domestic
travel is discouraged, which causes the domestic air travel demand
to fall. This is the unprecedentedly tremendous event risk ever for

Global Passenger Traffic (scheduled flights)

affected as well.
The JAL Group is providing air transport service to the public inthis rapidly-decreasing demand situation by promptly reacting
to government travel restrictions globally and taking utmost
infection prevention measures to ensure safety of customers and

¥

100.6

linked bonus payments. The Group continued its cost reduction
efforts using its amoeba management system and the total

passenger revenue decreased by 54.4 billion yen due to weak

operating expenses decreased by 0.0% year over year to 1,310.5

business demands along with the global economic slowdown

billion yen.

and COVID-19 spread. In the domestic passenger operation, both

As a result, consolidated operating profit decreased by 42.9%

leisure and business travel demand had been robust, however,year over year to 100.6 billion yen.
Ordinary income decreased by 38.0% year over year to 102.5

Fuel costs decreased by 7.8 billion yen as a result of less fuela decrease of expense of loss on sales and disposal of flight

consumption due to the reduction of flight frequency and decline

equipment. Profit attributable to owners of parent decreased byin fuel price in the market. Maintenance costs rose by 2.0 billion

64.6% to 53.4 billion yen after others, extraordinary income andyen due to higher engine maintenance costs. Personnel costs

losses, and tax expenses.

Fiscal year 2019 Changes in Operating Profit(Year)＋ stands for profit increase (revenue increase, cost decrease)▲ stands for profit decrease (revenue decrease, cost increase)(Billion of yen)

▲ 75.5 bn

Compound Annual Growth Rate 2020-2039
RPK in Billions■ 2019■ 2039(▲ 38.3％)

International
passenger"Other Revenues"
includeLoyalty program or
Ground Handling

1,923 3,564
North America
3.1%

1,975 4,323▲ 54.4▲10.3％

Asia-Pacific
4.8%

3.4%

Feb-Mar/2020
International passenger▲ 41.5

Domestic passenger▲ 25.5

Cargo and mail

+0.4

Other revenues

▲ 7.9

Total

▲ 74.5

Domestic
passenger

2,903 7,407

Middle East
4.1%(▲ 42.9％)▲ 67.4 bn

RPK y/y : ▲ 4.9%774 1,713

billionby 5.1% year over year to 1,411.2 billion yen. The international

Air Passenger Traffic Forecast

4.0%

53.4

In fiscal year 2019, the consolidated operating revenues decreased

ASK y/y : ▲ 0.6%

Europebillion ¥decreased by 5.9 billion yen due to a decrease mainly in earnings-

Source: International Civil Aviation Organization▲ 8.3▲ 8.4％

802

Latin America
3.0%

Cargo andmail▲ 2.6％

176.1

442

▲13.4

Other
revenues

＋0.2

＋0.1％

Fuel

+7.8
＋3.1％

8,486 18,664
World
FSC*1
Forex
Total

Source: Japan Aircraft Development Corporation

JAL Group

▲ 6.2
▲ 3.1
▲ 9.4

FSC
Forex
Total

▲ 0.7
▲ 1.2
▲ 2.0

FSC
Forex
Total

−
▲ 0.2

▲ 2.0

Aircraft▲ 2.9％

▲ 7.2

+5.9

▲ 6.5％

+2.0％

▲ 0.2

Total FSC
Total forex
Total

▲ 7.0
▲ 4.7
▲ 11.7

Personnel

Service costs
Expense of travel agency
Landing and navigation fees
Sales commissions
Other than those above
Total

FY2018

Revenues ▲ 76.0 billion (▲ 5.1%)
In fiscal year 2019, the operating revenue for the consolidated

to 100.6 billion yen and the ordinary profit decreased 38.0% fromfiscal year decreased 5.1% year over year to 1,411.2 billion yen,

the previous year to 102.5 billion yen. The net profit attributable

the operating expenses decreased 0.0% year over year to 1,310.5

to owners of the parent was 53.4 billion yen, down 64.6% frombillion yen, the operating profit decreased 42.9% year over year

the previous year.

The impact of
the change ofthe depreciation
method*2

Other
expenses

Maintenance"Aircraft" includes• Aircraft Depreciation• Aircraft Leases• Aircraft Insurance
Premium, etc.

4.0%

86

billionProfit attributable to owners of parent

billion yen and non-operating expenses decreased mainly due

1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018

our employees.

Africa1,411.2

also decreased by 13.4 billion yen.

(Millions of passengers)
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0

There is no question that the JAL Group has been significantly

354¥

Operating profit

due to the COVID-19 infection, the domestic passenger revenues

the airline industry and its end is not foreseeable at this moment.

180

Operating revenue

1. Earnings Summary

Expenses +8.5 billion (+0.7%)

+4.1

▲ 8.0

+0.7％

+0.9
+7.8
+1.5
+1.9
▲ 8.1
+4.1

108.6

100.6

FY2019(excluding thedepreciation
method change)

FY2019*1 FSC = Fuel Surcharge*2 The depreciation method is changed to a new method from FY2019. Before the depreciation method change, all components attached to aircraft weredepreciated altogether with aircraft. With the new method, assets are classified to each component, based on economic lives of components such as engines
and cabin interiors, and depreciated separately. Figures in ( ) do not include the depreciation method change.

87JAL REPORT 2020

Operating revenue

2. Segment Earnings¥(1) Air Transportation Segment

1,284.8billion yen and the operating profit decreased 47.1% year overyear to 85.9 billion yen.
*Figures for operating revenue and operating profit are before eliminationof transactions between segments.

billion¥

85.9

FY2018FY2019Passenger operations

530,679

476,230

Cargo operations

65,496Mail-service operations

9,123

Luggage operations

billion(Millions of yen)

YoY (%)

International operations

Sub total

Financial Data — Eight-year Summary

Evaluation and Analysis of Financial Conditions

Consolidated Financial Statements

FY2018FY2019FY2018YoY (%)

Passenger revenues(billion yen)
Passengers (1,000)

528.0

514.6

−2.6

YoY (%)

Passenger revenues(billion yen)
Passengers (1,000)

530.6

ASK (million seat kilometers)
RPK (million passenger kilometers)

44,65941,905−6.2

L/F (%)
Revenue per passenger*1(yen)
Yield*2 (yen)

81.3％

77.1％

−4.2pt58,13657,530

−1.0

11.9

11.4

−4.4

9.7

8.8

−9.3

476.2

−10.3

9,128

8,277

−9.3

54,92554,324−1.1

34,85933,783−3.1

Unit revenue*3 (yen)*1 Revenue per Passenger = Passenger Revenue / Passengers*2 Yield = Passenger Revenue / RPK*3 Unit Revenue = Passenger Revenue / ASKInternational Passengers■ RPK (million passenger kilometers) (left hand scale)■ ASK (million seat kilometers) (left hand scale)

36,11636,199＋0.2

40,00026,19525,443−2.9

59,744−8.8

35,00070.3％−2.2pt

−17.1

795

842

+5.9

15,14915,233+0.6

606,095

544,379−10.2

L/F (%)
Revenue per passenger*1(yen)
Yield*2 (yen)

72.5％

7,562

20.2

20.2

+0.3

14.6

14.2

−2.8

528,098

514,619−2.6

Cargo operations

21,853

20,724−5.2

Mail-service operations

3,547

3,627

+2.3

301

320

+6.5

Sub total
Total revenues from internationaland domestic operations
Other revenues

553,799539,291−2.6

1,159,895

1,083,671−6.6

197,708

201,128+1.7

Total revenues

1,357,603

1,284,800

−5.4

90.0

54,32485.0

50,00041,90580.0

40,00077.1

30,00075.0
70.0

20,00065.0

10,000

2014

2015

2016

2017

FY2019
YoY
−0.2
−9.7
−12.3
−20.6
−16.0
−10.3

Component Ratio
FY2018FY2019
26
29
16
16
33
32
11
10
14
13
100
100

FY2018FY2019● ASK

Unit revenue*3 (yen)*1 Revenue per Passenger = Passenger Revenue / Passengers*2 Yield = Passenger Revenue / RPK*3 Unit Revenue = Passenger Revenue / ASK

15,581

16,613+6.6

Europe

7,790

8,021

+3.0

Asia / Oceania

19,322

19,012

−1.6

China

3,422

3,315

−3.1

Hawaii / Guam

8,808

7,361

−16.4

Total

54,92554,324

−1.1

2018

2019

(FY)

60.0

12,714
6,580
15,661
2,870
6,831
44,65912,967
6,259
14,5762,392
5,709
41,905● Revenue passengers carried

1,332
734
4,270
1,554
1,236
9,128

FY2019

1,376
709
3,908
1,278
1,004
8,277

● Load Factor

88

+2.0
−4.9
−6.9
−16.6
−16.4
−6.2
YoY(%)

+3.3
−3.3
−8.5
−17.8
−18.7
−9.3
(%)

FY2018America
EuropeAsia / Oceania
China
Hawaii / Guam
Total

81.6
84.5
81.1
83.9
77.6
81.3

FY2019

78.1
78.0
76.7
72.2
77.5
77.1

25,44320,000YoY(pt)

−3.5
−6.4
−4.4
−11.7
−0.0
−4.2

70.0
65.0

15,000

0

60.0
55.0

2014

2015

2016

2017

2018

2019

(FY)

50.0

JALPAK CO., Ltd.

table on the right.

Overseas travelers handled(10,000 number of travelers)
Domestic travelers handled(10,000 number of travelers)Operating Revenue (before
elimination of consolidated
transactions, billions of yen)

FY2018FY2019YoY (%)

22.2

18.3

−17.8

271.8

260.6

−4.1

182.0

169.6

−6.9

FY2018FY2019

357.9

372.0

+3.9

19.4

20.1

+3.4

JAL Card Co., Ltd
Memberships (10,000
number of members)
Operating Revenue (before
elimination of consolidated
transactions, billions of yen)

3. Analysis of Factors Affecting Operating Expenses

YoY(%)(1,000)FY2018America
EuropeAsia / Oceania
China
Hawaii / Guam
Total

25,000(Million passenger kilometers)
FY201975.0

70.3

30,0005,000

YoY (%)

America

80.0

10,000(Million seat kilometers)

America
EuropeAsia / Oceania
China
Hawaii / Guam
Total

Stock/Corporate Information

36,199Results of JALPAK Co., Ltd. and JAL Card Co, Ltd. are shown in the（％）

FY201860,0000● Passenger revenues● RPK

Revenue Passenger-Load factor (%) (right hand scale)International/Domestic Route Maps

Revenue Passenger-Load factor (%) (right hand scale)

RPK (million passenger kilometers)

Passenger operations

America
EuropeAsia / Oceania
China
Hawaii / GuamTotal

ESG Data■ RPK (million passenger kilometers) (left hand scale)■ ASK (million seat kilometers) (left hand scale)

ASK (million seat kilometers)

Revenues of international routes by geographic segment

FY2019Consolidated Subsidiaries

Financial Data/
Corporate Information

Domestic Passengers

2) Domestic Passenger Operations(2) Other Businesses
1) International Passenger Operations

JAL Group
Sustainability

JAL Group's
Businesses and Strategies−10.3

Domestic operations

Luggage operations

Message fromthe President

Operating profit

Components of Revenues from the Air Transportation Segment

The operating revenue decreased 5.4% year over year to 1,284.8

JAL Group
Cor porate Policy

Major Operating Expense Items(Billions of yen)

FY2018FY2019YoY

YoY (%)

Fuel

251.2

243.4

−7.8

−3.1

Landing and navigation fees

86.3

84.8

−1.5

−1.8

Maintenance
Sales commissions(Air Transport)

72.9

75.0

+2.0

+2.9

18.9

17.0

−1.9

−10.3

Aircraft *1*2

112.2

+15.3
（+7.2）−0.9+13.6（+6.5）−2.0

3Service *

45.3

127.5
（119.4）
44.4

Personnel

302.1

296.2

−5.9

−2.0

−7.8
+8.1

−9.1
+2.4

Expenses of travel agency

86.6

78.7

Other

335.1

343.3

Total operating
expenses*2

1,311.1

1,310.5（1,302.5）−0.5（−8.5）YoY (%)

Operating revenue¥

1,310.5billionFuel costs decreased by 7.8 billion yen as a result of less fuelconsumption due to the reduction of flight frequency and decline
in fuel price in the market. Maintenance costs rose by 2.0 billion
yen due to higher engine maintenance costs. Personnel costs
decreased by 5.9 billion yen due to a decrease mainly in earningslinked bonus payments. The Group continued its cost reduction
efforts using its amoeba management system and the total
operating expenses decreased by 0.0% year over year to 1,310.5
billion yen.

−0.0（−0.7）*1 Aircraft = Aircraft Depreciation + Aircraft Leases + Aviation Insurance Premium, etc.
*2 The depreciation method is changed to a new method from FY2019. Before thedepreciation method change, all components attached to aircraft were depreciatedaltogether with aircraft. With the new method, assets are classified to each component,
based on economic lives of components such as engines and cabin interiors, anddepreciated separately. Figures in ( ) do not include the depreciation method change.
*3 Services = Expenses regarding inflight services, airport lounges, cargo equipment, etc.

89JAL REPORT 2020

Net profit attributable to owners of parent

4. Profit Attributable to Owners of Parent

¥

53.4

billionOrdinary income decreased by 38.0% year over year to 102.5

64.6% to 53.4 billion yen after others, extraordinary income andbillion yen and non-operating expenses decreased mainly due

losses, and tax expenses.

JAL Group
Cor porate Policy

Message fromthe President

Financial Data — Eight-year Summary

Evaluation and Analysis of Financial Conditions

Consolidated Financial Statements

Capital investment during the fiscal year 2019made for aircraft to improve operating efficiency.

60.0

billion–¥221.5

billionCash flow from financing activities

–¥

30.1

Largesized

to diversifying customer needs and systems
to increase efficiency and enhance passenger

billionconvenience.
In fiscal year 2019, capital investment totaled 238.5

The balance of cash and cash equivalents at the end of fiscal year

billion yen. Capital investment was mainly used to2019 decreased by 192.9 billion yen from the end of the previous

purchase 15 new aircraft (five Airbus A350-900,

fiscal year to 329.1 billion yen.

three Boeing 787-9, four Boeing 787-8, one ATR72-

Cash Flows from Operating Activities
As a result of adjusting net profit before income tax deferred etc.
of 96.5 billion yen with non-cash items, such as depreciation costs,
net defined benefit liabilities and debts and credits in operating
activities, and 82.7 billion yen of injection to Corporate Pension
Fund, cash flow from operating activities (inflow) decreased by
236.6 billion yen year-over-year to 60.0 billion yen.

Cash Flows from Investing Activities
Cash flow from investing activities (outflow) increased by
35.1 billion yen year-over-year to 221.5 billion yen, mainly for
expenditures for acquiring fixed assets.

Cash Flows from Financing Activities
Cash flow from financing activities (outflow) decreased by
6.9 billion yen year-over-year to 30.1 billion yen due to share
repurchase and payment of dividends and issuance of bonds.

(Billions of yen)
FY2018Cash flow from operating
activities*1
Depreciation andamortization
Cash flow from investing
activities
Investments and capital
contribution
Free cash flow*2
Cash flow from financing
activities
Total cash flow*3

FY2019YoY

and make advance payments for aircraft. One of
the five new Airbus A350-900 was converted to an

60.0−236.6

124.1

138.0

+13.9

−186.3–221.5−35.1−226.2–245.2−18.9

cabin comfort, and investments in IT to improve110.3–161.5−271.8customer convenience. In fiscal 2020, however, we＋6.9

will put priority on securing liquidity on hand and

−37.0

73.2

–30.1
–191.6−264.9

EBITDA

300.2

238.6

−61.5

EBITDAR

320.1

260.2

−59.9

*1 Decrease of Advanced Received by ticket cancellation and 82.7 billion
yen of Injection to Corporate Pension Fund are included*2 Cash Flow from Operating Activities + Cash Flow from Investing Activities*3 Cash flow from Operating Activities + Cash Flow from Investing Activities+ Cash Flow from Financing Activities

Capital investment will focus on growthbillion

As of end of FY2019(March 31, 2020)

Total

Owned

LeasedTotal

Airbus A350-900

0

0

0

4

1

5

+5

Boeing 777-200
Boeing 777-200ER
Boeing 777-300
Boeing 777-300ER

12

0

12

11

0

11

−1

11

0

11

11

0

11

—

4

0

4

4

0

4

—

13

0

13

13

0

13

—

40

0

40

43

1

44

+4

25

0

25

29

0

29

+4

14

3

17

17

3

20

+3

6

0

6

5

0

5

−1

29

0

29

29

0

29

—

74

3

77

80

3

83

+6

3

0

3

0

0

0

−3

Boeing 787-9
Boeing 767-300
Boeing 767-300ER
Medium-sized subtotal
Smallsized

Boeing 737-400

42

20

62

43

19

62

—

45

20

65

43

19

62

−3

18

0

18

18

0

18

—

14

0

14

14

0

14

—

1

0

1

0

0

0

−1

5

0

5

5

0

5

—

8

0

8

5

0

5

−3

5

1

6

7

1

8

+2

1

0

1

2

0

2

+1

52

1

53

51

1

52

−1

211

24

235

217

24

241

+6

Boeing 737-800
Small-sized subtotal
Regional Embraer 170

investments that will contribute to increasing
corporate value, such as the introduction of new
aircraft offering excellent fuel efficiency and

Embraer 190
DHC-8-400
DHC-8-400CC
SAAB340B
ATR42-600
ATR72-600
Regional Total

take steps to control capital investment.
Total

Shareholders’ equity

7. Financial Position
The assets at the fiscal year-end decreased by 170.9

Diff.

Leased

¥1,094.8

Equity ratio

billion

58.9

Consolidated financial position

billion yen from the end of the previous fiscal year to%(Billions of yen)
End of FY2018

End of FY2019

YoY

1,859.3 billion yen, mainly due to Cash and Operating

Total assets

2,030.3

1,859.3−170.9accounts receivable decrease.

Cash and deposits*1*2

522.0

329.1

−192.9The liabilities decreased by 102.6 billion yen from theInterest-bearing debt

142.3

191.7

+49.4

end of the previous fiscal year to 727.5 billion yen due

Future rental expenses under operating leases

81.1

81.5

+0.3

to decrease advances received and net defined benefit

Shareholdersʼ equity

1,165.1

1,094.8−70.3

liability.

Shareholdersʼ equity ratio (%)

57.4%

58.9%

+1.5pt

The net assets decreased by 68.2 billion yen from

D/E ratio (times)*3

0.1x

0.2x

+0.1x

the end of the previous fiscal year to 1,131.8 billion

ROIC(%) *4*5

9.5%

yen, as a result of paying dividends and a decrease in

ROE(%) *6

13.6%

accumulated other comprehensive income.

ROA(%) *5*7

9.1%

As a result of the above, shareholders’ equity ended
at 1,094.8 billion yen, and the equity ratio rose by 1.5
percentage points from the end of the previous fiscal
year to 58.9%.

90

241.5

Owned

MediumBoeing 787-8
sizedoperating lease aircraft in fiscal year 2019.

296.7

¥

Large-sized subtotal

600 and two ATR42-600), purchase leased aircraft
Cash flows

Stock/Corporate Information

Capital investment

As of end of FY2018(March 31, 2019)

measures to improve the Group’s ability to respondCash flow from investing activities

International/Domestic Route Maps

Fiscal 2019 Fleet

totaled 241.5 billion yen (including expenditure

It also includes intangible fixed assets such as¥

ESG Data

Financial Data/
Corporate Information

6. Capital Investment and Aircraft Procurement

In the air transportation segment, investment isequipment. Profit attributable to owners of parent decreased by

5. Cash Flows

Consolidated Subsidiaries

for intangible fixed assets).

a decrease of expense of loss on sales and disposal of flight

Cash flow from operating activities

JAL Group
Sustainability

JAL Group's
Businesses and Strategies

5.1%（5.5%） −4.4pt（−4.0pt）
4.7%− 8.8pt

5.2%（5.6%） −3.9pt（−3.5pt）*1 Certificate of Deposits etc. included*2 82.7 billion yen injection to Pension Fund included to the end of fiscal year 2019*3 D/E Ratio = On-balance sheet Interest-bearing Debt/ Shareholders' Equity*4 ROIC = NOPAT/Average Fixed Asset (incl. Future Rental Expenses under Operating
Leases) at beginning and end of a fiscal year
*5 T he depreciation method is changed to a new method from FY2019. Before the depreciation methodchange, all components attached to aircraft were depreciated altogether with aircraft. With the new method,
assets are classified to each component, based on economic lives of components such as engines and cabininteriors, and depreciated separately. Figures in ( ) do not include the depreciation method change.
*6 ROE = (Net income attributable to owners of the parent)/ (Average of shareholders’equity at beginning and end of a fiscal year)*7 ROA = (Operating profit ) / (Average of total assets at beginning and end of a fiscal
year)

91

JAL REPORT 2020

8. Credit Ratings

Message fromthe President

Financial Data — Eight-year Summary

Evaluation and Analysis of Financial Conditions

JAL Group
Sustainability

JAL Group's
Businesses and Strategies
Consolidated Financial Statements

Consolidated Subsidiaries

ESG Data

Financial Data/
Corporate Information

International/Domestic Route Maps

Stock/Corporate Information

10. Retirement Benefit Obligations

JAL’s current credit ratings are shown in thetable on the right.

JAL Group
Cor porate Policy(as of August 2020)

Rating & Investment Information, Inc. (R&I)

Issuer rating

A– (Negative)

Japan Credit Rating Agency, Ltd. (JCR)

Long-term issuer rating

A (Negative)

9. Fuel and Exchange Rate Hedging

The Company and its major consolidated subsidiaries have

Welfare Pension Fund. Certain overseas subsidiaries have defined-

established defined-benefit retirement plans such as corporate

benefit retirement plans.

pension plans and lump-sum retirement plans, as well as defined

The Japan Airlines Welfare Pension Fund also introduces ancontribution pension plans. When employees retire, and on otheroption similar to a cash-balance plan as well as other alternatives.

occasions, the Company and its consolidated subsidiaries may also

The JAL Group Pension Fund, which is used by some domestic

provide premium severance packages, which are not included

consolidated subsidiaries, uses a cash balance pension plan.

in calculations of the actuarial difference for retirement benefit

Simplified accounting methods are used to calculate retirement

obligations in retirement benefit accounting.

benefit liabilities, assets and expenses for defined-benefit

As of March 31, 2020, the Company and 39 consolidated

corporate pension plans and lump-sum retirement plans at somesubsidiaries had lump-sum retirement plans. The Group also

consolidated subsidiaries.

had three corporate pension funds, including the Japan Airlines(1) Hedging Policy
On international routes, fuel surcharges allow the Company tooffset some of its fuel costs. As a result, the Company uses fuel

Fuel hedging

Forex hedging

Fuel use

Foreign currency
revenues

hedging for fuel used on domestic routes, which is equivalent
to approximately 40% of all fuel consumed by the Group’s airtransport operations. In addition, the Company’s foreign currency
revenues are roughly the same as its foreign currency expenses,

Internationalroutes60%

FSC*
revenuereceived

excluding fuel costs. Consequently, the Company uses fuel andexchange rate hedging only for fuel costs.

Foreign currency
expensesNon-fuel
costs

Fuel costs

Domestic
routes40%

HedgedThe Company is exposed to fuelcost risks on domestic routes,
which do not have the FSC*The Company is exposed toforex risks related to fuel costs,
as foreign currency expenses
excluding fuel costs are largely
offset by foreign currency
revenues*FSC = Fuel Surcharge

11. Distribution of Profits to Shareholders
JAL regards shareholder returns as one of our most important

As a result, the annual dividends per share for fiscal year 2019 wasmanagement matters. Our fundamental policy is to actively

55 yen that was already paid as interim dividends.

implement shareholder returns through continuous and stable

Accordingly, the payout ratio becomes 35.3%, the total return

dividends and flexible share repurchases, while securing internalratio becomes 72.8% and the total return on equity ratio becomes

reserves for making investments for corporate growth in the

3.4%. When the spread of COVID-19 stops and our performance isfuture and changing business environments and to build a strong

determined to go back on its track as air transportation demandfinancial structure.

comes back in Japan and the world, we will strive to realize stable

JAL will decide the dividend per share level, considering its

and continuous shareholder return.

continuity, stability and predictability with reference to a payout
ratio of approximately 35%. In addition, JAL will proactively
and flexibly consider share repurchases, considering its financial
position and other factors. As a result, JAL seeks to achieve a total(2) Overcome Market Risks

Cumulative Impact of Price Fluctuations in FY 2017–2019

The impact of volatility in fuel prices is mitigated by hedging
and fuel surcharges, however there is some time lag of theireffects in each year. However, over a medium-term timeframe,
the Company has been largely successful in mitigating the risk offluctuations in fuel prices. Based on cumulative changes in prices
for the last three fiscal years, the Company has offset the impactof those changes through hedging and fuel surcharges.

payout ratio, which combines the total dividends paid out andthe total amounts of the share repurchases, of an approximately
35% to 50% range through appropriately sharing periodic profits

Fuel prices / forex

and allocating capitals among all of its stakeholders.

Total Shareholder Return History (FY2013-2019)

250.0

efficiency through monitoring a total return on equity ratio,

Impact

72.8

174.4

166.2

Profit fluctuationout and share repurchases by shareholders’ equity. JAL makes its
efforts to maintain this ratio at approximately 3% or above.
The effect of the spread of the COVID-19 infection has a significant
impact on the JAL Group, nonetheless it is yet temporary andit does not cause fundamental change to our profit structure,
therefore we will not change the above basic policy.
However, the worsened performance in the fourth quarter offiscal year ending March 2020 and the unforeseeable COVID-19
effect in the new fiscal year ending March 2021 makes cash flow
management based on various scenarios with continuous low
demand essential. Therefore, we determined not to provide yearend dividend in order to secure liquidity at hand. We regret that

100.0
25.1

0.0

150.8
135.4

47.7

50.0

60

164.1

149.0

150.0

which is calculated by dividing the sum of total dividends paid
0

80
70

200.0

At the same time, JAL continuously strives to improve capital

FSC / hedging（％）(Billions of yen)

25.0

20.0

25.1

29.4

32.3

30.0

20.0

20.0

38.7

38.3

29.0

37.7

43.5

33.2

2013

2014

2015

2016

2017

50

49.2

44.5

2018

35.3

40
30

53.4
20.0

20

18.8

10
2019 （FY）

Net Profit Attributable to owners of the parent
Total Dividends
Payout Ratio*2
Total Return Ratio*3
Share Repurchase*1*1 Share repurchase of a particular fiscal year includes ones determined
before the approval of financial reports of that fiscal year
*2 Dividend payout ratio=Total dividends/Net profit attributable to ownersof parent*3 Total return ratio =（Total amount of dividend + Amount of share
repurchase）/ Net profit attributable to owners of parent
FY2013-2018 net profit attributable to owners of parent excludes effects
of deferred income tax

we cannot pay dividends to shareholders, but we would like to
ask their understanding in this situation.

92

93

JAL REPORT 2020

Message fromthe President

Financial Data — Eight-year Summary

Evaluation and Analysis of Financial Conditions

JAL Group
Sustainability

JAL Group's
Businesses and Strategies
Consolidated Financial Statements

Consolidated Subsidiaries

ESG Data

Financial Data/
Corporate Information

International/Domestic Route Maps

Stock/Corporate Information

2) Exchange Rate Fluctuation Risk

Antimonopoly Act and other similar antitrust laws overseas, and

The JAL Group operates in countries other than Japan. As arules on taxes and public dues such as landing fees. Revisions toresult, some of its revenues and expenses are denominatedthese rules and regulations or notifications of legally enforceable

in foreign currencies. In particular, the price of aviation fuel,airworthiness directives could have an impact on the Group’s

one of the Group’s main expenses, is largely linked to the US

operating performance. Moreover, the allocation of flight slots at

markets worldwide. Demand for air travel may be affected bydollar. Fluctuations in US dollar exchange rates therefore have a

Haneda and Narita airports and the timing of the launch of new

global economy trends, terrorist attacks, regional conflicts, war

greater impact on the Group’s expenses than on its revenues. To

routes could also affect the Group’s operating performance.

and the JAL Group may be affected by unforeseen risks not describedand other events. In addition, the JAL Group’s services are partly

mitigate the impact of exchange rate volatility on profits, the JAL2) Environmental Compliance Risk

below. This report also contains forward-looking statements based on

dependent on maintenance companies, airport personnel, skyGroup uses foreign currency revenues to offset foreign currency

Amid growing pressure on companies in recent years to fulfill

information available to the Company as of March 31, 2020. The JAL

marshals, fuel suppliers, luggage handling companies, security

expenses and foreign currency hedging transactions. The price of

their corporate social responsibility to the environment,

companies, and other third parties, which could affect the Group’s

new aircraft is also closely linked to the US dollar, which means

such as preventing global warming, the JAL Group is facing

business operations.

the Group is also exposed to the risk of exchange rate fluctuations

tighter restrictions on CO2 emissions, noise pollution, harmful2) Competitive Risk

when recording the value of assets and depreciation costs

substances, and other environment issues. A further tightening

The Group faces severe competition in Japan and overseas inrelated to aircraft. To mitigate this risk, the Group uses hedging

of environmental regulations that leads to a higher cost burden(1) Pandemic Risk, Natural Disaster Risk and Climate
Change Risk

areas such as routes, services, and pricing. On domestic routes,

transactions to diversify opportunities for foreign currency

through emission charging mechanisms or other schemes, such

the Group competes with other major Japanese airlines, new low

exchange.

as a new greenhouse gas trading system to be implemented

1) Pandemic Risk

cost airlines, and bullet train services. On international routes, the3) Capital Market Risk and Financial Market Risk

from fiscal 2020 at earliest, could have an impact on the Group’s

The JAL Group operates the air transportation business in Japan andGroup competes with major domestic and international airlines,

The JAL Group needs to make significant capital investments,

operating performance.

around the world. A global outbreak of an unknown disease, suchand competition is intensifying on both domestic and internationalsuch as procuring new aircraft. To meet funding needs for3) Litigation Risk

as COVID-19, which has been spreading around the world since theroutes. Alliances, codeshare agreements, and reciprocal air

these investments, the Group may procure funds from financial

The JAL Group’s business activities are exposed to the risk

beginning of 2020, could lead to a sharp decline in air passenger demandfrequent flyer programs between overseas and Japanese airlines

institutions or capital markets. The Group’s ability to secureof various types of litigation, which could affect the Group’s

caused by government-imposed restrictions on the movement of people

are contributing to the challenging environment on international

funds and its funding costs are affected by trends in capital andoperations and operating performance. In the event thatsuch as entry and travel restrictions and voluntary restraint from goingroutes. Significant deterioration in this competitive climate andfinancial markets, and by changes in its credit rating, which may

a litigation is filed against the Group, developments in theout, and voluntary restraint from using aircraft by companies and users

operating environment could affect the Group’s operations.

limit the Group’s access to funds and lead to higher funding costs.

subsequent legal case may require additional costs and theto prevent infection. As the Group's air transportation business has a

The JAL Group has partnerships with global partner airlines inhigh proportion of fixed costs such as aircraft costs and personnel costs, avarious forms such as joint business, alliance, codeshare, frequent(5) Aviation Safety Risk

short-term sharp decline in demand could seriously affect the operating

flyer program, and so forth. The JAL Group’s alliance strategy may

The JAL Group implements a wide range of measures on a daily

performance of airlines including the JAL Group.

be affected by changes in operating conditions at other partner

basis to ensure the safe operation of its flights. However, a single(7) IT Risk and Customer Data Protection Risk

2) Natural Disaster Risk and Climate Change Risk

airlines including oneworld members or joint business partners,

fatal accident has the potential to undermine customer trust in

The JAL Group’s operations are dependent on a large number of

The majority of the JAL Group’s passengers use aircraft departing

and by changes in the oneworld alliance membership or major

the Group’s flight safety and lead to a loss of public support.

IT systems. Failures in these IT systems caused by flaws in computerfrom or arriving at Haneda and Narita airports. Consequently, thesedevelopments in the Group’s alliance relationships.

The Group must also provide compensation for any passenger

programs, computer viruses, and other cyber-attacks may lead

fatalities or injuries in the event of an accident, which could

to the loss of critical data, as well as issues in flight operations,(3) Aircraft Delivery Risk

have a severe impact on the Group’s operating performance.

which could affect the Group’s operations. Largescale failures inIn the air transportation business, the JAL Group places orders

In addition, safety issues related to the JAL Group, the same

power systems, communication networks, other infrastructure

for aircraft with the Boeing Company, Airbus SAS, Embraer SA,

aircraft type operated by the Group or codeshare flights could

that support IT systems and Cloud services for the Group’s email

tasked with controlling the operation and scheduling of the Group’s

ATR, and Mitsubishi Aircraft Corporation to increase efficiency

undermine customer trust in the Group’s flight safety and lead tocommunications could also result in significant disruption to thefleet worldwide, are both located in the Tokyo area.

by switching to more fuel-efficient aircraft and reducing aircrafta loss of public support, which could affect the Group’s operatingGroup’s operations.

Consequently, a major earthquake or volcanic eruption in thetypes in the fleet. However, the delivery of new aircraft may be

performance. To limit the impact of legal damages related to air

In addition, inadequate handling of customers’ personal

delayed due to technical, financial, and other reasons at aircraft

accidents and to ensure those affected by any accident receive

information by the Group or unauthorized access that results in

manufacturers, which could force adjustments to fleet plans thatsufficient compensation, the Group has purchased liability

the disclosure of such information could damage public trust inaffect the Group’s operations over the medium and long term.

insurance that provides an internationally recognized level ofthe Group’s business, systems and corporate brand and undermine

compensation and coverage.

customer and market trust in the JAL Group, which could affect

12. Business Risks

The JAL Group has identified a number of risks that could have amaterial impact on investment decisions. The list is not exhaustive

Group is exposed to the following principal risks due to the natureof its business activities, centered on the scheduled air transportation
business and non-scheduled air transportation business.

airports play a vital role in the JAL Group’s air transportation business.
In addition, the Group’s Information System Center, which plays animportant role in managing the Group’s flights, reservations andother services, and the Integrated Operations Control (IOC), which isTokyo area could lead to the protracted closure of Haneda or
Narita airports, while a fire, terrorist attack or other incident
at these key facilities could lead to a prolonged outage of theGroup’s information systems and operational capabilities, whichbooking of provisions, which could also affect the Group’s
operating performance.

the Group’s operating performance.

would have a severe impact on the Group’s operations.

(4) Market Fluctuation Risk

To mitigate the risk of a shutdown of the Integrated Operations Control

1) Fuel Price Fluctuation Risk

in Tokyo, the Group transferred some functions to the Operations

Fluctuations in fuel prices have a significant impact on the(6) Regulatory Risk, Environmental Compliance Risk
and Litigation Risk

(8) HR Risk and Industrial Relations Risk

JAL Group’s operating performance. The Group charges a fuel

The Group’s operations are subject to various international

The JAL Group’s business is dependent on securing personnel who
have national certificates and other legally required qualifications

Control Center at Osaka International Airport which is in 24-7 operation,
but it is not a substitution for all the functions of the IOC in Tokyo.

surcharge to partly cover the impact of higher fuel prices.

legal restrictions and national and local government laws andIn addition, if climate change caused by global warning, etc.

However, changes in fuel prices are not immediately reflected

regulations. Revisions to these laws and regulations may result in

related to the operation of aircraft. However, due to thebrings more frequent large-scale natural disasters to Japan, itin the fuel surcharge and it is inappropriate to ask customers toeven tighter restrictions on the Group’s operations, which could

considerable amount of time required by employees to acquire

could affect the Group's operating performance.

cover the entire increase in fuel prices. The Group also uses crude

lead to a significant increase in costs.

these qualifications and skills during the course of their duties, theoil hedging transactions to mitigate the risk of fuel price volatility.

1) Regulatory Risk

JAL Group may not be able to secure sufficient personnel when

However, a sudden and steep drop in oil prices may not contribute

The JAL Group conducts its operations in accordance with various

required, which could affect the Group’s business operations.

to an improvement in the Group’s operating performance, as therules and regulations, such as Japan’s Civil Aeronautics Act andIn addition, many of the Group’s employees are members of labor

1) External Environment Risk

benefits of the decline would not be reflected in business results

other regulations governing airline businesses, bilateral aviation

unions. A collective strike by Group employees or other labor

The JAL Group’s air transportation business operates in Japan and

immediately due to hedge contract positions and other factors.

agreements and other international arrangements, Japan’s

disputes could affect the Group’s aircraft operations.

(2) External Environment Risk such as International
Affairs and Economic Trends

94

JAL Group
Cor porate Policy

95

JAL REPORT 2020

Consolidated Financial Statements

Consolidated Financial Statements

Consolidated Subsidiaries

Operating accounts payable (Note 8)
Thousands of U.S. dollars(Note 5)

2020

2020

2019

2020

Cash and deposits (Notes 6, 8 and 11)¥ 329,149¥ 462,064$ 3,024,432

Notes and operating account receivable

88,871

153,112816,603―

60,000―Flight equipment spare parts and supplies

26,491

21,929243,416

Other

82,43265,095757,438

(950)

(661)

(8,729)Stock/Corporate Information

Thousands of U.S. dollars(Note 5)
2020

2019

¥ 185,650$ 1,528,319

87

65

799

Current portion of long-term loans payable (Notes 8 and 11)

13,556

13,287

124,561

Lease obligations (Notes 8 and 11)

1,067

2,461

9,804

525,995

761,539

4,833,180

195

190

1,791

Income taxes payable

4,083

21,73837,517

Advances received

72,423

129,108

665,469

255

―

2,343

100,463

101,896

923,118

358,460

454,399

3,293,760

Bonds payable (Notes 8 and 11)

90,00050,000826,977

Long-term loans payable (Notes 8 and 11)

84,77073,524

778,921

Lease obligations (Notes 8 and 11)

1,988

2,504

18,267

113

312

1,038

Asset retirement obligations (Note 20)
Other
Total current liabilities
Non-current liabilities:

Long-term accounts payable—installment purchase(Notes 8 and 11)
Deferred tax liabilities (Note 13)
Non-current assets:
100,117

101,289

919,939

241

169

2,214

Reserve for loss on antitrust litigation

5,816

5,936

53,441

Net defined benefit liability (Note 12)

151,330

212,672

1,390,517

Asset retirement obligations (Note 20)

8,829

8,657

81,126

Other
Tangible fixed assets, net:
Flight equipment (Notes 11 and 17)

827,937

733,961

7,607,617

Ground property and equipment (Note 17)

59,82053,478549,664

Advances on flight equipment and other purchases

110,050

141,776

1,011,210

997,807929,216

9,168,492

Total tangible fixed assets

International/Domestic Route Maps

¥ 166,327

Short-term loans payable (Notes 8 and 11)

Accounts payable—installment purchase (Notes 8 and 11)

Current assets:

Investment securities (Notes 7, 8, 9 and 11)

ESG Data

Current liabilities:

AssetsTotal current assets

Evaluation and Analysis of Financial Conditions

Financial Data/
Corporate Information

Liabilities

Millions of yen

Allowance for doubtful accounts

Financial Data — Eight-year Summary

JAL Group
Sustainability

JAL Group's
Businesses and Strategies

As of March 31

Japan Airlines Co., Ltd. and Consolidated Subsidiaries

Securities (Notes 6, 8 and 9)

Message fromthe President

Millions of yen(1) Consolidated Balance Sheets

As of March 31

JAL Group
Cor porate Policy

25,97522,015

238,674

Total non-current liabilities

369,065

375,793

3,391,206

Total liabilities

727,525

830,192

6,684,967

Issued: 337,143,500 shares in 2020 and
349,028,700 shares in 2019

181,352

181,352

1,666,378

Capital surplus

183,049

183,050

1,681,971

Retained earnings

797,911

822,554

7,331,719

Contingent liabilities (Note 18)
Net assets (Note 14)
Shareholders' equity
Common stock:
Authorized: 700,000,000 shares in 2020 and 2019

Software

95,642

92,076

878,820

Long-term loans receivable (Note 11)

6,691

7,240

61,481

Deferred tax assets (Note 13)

84,632

96,625

777,653

938

2,486

8,618

Other

48,78540,129448,267

Allowance for doubtful accounts(1,248)(275)(11,467)

1,333,367

1,268,788

12,251,833¥ 1,859,362¥ 2,030,328$ 17,085,013

Net defined benefit asset (Note 12)

Total non-current assets
Total assets

Treasury shares, at cost:
201,851 shares in 2020 and 201,957 shares in 2019

(534)

(535)

(4,906)

1,161,778

1,186,421

10,675,163

Valuation difference on available-for-sale securities (Note 9)

17,676

20,371

162,418

Deferred gains (losses) on hedges (Note 10)(23,146)

1,837(212,680)

(28)

99

(257)

(61,467)(43,596)(564,798)

Total accumulated other comprehensive income(66,965)(21,287)(615,317)

Non-controlling interests

37,02335,001

340,191

Total shareholders' equity
Accumulated other comprehensive income:

Foreign currency translation adjustment
Remeasurements of defined benefit plans (Note 12)

Total net assets
Total liabilities and net assets

1,131,836

1,200,135

10,400,036¥ 1,859,362¥ 2,030,328$ 17,085,013

The accompanying notes are an integral part of these consolidated financial statements.

96

97JAL REPORT 2020

(2) Consolidated Statement of Income and Comprehensive Income
Years ended March 31
Operating revenue:
Passenger:
Domestic
International
Incidental and other revenue
Total operating revenue
Operating expenses:
Wages, salaries and benefits
Aircraft fuelLanding fees and other rent
Aircraft maintenanceAircraft rent
Depreciation and amortization
Other
Total operating expenses
Operating profit
Non-operating income (expenses):
Interest income
Dividend income
Interest expenses
Gain on sales of flight equipment
Loss on sales and disposal of flight equipment
Loss on sales and disposal of non-current assets
Loss on valuation of flight equipment spare parts andsupplies
Share of profit of entities accounted for using equity
methodForeign exchange losses
Gain on sales of investments in securities
Loss on valuation of investment securities
Provision of allowance for doubtful accounts
Subsidy income for aircraft purchase
Loss on reduction of aircraft
Subsidy income
Impairment loss (Note 16)
Other
Total non-operating income (expenses)
Profit before income taxes
Income taxes—current (Note 13)
Income taxes—deferred (Note 13)
Total income taxes
Profit2020

Thousands of U.S. dollars(Note 5)2020

¥ 514,619
476,230
420,379
1,411,230

296,203
243,420
84,83375,011
21,552138,035
451,541
1,310,597
100,632

Profit attributable to:
Owners of parent
Non-controlling interests
Other comprehensive income (Note 15):
Valuation difference on available-for-sale securities
Deferred losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:
Owners of parent
Non-controlling interests

98

2019

The accompanying notes are an integral part of these consolidated financial statements.

¥ 528,098
530,679
428,483
1,487,261

302,156251,223
86,38372,926
19,918124,104
454,389
1,311,101
176,160$ 4,728,650
4,375,907
3,862,712
12,967,288

2,721,703
2,236,699
779,500
689,249
198,033
1,268,354
4,149,048
12,042,607
924,671

1,437
1,582
(658)
1,710
(2,901)(2,172)

1,068
1,376
(803)
1,494
(14,474)(1,030)13,204
14,536(6,046)
15,712(26,656)(19,957)(1,031)(1,668)(9,473)

1,381

1,317

12,689(1,241)673(1,151)(990)
2,414(2,401)
1,219(1,959)(29)(4,118)96,513

(486)
103
(119)
2,548
(2,548)630(7,898)570(19,920)
156,240(11,403)6,183(10,576)(9,096)22,181(22,061)
11,200(18,000)(266)(37,838)
886,823

7,898
31,17339,07257,44133,223(32,127)
1,096
155,144

72,571
286,437
359,018
527,804―

Message fromthe President

Financial Data — Eight-year Summary

Evaluation and Analysis of Financial Conditions

JAL Group
Sustainability

JAL Group's
Businesses and Strategies
Consolidated Financial Statements

Consolidated Subsidiaries

ESG Data

Financial Data/
Corporate Information

International/Domestic Route Maps

Stock/Corporate Information(3) Consolidated Statements of Changes in Net Assets

Japan Airlines Co., Ltd. and Consolidated Subsidiaries

Millions of yen

JAL Group
Cor porate Policy

53,407
4,034

150,807
4,337

490,737
37,066(2,545)(23,672)(151)(17,976)

3,868(4,505)
25
3,845(23,385)(217,513)(1,387)(165,175)(1,466)71(13,470)(45,812)
11,6283,305
158,449(420,950)
106,845

7,729¥ 3,898

154,156¥ 4,292

71,019$ 35,817

Japan Airlines Co., Ltd. and Consolidated Subsidiaries(Millions of yen)

Shareholders' equity

Balance as of April 1, 2018
Changes of items during period
Dividends of surplus
Profit attributable to owners of parent
Purchase of treasury shares
Retirement of treasury shares
Change of scope of consolidation, etc.
Net changes of items other than shareholders' equity
Total changes of items during period
Balance as of March 31, 2019
Valuation difference
on available-for-salesecurities
Balance as of April 1, 2018
¥ 16,469
Changes of items during period
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury shares
Retirement of treasury
sharesChange of scope of
consolidation, etc.
Net changes of items other
3,902
than shareholders' equity
Total changes of items
3,902
during period
Balance as of March 31, 2019
¥ 20,371

Common stock

Capital surplus

Retained earnings

Treasury shares¥ 181,352¥ 183,049¥ 731,106¥ (10,535)(39,377)
150,807―¥ 181,352

0(19,999)170¥ 183,050

91,447¥ 822,554

Accumulated other comprehensive income
Deferred gains Foreign currency Remeasurements Total accumulated(losses) on
translationof defined benefit other complehensive
hedgesadjustment
plansincome¥ 6,360¥ (30)¥ (47,436)¥ (24,637)(9,999)19,999Total shareholders'equity¥ 1,084,972(39,377)
150,807(9,999)―18
9,999¥ (535)

101,448¥ 1,186,421

Non-controllinginterests

Total net assets¥ 33,792¥ 1,094,127(39,377)
150,807(9,999)―18(4,522)

130

3,839

3,349

1,209

4,559

(4,522)

130

3,839

3,349

1,209

106,007¥ 1,837¥ 99¥ (43,596)¥ (21,287)¥ 35,001¥ 1,200,135

Common stock

Capital surplus

Retained earnings¥ 181,352¥ 183,050¥ 822,554

Shareholders' equity

Balance as of April 1, 2019
Changes of items during period
Dividends of surplus
Profit attributable to owners of parent
Purchase of treasury shares
Retirement of treasury shares
Change in equity in entities accounted for using equity method, etc.
Net changes of items other than shareholders' equity
Total changes of items during period
Balance as of March 31, 2020

Valuation difference
on available-for-salesecurities
Balance as of April 1, 2019
¥ 20,371
Changes of items during period
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury shares
Retirement of treasury
sharesChange in equity inentities accounted forusing equity method, etc.
Net changes of items other(2,694)than shareholders' equity
Total changes of items(2,694)during period
Balance as of March 31, 2020
¥ 17,676

Total shareholders'equity¥ (535) ¥ 1,186,421

Treasury shares(38,050)
53,407(39,999)(0)―¥ 181,352(0)¥ 183,049(24,642)¥ 797,911

Accumulated other comprehensive income
Deferred gains Foreign currency Remeasurements Total accumulated(losses) on
translationof defined benefit other complehensive
hedgesadjustment
plansincome¥ 1,837¥ 99¥ (43,596)¥ (21,287)(39,999)
39,9990(38,050)
53,407(39,999)―00¥ (534)(24,642)¥ 1,161,778

Non-controllinginterests

Total net assets¥ 35,001¥ 1,200,135(38,050)
53,407(39,999)―

0(24,983)(128)(17,870)(45,677)

2,022(43,655)(24,983)(128)(17,870)(45,677)

2,022(68,298)¥ (23,146)¥ (28)¥ (61,467)¥ (66,965)¥ 37,023¥ 1,131,836

99

JAL REPORT 2020

JAL Group
Cor porate Policy

Message fromthe President

Financial Data — Eight-year Summary

Evaluation and Analysis of Financial Conditions

JAL Group
Sustainability

JAL Group's
Businesses and Strategies
Consolidated Financial Statements

Consolidated Subsidiaries

ESG Data

Financial Data/
Corporate Information

International/Domestic Route Maps

Stock/Corporate Information(4) Consolidated Statement of Cash flows
Common stock
Balance as of April 1, 2019
Changes of items during period
Dividends of surplus
Profit attributable to owners of parent
Purchase of treasury shares
Retirement of treasury shares
Change in equity in entities accounted for using equity method, etc.
Net changes of items other than shareholders' equity
Total changes of items during period
Balance as of March 31, 2020

Valuation difference
on availablefor-sale securities
Balance as of April 1, 2019 $ 187,181$ 1,666,378

Thousands of U.S. dollars (Note 5)
Shareholders' equity
Total shareholders'Capital surplus
Retained earnings Treasury shares
equity$ 1,681,981$ 7,558,154$ (4,915) $ 10,901,598(349,627)
490,737(367,536)(0)―$ 1,666,378(0)$ 1,681,971(226,426)$ 7,331,719(367,536)
367,53600$ (4,906)

Accumulated other comprehensive income
Deferred gains Foreign currency Remeasurements Total accumulated Non- controllinginterests(losses) on
translationof defined benefit other comprehensive
hedgesadjustment
plansincome$ 16,879$ 909$ (400,588)$ (195,598)$ 321,611(349,627)
490,737(367,536)(229,559)(1,176)(164,201)(419,709)

18,5792020¥ 96,513¥ 156,240$886,823

138,035

124,104

1,268,354

4,650

19,27142,727

Decrease in net defined benefit liability(85,775)(12,157)(788,155)

Interest and dividend income(3,019)(2,445)(27,740)

658

803

6,046

Foreign exchange losses

1,092

266

10,033

Share of profit of entities accounted for using equity
method(1,381)(1,317)(12,689)

Decrease (increase) in notes and operating accounts receivable

64,256(1,852)590,425

Decrease (increase) in flight equipment spare parts and supplies(4,522)

188(41,551)

Profit before income taxes
Adjustments to reconcile profit before income taxes to net
cash provided by operating activities:
Depreciation and amortization

Interest expenses
Total net assets$ 11,027,611

2020

2019

Cash flows from operating activities

Loss on sales and disposal of non-current assets andimpairment loss

(349,627)(24,754)

Years ended March 31

0(226,426)$ 10,675,163

Thousands of U.S. dollars(Note 5)

Millions of yen―

Changes of items during period
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury shares
Retirement of treasury
sharesChange in equity inentities accounted forusing equity method, etc.
Net changes of items otherthan shareholders' equity
Total changes of items
during period
Balance as of March 31, 2020

Japan Airlines Co., Ltd. and Consolidated Subsidiaries

Increase (decrease) in operating accounts payable(19,288)

7,707(177,230)

490,737

Increase (decrease) in advances received(56,874)

21,957(522,594)(367,536)

Other, net(39,307)

7,865(361,177)―

Subtotal

95,038

320,632

873,270

Interest and dividends income received

3,870

3,005

35,5600Interest expenses paid

(650)

(802)

(5,972)

Income taxes paid

(38,227)(26,117)(351,254)

Net cash provided by operating activities

60,030296,717551,594(401,130)(24,754)(229,559)(1,176)(164,201)(419,709)

18,579(627,565)$ 162,418$ (212,680)$ (257)$ (564,798)$ (615,317)$ 340,191$ 10,400,036

Cash flows from investing activities(239,611)(222,126)(2,201,699)

Proceeds from sales of non-current assets

20,02333,390183,984

Purchase of non-current assets
Purchase of investment securities(5,647)(4,153)(51,888)

Proceeds from sales and redemption of investment
securities

1,465

247

13,461

Payments of loans receivable

(233)

(314)

(2,140)

Collection of loans receivable
Other, net
Net cash used in investing activities

837

833

7,690

1,592

5,730

14,628(221,573)(186,392)(2,035,955)

Cash flows from financing activities
22(3,085)202

Proceeds from long-term loans payable

24,882

10,800228,631

Repayments of long-term loans payable(13,367)(19,439)(122,824)

Net increase (decrease) in short-term loans payable

Repayments of lease obligations(1,376)(2,649)(12,643)

Proceeds from issuance of bonds

39,75029,796365,248

Purchase of treasury shares(40,015)(10,024)(367,683)

Cash dividends paid

(38,146)(39,347)(350,509)

Dividends paid to non-controlling interests(2,384)(3,534)(21,905)

499

447

4,585

(30,135)(37,037)(276,899)

Effect of exchange rate changes on cash and cash
equivalents(1,236)(21)(11,357)

Net increase (decrease) in cash and cash equivalents(192,914)

73,265(1,772,617)

Cash and cash equivalents at beginning of period

522,064

448,842

4,797,059

―

(44)

―

¥ 329,149¥ 522,064$3,024,432

Other, net
Net cash used in financing activities

Decrease in cash and cash equivalents resulting fromexclusion of subsidiaries from consolidation
Cash and cash equivalents at end of period (Note 6)

The accompanying notes are an integral part of these consolidated financial statements.

100

101

JAL REPORT 2020

JAL Group
Cor porate Policy

Message fromthe President

Financial Data — Eight-year Summary

Evaluation and Analysis of Financial Conditions

JAL Group
Sustainability

JAL Group's
Businesses and Strategies
Consolidated Financial Statements

Consolidated Subsidiaries

ESG Data

Financial Data/
Corporate Information

International/Domestic Route Maps

Stock/Corporate Information

Notes to the Consolidated Financial Statements
Japan Airlines Co., Ltd. and Consolidated Subsidiaries

1. BASIS OF PRESENTING FINANCIAL STATEMENTS

b. Securities

arising from this change, please refer to "Note 21. SEGMENT

j. Foreign Currency Translation

Japan Airlines Co., Ltd. (the "Company") and its domestic

Securities, except for investment securities of non-consolidated

INFORMATION."

Revenues and expenses in foreign currencies are translated

consolidated subsidiaries maintain their accounting records andsubsidiaries and affiliates, are classified as trading securities,

prepare their financial statements in accordance with accounting

held-to-maturity securities or other securities. Trading securities

principles generally accepted in Japan, which are different inare carried at fair value. Held-to-maturity securities are carriede. Software (excluding leased assets)

currency receivables and payables are translated into yen at thecertain respects as to the application and disclosure requirements

at amortized cost. Marketable securities classified as other

Computer software intended for internal use is amortized by theapplicable year-end foreign exchange rates and any gain or lossof International Financial Reporting Standards. The accompanying

securities are carried at fair value with any unrealized gain or

straight-line method based on its estimated useful life, which ison translation is included in current earnings.

consolidated financial statements have been compiled from theloss reported as a separate component of net assets, net of taxes.

principally five years.

Differences arising from the translation of assets, liabilities,

consolidated financial statements filed with the appropriate

Non-marketable securities classified as other securities are carried

Local Finance Bureau of the Ministry of Finance as required byat cost or amortized cost. Cost of securities sold is determined

the Financial Instruments and Exchange Act of Japan and include

principally by the moving-average method.

f. Leased Assets

at the applicable exchange rates at the year-end are presented

certain additional financial information for the convenience

Investments in investment limited partnership and similar

Depreciation of leased assets is computed as follows:

as foreign currency translation adjustment and non-controllingof readers outside Japan. Some supplementary information

associations (those deemed as securities under Paragraph 2 ofLeased assets arising from finance lease transactions that transfer

interests in a component of net assets.

included in the statutory Japanese-language consolidated

Article 2 of the Financial Instruments and Exchange Act of Japan)

the ownership of leased assets to the lessee are depreciatedfinancial statements, but not required for fair presentation, is notare stated at net amount equivalent to the Company's equity on

by the same method applied to assets arising from purchasepresented in the accompanying consolidated financial statements.

the basis of the most recent financial statements available as oftransactions.

k. Derivatives and Hedge Accounting

As permitted by the Financial Instruments and Exchange Act of

the financial reporting date stipulated in respective partnership

Leased assets under finance lease transactions that do not transfer

Derivatives positions are stated at fair value.

Japan, amounts of less than one million yen have been omitted.

contracts.

at the rates prevailing at the time of the transaction. Except
as noted in "k. Derivatives and Hedge Accounting," foreign

revenues and expenses of foreign consolidated subsidiaries
and entities accounted for using the equity method into yen

the ownership to the lessee are depreciated to a residual value

Gains or losses on derivatives designated as hedging instruments

As a result, the totals shown in the accompanying consolidatedof zero by the straight-line method using the lease term as theare deferred until the gains or losses on the underlying hedged

financial statements (both in yen and U.S. dollars) do not

useful life.

items are recognized with any unrealized gains or losses reported

necessarily agree with the sum of the individual amounts.

c. Inventories

Certain amounts previously reported have been reclassified toInventories are valued at the lower of cost and net realizableconform to the current year's classification.

value with cost determined principally by the moving-averageg. Allowance for Doubtful Accounts

forward foreign currency exchange rates if certain conditions are

method.

General provision for doubtful accounts is provided by applying a

met.

as a separate component of net assets, net of taxes. Foreign
currency receivables and payables are translated at the applicablereserve percentage to receivables based on experience from pasttransactions. When considered necessary, specific reserves are
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESd. Tangible Fixed Assets (excluding leased assets)a. Principles of Consolidation and Accounting for Investments

Tangible fixed assets, excluding leased assets, are stated at cost,in Unconsolidated Subsidiaries and Affiliates

net of accumulated depreciation, and accumulated impairment

The accompanying consolidated financial statements include

loss, if any, except as indicated in the following paragraph.

h. Accounting Method for Retirement Benefits

the accounts of the Company and all significant subsidiaries

Accumulated depreciation of tangible fixed assets on MarchIn calculating retirement benefit obligations, the method

controlled directly or indirectly by the Company. Companies over31, 2020 and 2019 amounted to ¥589,316 million ($5,415,014

of attributing expected benefits to the accounting period is

m. Income Taxes

which the Company exercises significant influence in terms ofthousand) and ¥500,827 million, respectively.

principally based on the benefit formula.

Deferred tax assets and liabilities are recognized for expected

their operating and financial policies have been included in the

Depreciation of tangible fixed assets is computed as follows:

Actuarial gain and loss are amortized by the straight-line method

future tax consequences attributable to temporary differences

accompanying consolidated financial statements on the equity

Flight equipment: The straight-line method based on its

over a period ranging from 5 to 17 years, which is less than the

between the financial statement carrying amounts of existingbasis.

estimated useful life

average remaining years of service of the active participants in theassets and liabilities and their respective tax basis, and operating

The balance sheet date of three of the consolidated subsidiaries

Other: Principally the straight-line method based on theplans. Amortization is computed from the fiscal year subsequentloss and tax credit carryforwards. Valuation allowance is recorded

is December 31. Any significant differences in intercompany

estimated useful lives of the respective assets

to the year in which the difference was recorded.

to reduce deferred tax assets to their net realizable value if it is

Past service cost is principally charged to income as incurred.

more likely than not that some portion or all of the deferred tax

accounts and transactions arising from intervening intercompany

102

The estimated useful lives are principally as follows:

made based on the assessment of individual accounts.

l. Revenue Recognition
Passenger and cargo revenues are recognized when thetransportation services are rendered.

transactions during the period between the balance sheet date

Flight equipment: From 8 to 20 years

However, at certain subsidiaries past service cost is amortized

assets will not be realized.

of each subsidiary and the consolidated balance sheet date

Other: From 2 to 65 years

by the straight-line method over a period which is less than the

The Company and certain domestic consolidated subsidiaries file
tax returns under the Japanese consolidated corporate tax system.

have been adjusted, if necessary. The differences between the

The Company has modified systems related to some aircraft

average remaining years of service of the active participants inacquisition and the fair value of the net assets at the respectiveengine parts and cabin assets in order to ensure depreciation more

the plans.

dates of acquisition of the consolidated subsidiaries andprecisely reflecting the estimated periods over which an asset iscompanies accounted for by the equity method are recorded as

expected to be economically usable. As a result, the determination

goodwill amortized by the straight-line method over a period ofof the useful life of some aircraft engine parts and cabin assets has

i. Reserve for Loss on Antitrust Litigation

the Japanese Consolidated Corporate Tax System to the Group

five years.

been changed from the fiscal year ended March 31, 2020.

Estimated future loss is accrued in order to provide for penalties

Tax Sharing System

All significant intercompany accounts and transactions andFollowing this change, operating profit decreased by ¥8,060

and compensation potentially arising from price cartels.

The Company and its domestic consolidated subsidiaries do notunrealized gain or loss on intercompany accounts and transactions

million ($74,060 thousand), and profit before income taxes

adopt paragraph 44 of "Implementation Guidance on Tax Effectare eliminated in consolidation.

decreased by ¥5,543 million ($50,932 thousand) for the fiscal year

Accounting" (ASBJ Guidance No. 28, February 16, 2018) but adopt

ended March 31, 2020.

rules of tax laws before amendments for the amounts of deferred

For details of the impact on individual business segments

tax assets and liabilities, regarding the transition to the group

n. Adoption of Tax Effect Accounting for the Transition from103JAL REPORT 2020

Message fromthe President

Financial Data — Eight-year Summary

Evaluation and Analysis of Financial Conditions

JAL Group
Sustainability

JAL Group's
Businesses and Strategies
Consolidated Financial Statements

Consolidated Subsidiaries

ESG Data

Financial Data/
Corporate Information

International/Domestic Route Maps

Stock/Corporate Information

tax sharing system established by "Act on Partial Amendment ofretrospectively, and consolidated statements of cash flows forStatement No. 9, July 4, 2019)

5. U.S. DOLLAR AMOUNTS

the Income Tax Act and Others" (Act No. 8 of 2020) and related

the year ended March 31, 2019 consist of the figures after the- "Accounting Standard for Financial Instruments" (ASBJ

Amounts in U.S. dollars are included solely for the convenience

revisions to the single tax payment system, due to paragraph 3

retrospective application.

Statement No. 10, July 4, 2019)of the reader. A rate of ¥108.83 = US$1.00, the approximateof "Practical Solution on the Treatment of Tax Effect Accounting

Following this change, for the year ended March 31, 2019, "Cash- "Implementation Guidance on Disclosures about Fair Value of

exchange rate prevailing on March 31, 2020, has been used infor the Transition from the Consolidated Taxation System to theflows from investing activities" increased by ¥3,321 million

Financial Instruments" (ASBJ Guidance No. 19, March 31, 2020)

translation. The convenience translations should not be construed

Group Tax Sharing System" (PITF No. 39, March 31, 2020).

($30,515 thousand), "Net increase (decrease) in cash and cash

as representations that the Japanese yen amounts have been,equivalents" increased by ¥3,297 million ($30,294 thousand)(1) Overview

could have been or could in the future be converted into U.S.
dollars at this or any other rate of exchange.

and "Cash and cash equivalents at end of period" increased by

The ASBJ has promoted an initiative to enhance the comparabilityo. Cash Equivalents¥269,268 million ($2,474,207 thousand), respectively, comparedof the requirements of Japanese and international accounting

Cash equivalents are defined as time deposits with an original

with those before the retrospective application.

standards, primarily in the areas of guidance on the fair value

maturity of a year or less and highly liquid, short-term investmentsof financial instruments and their disclosure. To this end,

with an original maturity of three months or less that are exposed

the ASBJ has issued the "Accounting Standard for Fair Value

6. CASH AND CASH EQUIVALENTS

Accounting Standards Issued but Not Yet Effective

Measurement," etc., in consideration of the fact that the IASB

The components of cash and cash equivalents in the

The following standard and guidance were issued but not yet

and the FASB have prescribed similarly detailed guidance (IFRS

accompanying consolidated statements of cash flows on Marchadopted.

No. 13 "Fair Value Measurement" issued by IASB and Accounting

31, 2020 and 2019 were as follows:- "Accounting Standard for Revenue Recognition" (ASBJ

Standard Codification Topic 820 "Fair Value Measurement" issued

3. CHANGES IN ACCOUNTING POLICY/CHANGES IN PRESENTATIONStatement No. 29, March 31, 2020)

by FASB).

For the year ended March 31, 2019

- "Implementation Guidance on Accounting Standard for Revenue

The ASBJ's fundamental policies for developing the "Accounting

As of March 31

2020

2019

2020

(Changes due to application of "Partial Amendments to

Recognition" (ASBJ Guidance No. 30, March 31, 2020)

Standard for Fair Value Measurement," etc. are (1) to include all

Cash and deposits¥ 329,149¥ 462,064$ 3,024,432

Accounting Standard for Tax Effect Accounting")(1) Overview

requirements of IFRS No. 13 so as to enhance the comparability

Securities

The Company and its domestic subsidiaries adopted "Partial

The International Accounting Standards Board (IASB) andof financial statements of domestic and overseas companies by

Cash and cash equivalents

Amendments to Accounting Standard for Tax Effect Accounting"

Financial Accounting Standards Board (FASB) co-developed

prescribing uniform measurement methods, and (2) to allow for(Accounting Standards Board of Japan (ASBJ) Statement No. 28,

a new comprehensive revenue recognition standard andexceptional treatments in consideration of established accounting

February 16, 2018 (hereinafter, "Statement No. 28")) from thepublished "Revenue from Contracts with Customers" in May 2014

conventions in Japan without compromising the comparability of

beginning of the current fiscal year and changed the presentation(International Financial Reporting Standard (IFRS) No. 15 in IASB,

financial statements.

and related notes of deferred tax assets and deferred tax

Topic 606 in FASB). Considering IFRS No. 15 will be applied fromliabilities, such that deferred tax assets and deferred tax liabilities

the fiscal year starting January 1, 2018 and Topic 606 from the(2) Effective date and effects of the application of the standards

are classified as part of "non-current assets" and "non-current

fiscal year starting December 15, 2017, the ASBJ developed the

Because the Company is applying IFRS from the first quarter of

liabilities," respectively.

comprehensive Accounting Standard for Revenue Recognition

the year ending March 31, 2021, the Company is not applying

and published them together with implementation guidance.

these ASBJ accounting standards, and will not evaluate their

The notes related to tax effect accounting additionally included

The fundamental policy for developing the Accounting Standard

impact on the consolidated financial statements.

those described in notes 8 (excluding total amount of valuation

for Revenue Recognition by the ASBJ was that the accounting

allowance) and 9 of the "Accounting Standard for Tax Effectstandards would incorporate the fundamental policy of IFRS No.

Accounting," which are required in paragraphs 3 to 5 of

15 as the starting point from the perspective of comparability ofStatement No. 28.

financial statements, which is one of the benefits of achieving

4. ADDITIONAL INFORMATION

consistency with IFRS No. 15. If there are matters to be taken into

The airline industry including the JAL Group has been significantly

For the year ended March 31, 2020

consideration in Japan in actual practice, etc., alternative handlingaffected by the outbreak of the novel coronavirus since January(Change in Scope of Cash Equivalents in Consolidated Statements

will be added within a range that would not impair financial

2020. Global infections triggered worldwide travel restrictions,of Cash Flows)statement comparability.

which eliminated international travel demand. In Japan, a state

Cash equivalents did not previously include time deposits with

(2) Effective date and effects of the application of the standardsof emergency was declared and domestic travel is discouraged,

an original maturity of longer than three months. However, cash

Because the Company is applying IFRS from the first quarter of

causing plummeting demand for domestic air travel.

equivalents have included time deposits with an original maturity

the year ending March 31, 2021, the Company is not applying

The JAL Group has therefore prepared its accounting estimates,of a year or less from the year ended March 31, 2020.

these ASBJ accounting standards, and will not evaluate their

including those for the recoverability of deferred tax assets, etc.,

The change is due to the actual condition that the Company

impact on the consolidated financial statements.

assuming that this crisis, unprecedented in the airline industry,

to insignificant risk of changes in value.

Thousands of
U.S. dollars

Millions of yen̶60,000̶¥ 329,149¥ 522,064$ 3,024,432

will continue for an indeterminate part of the fiscal year ending

operates time deposits with an original maturity of longer than104

JAL Group
Cor porate Policy

three months but not exceeding a year integrating with time

The following standards and guidance were issued but not yet

March 31, 2021.

deposits with an original maturity of three months or less, andadopted.

The impact arising from the spread of the novel coronavirus

clarification of internal regulations considering this condition- "Accounting Standard for Fair Value Measurement" (ASBJ

includes various uncertainties which may affect the JAL Group's

from the year ended March 31, 2020. Therefore, the Company has

Statement No. 30, July 4, 2019)consolidated financial position and operating results for the year

decided to include these time deposits in cash equivalents in order- "Implementation Guidance on Accounting Standard for Fair

ending March 31, 2021.

to present the actual cash flows more accurately.

Value Measurement" (ASBJ Guidance No. 31, July 4, 2019)

This change in the accounting policy has been applied- "Accounting Standard for Measurement of Inventories" (ASBJ

105

JAL REPORT 2020

JAL Group
Cor porate Policy

Message fromthe President

Financial Data — Eight-year Summary

Evaluation and Analysis of Financial Conditions

7. INVESTMENT SECURITIES OF NON-CONSOLIDATED

mitigate the risk of fluctuations in commodity prices of fuel and

SUBSIDIARIES AND AFFILIATES

to stabilize such fuel costs.

As of March 31, 2020

Investment securities of non-consolidated subsidiaries andThere are internal policies for derivative transactions which

Assetsaffiliates which were included in "investment securities" in

set forth authorization levels and upper limits on transaction(1) Cash and deposits

the consolidated balance sheets on March 31, 2020 and 2019

volumes, and the JAL Group enters into derivative transactions

amounted to ¥37,598 million ($345,474 thousand) and ¥39,210

in accordance with such policies. Moreover, monthly meetings(2) Notes and operating accounts
receivablemillion, respectively. Bonds of affiliates which were included inare attended by board members responsible for derivatives to"investment securities" in the consolidated balance sheets ofdetermine methods and ratios for minimizing risks as well as toMarch 31, 2020 and 2019 amounted to ¥3,330 million ($30,598

report and confirm results of derivative transactions.

thousand) and ¥3,330 million, respectively. Investments in other

The fair value of financial instruments is based on quoted market

securities of non-consolidated subsidiaries and affiliates which

prices where available. When there is no market price available,

were included in "investment securities" in the consolidated

fair value is reasonably estimated. Since various assumptionsbalance sheets on March 31, 2020 and 2019 amounted to ¥3,554

and factors are reflected in estimating fair value, different(1) Operating accounts payable

million ($32,656 thousand) and ¥1,679 million, respectively.

assumptions and factors could result in different fair values.

(2) Short-term loans payable

The book value of financial instruments stated in the consolidated

8. FAIR VALUES OF FINANCIAL INSTRUMENTS
The Company and its consolidated subsidiaries (the "JAL Group")manage its financial instruments to raise funds, principally forthe purpose of flight equipment and facilities in accordance withmanagement plans for air transportation, utilizing loans fromfinancial institutions, issuance of bonds, finance lease transactions

JAL Group
Sustainability

JAL Group's
Businesses and Strategies
Consolidated Financial Statements

Consolidated Subsidiaries

ESG Data

Financial Data/
Corporate Information

International/Domestic Route Maps

Millions of yen
Book value

Fair value

Millions of yen
Difference

As of March 31, 2019

Book value

Fair value

Difference¥ 462,064¥ 462,064¥

153,112

153,112̶

(1,069)Assets¥ 329,149
88,871¥ 329,149¥

88,871

̶(1) Cash and deposits̶(2) Notes and operating accounts
receivable(3) Securities and investment
securities(i) Investment securities of nonconsolidated subsidiaries
and affiliates

Stock/Corporate Information

̶(3) Securities and investment
securities
17,92910,007(7,922)(i) Investment securities of nonconsolidated subsidiaries
and affiliates

17,145

16,075(ii) Other investment securities

104,036

104,036̶Total

736,358

735,288(1,069)185,650

185,650

̶

65

65

̶

(3) Bonds payable

50,00050,568568(ii) Other investment securities

40,584

40,584

̶

Total

476,534

468,612(7,922)

166,327

166,327

̶(1) Operating accounts payable

87

87

̶

(2) Short-term loans payable(3) Bonds payable

90,00087,075(2,925)balance sheets, their fair value and the differences as of March(4) Long-term loans payable

98,326

98,290(35)(4) Long-term loans payable

86,81186,811

̶

31, 2020 and 2019 were as follows:(5) Lease obligations

3,055

3,055

̶

(5) Lease obligations

4,966

4,966

̶

̶

(6) Long-term accounts payable̶
installment purchase

503

503

̶

Liabilities(6) Long-term accounts payable̶
installment purchaseLiabilities

309

309

Total

358,107355,146

Derivatives*¥ (28,522)¥ (28,523)(2,960)¥(0)* Derivative assets and liabilities are stated on a net basis, and net liabilities are
enclosed in parentheses.
Transactions for which hedge accounting has not been applied are omitted
due to being insignificant.

Total
Derivatives*

327,997¥

2,412

328,565
¥

2,419

568
¥

7

* Derivative assets and liabilities are stated on a net basis, and net liabilities are
enclosed in parentheses.
Transactions for which hedge accounting has not been applied are omitted
due to being insignificant.

and derivatives. Funds from short-term loans payable are utilized
for ordinary operations. Funds from long-term loans payableand finance lease transactions are utilized for flight equipment
and facilities. Derivatives are utilized for the purpose of reducing
the risk of fluctuations of interest rates and foreign currency
exchange rates, and not for the purpose of speculation.
With respect to operating accounts receivable, the JAL Group
exercises due date management and outstanding balance
management in accordance with internal policies. The JAL Group

Thousands of U.S. dollars

As of March 31, 2020
(1) Cash and deposits(2) Notes and operating accounts
receivablemonitoring their creditworthiness. Securities and investment(ii) Other investment securities

securities are composed mainly of shares of companies with which

Total

the JAL Group has business relationships. The JAL Group reviews

Liabilities

position of the issuers periodically in order to identify andmitigate risks of impairment. Most operating accounts payable
are due within one year. As for derivatives, the JAL Group believes
that the credit risks are extremely low, as it enters into derivativetransactions only with reputable financial institutions with a

Difference$3,024,432$3,024,432$

816,603

816,603̶

164,743

91,950(72,792)

̶(3) Securities and investment
securities

major customers experience financial difficulties by periodicallythe fair values of such financial instruments and the financial

Fair value

Assets(i) Investment securities of nonconsolidated subsidiaries
and affiliates

makes best efforts to identify and mitigate risks of bad debt whenBook value

372,911

372,911

̶

4,378,700

4,305,908(72,792)

1,528,319

1,528,319

̶

799

799

̶

(3) Bonds payable

826,977

800,101(26,876)(4) Long-term loans payable

903,482

903,151(321)(5) Lease obligations

28,071

28,071

̶(6) Long-term accounts payable̶
installment purchase

2,839

2,839

̶

(1) Operating accounts payable(2) Short-term loans payable

Total

3,290,517

3,263,309

The Company utilizes derivatives in order to mitigate the risks

Derivatives*$ (262,078)$ (262,087)

of fluctuations in interest rates and foreign currency exchange* Derivative assets and liabilities are stated on a net basis, and net liabilities are
enclosed in parentheses.
Transactions for which hedge accounting has not been applied are omitted
due to being insignificant.

sound credit profile.

rates on receivables and payables. The JAL Group utilizes currency
options to reduce the risk of foreign currency exchange rate

(27,198)$(0)

fluctuations for specific foreign currency-denominated receivables
and payables, mainly for fuel purchase payables.
The JAL Group also utilizes commodity derivatives in order to

106

107

JAL REPORT 2020

JAL Group
Cor porate Policy

Message fromthe President

Financial Data — Eight-year Summary

Evaluation and Analysis of Financial Conditions

JAL Group's
Businesses and Strategies
Consolidated Financial Statements

Consolidated Subsidiaries

JAL Group
Sustainability
ESG Data

Financial Data/
Corporate Information

International/Domestic Route Maps

Stock/Corporate Information(i) Methods of calculating the fair value of financial(iii) Redemption schedule for monetary claims and securities

9. INVESTMENT SECURITIESFor the year ended March 31, 2020, ¥1,151 million ($10,576

instruments, including securities and derivatives transactions

with maturity dates subsequent to the consolidated balance

No trading securities were held on March 31, 2020 and 2019.

thousand) of impairment loss on other securities was recognized.

sheet date

Securities classified as other securities are included in "investment

With respect to impairment loss on securities for which fair value

securities" in the accompanying consolidated balance sheets.

is impracticable to measure, if the disposal value of the shares

The components of unrealized gain or loss on marketable

falls by 50% or more in comparison to the acquisition cost due

securities classified as other securities on March 31, 2020 and 2019

to deterioration in the issuing company's financial position,

were summarized as follows:

impairment loss is recognized unless there is sufficient evidence

AssetsMillions of yen(1) Cash and deposits and (2) Notes and operating accounts
receivable

Within one
year

More than
one year,within fiveyears¥

The fair value equates to the book value due to the short-term

As of March 31, 2020

nature of these instruments.

Cash and deposits¥ 329,149(3) Securities and investment securities

Notes and operating
accounts receivable

88,871

The fair value of securities is determined mainly based on themarket price. These investment securities are described further in"Note 9. INVESTMENT SECURITIES."

Investment securities:
Held-to-maturity
securities̶More than
five years,
within 10
years
¥

̶

̶

¥

̶

̶

̶

̶

̶

4,267

Thousands of U.S. dollars
Within one
year

More than
one year,within fiveyears$

More than
five years,
within 10
years

StocksMore than
10 years

As of March 31, 2020

(3) Bonds payable

Cash and deposits$ 3,024,432

The fair value of bonds payable is determined based on theNotes and operating
accounts receivable

816,603̶̶̶market price.

Investment securities:
Held-to-maturity
securities

̶

̶

̶

39,207(4) Long-term loans payable, (5) Lease obligations and (6) Longterm accounts payable—installment purchase$̶

comparable maturity.
Derivatives
Derivatives are described further in "Note 10. DERIVATIVES ANDHEDGING ACTIVITIES."(ii) Financial instruments for which the fair value isimpracticable to measure
Thousands of
U.S. dollars

Millions of yen

As of March 31

2020

2019

2020

Investment securities
of non-consolidated
subsidiaries and affiliates¥ 19,669¥ 22,065$ 180,731

Held-to-maturity securities

4,267

3,330

39,207

Total

25,010

815

478

(337)

815

478

(337)

¥ 15,910¥ 40,584¥ 24,673

Within one
year

More than
one year,within fiveyears

Cash and deposits¥ 462,064¥

Notes and operating
accounts receivable

153,11260,000

Held-to-maturity
securities

̶

Other securities
with maturity date

̶

̶
̶
̶
̶

1,027

More than
five years,
within 10
years
¥

̶

securities was not recognized.

10. DERIVATIVES AND HEDGING ACTIVITIES
Certain consolidated subsidiaries utilize forward foreign currency
exchange contracts and currency options on a consistent basis toequipment and foreign-denominated accounts payable, andThousands of U.S. dollars
As of March 31, 2020

Acquisition
cost

Carrying
value

Unrealized
gain (loss)$ 138,702$ 368,519$ 229,807

138,702368,519

229,807

More than
10 years
¥

̶

7,488

4,392

(3,096)

7,488

4,392

(3,096)

Total$ 146,191$ 372,911$ 226,711

̶

The redemption schedule for short-term and long-term debt
subsequent to the consolidated balance sheet date is describedin "Note 11. SHORT-TERM LOANS PAYABLE AND LONG-TERM

̶The Company and its consolidated subsidiaries enter into
these hedging transactions in accordance with the internal
guidelines and strategies established by management. The
routine operations of the department which is responsible
for hedging transactions are examined by other departments.
hedge effectiveness, which are performed both at inception andon an ongoing basis, are reported at meetings of the related

Millions of yen

̶

3,330

its management of risk exposure related to the commodity prices

Gains and losses on hedging instruments and the assessment of

̶

̶
̶

̶

Stocksother items. The Company also enters into a variety of options inof fuel.

Unrealized loss:

As of March 31, 2019

Acquisition
cost

Carrying
value

Unrealized
gain (loss)¥ 15,095¥ 43,294¥ 28,199

15,09543,29428,199(72)

Unrealized gain:
Stocks
Unrealized loss:
StocksShort-term investments

DEBT."
Total

Other securities
17,666
14,711
162,326
The above are not included in "(3) (ii) Other investment securities" in thefair value of financial instruments because there is no market value and it isimpracticable to measure the fair value.

¥ 25,010

40,106

For the year ended March 31, 2019, significant impairment loss ondenominated purchase commitments, principally for flight

Millions of yen

Investment securities:
Short-term investments¥ 40,106

15,095

̶

Stocks

As of March 31, 2019

¥ 15,095

Unrealized gain:

long-term accounts payable—installment purchase with fixed
discounted using the current borrowing rate for similar debt of a

Unrealized
gain (loss)

hedge certain foreign currency transactions related to foreign$

The fair value of long-term loans payable, lease obligations andinterest rates is based on the present value of future cash flows

Carrying
value

Unrealized loss:

nature of these instruments.

̶

Acquisition
cost

Unrealized gain:
Stocks(1) Operating accounts payable and (2) Short-term loans payablefor their recoverability.

Millions of yen

̶

As of March 31, 2020

Liabilities
The fair value equates to the book value due to the short-term

More than
10 years

815

742

60,00060,000―60,81560,742(72)¥ 75,910¥ 104,036¥ 28,126

department managers on a timely basis.
The contract amount and the estimated fair value of the open
derivatives positions on March 31, 2020 and 2019, which met thecriteria required for the application of hedge accounting, aresummarized as follows:

Proceeds from sales of securities classified as other securities forthe year ended March 31, 2020 amounted to ¥626 million ($5,752
thousand). For the year ended March 31, 2020, the aggregate gain
realized on those sales totaled ¥593 million ($5,448 thousand),and the aggregate loss realized on those sales totaled ¥1 million($9 thousand). Neither was applicable to the year ended March
31, 2019.

108

109

JAL REPORT 2020

Millions of yen
As of March 31, 2020
Type of derivativeThousands of U.S. dollars

Contract amount
Major hedged items

Contract amount

Maturing
after one
year

Total

Estimated
fair value

Maturing
after one
year

Total

Estimated
fair value

JAL Group
Cor porate Policy

Message fromthe President

Financial Data — Eight-year Summary

Evaluation and Analysis of Financial Conditions

revolving pledges on each company's obligations accompanying

March 31, 2020 and 2019 consisted of the following:syndicated loans taken out by the following three companies

Operating accounts payable¥ 44,048¥ 5,664¥ 799$ 404,741$ 52,044$ 7,341

Operating accounts payable

2,028

38

(18)

18,634349(165)

As of March 31

OthersOperating accounts payable

996

0

(48)

9,151

0

(441)

Long-term loans:

22,400701

742,249

205,825

6,441

Operating accounts payable

69,125

18,332(451)

635,164

168,446(4,144)

Aircraft fuel81,56323,705(29,503)749,453

217,816(271,092)

Sell:
Put option
Commodity swaps:
Received variable/pay fixed

Method of hedge accounting: Special treatment ("Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – k. Derivatives andHedge Accounting")
Forward foreign currency exchange contracts:
Buy:
USD

Operating accounts payable

307

̶

5

2,820

̶

45

EUR

Operating accounts payable

71

̶

(4)

652

̶

(36)

OthersOperating accounts payable

22

̶

(2)

202

̶

(18)

¥ (28,523)

Total$ (262,087)

All derivative transactions were conducted as over-the-counter (OTC) transactions. Fair value is estimated based on prices quoted byfinancial institutions and others.

As of March 31, 2019
Type of derivative

Contract amount
Major hedged items

Maturing
after one year

Total

Estimated
fair value

Forward foreign currency exchange contracts:
USD

Operating accounts payable¥ 55,926¥ 3,252

¥ 687

EUR

Operating accounts payable

2,513

34

(102)

OthersOperating accounts payable

1,287

̶

(27)

80,14019,634

69,04015,702

Aircraft fuel81,05521,049¥ 13,287$ 124,561

0.2%

amounting to ¥50,000 million ($459,432 thousand) with threebanks. There were no loan payables outstanding under these loan

73,524

778,9210.2%

Current portion oflease obligations

1,067

2,461

9,804

1.4%

Lease obligations(excluding current
portion) due 2021
to 2032

1,988

2,504

18,267

1.1%

commitment agreements.

Lease obligations:

Outline of Current Retirement Benefit System

Bonds payable due
2021 to 2040
Total

An employee whose employment is terminated is entitled, in mostcases, to pension annuity payments or to a lump-sum severanceLong-term accounts
payable̶installment
purchase:
Current portionof long-term
accounts payable̶
installment
purchase

12. RETIREMENT BENEFIT PLANS

payment determined by reference to the employee's basic rateof pay, length of service and the conditions under which thetermination occurs.
195

1,791

190

2.0%

The Company and certain significant domestic consolidated
subsidiaries have established contributory defined benefit pension
plans such as corporate pension funds and lump-sum severance
indemnity plans. In certain cases, additional severance payments
may be provided.

113

1,038

312

2.0%

As of March 31, 2020, the Company and 38 consolidated
subsidiaries had adopted a lump-sum severance indemnity plan.
Additionally, there were three corporate pension funds, including
the Japan Airlines Welfare Pension Fund. Certain foreign

90,00050,000826,977¥ 191,691¥ 142,281$ 1,761,380

0.4%

subsidiaries have also established contributory defined benefit
pension plans.
The Japan Airlines Welfare Pension Fund also introduced an

363

consolidated subsidiaries, introduced a cash-balance plan option.

(134)

Years ending March 31

1,624Millions of yen

Thousands of
U.S. dollars

2021¥ 14,819$ 136,166

2022

24,385224,0652023

23,963

220,1872024

22,651

208,1312025

22,610207,7552026 and thereafter

83,260765,046¥ 191,691$ 1,761,380

Total

Buy:
USD

Operating accounts payable

919

̶

29

Assets pledged as collateral as of March 31, 2020 for long-term

EUR

Operating accounts payable

259

̶

(17)

Operating accounts payable223̶and short-term debt of ¥95,524 million ($877,735 thousand) are

Others(5)

Aircraft fuel

The Company entered into loan commitment agreements

The JAL Group Pension Fund, which was established by certain

Forward foreign currency exchange contracts:¥ 2,419

All derivative transactions were conducted as OTC transactions. Fair value is estimated based on prices quoted by financial institutions and others.

110¥ 13,556

follows:

Method of hedge accounting: Special treatment ("Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – k. Derivatives and Hedge
Accounting")

Total▪Kyushu Kumamoto International Airport Co., Ltd.

option similar to a cash-balance plan as well as other alternatives.

Commodity swaps:
Received variable/pay fixed▪Tokyo International Airport Terminal Corporation, an affiliate▪Hokkaido Airports Co., Ltd.

84,770Sell:
Operating accounts payable

2020

company.

five years subsequent to March 31, 2020 are summarized as

Buy:

Put option

2020

2019

with financial institutions, for the core business purposes of each

The aggregate annual maturities of long-term debt due within

Currency options:Operating accounts payable

Long-term loans
payable (excluding
current portion) due
2023 to 2035

2020

Thousandsof U.S.
dollars

Weightedaverageinterest
rate

Bonds payable:

Buy:

Call option

Current portion of
long-term loans
payableLong-term
accounts payable̶
installment
purchase(excluding current
portion) due 2021
to 2026

Millions of yen

Stock/Corporate Information

Assets pledged as collateral include certain assets set aside for

USD

80,779International/Domestic Route Maps

outstanding on March 31, 2020 was 1.0%. Long-term debt on

Millions of yen

Operating accounts payable

ESG Data

The weighted-average interest rate for short-term loans payable

EUR

Call option

Consolidated Subsidiaries

equipment and others totaling ¥162,738 million.

Buy:

Buy:

Consolidated Financial Statements

Financial Data/
Corporate Information

11. SHORT-TERM LOANS PAYABLE AND LONG-TERM DEBT

Forward foreign currency exchange contracts:

Currency options:

JAL Group
Sustainability

JAL Group's
Businesses and Strategies

Some of the consolidated subsidiaries use the simplified method
for the calculation of retirement benefit obligations.

flight equipment and others totaling ¥169,178 million ($1,554,516
thousand). Assets pledged as collateral as of March 31, 2019
for long-term and short-term debt of ¥86,620 million are flight111

JAL REPORT 2020

For the years ended March 31, 2020 and 2019(4) Reconciliation from retirement benefit obligations and plana. Defined Benefit Plans

assets to net defined benefit liability (asset)(1) Balances of retirement benefit obligations, excluding plans
Thousands of
U.S. dollars

Millions of yen
2020

2019

2020

¥ 465,816¥ 471,248$ 4,280,216

Service cost

13,437

13,131

123,467Interest cost

3,445

3,482

31,654

Actuarial loss

33,0552,280

303,730

Benefit paid

(25,519)(24,323)(234,484)

Years ended March 31
Balance at beginning of period

Reclassification of retirement
benefit obligations due to thechange from the simplified
method2

Other
Balance at end of period̶393¥ 490,630

3,611
18

(1)
¥ 465,816$ 4,508,223

Millions of yen

Total

100

100

97,643

98,579897,206

Total net defined benefit
liability (asset)

150,392

210,186

1,381,898

Net defined benefit liability

151,330

212,672

1,390,517(938)(2,486)(8,618)Net defined benefit asset
Total net defined benefit
liability (asset)¥ 150,392¥ 210,186

Thousands of
U.S. dollars

Years ended March 31

2020

2019

2020

Service cost

¥ 13,437¥ 13,131$ 123,467
31,654

Balance at beginning of period¥ 257,847¥ 245,430$ 2,369,263

Past service costs amortization

(60)

(60)

(551)

Expected return on plan assets

4,550

3,749

41,808

Net actuarial loss amortization

7,968

7,713

73,215Retirement benefit cost basedon the simplified method

506

400

4,649

Contributions paid by theemployer

100,258

28,194921,234

Other

(698)

(697)

(6,413)

Benefit paid

(19,846)(19,712)(182,357)

Subtotal

20,04820,221

184,213¥ 342,030¥ 257,847$ 3,142,791

101

̶

928

Years ended March 31

2020

2019

2020

Balance at beginning of period¥ 2,216¥ 2,146$ 20,362

Retirement benefit cost

506

400

4,649

Contributions paid by theemployer

(128)

(124)

(1,176)

Benefit paid

(155)

(169)

(1,424)

Decrease due to partial
termination of retirement
benefit plans

(352)

(31)

(3,234)

Reclassification of retirement
benefit obligations due to thechange from the simplified
method(291)

̶(2,673)

(2)

(4)

(18)

¥ 1,792¥ 2,216$ 16,466

Other
Balance at end of period

Reclassification of retirement
benefit obligations due to thechange from the simplified
methodLoss on partial termination ofdefined benefit plans, net

Thousands of
U.S. dollars

Current and target asset allocations and historical and expected
returns on various categories of plan assets have been considered indetermining the long-term expected rate of return.
(9) Actuarial assumptions
Years ended March 31

2020

2019
%

%

Discount rate

0.3–0.7

0.4–1.2

Long-term expected rate of return

1.0–2.0

1.0–2.0(5) Retirement benefit costs(41,808)

Millions of yen

Total

63

̶

578

¥ 20,214¥ 20,221$ 185,739

comprehensive income
Millions of yen
Years ended March 31

2020

Actuarial gains (losses)
Total

2019

Thousands of
U.S. dollars
2020¥ (60)¥ (60)$ (551)(25,865)

5,619(237,664)¥ (25,925)¥ 5,558$ (238,215)

Past service costs(7) Remeasurements of defined benefit plans in accumulated
other comprehensive income
Thousands of
U.S. dollars

As of March 31

2019

2018

2019

Past service costs that are yet tobe recognized¥ (199)¥ (259)$ (1,828)

Actuarial losses that are yet tobe recognized

88,40462,538812,312¥ 88,204¥ 62,278$ 810,475

Total

b. Defined Contribution Plans
The Company and its consolidated subsidiaries contributed a totalof ¥1,839 million ($16,897 thousand) and ¥1,629 million for theyears ended March 31, 2020 and 2019, respectively.

Thousands of
U.S. dollars

Millions of yen
2020

2019

2020

Net defined benefit liability¥ 46,846¥ 64,380$ 430,451

Operating accounts payable

10,781

11,02099,062

Deferred losses on hedges

9,616

880

88,357

Non-recurring depreciation

4,510

4,827

41,440

Deferred liability on flightequipment

2,750

2,943

25,268Asset retirement obligations

2,637

2,482

24,230

Impairment loss

2,276

2,274

20,913

Reserve for loss on antitrust
litigation

1,741

1,776

15,997

811

7,735

7,451

12,035

7,360

110,585

As of March 31
Deferred tax assets:

Accrued bonuses
Tax loss carryforwards*2

10,3409,728

95,010Subtotal of deferred tax assets

104,347

115,411

958,807

Valuation allowance for tax
loss carryforwards*2(1,744)(567)(16,024)(6,736)(4,605)(61,894)

Other

Valuation allowance fordeductible temporary differences*1(8,480)(5,173)(77,919)

95,867110,238

880,887

Valuation difference on
available-for-sale securities

7,479

8,548

68,721

Asset retirement obligations

692

629

6,358

Deferred gains on hedges

20

1,722

183

3,284

2,882

30,175

11,476

13,782

105,448¥ 84,390¥ 96,455$ 775,429

Subtotal of valuation allowances
Total deferred tax assets
Deferred tax liabilities:

Other
Total deferred tax liabilities
Net deferred tax assets(6) Remeasurements of defined benefit plans in other

Millions of yen

112$ 1,381,898

3,482

simplified method

4(3,175,383)(3,749)assets to net defined benefit liability (asset), applying the13(261,405)

3,445(3) Reconciliation from retirement benefit obligations and plan

were as follows:

Bond(345,577)(4,550)

Balance at end of period

91

Plan assets

Expected return on plan assets(7,148)80

5Interest cost

185

and the related valuation allowances on March 31, 2020 and 2019

General insurance fund7484,691

Stock/Corporate Information

%

Other

111,606

International/Domestic Route Maps

The significant components of deferred tax assets and liabilities2019$ 3,660,075

52,749ESG Data%¥ 373,012

2020

(778)

2020

¥ 398,326

Unfunded retirement benefit
obligations

Consolidated Subsidiaries

Financial Data/
Corporate Information

13. INCOME TAX(8) Plan assets

Funded retirement benefit
obligations

2019

Actuarial gain (loss)

Consolidated Financial Statements

2020

2020

Years ended March 31

Evaluation and Analysis of Financial Conditions

2019

Millions of yen

Thousands of
U.S. dollars

Financial Data — Eight-year Summary

JAL Group
Sustainability

JAL Group's
Businesses and Strategies

2020

Years ended March 31(2) Balances of plan assets, excluding plans adopting thesimplified method

Message fromthe President

Years ended March 31
Thousands of
U.S. dollars

Millions of yen

adopting the simplified method

JAL Group
Cor porate Policy*1 The main reason for the increase in valuation allowances is an increasein the valuation allowance for tax loss carryforwards at consolidated
subsidiaries.
*2 Tax loss carryforwards and associated deferred tax assets by deadline ofcarry forward:

Millions of yen
As of March 31,
2020

2021

2022

2023

2024

2025

2026 andbeyondTotal

Tax losscarryforwards (a)

¥ ̶

¥ ̶

¥ ̶

¥ ̶

¥ ̶

¥ 12,035¥ 12,035

Valuation
allowance

̶

̶

̶

̶

̶

(1,744)(1,744)

Deferred tax
assets

¥ ̶

¥ ̶

¥ ̶

¥ ̶

¥ ̶

¥ 10,291¥ 10,291(b)

113

JAL REPORT 2020

Thousands of U.S. dollars
As of March 31,
2020

2021

2022

2023

2024

2025

2026 andbeyondTotal

Tax losscarryforwards (a)

$ ̶

$ ̶

$ ̶

$ ̶

$ ̶

$ 110,585$ 110,585

Valuation
allowance̶

Deferred tax
assets

$ ̶

̶

̶

$̶

̶

$ ̶

̶

$ ̶

$ ̶

(16,024)(16,024)$ 94,560$ 94,560(b)(a) Tax loss carryforwards reflect the amounts resulting from multiplying
the statutory tax rate.
(b) Of the total tax loss carryforwards of ¥12,035 million ($110,585
thousand), ¥10,291 million ($94,560 thousand) has been determined
to be recoverable based on the taxable income that the Company
and its domestic consolidated subsidiaries expect in the future.
Millions of yen
As of March
31, 2019

2020

Tax losscarryforwards (a)¥ 7,156

Valuation
allowance
Deferred tax
assets

2021
¥ ̶

2022
¥ ̶

2023
¥ ̶

2024

2025 andbeyond

Total

¥ 204

¥ 7,360¥ ̶which generated largely independent cash flows for calculating

certain conditions are met, but neither additional paid-in capital

March 31, 2020 and 2019 were as follows:

impairment loss. Assets to be sold and idle assets are written

nor the legal reserve is available for distribution by resolution of
the board of directors.

shares as additional paid-in capital, which is included in capitalsurplus. The maximum amount that a company can distributeas dividends is calculated based on its unconsolidated financial
statements in accordance with the Act.

Effective tax rate

40.5

0.7

subsidiaries are generally based on the tax rates applicable intheir countries of incorporation.

14. NET ASSETSThe Companies Act of Japan (the "Act") provides that an
amount equal to at least 10% of the amount to be disbursed
as distributions of capital surplus (except for distributions ofadditional paid-in capital) and retained earnings (except for
distributions of the legal reserve) be appropriated to additional
paid-in capital and the legal reserve, respectively, until the sum of114

The Company and certain consolidated subsidiaries have

3,868

(23,385)

Thousands of shares

Common stock
Preferred stock
Total

As of April
1, 2019

Increase

Decrease

As of March
31, 2020

700,000

̶̶

50,000̶̶50,000750,000̶̶

750,000

700,000

Number of shares ofstock in issue:
349,028

̶

11,885337,143

349,028

̶

11,885337,143201

11,885

11,885201

201

11,885

11,885201

The increase in common stock in treasury of 11,885 thousand
The decrease in common stock in issue and common stock intreasury of 11,885 thousand shares is due to the retirement oftreasury shares.
The total number and changes in the total number of shares ofthe year ended March 31, 2019 were as follows:

As of April
1, 2018

Increase

Deferred gains (losses) arisingduring the period
Less: Reclassification adjustment
included in profit

Decrease(33,919)

5,835(311,669)

141(12,252)

1,295

Pre-tax amount(33,777)(6,417)(310,364)

Tax expense (benefit)

10,104

1,912

92,842

Deferred gains (losses) onhedges, net of taxes(23,672)(4,505)(217,513)

Foreign currency translation
adjustment:
25(1,387)

Less: Reclassification adjustment
included in profit

̶

(0)

̶

Foreign currency translation
adjustment

(151)

25

(1,387)(33,834)(2,094)(310,888)

Less: Reclassification adjustment
included in profit

7,908

7,653

72,663(25,925)5,558(238,215)

7,949(1,712)

73,040(17,976)

3,845(165,175)(1,466)

Total other comprehensive income¥ (45,812)

̶̶

700,000

50,000750,000

̶

̶

̶

̶

50,000750,000

353,715353,715

̶
̶

4,687
4,687

349,028
349,028

2,555
2,555

2,333
2,333

4,687
4,687

201
201

―

Software

Shinagawa-ku,
Tokyo

An impairment loss of ¥1,959 million ($18,000 thousand) was
recognized in non-operating expenses in the accompanying
consolidated statements of income and comprehensive income¥1,190 million ($10,934 thousand) due to the decision to cease theoperations of AXESS INTERNATIONAL NETWORK, INC. at the end
The recoverable amount of assets to be sold or disposed of is

In addition, some associated companies accounted for by theequity method recognized an impairment loss using the same
methodology. An impairment loss of ¥279 million ($2,563
thousand) was recognized as "share of profit of entities
accounted for using equity method."
The Company and certain consolidated subsidiaries haverecognized impairment losses on the following groups of assets

Share of other comprehensive
income of entities accounted
for using equity method arisingduring the period

700,000

Flight equipment

Assets to be disposed of(the value of assets that cannot be sold is evaluated as zero).

Share of other comprehensive
income of entities accounted forusing equity method:

Common stock

Assets to be sold or disposed ofLocations

measured by the net realizable value based on sales agreements

As of March
31, 2019

Preferred stock
Total
Number of shares ofstock in issue:
Common stock
Total
Number of sharesof common stock intreasury:
Common stock
Total

Groups of assetsof March, 2021.

Remeasurements of defined
benefit plans arising during theperiodTax expense (benefit)

Assets utilized in the Company's
and consolidated subsidiaries'
operations

equipment of ¥523 million ($4,805 thousand) and software of(151)

Pre-tax amountcomprehensive income for the year ended March 31, 2020:

for the year ended March 31, 2020. The main breakdown is flight

Translation adjustment arisingduring the period

Remeasurements of defined
benefit plans

Thousands of sharesYear ended March 31,
2019
Number of shares ofstock authorized:

Deferred gains (losses) on hedges,
net of taxes:

Remeasurements of defined benefit
plans:

shares is due to a share repurchase.

consolidated subsidiaries consist of corporation tax, inhabitants'
taxes and enterprise tax. Income taxes of foreign consolidated

2020 and 2019, respectively.

(2,545)

Valuation difference on availablefor-sale securities, net of taxes

stock authorized and in issue and common stock in treasury for
Income taxes in Japan applicable to the Company and its domestic

̶in the accompanying consolidated statements of income and

Total

1.9

̶

recognized impairment losses on the following groups of assets

Common stock

1.0

̶

9,813

Number of sharesof common stock intreasury:

Other

Less: Reclassification adjustment
included in profit

with the contract amounts of sales for the years ended March 31,(33,198)

Total(30.8)$ (33,198)

5,562

Common stock

10.0¥ 5,562(1,693)

Number of shares ofstock authorized:

Changes in valuation allowance (including the
tax loss carryforwards expired)¥ (3,613)

1,068¥ 6,792(b)(0.3)

by the Company and its consolidated subsidiaries in accordance

Unrealized holding gains (losses)
arising during the period(3,613)¥̶(0.4)

and value in use. Fair value is based on reasonable estimates madeValuation difference on availablefor-sale securities, net of taxes:

Tax expense (benefit)¥ ̶

Share of loss of entities accounted for using
equity method

recoverable amounts at the higher of fair value less costs to sell

Pre-tax amount

¥ ̶

29.9

2020

2019

The Company and its consolidated subsidiaries estimatedstock authorized and in issue and common stock in treasury for

¥ ̶

29.9

2020

down to their respective recoverable amounts.

The total number and changes in the total number of shares of¥ ̶

Statutory rateYears ended March 31

designate an amount not exceeding half of the price of new¥ 6,792%

Thousandsof U.S.
dollars

Millions of yen

A company may, by a resolution of its board of directors,

(567)

%

Stock/Corporate Information

Assets are attributed or allocated to cash-generating units

(204)

2019

International/Domestic Route Maps

comprehensive income including tax effect for the years ended

̶

2020

ESG Data

by a resolution of the shareholders or by the board of directors if̶Years ended March 31

Consolidated Subsidiaries

capital stock account. Such distributions can be made at any time̶

was as follows:

Consolidated Financial Statements

16. IMPAIRMENT LOSS ON NON-CURRENT ASSETS

̶effective tax rates for the years ended March 31, 2020 and 2019

Evaluation and Analysis of Financial Conditions

Financial Data/
Corporate Information

Reclassification adjustments for each component of other(363)

tax rate and the Company's and the consolidated subsidiaries'

Financial Data — Eight-year Summary

JAL Group
Sustainability

JAL Group's
Businesses and Strategies

15. OTHER COMPREHENSIVE INCOME

Year ended March 31,
2020

The reconciliation between the Japanese statutory income

Message fromthe President

additional paid-in capital and the legal reserve equals 25% of thethe year ended March 31, 2020 were as follows:(a) Tax loss carryforwards reflect the amounts resulting from multiplying
the statutory tax rate.
(b) Taxable income against which tax loss carryforwards can be utilized
is likely to be earned in the next year. The Company has therefore
determined that the deferred tax assets for the tax loss carryforwards
are recoverable.

JAL Group
Cor porate Policyin the accompanying consolidated statements of income andcomprehensive income for the year ended March 31, 2019:71¥ 3,305(13,470)$ (420,950)

Assets utilized in the Company's
and consolidated subsidiaries'
operations

Groups of assets

Assets to be sold or disposed of

Flight equipment―

Equipment(Including asset
retirement obligation)

NaritaInternational
Airport
Maintenancedistrict

Assets to be disposed ofLocations115

JAL REPORT 2020

JAL Group
Cor porate Policy

Message fromthe President

Financial Data — Eight-year Summary

Evaluation and Analysis of Financial Conditions

JAL Group's
Businesses and Strategies
Consolidated Financial Statements

Consolidated Subsidiaries

JAL Group
Sustainability
ESG Data

Financial Data/
Corporate Information

International/Domestic Route Maps

Stock/Corporate Information

An impairment loss of ¥7,898 million was recognized in non-

19. AMOUNTS PER SHARE

20. ASSET RETIREMENT OBLIGATIONS

21. SEGMENT INFORMATION

operating expenses in the accompanying consolidated statements

Basic earnings per share is computed based on the earnings

a. Asset Retirement Obligations Recognized in the

The reportable segments of the Company and its consolidatedof income and comprehensive income for the year ended March

available for distribution to or allocable to the shareholders ofConsolidated Balance Sheets on March 31, 2020 and 2019subsidiaries comprise components for which discrete financial

31, 2019. The main breakdown is flight equipment of ¥477 million

common stock and the weighted-average number of shares of

The Company and its consolidated subsidiaries have, in connection

information is available and whose operating results are regularly

and other equipment including removal costs corresponding

common stock outstanding during each year. Diluted earnings perwith some buildings and land, entered into real estate lease

reviewed by the board of directors for decisions about resource

to asset retirement obligations in the Narita International

share are computed based on earnings available for distribution

contracts with terms ranging from 5 to 46 years for the years

allocation and performance assessments. Air transportation

Airport Maintenance district scheduled for reorganization of

to the shareholders and the weighted-average number of shares

ended March 31, 2020 and 2019. Asset retirement obligations

includes international and domestic passenger operations, cargo¥7,421 million. The recoverable amount of assets to be sold orof common stock outstanding during each year after giving effecthave been recognized in light of the obligation of the Company

operations and other transportation services.

disposed of is measured by the net realizable value based on sales

to potentially dilutive securities to be issued upon the conversion

and its consolidated subsidiaries to the owners of the buildings

The accounting policies of the segments are substantially theagreements (the value of assets that cannot be sold is evaluatedof convertible bonds. However, diluted earnings per share haveand land to remove facilities from the leased real estate at thesame as those described in the significant accounting policies inas zero), or calculated by discounting future cash flows measured

not been stated for the years ended March 31, 2020 and 2019end of those contracts. The obligations as of March 31, 2020 and"Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES."

by value in use at a discount rate of 5.0%.

since the Company had issued no equity instruments with a2019 have been calculated with expected useful lives ranging

Inter-group sales are recorded under the same conditions used indilutive effect on earnings per share.

from 5 to 46 years with discount rates ranging from -0.2% to 2.5%.

transactions with third parties.

Yen
Years ended March 31

17. LEASES

U.S. dollars

2020

2019

¥ 155.66¥ 432.10

2020

Basic

carrying amount of asset retirement obligations for the years
ended March 31, 2020 and 2019:

Earnings per share of common stock:

As Lessee

The following table summarizes the changes in the aggregate$ 1.43

Depreciation equivalent is calculated by the straight-line methodon the assumption that the useful lives of the related assets are

The following table sets forth the computation of basic earnings

the same as the lease term and that the residual value is zero.

per share of common stock for the years ended March 31, 2020

The interest expenses equivalent is calculated on the assumption

and 2019:

that the difference between aggregate lease rentals and theinterest method.
Future rental expenses under non-cancelable operating leases
outstanding on March 31, 2020 and 2019 were as follows:
Millions of yen

Thousands of
U.S. dollars

As of March 31

2020

2019

2020

Within one year

¥ 15,239¥ 14,368$ 140,025

Over one year

66,30566,802609,252¥ 81,545¥ 81,170$ 749,287

Total

Thousandsof U.S.
dollars

Millions of yen

acquisition cost of leased assets is deemed to be the interest
portion and is apportioned over the term of the lease by theThousandsof U.S.
dollars

Millions of yen

Years ended March 31

2020

2020

2019

Earnings (allocable to) available
for shareholders of common
stock:
Profit attributable to ownersof parent

Years ended March 31

2020

2019

2020

Balance at beginning of period¥ 8,657

3,988$ 79,546

Increase due to purchases of tangible
fixed assets

3

2

27

Increase due to changes in estimatedobligations

360

5,031

3,307

Accretion due to the passage of time

63

58

578

Decrease due to settlement

(0)

(423)

(0)

¥ 9,084

8,657$ 83,469

Balance at end of period¥ 53,407¥ 150,807$ 490,737̶̶̶¥ 53,407¥ 150,807$ 490,737

Appropriations for payment ofpreferred dividends

Thousands of shares
Years ended March 31

2020

2019

Weighted-average number of shares ofcommon stock outstanding

343,101

349,006

b. Asset Retirement Obligations Not Recognized in theConsolidated Balance Sheets as of March 31, 2020 and 2019
The Company and its consolidated subsidiaries have rented lots
and buildings from domestic service airports based on permission
for national property use and based on a real estate rental
contract for national property, and have an obligation to remove
their facilities from the leased real estate. The Company and its

18. CONTINGENT LIABILITIESNet assets per share are computed based on the net assets

consolidated subsidiaries have an important role in public traffic,

As of March 31, 2020 and 2019, contingent liabilities foravailable for distribution to the shareholders of common stockand depend on the trends at the aviation administrations of eachguarantees for bank loans of employees amounted to ¥60 million

and the number of shares of common stock outstanding on eachcountry. For this reason, with regard to rented airport-related($551 thousand) and ¥81 million, respectively.

balance sheet date.

facilities, the time of building removal and withdrawal cannot be

As of March 31, 2020 and 2019, contingent liabilities forguarantees for lease obligations of Jetstar Japan Co., Ltd.
amounted to ¥3,315 million ($30,460 thousand) and ¥3,680
million, respectively.

Yen
As of March 31
Net assets per share ofcommon stock

U.S. dollars

2020

2019

¥ 3,249.27¥ 3,340.15

2020$ 29.85

determined at the discretion of the Company and its consolidated
subsidiaries alone. Moreover, since there is also no schedule forbuilding removal and withdrawal at present, asset retirement
obligations cannot be reasonably estimated. Therefore, theresulting asset retirement obligations have not been calculated.

The Company provides guarantees for damages resulting frombreach of an obligation, assertion or guarantee under the stocktransfer reservation agreement concluded between Fukuoka
Airport Holdings Co., Ltd. (transferor), in which the Company
holds an investment, and the Ministry of Land, Infrastructure,
Transport and Tourism Civil Aviation Bureau (transferee), cappedat ¥7,867 million ($72,287 thousand) on March 31, 2020 and 2019.

116

117

JAL REPORT 2020

Millions of yen
Year ended March 31, 2020

Airtransportation

Other

Total

Eliminations

Consolidated

Intersegment
Total
Segment profit
AssetsDepreciation and amortization
Impairment loss
Investments in entities accounted for using equity
methodIncrease in tangible fixed assets and intangible assets

Message fromthe President

Financial Data — Eight-year Summary

Evaluation and Analysis of Financial Conditions

Consolidated Financial Statements¥ 1,172,684¥ 238,545¥ 1,411,230¥̶

¥ 1,411,230

112,115

36,952

149,067(149,067)

̶

1,284,800

275,497

1,560,298(149,067)

1,411,230

85,936

15,066

101,003(370)

100,632

1,791,385

172,515

1,963,901(104,538)

1,859,362

136,226

1,821

138,047(11)

138,035

543

1,416

1,959

̶

1,959

6,756

24,22230,979̶

30,979¥ 238,643¥ 2,921¥ 241,564¥ (59)¥ 241,504

Airtransportation

Other

Total

Consolidated

There are no material transactions that need to be presented forthe years ended March 31, 2020 and 2019.

POLICIES," the Company has modified systems related tosome aircraft engine parts and cabin assets in order to ensure
depreciation more precisely reflecting the estimated periods over

23. SUBSEQUENT EVENTS

which an asset is expected to be economically usable. As a result,

Borrowing of Significant Funds

the determination of the useful life of some aircraft engine parts

Based on the resolution of the board of directors held on April 22,

and cabin assets has been changed from the year ended March

2020, the Company borrowed funds as summarized below.

31, 2020.
Following this change, segment profit decreased by ¥8,060 million$ 12,967,288$ ̶$ 12,967,288

1,030,184

339,538

1,369,723(1,369,723)

̶

11,805,568

2,531,443

14,337,021(1,369,723)

12,967,288

789,635

138,436

928,080(3,399)924,671

Assets

16,460,396

1,585,178

18,045,584(960,562)

17,085,013

Depreciation and amortization

1,251,732

16,732

1,268,464(101)

1,268,354

Impairment loss

4,989

13,011

18,000̶

18,000Investments in entities accounted for using equity
method62,078

222,567

284,654̶

284,654$ 2,192,805$ 26,840$ 2,219,645$ (542)$ 2,219,093

Increase in tangible fixed assets and intangible assets(1) Purpose for funding
Capital expenditures(2) Lending institutions
MUFG Bank, Ltd., Mizuho Bank, Ltd. and two other banks

Information by Geographical Area

March 31, 2020 and 2019, export sales of domestic consolidated
for the years ended March 31, 2020 and 2019 were as follows:
Millions of yen

Thousands of
U.S. dollars

2020

2019

2020

Asia and Oceania¥ 233,760¥ 274,167$ 2,147,937

North America

225,151

236,802

2,068,832

Europe90,593

100,944

832,426

Total¥ 549,505¥ 611,914$ 5,049,205

Years ended March 31(3) Loan amount¥88,479 million ($813,001 thousand)subsidiaries and sales of consolidated subsidiaries outside Japan$ 2,191,904

Segment profit

Stock/Corporate Information(Change of the Useful Life)

consolidated airline subsidiaries rendered during the years ended
Eliminations$ 10,775,374

TotalInternational/Domestic Route Maps

etc.

international passenger and cargo services of domestic

Operating revenue:

Intersegment

ESG Data

22. RELATED-PARTY INFORMATION($74,060 thousand) in the air transportation business segment.

Thousands of U.S. dollars

External

Consolidated Subsidiaries

Financial Data/
Corporate Information

Information Related to Changes in the Reportable Segments,

Operating revenue from overseas operations, which include

Year ended March 31, 2020

JAL Group
Sustainability

JAL Group's
Businesses and Strategies

As described in "Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING

Operating revenue:
External

JAL Group
Cor porate Policy(4) Interest rate
Base interest rate plus the spread(5) Date of borrowing
June 9, 2020
(6) Repayment due dates
From December 9, 2020 to June 9, 2030
(7) Assets pledged as collateral
Flight equipment

Millions of yen
Year ended March 31, 2019Airtransportation

Other

Total

Eliminations

Consolidated

Operating revenue:
External
Intersegment
Total
Segment profit¥ 252,764¥ 1,487,261¥̶¥ 1,487,261

123,105

35,425

158,531(158,531)

̶

1,357,603

288,190

1,645,793(158,531)

1,487,261

162,316

13,880176,196(36)

176,160

1,971,986

189,582

2,161,569(131,240)

2,030,328

121,863

2,249

124,113(9)

124,104

Impairment loss

7,898

̶

7,898

̶

7,898

Investments in entities accounted for using equity
method8,246

23,32331,570̶

31,570¥ 221,708¥ 1,768¥ 223,477¥̶¥ 223,477

AssetsDepreciation and amortization

Increase in tangible fixed assets and intangible assets

118¥ 1,234,497

119

JAL REPORT 2020

120

JAL Group
Cor porate Policy

Message fromthe President

Financial Data — Eight-year Summary

Evaluation and Analysis of Financial Conditions

JAL Group's
Businesses and Strategies
Consolidated Financial Statements

Consolidated Subsidiaries

JAL Group
Sustainability
ESG Data

Financial Data/
Corporate Information

International/Domestic Route Maps

Stock/Corporate Information

121

JAL REPORT 2020

JAL Group
Cor porate Policy

Message fromthe President

Financial Data — Eight-year Summary

Evaluation and Analysis of Financial Conditions

Consolidated Financial Statements

Consolidated Subsidiaries

Corporate Name

Paid-in Capital Ratio of Voting Rights(Millions of yen) Direct (%) Indirect (%) Total (%)

Air Transport Business Segment
4,537

72.8

̶

72.8

JAPAN AIR COMMUTER CO., LTD.

300

60.0

̶

60.0

200

100.0

̶

100.0

9,000

100.0

̶

100.0

HOKKAIDO AIR SYSTEM CO., LTD.

490

57.3

̶

57.3

RYUKYU AIR COMMUTER CO., LTD.

396

̶

74.5

74.5

Airport Passenger Handling
JAL SKY CO., LTD.

ESG Data

International/Domestic Route Maps

Stock/Corporate Information(As of March 31, 2020)

Paid-in Capital Ratio of Voting Rights(Millions of yen) Direct (%) Indirect (%) Total (%)

Corporate Name

MaintenanceJAPAN TRANSOCEAN AIR CO., LTD.

ZIPAIR TOKYO CO., LTD.

Consolidated Subsidiaries

Financial Data/
Corporate Information

Other Segments

Air Transport Business

J-AIR CO., LTD.

JAL Group
Sustainability

JAL Group's
Businesses and Strategies

100

100.0

̶

JAL AIRTECH CO., LTD.

315

66.6

3.4

70.0

46.4

4.6

51.0

Cargo
HKD1,000JUPITER GLOBAL, LTD.

1,960

Passenger Sales
JALPAK CO., LTD.*1

80

96.4

1.2

97.7

JAL SALES CO., LTD.

460

100.0

̶

100.0

16.7

83.3

100.0

̶

100.0

100.0

̶

100.0

100.0

̶

100.0

100.0

̶

100.0

100.0

̶

100.0

100.0

̶

100.0

100.0

̶

49.0

49.0

100

51.0

̶

51.0

JAL INFORMATION TECHNOLOGYCO., LTD.

702

100.0

̶

100.0

100.0

JAL JTA SALES CO., LTD.

30

33.0

100.0

JALPAK INTERNATIONALHAWAII, INC.

USD 1,000

100.0

̶

100.0

̶

100.0

JALPAK INTERNATIONAL(EUROPE) B.V.

EUR 1,000

100.0

30

100.0

̶

100.0

EUR 1,000

JALSKY KANAZAWA CO., LTD.

10

100.0

̶

100.0

JALPAK INTERNATIONAL(FRANCE) S.A.S.

JALSKY SENDAI CO., LTD.

10

100.0

̶

100.0

JAL GROUND SERVICE CO., LTD.

100

99.8

0.2

100.0

JAL GROUND SERVICE OSAKA CO., LTD.

10

̶

100.0

100.0

JAL GROUND SERVICE KYUSHU CO., LTD.

10

̶

100.0

100.0

JAL GROUND SERVICE SAPPORO CO., LTD.

10

̶

97.7

97.7

JAL ENGINEERING CO., LTD.

80

100.0

̶

100.0

JAL MAINTENANCE SERVICE CO., LTD.

10

100.0

̶

100.0

JAL KANSAI AIRCARGOSYSTEM CO., LTD.

100

69.2

̶

69.2

JAL DIGITAL EXPERIENCE CO., LTD.

475

51.0

̶

51.0

JAL CARGO SERVICE CO., LTD.

50

100.0

̶

100.0

JAL PAYMENT PORT CO., LTD.

390

16.5

68.5

84.9

JAL CARGO HANDLING CO., LTD.

50

̶

100.0

100.0

JAL CARD, INC.

360

50.6

̶

50.6

JAL CARGO SERVICE KYUSHU CO., LTD.

20

40.0

40.0

80.0

JAL FACILITIES CO., LTD.

180

85.0

̶

85.0

JAL BUSINESS AVIATION CO., LTD.

150

51.0

̶

51.0

JAL SKY AIRPORT OKINAWACOMPANY., LTD.

33

66.7

JALSKY OSAKA CO., LTD.

30

JALSKY KYUSHU CO., LTD.

30

JALSKY SAPPORO CO., LTD.

Ground Handling

Maintenance

1,000
1,600
160

EURO-CREATIVE TOURS (U.K.) LTD.
JALPAK INTERNATIONAL ASIA
PTE. LTD.
JAL SATELLITE TRAVEL CO., LTD.
PT. TAURINA TRAVEL DJAYA*2

GBP 1,000

100
SGD 1,000

146
HKD 1,000

750
IDR 1,000

500,000

Airport-Related Business

Cargo

Passenger Sales

JAL ABC, INC.

OthersJAL NAVIA CO., LTD.

50

100.0

̶

100.0

JAL MILEAGE BANK CO., LTD.

40

100.0

̶

100.0

AXESS INTERNATIONAL
NETWORK, INC.

100

100.0

̶

100.0

2

JAL AGRIPORT CO., LTD.*

100

49.0

̶

49.0

2,700

51.0

̶

51.0

JAL HONGYUAN CO., LTD.

100

51.0

̶

51.0

JAL BRAND COMMUNICATIONS
CO., LTD.

100

100.0

̶

100.0

Airport-Related Business
JAL ROYAL CATERING CO., LTD.

JTA INFORMATION &COMMUNICATION CO., LTD.

50

̶

100.0

100.0

JAL SBI FINTECH CO., LTD.

45

51.0

̶

51.0

JAL SUNLIGHT CO., LTD.

20

100.0

̶

100.0

OFFICIAL FILING CO., LTD.

10

50.0

4.0

54.0

JPRO CO., LTD.

10

̶

100.0

100.0

100.0

̶

100.0

JLC INSURANCE COMPANY
LIMITEDUSD 1,000

2,000*1 Operating revenue (excluding operating revenue between consolidated
subsidiaries) of JALPAK CO., LTD. accounts for over 10% of consolidated
operating revenue.
*2 Although JAL's ownership is 50% or less, the company is a considered
subsidiary because JAL has substantial control.

122

123

JAL REPORT 2020

ESG Data

General Waste (Aircraft)*1
General Waste (Ground)*1
Industrial Waste*1
Ratio of Final Disposal

FY2016

854
1.5
6.0

FY2017FY2018FY2019

85.1
5.78
4.43
0.72

907
1.3
5.4
46.0
82.2
5.02
3.87
0.63

933
1.3
5.0
47.9
80.6
5.10
3.95
0.63

120
46,770430

11344,936426

110
43,512435

102
41,717485

98 Million kWh
40,153 1,000 liters
447
1,000㎥

—
—

—
—

3,475
1.2

3,436
1.1

4,368
1,772
3,266
1.0

4,285
1,689
3,912
1.0

4,188
1,722
3,330
0.3

—

909
1.3
5.0
46.6
83.0
5.54
4.35
0.66

Unit

875
1.4
5.7
44.4
84.6
5.30
4.24
0.71

FY2015

10,000 tons
10,000 tons
10,000 tons
10,000 tons％

1,000 tons
1,000 tons
1,000 tons

tons
tons
tons
％

FY2016FY2017FY2018FY2019Unit

31,98623,3672,519
6,100

32,75324,0552,570
6,128

33,03823,8282,629
6,581

34,00324,2952,690
7,018

35,65325,2782,766
7,609

Persons
Persons
Persons
Persons

Average Age
Ground Staff
Cockpit Crew
Cabin Attendants

37.4
37.7
41.1
35.0

38.2
38.6
43.8
34.9

38.6
38.9
44.1
35.6

39.1
39.5
44.0
35.4

39.4
40.2
43.8
35.0

Years old
Years old
Years old
Years old

Ratio of Men
Ratio of Women

52.3
47.7

52.5
47.5

51.6
48.4

50.2
49.8

49.4
50.6

％
％
％
％
％
％

Managerial Staff
General Staff
Ratio of Disabled Staff*4
Ratio of Female Managers

16.0
84.0
2.28
15.6

15.9
84.1
2.56
16.3

15.8
84.2
2.69
16.3

15.5
84.5
2.69
16.8

Training Period per Person
Training Cost per Person

62.8
380,997

66.4
403,51964.7
422,18770.8
470,698

Childcare Leave Applicants*5
Nursing Care Leave Applicants*5

782
42

781
65

843
89

789
68

743
53

Persons
Persons

Ratio of Local Hires at Overseas Offices
Ratio of Locally Hired Managerial Staff at Overseas Offices

90.4
60.8

89.9
61.9

88.4
58.4

89.8
64.0

88.4
56.3

％
％

Average Years of Continuous Service

13.9

14.2

14.5

14.7

14.4

Years

1,705
30,0002,169
14,0636,826
59,5518,140
68,288

7,745
51,734

Persons
Hours

Community Contribution
Participation in Voluntary Activities
Total Hours of Voluntary Activities

14.8
85.1
2.62
18.4

72.3 Hours/Person
449,480 Yen/Person*1 Airports, Offices, Maintenance Centers (Japan)*2 Past data have been revised in accordance with improvements made in the accuracy of data collection.
*3 The number of employees until fiscal 2016 excluded employees planning to retire as of the end of March that fiscal year, but since fiscal 2017, the number of
employees has included these employees and excluded temporary employees (from temporary staffing companies).
*4 As of June 1 of the year following each fiscal year. Combined data for Japan Airlines Co., Ltd. and its special subsidiary JAL Sunlight Co., Ltd.
*5 Japan Airlines Co., Ltd. only

124

Evaluation and Analysis of Financial Conditions

Consolidated Financial Statements

Consolidated Subsidiaries

JAL Group
Sustainability
ESG Data

Financial Data/
Corporate Information

International/Domestic Route Maps

Stock/Corporate Information(As of March 31, 2020)
Topics discussed

Formulation of Fundamental Policies of Corporate Governance

Yes

Organization Form

Company with Audit and Supervisory Board

Directors

Social Data (Japan Airlines Co., Ltd. and 55 Consolidated Subsidiaries) (S)Human Resources
Consolidated Staff Headcount*3
Ground Staff
Cockpit Crew
Cabin Attendants

Financial Data — Eight-year Summary

JAL Group's
Businesses and Strategies

Corporate governance-related items

FY2015

Electricity Use*1
Heat Use (Crude oil equivalent)*1
Water Use*1

Message fromthe President

Governance Data (Japan Airlines Co., Ltd.) (G)Environmental Data (E)Environment
CO2 Emissions
Scope 1 Aircraft
Ground*1
1
Scope 2*
Scope 3*2
CO2 Emissions/RTK (Comparison with FY2005)
NOx (LTO cycle)
CO (LTO cycle)
HC (LTO cycle)

JAL Group
Cor porate Policy

Term of Office Stipulated

1 yearChairperson of the Board

Chairperson

Number of Directors

10 (of which, 3 External Directors)

Number of Board of Directors meetings

20 (FY2019)

External Director attendance at Board of Directors meetings

98% (FY2019)

Audit and Supervisory Board Members
Number of Audit and Supervisory Board Members
External Audit and Supervisory Board Member attendance at Board of
Directors meetings
Key meetings attended by Audit and Supervisory Board
Members
Number of Audit and Supervisory Board meetings
External Audit and Supervisory Board Member attendance at Audit andSupervisory Board meetings
Appointment of independent External Directors and External Audit andSupervisory Board Members
Accounting Auditor
Internal Auditing

5 (of which, 3 External Members)
100%(FY2019)
Management Committee, Group Safety Enhancement Council, Risk Management Council, Group
Company Business Performance Report Meeting, Management Liaison Committee*7
13 (FY2019)100% (FY2019)
6 (3 External Directors, 3 External Audit and Supervisory Board Members)
KPMG AZSA LLC
Internal Audit

Establishment of Committee

Composition(number of members)

Chairperson (FY2019)

Number of meetings(FY2019)

Corporate Governance Committee

4

Eizo Kobayashi (Independent External Director)

2

Nominating Committee
Compensation Committee
Personnel Committee
Officers Disciplinary Committee

5
5
5
5

Masatoshi Ito (Independent External Director)
Eizo Kobayashi (Independent External Director)
Yuji Akasaka (Representative Director, Executive President)
Eizo Kobayashi (Independent External Director)*6

2
7
4
4

Topics discussed

Composition

Number ofmeetings(FY2019)

The Executive Management Council is a body established by theCompany for the purpose of contributing to appropriate and flexible
decision-making by the Board of Directors and the President.

A forum for discussion attended by the President, Vice President, Senior
Managing Executive Officers, Managing Executive Officers, other Directors,
and Audit and Supervisory Board Members.

38

This body is tasked with ensuring safe flight operations across theGroup and promoting safety management, in line with the Group’s
principles and policies. The council formulates key policies related tosafety management, clarifies the status of management systems andregularly overhauls those systems, addresses issues relating to dayto-day flight safety, and deliberates on important matters as reported
upon by the Group Operational Safety Promotion Committee.

Safety General Manager for Japan Airlines, chairperson, vice chairperson,
council members. The chairperson (president) can call Full-time Adviser
and Related Managers and ask for opinions. Audit & Supervisory Board
Members can attend and express opinions.

12

The Council takes responsibility for overall risk
management to stabilize Group-wide management
activities. It also makes decisions in relation toestablishing the JAL Group Basic Policies on Risk
Management, conducts regular risk investigations,takes measures when risks eventuate, and manages
BCP.

President, Vice President, General Manager of Managing Division Route Marketing, General
Manager of Product / Service Planning, General Manager of Managing Division Passenger
Sales, General Manager of Cargo & Mail, General Manager of Corporate Safety & Security,
General Manager of Operations, General Manager of Flight Operations, General Manager
of Engineering & Maintenance, General Manager of Cabin Attendants, General Manager
of Airport Operations, General Manager of Corporate Control, General Manager ofFinance & Accounting Division, General Manager of Human Resources, General Manager
of Procurement, General Manager of Corporate Planning, General Manager of Innovation
Promotion, General Manager of IT Planning, Director of Strategic Corporate Relations at the
Policy Management Center, General Manager of General Affairs. Audit & Supervisory Board
Members also attend the Council.

3

The Corporate Brand Promotion Council is tasked with improving
corporate brand (corporate value) based on the JAL Group
Corporate Policy and strategies, clarifying the status of corporate
activities, managing the progress of each measure, and sharing
information to strengthen the corporate brand.

President, Brand Communication / Tokyo 2020 Olympic and Paralympic
Promotion Department Director, Executive Officers and Presidents ofGroup airlines nominated by the chairperson. The chairperson can call thesuitable person according to the agenda.

2

JAL Philosophy Council is tasked with promoting the
JAL Philosophy. It is responsible for developing basic
policies for initiatives, planning and implementing
related measures and evaluating the impact of thosemeasures.

Chairperson, President, Vice President, General Manager of Managing Division RouteMarketing, General Manager of Managing Division Passenger Sales, General Manager ofCargo & Mail, General Manager of Flight Operations, General Manager of Engineering& Maintenance, General Manager of Cabin Attendants, General Manager of Airport
Operations, General Manager of General Affairs, General Manager of Human Resources,
General Manager of Corporate Control, General Manager of Communication Division,
General Manager of Safety & Security Division, General Manager of Operation Division. The
chairperson (president) can call the suitable person according to the agenda.

2Group Company
Business
Performance
Report Meeting

The purpose of The Group Earnings Announcement Session is toshare the “performance” of each company and department of the
JAL Group and to consider ways to improve the performance.

Directors, Honorary advisor, Chairperson, Vice Chairperson, President,
Executive Officers, Area Managers, Presidents of Group airlines, Audit &Supervisory Board Members. Members can include the suitable person asneeded.

12

Management
LiaisonCommittee*7

The Management Liaison Committee monitors
the progress of management projects and sharesinformation.

Chairperson, President, Vice President, Senior Managing Executive Officers, Managing
Executive Officers, Executive Officers. The chairperson (president) can call the suitable person
according to the agenda.

17

Bodies directly
controlled by
the President

Executive
Management
CouncilGroup Safety
Enhancement
CouncilGroup Risk
Management
Council

Corporate
Brand
PromotionCouncilJAL
Philosophy
Council*6 Replaced by Sonoko Hatchoji (Independent External Director) in fiscal 2020
*7 Became the Group Management Coucil in fiscal 2020125JAL REPORT 2020

International Route Map

Oulu
Moscow
Helsinki
Riga
VilniusGlasgow Brussels
Aberdeen

Message fromthe President

Financial Data — Eight-year Summary

Evaluation and Analysis of Financial Conditions

JAL Group's
Businesses and Strategies
Consolidated Financial Statements

Consolidated Subsidiaries

Wenatchee
Kelowna
Bellingham

Prince George
Whitehorse
Terrace
Ketchikan
JuneauFairbanks

Tallinn
St. Petersburg

Yellowknife

Anchorage

Walla Walla
Edmonton
Calgary
SpokanePullmanKalispell
MissoulaOklahoma City
Omaha
Minneapolis
Wichita

Warsaw

ViennaFrankfurt
MunichPerm

Tenerife

Rostov
Sochi

Gran Canaria
SevillaSao Paulo
MalagaBologna
Rome
ZurichBilbaoAddis Ababa
Nairobi

Stock/Corporate Information

Great Falls
BozemanJacksonKrasnodar

Yekaterinburg
Ulan Bator

Kazan

Bucharest
Istanbul

Chiang Rai
Lampang
Sukhothai
Chiang Mai

Mandalay
Nay Pyi Taw

Johannesburg
DurbanCape Town

ToledoDetroitTorontoCleveland
OttawaBuffaloDenverWinnipeg

Xi'an
FuzhouXiamenShenyang
DalianYantai

Vladivostok

Victoria
YakimaJapan

AnkaraPhu Quoc
Yogyakarta
Surabaya
Kuching
Denpasar
Sibu
Bintulu
Miri
LabuanPortlandVancouverSeoul

Beijing

Tianjin
Chongqing
Guwahati
Qingdao
BagdograChengduVaranasi
Nanjing
Leh
Srinagar
Chandigarh
Kunming
Amritsar
Delhi
Dubai
Doha
Guangzhou
Shenzhen
Lucknow
Ranchi
Hanoi
Kolkata
Ahmadabad
RaipurBhubaneswar
Mumbai
YangonPune
Hyderabad
Chennai
Goa
BangkokBangalore
Kochi
PhuketColomboMale
Langkawi
Alor Setar
Dar es SalaamPenangKuala Terengganu
Kuala Lumpur
Johor Bahru
Jakarta
Singapore

Stuttgart
ZagrebDubrovnik
Athens
Venice Amman

Milan
Nice
GenevaMarseille
Barcelona
Toulouse

Ufa

Samara

Baku

Malta

International/Domestic Route Maps

Tulsa
MadisonMilwaukee
ChicagoPeoriaBloomington
Grand Rapids
KalamazooSalt Lake City

Nizhny Novgorod

BerlinHannoverPragueBudapest

ESG Data

Des Moines
Kansas City
JoplinKhabarovsk

London
Paris
Basel
Lyon
La Coruna
Santiago deCompostela
Vigo
OviedoPorto
LisbonMadridFinancial Data/
Cor porate Information

JAL Group
Sustainability(As of September 4, 2020)

Stockholm
Hamburg
Reykjavik
KittilaNewcastle
Copenhagen
BillundDublinDusseldorf
Gothenburg
Ivalo
Manchester
Luxembourg
BelfastOslo
Rovaniemi
Amsterdam
Edinburgh

JAL Group
Cor porate Policy

Busan

Boise

ShanghaiHangzhouTaipeiTainanKaohsiung
Hong Kong
Guam
ManilaLuang Prabang
Vientiane
Da Nang
Trat
Nha Trang
Phnom Penh
Siem Reap
Ho Chi Minh City
Kota Kinabalu
Samui
Krabi
Kuantan

Tawau
Sandakan

CairnsBrisbaneGold Coast

Perth

SydneyMelbourne

Auckland

BostonSeattlePasco
PortlandRedmond
EugeneReno
Sacramento
Santa Rosa
San Francisco
Mammoth Lakes
Las Vegas
Palm Springs San Jose
FresnoBurbank
Los Angeles
OntarioLong BeachSanta Ana
San Diego
Phoenix
TucsonHermosillo
Lihue
AlbuquerqueCiudad Obregon
Honolulu
Los Mochis
Kahului
El PasoCiudad Juarez
Kona
Chihuahua
Hilo
La PazCuliacan
San Jose del Cabo
North West Arkansas
DurangoLittle RockMonterrey
Puerto Vallarta
Nadi
Guadalajara
Manzanillo
Aguascalientes
PapeeteNuevo Laredo
Leon
Reynosa
San Luis Potosi
Queretaro
Ixtapa Zihuatanejo
TampicoMexico City
Acapulco
Veracruz

Medford

OaxacaDallasOrlando

Miami
Fort Lauderdale
West Palm Beach
Fort Myers
Tampa
CancunPensacola
MeridaNew Orleans

San Juan

Fortaleza

RochesterMontreal
Burlington
Syracuse
Columbus
Pittsburgh
Manchester
NewarkHartford
New York
Philadelphia
Harrisburg
Baltimore
DaytonWashington
Richmond
Indianapolis
Cincinnati
Norfolk
Lexington
Evansville
Raleigh Durham
Greensboro
Louisville
Knoxville
Charlotte
Greenville
ColumbiaCharleston
Nashville
Atlanta
Savannah
St. Louis
HuntsvilleJacksonville
Birmingham
Memphis
ParisFrankfurt

Salvador

RecifeLondonBrasilia

ManausBelo Horizonte
CampecheCiudad del Carmen

Londrina
IguazuSan Antonio
AustinHoustonLima
Campo GrandeTapachulaSantiago

Villahermosa
Tuxtla Gutierrez
Port Alegre
Curitiba
Sao Paulo
Rio De Janeiro• The routes above include code-share flights.
• The map has been altered to highlight the cities on JAL’s route network.
• Broken lines () are one-way routes.

126

127

JAL REPORT 2020

Domestic Route Map

JAL Group
Cor porate Policy

Message fromthe President

Financial Data — Eight-year Summary

Evaluation and Analysis of Financial Conditions

JAL Group's
Businesses and Strategies
Consolidated Financial Statements

Financial Data/
Cor porate Information

JAL Group
Sustainability

Consolidated Subsidiaries

ESG Data

International/Domestic Route Maps

Stock Information / Corporate Information(As of September 4, 2020)

Stock/Corporate Information(As of March 31, 2020)

Stock Information• Stock Exchange The First Section of the Tokyo Stock Exchange• Stock Code9201

• Number of Shares Per Unit

100 shares• Account closing date

March 31

• Ordinary General Meeting of Shareholders

Rishiri

June each year

• Date of Finalizing Shareholders Eligible to Exercise Voting Rights
at the Ordinary General Meeting of Shareholders
March 31
Asahikawa(Center of Hokkaido)
Sapporo(Okadama)

Memanbetsu
Kushiro(Tancho Kushiro)
Obihiro(Tokachi Obihiro)

Sapporo(New Chitose)

Aomori
MisawaAkita

Hanamaki(Iwate Hanamaki)

Yamagata(Oishii Yamagata)
Sendai
Niigata

Komatsu

Oki(Oki Island Global Geopark)

Izumo(Izumo Enmusubi)

Tajima(Kounotori Tajima)

Okayama(Okayama Momotaro)
Hiroshima

Osaka(Kobe)

Matsumoto(Shinshu Matsumoto)

Osaka(Itami)

Nagoya(Komaki)Nagoya(Chubu)Tokyo(Haneda)Tokyo(Narita)

Shizuoka(Mt.Fuji Shizuoka)

Kumamoto(Aso Kumamoto)Nagasaki
AmakusaMiyazaki(Miyazaki Bougainvillea)

KagoshimaTanegashima(Cosmoport Tanegashima)
Yakushima

Amami-Oshima
Kikaijima

September 30 and March 31• Shareholder Registry Administrator
Mitsubishi UFJ Trust and Banking Corporation• Contact
Stock Transfer Agency Department
Mitsubishi UFJ Trust and Banking Corporation
1-1, Nikko-cho, Fuchu-shi, Tokyo, Japan
Mailing address: ShinTokyo Post Office Post-office box no. 29
Phone: 0120-232-711 (toll free (Only within Japan))
Open: 9:00 am to 5:00 pm except Sat, Sun and public holidays(Japan time)
Website: www.tr.mufg.jp/daikou/ (only in Japanese)• Limitation on listing or recording of Citizens of Foreign
Countries and Other Persons in Register of Shareholders andRegister of Beneficial Shareholders
The Articles of Incorporation lay down the following provision
concerning the Civil Aeronautics Act, Article 120-2.

(Yen)
5,000

Share price(Left axis)

Trading volume(Right axis)(Million shares)
200*Some routes are not operated in certain seasons.
4,000

160

3,000

120

2,000

80

Kita-Daito
Kumejima
Okinawa(Naha)TaramaYonaguni

MiyakoIshigaki(Painushima Ishigaki)

Minami-Daito• The routes below are operated as code-share flights with Fuji Dream Airlines Co., Ltd. (FDA) using FDA

aircraft and crew: Osaka (Kobe)–Aomori, Osaka (Kobe)–Matsumoto, Osaka (Kobe)–Izumo, Osaka (Kobe)–
Kochi, Sapporo (New Chitose)–Yamagata, Sapporo (New Chitose)–Matsumoto, Sapporo (Okadama)–
Matsumoto, Sapporo (Okadama)–Shizuoka, Yamagata–Nagoya (Komaki), Sendai–Izumo, Niigata–Nagoya(Komaki), Niigata–Fukuoka, Matsumoto–Fukuoka, Shizuoka–Izumo, Shizuoka–Fukuoka, Shizuoka–
Kitakyushu, Shizuoka–Kagoshima, Nagoya (Komaki)–Izumo, Nagoya (Komaki)–Kochi, Nagoya (Komaki)–Fukuoka, and Nagoya (Komaki)–Kumamoto.

• The routes below are operated as code-share flights with Amakusa Airlines Co., Ltd. (AMX) using AMX
aircraft and crew: Fukuoka–Amakusa and Kumamoto–Amakusa.

*Some flights on the Osaka (Itami) = Kumamoto route are also code-share flights with AMX.

128

40

1,000

0

0
April
2016

April
2017

April
2018

April
2019

April
2020

shares of treasury stock were retired on November 8, 2019, and the number of issued
shares was reduced by 5,818,000.
*Based on the result of a decision by the Board of Directors on October 31, 2019, 6,067,000
shares of treasury stock were retired on March 13, 2020, and the number of issued shares
was reduced by 6,067,000.

• Major Shareholders
Number ofsharesShareholder• Method of official announcement
Electronic public notice at:
URL www.jal.com/ja/corporate/publicnotices/ (only in Japanese)
Provided, however, that if the electronic notice cannot be made due
to an accident or any unavoidable reason, the public notice shall be
published in the Nihon Keizai Shimbun.

• Transition of Share Price and Trading Volume

Tokunoshima(Tokunoshima Kodakara)
Okinoerabu(Erabuyurinoshima)
Yoron• Shareholder Registry Administrator
Mitsubishi UFJ Trust and Banking Corporation

Article 12. Limitation on listing or recording of Citizens of Foreign Countries and Other
Persons in Register of Shareholders and Register of Beneficial Shareholders 12.1
If the Company receives from a person, who falls into one of the categories listed
in the items below, a request for listing or recording his or her name and addressin the register of shareholders (including the register of beneficial shareholders;hereinafter the same), and if the acceptance of such request causes the total voting
rights owned by persons, who fall into one of the categories listed in the items
below, to represent one-third or more of the Company’s total voting rights, theCompany shall refuse such listing or recording.
(1) A person who does not have Japanese citizenship(2) A foreign country, foreign public body or similar entity(3) A corporation or other organization established under foreign laws and regulations
2. When the Company intends to list or record all shares held by any of theshareholders listed in the items of the following paragraph, upon notification froma book-entry institution in accordance with Article 151. Paragraph (1) or (8) of the
Act on Book-Entry Transfer of Company Bonds, Shares, etc., and thereby the total
number of voting rights held by such persons listed in the items of the preceding
paragraph will account for more than a third of the Company’s voting rights, theCompany shall list or record such shareholders in the register of shareholders inaccordance with measures provided for in the Ordinance of the Ministry of Land,
Infrastructure, Transport and Tourism to list or record only a part of the shares sothat the total number of voting rights held by such shareholders in the items of thepreceding paragraph accounts for less than a third of the Company’s voting rights.

Osaka(Kansai)

Tokushima
Yamaguchi Ube Takamatsu(Tokushima Awaodori)
Kitakyushu
Kochi
Matsuyama(Kochi Ryoma)
Oita
Nanki Shirahama

Fukuoka

September 30 and March 31• Date of record for dividend

Hakodate

Okushiri• Date of record for dividend• Total number of shares to be issued 750 million(Common stock) (700 million)(Class 1 Preferred stock) (12.5 million)(Class 2 Preferred stock) (12.5 million)(Class 3 Preferred stock) (12.5 million)(Class 4 Preferred stock) (12.5 million)• Outstanding Issued Shares
Common stock 337,143,500 (Number of shares per unit: 100)
Number of Shareholders 236,234*T he total number of shares issued includes 136,157 shares of treasury stock.
*B ased on the result of a decision by the Board of Directors on October 23, 2019, 5,818,000

Percentage of sharesagainst total number
of issued shares (excl.
treasury stock) (%)

The Master Trust Bank of Japan, Ltd.
(Trust account)

25,965,000

7.70Japan Trustee Services Bank, Ltd.*(Trust account)

14,172,500

4.20

Kyocera Corporation

7,638,400

2.26

Japan Trustee Services Bank, Ltd.*(Trust account 9)

7,028,700

2.08

Japan Trustee Services Bank, Ltd.*(Trust account 5)

6,945,100

2.06

Daiwa Securities Group Inc.

5,000,000

1.48Japan Trustee Services Bank, Ltd.*(Trust account 7)

4,122,200

1.22

STATE STREET BANK WEST CLIENT TREATY 505234

3,988,262

1.18

Japan Trustee Services Bank, Ltd.*(Trust account 1)

3,562,600

1.05

CITIBANK, N.A. - NY, AS DEPOSITARY BANK FOR
DEPOSITARY SHARE HOLDERS

3,544,994

1.05*On July 27, 2020, Japan Trustee Services Bank, Ltd. merged with JTC Holdings, Ltd.
and Trust & Custody Services Bank, Ltd., to become Custody Bank of Japan, Ltd.

Company Profile
Corporate NameJapan Airlines Co., Ltd.

Headquarters

Nomura Real Estate Bldg., 2-4-11
Higashi-Shinagawa, Shinagawa-ku, Tokyo
140-8637, Japan
Phone: +81 (0)3-5460-3121
Website: www.jal.com/en

Established

August 1, 1951

Representative
Director,
Yuji Akasaka
Executive President
Capital181,352 million yen

Employees

Consolidated Employees 35,653 people
Employees 13,869 people

Capital andPaid-in Capital

355,845 million yen

Businesses

1. Scheduled and non-scheduled airtransport services
2. Aerial work services
3. Other related business(Amount is rounded down to the nearest million yen)129

日本航空株式会社
財務部・ブランドエンゲージメント推進部〒140-8637
東京都品川区東品川二丁目4番11号 野村不動産天王洲ビル
TEL:03-5460-3121

Japan Airlines Co.,Ltd.
ホームページ
www.jal.co.jp
Finance Department,
ESG Promotion Department
企業情報
www.jal.com/ja/outline/
CSR情報
www.jal.com/ja/csr/
Nomura Real Estate Building, 2-4-11 Higashi-Shinagawa, Shinagawa-ku, Tokyo 140-8637, Japan
投資家情報
www.jal.com/ja/investor/
Tel.: +81 (0)3-5460-3121
Corporate website
Corporate information
Sustainability information
Investor Relations

www.jal.com/en/
www.jal.com/en/outline/
https://www.jal.com/en/sustainability/
www.jal.com/en/investor/