English Version

CONTENTS
02

Highlights

06

President’s Message

16	The Medium Term Management Plan
to Date18

Safety Initiatives

24

Route Network, Products and Services

29

Group Management30

Human Resources

36
38

P. 06 President’s Message
The president describes the ideal company
JAL aspires to become and discusses theThree Targets and Three Differentiations of theMedium Term Management Plan.

JAL Group CSRJAL Group CSR

39

The Environment

44

Safety and Security

46

Bringing Japan and the World48

Nurturing the Next Generation

50

Governance

50

Stakeholder Dialog

53

Governance59

Environmental, Social andGovernance (ESG) Data

60

Executive Officers

62

Financial Section

86

Consolidated Subsidiaries

87	JAL Group Route Network

P. 16 The Medium Term
Management Plan to Date
We provide a progress report on the Key
Initiatives in the Five Areas we are pursuing toachieve the Medium Term Management Plan.

P. 50 Stakeholder Dialog
We convened a dialog with an outside expert
and an external director to discuss JAL’s
corporate governance.

Editorial Policy

JAL Report 2015 was compiled using various referential guidelines as an integrated
report on financial information and CSR activities, and is intended to promote
understanding of the corporate value and growth prospects of the JAL Group.

Period Covered by
the Report

In principle, the report covers activities for the period from April 2014 to March 2015
(fiscal 2014).

Scope of the Report

JAL Group companies

Date of Publication

July 2015

JAL Corporate Website http://www.jal.com/en/
We offer a comprehensive report on our aspirations and business activities.
About JAL
http://www.jal.com/en/outline/

Safety and Flight Information
http://www.jal.com/en/flight/

http://www.jal.com/en/csr/

Investor Relations
http://www.jal.com/en/investor/

J A L

JAL REPORT 2014

CSR Activities

JAL REPORT 2015
We provide information on
our main initiatives for fiscal
2014 and content we areparticularly eager to sharewith stakeholders.

R E P O R T

2 0 1 5

JAL Group Corporate Policy
The JAL Group will:
Pursue the material and intellectual growth of all
our employees;
Deliver unparalleled service to our customers; andIncrease corporate value and contribute to thebetterment of society.

JAL REPORT 201501

Highlights

Operating Revenue

Operating Profit / Operating Profit Margin(JPY Bn)(JPY Bn)

1,500

250

1,200

1,204.8 1,238.8

1,309.3 1,344.7

(%)
25

204.9

195.2

200

900

17.0

150

15.8
600

100

300

50

0

2011

2012

2013

0

2014 (FY)Net Income

12.7

13.4

171.6

300

166.2

160

5

2012

2011

2013

2014 (FY)

149.0

276.2

240

265.5

249.5

22.3

30
24

19.1

19.8

120

180

80

120

12

40

60

6

0

2011

2012

2013

0

2014 (FY)2011

Net Income Per Share2013

2014 (FY)60

514.52500

473.36 458.45
411.06

40

300

30

200

20

2011

2012

2013

10

2014 (FY)

52.7

2013

2014 (FY)

35.7

2011

2012

Number of Employees (Consolidated)

Interest-bearing Debt / D/E Ratio(JPY Bn)

51.5
46.4

50

400

(Times)250

1.0

35,0000.8

28,0000.6

21,0000.4

14,000

0.2

7,000

208.4
200

30,87530,882

31,472

31,534

160.1
134.2

150

0.5
100

100.5
0.3
0.2

50

0.1
0

0

(%)

600

100

2012

18

Equity Ratio(Yen)

JAL REPORT 2015

0

(%)

286.1

23.8

02

15
10

(JPY Bn)

186.6

20

EBITDA*1 / EBITDA Margin*2(JPY Bn)
200

179.6

166.7

2011

2012

2013

2014 (FY)

0

0

2011

2012

2013

2014 (FY)Highlights

President’s Message

Net Income(JPY Bn)(JPY Bn)
200

The Medium Term Management Plan to Date

186.6

171.6

300

166.2

160

149.0

276.2

240

265.5

249.5

22.3

30
24

19.1

19.8

120

180

80

120

12

40

60

6

2011

2012

2013

0

2014 (FY)2011

Net Income Per Share

2012

2013

2014 (FY)

0

(%)
60

600

514.52500

473.36 458.45
411.06

40

300

30

200

20

2011

2012

2013

10

2014 (FY)

52.7

2013

2014 (FY)

35.7

2011

2012

Number of Employees (Consolidated)

Interest-bearing Debt / D/E Ratio(JPY Bn)

51.5
46.4

50

400

(Times)250

1.0

35,0000.8

28,0000.6

21,0000.4

14,000

0.2

7,000

208.4
200

30,87530,882

31,472

31,534

160.1
134.2

150

0.5
100

100.5
0.3
0.2

50

0.1
0

18

Equity Ratio

(Yen)

100

Financial Section

(%)

286.1

23.8

0

CSR

EBITDA*1 / EBITDA Margin*2

2011

2012

2013

2014 (FY)

0

0

2011

2012

2013

2014 (FY)*1 E
 BITDA: Operating Profit +Depreciation*2 E
 BITDA Margin: EBITDA ÷
Operating Revenue*3 Japan Airlines Co., Ltd. hasundertaken a stock split tocreate two new shares for
one common share, effective
October 1, 2014. Accordingly,
figures for net income pershare have been calculated
and presented on the premisethat the stock split occurred infiscal 2011.

JAL REPORT 201503

Major Financial Items
Japan Airlines Co., Ltd. Consolidated Performance
FY2014 (Accounting date: March 31, 2015), FY2013, FY2012 and FY2011(Millions of yen)

FY2011FY2012FY2013

FY2014

Operating Revenue

1,204,813

1,238,839

1,309,343

1,344,711

Operating Expense

999,890

1,043,596

1,142,550

1,165,021

Operating Profit

204,922

195,242

166,792

179,689

Ordinary Income

197,688

185,863

157,634

175,275

Net Income

186,616

171,672

166,251

149,045Net Income Per Share (Yen)

514.52473.36458.45411.06

Japan Airlines Co., Ltd. has undertaken a stock split to create two new shares for one common share, effective October 1, 2014. Accordingly, figures for net income pershare have been calculated and presented on the premise that the stock split occurred in fiscal 2011.

Interest-bearing Debt

208,460

160,145

134,282

100,592

Shareholders’ Equity

388,523

565,048

690,288776,476

Net Assets

413,861

583,189

711,064

800,751

Total Assets

1,087,627

1,216,612

1,340,168

1,473,354

181,352

181,352

181,352

362,704

Shares Issued (Thousand shares)

Japan Airlines Co., Ltd. has undertaken a stock split to create two new shares for one common share, effective October 1, 2014.

256,673

264,853

247,941

261,139

Cash Flow from Investing Activities–147,221–264,436–131,237–230,559

Cash Flow from Financing Activities–274,460–60,643–61,912–67,323

Cash Flow from Operating Activities

04

JAL REPORT 2015

Highlights

President’s Message

The Medium Term Management Plan to Date

CSR

Financial Section

Traffic Results
Japan Airlines Co., Ltd. Consolidated performance
FY2014 (Accounting date: March 31, 2015), FY2013, FY2012 and FY2011

Revenue passengers carried(number of passengers)

Revenue passenger km(1,000 passenger-km)

FY2011FY2012FY2013

FY2014

International

6,844,772

7,525,038

7,723,293

7,793,704

Domestic

28,965,514

30,020,440

31,218,734

31,644,018

Total

35,810,286

37,545,478

38,942,027

39,437,722

International

30,313,789

34,036,119

35,390,384

36,109,588

Domestic

22,264,394

23,012,898

23,745,163

23,993,738

Total

52,578,184

57,049,018

59,135,548

60,103,327

70.4

76.1

76.5

75.7

62.7

63.1

64.0

66.1

66.9

70.3

71.0

71.5

International

43,036,984

44,745,317

46,235,058

47,696,816

Domestic

35,523,214

36,443,994

37,084,260

36,306,359

Total

78,560,199

81,189,311

83,319,319

84,003,176

International

1,314,295

1,378,282

1,512,142

1,754,657

Domestic

355,909360,176

366,989356,691

1,670,205

1,738,458

1,879,132

2,111,349

Revenue passenger-load factor International(%)
Domestic
Total
Available seat-km(1,000 seat-km)

Revenue cargo ton-km(1,000 ton-km)

Total

JAL REPORT 201505

President’s Message

To become the most loved,
and number one airline of
choice in the world
Yoshiharu Ueki
Representative Director, President
Japan Airlines Co., Ltd.

Working Together with Our Employees
toward Our Goal
In the years to come, JAL will work toward thegoal of becoming the most loved, and number
one airline of choice in the world. When I became
the president in 2012, following our corporatebankruptcy, I reflected upon the direction JAL
should take in the future and declared this goalas my resolution for our customers and thegeneral public as well as our employees.
So that customers choose JAL, we must be
an airline that is unique. Our Japanese values,that is, our sense of hospitality, attention todetail, and noble spirit, differentiate JAL. I am
convinced that by developing and gaining mastery of our characteristics as a quintessential-

06

JAL REPORT 2015ly Japanese airline, we will achieve our goal of
becoming the most preferred airline, not just inJapan but also across the world.
Ultimately, attaining this goal and performing with consistent excellence depends on ourhuman resources. I firmly believe we can do thisby encouraging the personal growth of every
employee and by effectively integrating theirabilities into a single force. By internalizing andpracticing the JAL Philosophy, representing themindset, values and way of thinking to which
all employees involved in JAL’s products andservices should adhere, and through the united effort of all the approximately 32,000 Group
employees, we will advance, step by step, toward
our lofty goal of becoming the most loved, andnumber one airline of choice in the world.

Highlights

President’s Message

Market Outlook
Having emerged from the global economic
slump, the Japanese economy has been gradually recovering along with signs of a recovery
in the global economy, led by the developed
countries.
Passenger demand for international flights
continues to show steady growth, as the weaker
yen and relaxed visa requirements have boosted the number of passengers visiting Japan toabove 13 million per year. Meanwhile, having
marked a record high in 2012, outbound passenger demand has continued to decline on
the back of factors including the weaker yen.
Demand for domestic flights has increased due
to robust consumer appetite for travel and newly

The Medium Term Management Plan to Date

CSR

Financial Section

Number of Passengers on International Flights andForeign Visitors to Japan(Thousandpeople)80,00060,00048,58753,917

Number of Passengers on International
Flights (to/from Japan)
Foreign Visitors to Japan
63,683(preliminarydata)
59,17357,05250,22240,00020,000

6,790
0

2009

8,611
2010

6,219
2011

8,358
2012

10,3642013

13,4132014 (Year)

Source: M inistry of Land, Infrastructure, Transport and Tourism and the Japan National
Tourism Organization

JAL REPORT 201507

U.S. Dollar-Yen Exchange Rate
(Yen)
130
120
110
100
90
80
70

2010

2011

2012

2013

2014

(FY)

(Source: Thomson Reuters)

Singapore Kerosene Price(USD/bbl)
150

120

90

60

2010

2011

2012

2013

2014

(FY)

created demand stimulated by low-cost carriers(LCCs).
From the perspective of airline industry supply,
the greater number of departure and arrival slots
for international flights in the Tokyo metropolitan
area and further expansion of LCCs have led to asignificant increase in the supply of international
flights. The supply of domestic flights also rose,due to increased supply from LCCs for flights inand out of Narita and Kansai airports.
Looking ahead, assuming continued recovery of the Japanese and global economies, we
expect passenger demand for both internationaland domestic flights to continue to grow. Meanwhile, supply is not expected to significantly
expand until 2016, which should lead to a gradual improvement in the balance of supply anddemand. Japanese carriers are also likely to be
influenced by the yen’s continued weakness andtrends in the fuel market. However, JAL seeks
to mitigate the risk of fluctuations in the balanceof payments by undertaking a certain amount ofderivative trading for both the foreign exchange
and fuel transactions.

(Source: Thomson Reuters)

Hedging Ratio for Fuel Costs (as of March 31, 2015)
■Fuel
100

90%

80
60
40

40%

20
0

08

■FX

Formulation of the Rolling Plan 2015 for
the JAL Group Medium Term Management
Plan for Fiscal Years 2012–2016

10% 10%FY2015

JAL REPORT 2015

FY20165%

5%FY2017

In 2012, we announced the “JAL Group Medium Term Management Plan for Fiscal Years
2012–2016” (hereafter Medium Term Management Plan). We formulated the plan following
intensive discussions on the path we shouldtake to continue providing unparalleled service
to our customers far into the future and become
a company that contributes to society.
In the past, JAL had repeated a cycle of creating a Medium Term Management Plan and,not being able to complete it, would create a
new plan.
We formulated this Medium Term Management Plan by reflecting on our past, humbly
looking back at the end of each previous year,

Highlights

and reconfirming our policies for the required
actions to ensure we accomplish our goals within the remaining period, and then sharing thiscontent with our internal and external stakeholders in the form of a rolling plan. We have madesteady progress to date, and clearing our targets
for each year has finally allowed us to prepare
for handling any risk and achieving new growth.
Consequently, we confirmed that the initial management targets of our Medium Term Manage-

2012– FY2013

FY

President’s Message

The Medium Term Management Plan to Date

CSR

Financial Section

ment Plan will remain the same for fiscal 2015,
and we formulated the “Medium Term Management Plan Rolling Plan 2015” for the fourth yearwith a consistent storyline.
Together with our employees, we have vowed
to combine the abilities of each individual towardachieving our goal of higher earnings on higher revenues, and thus ensure completion of thecurrent Medium Term Management Plan in thetwo remaining years.

A period that tested our ability to execute the Medium
Term Management Plan

Drawing on lessons learned in the past that we created plans without full execution of the measures we had
decided to take, and without ample analysis, all JAL Group staff worked to demonstrate that the JAL Group haschanged and has become a company that keeps its promises to its stakeholders. Under the harsh businessenvironment that prevailed during this two-year period, caused by factors such as the grounding of Boeing 787
aircraft and a rapid decline in the yen, we nevertheless strived to introduce new products, enhance our services
and improve productivity. As a result, we were able to attain our target of raising our operating profit margin
to above 10%. While revenues increased, however, earnings decreased year-on-year, and we realized that weneeded to develop the ability to respond to severe business environments.

2014

FY

A period for establishing our business foundation for
new growth

At the beginning of fiscal 2014, we expected extremely severe business conditions, which included intensifying
competition at Tokyo metropolitan airports as a result of the dramatic increase of international flight slots at
Haneda Airport, negative effects to traffic demand caused by the consumption tax increase, and rising fuelcosts due to the weaker yen. Accordingly, we began by positioning that year as a period for establishing ourbusiness foundation in line with our projections for higher revenues and lower profit. As it turned out, the higher
consumption tax rate had only a limited negative impact on demand for air transport, while robust demand for
inbound flights and a decline in the fuel markets served to alleviate the severity of the business environment. We
also made a concerted effort to reduce costs and improve our products and services. As a result, we achieved
higher revenues and profits compared to the previous year. We believe that we have established the businessfoundation for growth in the form of higher earnings on higher revenues.

2015– FY2016FY

A period for achieving new growth and managementtargets in the Medium Term Management Plan

Although we expect a severe business environment ahead, we are not only pursuing business expansion; weare also working to differentiate ourselves in order to survive the competition based on the keywords “Autonomy,” “Challenge” and “Speed.” We will strive to enhance the JAL Brand and improve our products and services
in order to become the first choice of more customers, and to strengthen our cost competitiveness to accomplish growth in terms of revenue and profit improvement, thus ensuring that we attain the targets set out in our
Medium Term Management Plan. Furthermore, in light of the projected expansion in the capacity of metropolitan airports and rise in demand for inbound flights ahead of the Tokyo Olympic and Paralympic Games in 2020,
we will also proceed with building a corporate foundation capable of responding to various social changes.

JAL REPORT 201509

2016 in our Medium Term Management Plan.
To attain these management targets, we will
strive to clearly differentiate JAL from other competing airlines in the three areas of “Enhancement of the JAL Brand,” “Route Network,
Products and Services” and “Cost Competitiveness,” to survive future competition.
We are pursuing the Key Initiatives in Five Areas
to realize the following Three Differentiations.

Our Medium Term Goals
To realize the JAL Group Corporate Policy andbecome the most loved, and number one airline of choice in the world, we are upholding theThree Management Targets of maintaining thehighest standards of safety, achieving Customer
Satisfaction No. 1*, and achieving an operating
profit margin of 10% or more for five consecutive
years and an equity ratio of 50% or more in fiscal
Outline of the Medium Term Management Plan FY2012–2016

Surviving Future Competition (Three Differentiations)Route Network, Products andServices

Enhancement of the JAL Brand
We will maintain safety and provide
customers with unparalleled services
to enhance the JAL Group as a fullservice carrier.

P.

Cost CompetitivenessWe will build a highly convenient route
network and provide products andservices ahead of our competitors
to become the customers’ most preferred airline group.

13

P.

We will continuously strive to improve
cost efficiency, maintain and improve
cost competitiveness to strengthen
our resilience to risks and build abusiness foundation for sustainablegrowth.

13

P.

13

Key Initiatives (Five Areas)
Safety Initiatives
P.

18

Route NetworkP.

24

Products andServices
P.

Group Management

24

P.

29

Human Resources
Management
P.

30

Management Targets (Three Targets)
JAL recognizes that ensuring safety
in flight operations is the basis of theexistence of the JAL Group and oursocial responsibility. As a leading
company in safety in the transportation
sector, JAL will maintain the highest
standards of safety.
P.

JAL will provide unparalleled services tocontinuously deliver a fresh and enjoyable
travel experience for customers. We aim
to achieve “Customer Satisfaction No.
1”* by FY2016.

11

P.

12

JAL aims to establish sufficient levelsof profitability and financial stability
to absorb the impact of economic
fluctuations and risk events by achieving
an operating profit margin of 10% or more
for five consecutive years and an equity
ratio of 50% or more in FY2016.
P.

12* In terms of the repeat intention rate and recommendation intention rate on the Japanese Customer Satisfaction Index (JCSI) announced by the Japan Productivity Center,
Service Productivity & Innovation for Growth.

10

JAL REPORT 2015

Highlights

Progress of Management Targets

1

JAL recognizes that ensuring safety in flight operations is the basis of
the existence of the JAL Group andour social responsibility. As a leading company in safety in the transportation sector, JAL will maintainthe highest standards of safety.

In the JAL Group’s safety targets, we aimed forzero aircraft accidents and zero serious incidents, but with much regret, we recorded two
aircraft accidents in fiscal 2014. We sincerely
apologize to the passengers and persons affected for causing substantial distress and inconvenience. We take this incident seriously and havebeen investigating the cause and implementing
countermeasures.
As for our other safety indicators of irregular
operation, passenger injuries, and malfunctions
caused by human error, we have sought toaddress the direct causes and work on underlying indirect causes as well, and the number ofincidents has generally declined. We will nevertheless maintain our efforts to meet even higher
standards in future.
External experts in the Safety Advisory Group
have continually inspected our worksites over the
past ten years, and discussions are being held
on a semi-annual basis. Safety depends on thefundamental premise that employees are working with high motivation. Experts have explainedthat this is required to ensure the effectivenessof various safety measures and educational programs. They have also noted that they can feelthe motivation of employees at JAL worksites
today, which constitutes JAL’s greatest asset.
Their comments apply to overall management
as well as safety.

President’s Message

The Medium Term Management Plan to Date

CSR

Financial Section

While only our pilots and maintenance staff
tend to be thought of as being directly involvedin ensuring safety, we have also been cultivating
an awareness that safety can be achieved only
through the personal efforts of all the approximately 32,000 employees of the JAL Group, andthat we protect safety through a united effort.
While ensuring safety requires a never-ending
effort, I believe we have established a foundation upon which we can continue to strive forhigher goals.
Fiscal 2014 Management Indicators and Results
Indicators

Results

OutlineApril 29, 2014
JAL1252 (Yamagata-Haneda)
Turbulence during descentresulted in one cabin attendantfalling and suffering a bone
fracture

Aircraftaccidents

2

Seriousincidents

0

September 12, 2014
JAL93 (Haneda-Gimpo)
Turbulence during the flight
resulted in one cabin attendantsustaining injuries that required
two weeks of hospitalization
─

JAL REPORT 201511

2

JAL will provide unparalleled services to continuously deliver a
fresh and enjoyable travel experience for customers. We aim toachieve “Customer Satisfaction
No. 1” by fiscal 2016.

A distinctive characteristic of the JAL Group isthat over 90% of its revenue is generated by asingle product, flight. Although only a few sections directly interact with our customers, all
the work done by the roughly 32,000 employees of the Group has some effect on our flights.
For example, our pilots have begun to consider
ways they can also contribute to customer satisfaction within the limited opportunities availJapanese Customer Satisfaction Index (JCSI)International Routes– Repeat Intention Rate
ANA
SQ
JAL

(%)
75

International Routes– Recommendation Intention
ANA
SQ
JAL

(%)
75

1st

1st
70

70

3rd
65

2nd
65

3rd

60

60

3rd

3rd

1st
2nd

3rd

55

55

2010

2011

2012

2013

2014

2010

2011

2012

2013

(FY)

(FY)

Domestic Routes– Repeat Intention Rate

Domestic Routes– Recommendation Intention

ANA
Star Flyer
JAL

(%)
75

2014

ANA
Star Flyer
JAL

(%)
75

70

3

70

6th

65

5th

3rd

65

6th

2nd

60

55

3rd

3rd

60

5th

able to them, by adding a creative touch to theirin-flight announcements and by coming out tothe boarding gate to explain why a flight is being
delayed. As in this example, I feel that a mindset
has become well established for enhancing customer satisfaction through a united effort basedon creative contributions by individual employees and effectively “passing the baton.” Thesame mechanism is at work in our safety efforts.
In fiscal 2014, we focused on enhancing quality by introducing new aircraft in both our international and domestic flights, and in June 2014 weannounced our Group-wide pledge, “Embrace
New Challenges JAL.” In addition to providing
customers with safe, on-time flights, we will
introduce new services every month toward ourgoal of providing unparalleled services to continuously deliver a fresh and enjoyable travel experience for customers, and support those who
are taking on challenges.
Due in part to these efforts, and along with
our endeavors to improve the quality of our services, we were able to achieve the top ranking
for customer loyalty (a measure of customer
intention to use a service again) on international
flights for the second consecutive year, as wellas the top ranking for customer recommendation intention (a measure of customer intention torecommend the service to others). Meanwhile,
we have remained in third place for both measures in our domestic flights, indicating room for
improvement.
As with safety, there is no end to our efforts
for customer satisfaction. We will take on thechallenge of rapidly providing and improving our
products and services in our ongoing pursuit ofgreater customer satisfaction.

3rd

4th

2010

2011

JAL aims to establish sufficientlevels of profitability and financial stability to absorb the impactof economic fluctuations and risk
events by achieving an operating
profit margin of 10% or more for fiveconsecutive years and an equity
ratio of 50% or more in fiscal 2016.

55

2010

2011

2012

2013

2014
(FY)

2012

2013

2014
(FY)

Source: JCSI Survey

12

JAL REPORT 2015

In fiscal 2014 we achieved an operating revenueof 1,344.7 billion yen (up 2.7% year-on-year),

Highlights

an operating profit of 179.6 billion yen (up 7.7%
year-on-year) and a net income of 149.0 billion yen (down 10.3% year-on-year). After fiscal
2011, when we reported the highest earnings,
we recorded two consecutive years of lower
year-on-year earnings on higher year-on-year
revenues. While our goal had been to achieve
higher earnings on higher revenues starting withfiscal 2015, we were able to attain this goal one
year in advance due in part to the dramatic fallin fuel prices and our united efforts to maximize
revenues and minimize expenses. Our operating
profit margin was 13.4% and remained above
our Management Target of 10% or more. We
steadily accumulated equity to 776.4 billion yen
and our equity ratio was 52.7% as of the end of
fiscal 2014.
Having been given a fresh start as a reborn
JAL, we resolved to never again burden those
who had supported us by seeking to build ahigh-profit structure and a solid financial basethat can withstand global risks such as war
and terrorism, the spread of disease, and natural disasters. The divisional profitability management system has taken root and we havebeen able to steadily prepare for such eventualities, sustained by the personal efforts of each
employee.
We have now passed the turnaround pointof our Medium Term Management Plan. While
we expect the yen to further weaken and theharsh competitive environment to prevail both inJapan and overseas, we will all work in concert
to achieve future growth in the form of higher
earnings on higher revenues.

Differentiating JAL to Survive Future
Competition
Enhancement of the JAL Brand
In November 2014, under the direct supervisionof the president, we set up the Corporate Brand
Promotion Division, headed by a director who
had served as a cabin attendant. Through thisPresident’s Message

The Medium Term Management Plan to Date

CSR

Financial Section

division, we are pursuing activities that will raise
the quality of our services and boost recognitionof the JAL brand, aiming to create a sense that
“When it comes to airlines, JAL is the one.”
We believe that it is people who build abrand. While bringing together the minds of all
our employees is the most difficult part of thatprocess, we already possess a foundation built
upon the JAL Philosophy. Every employee will befully aware of their responsibility to shoulder the
JAL brand as we seek to differentiate the company by developing various measures communicated through stories in order to more effectively
express the JAL brand.
Route Network, Products and Services
We are not merely pursuing scale expansion; weare seeking to be chosen by more customers by
quickly enhancing our route network, products
and services.
In international passenger operations, webegan operating four routes to take advantage of our daytime slots to and from Haneda,
and expanded the use of JAL SKY SUITE aircraft. In our domestic passenger operations,
we increased flights to and from Haneda withinternational connections and began operating
flights on our new JAL SKY NEXT aircraft. We
intend to further sharpen our competitiveness byenhancing habitability and comfort through our
high-quality seating to create a relaxing spacewith a uniquely Japanese touch.
Cost Competitiveness
Although costs rose due to the decline in the
yen and other changes in the external environment as well as investments we made to improve
our services, we worked hard to reduce costs
by improving productivity. Under the premise ofmaintaining and enhancing safety and quality,
we will hold onto our advantage in cost competitiveness by further spreading the use of the divisional profitability management system as wellas the innovative ingenuity of all staff.

JAL REPORT 201513

Dividend Policy
Until now, we have been determining the total
amount of dividend payments to shareholders
by allocating approximately 20% of consolidated
net income after adjusting for taxes. However, inview of the steady progress we have been making in building a robust financial base, we havechanged this policy and will allocate approximately 25% of consolidated net income after
adjusting for taxes as total dividend payment,
beginning with the fiscal year under review.
As a result, we have decided to pay a dividendof 104 yen per share for the fiscal year ended
March 31, 2015, based on an overall consideration of our business performance and financial
condition, together with the operating environment for the fiscal year under review.

CSR Activities
We will emphasize initiatives that are unique to
the JAL Group as an airline company in our pursuit of CSR activities.
P. 30
Harnessing Our Human Assets
The actions of a company are sustained by thepower of its human assets. We hope to create avigorous JAL Group by mobilizing the energies
of our diverse human resources, including theirdifferent experiences, perspectives and values.
We are particularly keen to promote women’s
careers and are working to change attitudes anddeveloping a system that allows for flexible working styles. Our goal is to increase the number offemale managers in the JAL Group to 20%, andthe number of female managers in organizational management posts in Japan Airlines to 15%
or higher by the end of fiscal 2023. We do notview this as simply following the latest trend; webelieve that failing to capitalize on the imagination and full creativity of women would representa loss for the company and obstacle to future
growth.
P. 39
Our Actions for the Environment
Our most important action related to the environment is our daily effort to reduce fuel consumption by as much as possible. As a part of it, weare introducing new types of aircraft and coming

14

JAL REPORT 2015

up with creative ideas related to flight operations. In addition, we have been participating in
the CONTRAIL project, which uses passenger
aircraft for atmospheric observation. Since theearlier project began in 1993, air sampling equipment installed on our aircraft has been used tocontinuously collect atmospheric data. We are
the only organizations that has gathered observational data over such a long period and has
consequently attracted interest from research
institutions and governments around the world.
We will continue promoting our environmental
initiatives with an acute awareness of how ongoing engagement increases in value over time, as
exemplified by this project.
P. 46
Regional Revitalization
Tourism is important for regional revitalization
and a field in which we are able to contribute.
The number of foreign visitors to Japan has risen
dramatically, and we hope to transport foreign
travelers to outlying regions by further expanding measures to stimulate demand and deliver
information as well as by providing convenient
networks that contribute to the revitalization ofregional communities.
Since 2011, the JAL Group has been undertaking the JAPAN PROJECT to revitalize local
communities by communicating the splendorsof Japan using every tool available to us, including in-flight magazines, onboard videos, in-flightmeals and the JAL Group website. We havepartnered with various prefectures more than 45
times to date and will continue to build on theJAPAN PROJECT toward the goal of contributing to regional revitalization.
While some time has passed since the Great
East Japan Earthquake, JAL continues to promote the JAL Tohoku Support Project “Visit
Tohoku!” in response to thoughts shared by allcommunities in affected areas, including “Don’t
forget the affected areas” and “Please come,see, consume and take part in the recovery.” We
will continue to offer our support from the two
perspectives of promoting local industries andaiding people in these areas.
P. 50
GovernanceIn governance, we place the strongest emphasison ensuring transparency. We have establishedHighlights

an open system that includes checks by third
parties such as the Safety Advisory Group, andmanagement oversight by external directors.
We will seek to secure a governance systemthat is clearly presented to our stakeholders andreflects JAL as it is.

To Become the most loved, and number
one airline of choice in the world
Today, as we enter the thirtieth year since
the accident at Mount Osutaka, we are firmly resolved to ensuring safe operations as thefoundation of the JAL Group’s existence. With anever-present sense of gratitude for our customers, shareholders and other stakeholders, and asteadfast will to survive in the rapidly changing
airline industry, we will strive to enhance our corporate value by offering pleasant services.

President’s Message

The Medium Term Management Plan to Date

CSR

Financial Section

We will also work to realize the JAL Corporate
Policy by uniting the efforts of management andemployees under the keywords of “Autonomy”
with every employee thinking and acting witha strong will, “Challenge” required to embark
on new efforts without fear, and “Speed” inresponding to social change toward our goal of
becoming the most loved, and number one airline of choice in the world.
We thank you in advance for your continued
patronage and support.

Representative Director, President
Japan Airlines Co., Ltd.

JAL REPORT 201515

Staff alone are present; a sense of anticipation fills the aircraft.
Eye-to-eye contact; hearts uniting as one.
Another day to bring passengers to their destinations.

16

JAL REPORT 2015

The Medium Term Management Plan to Date
JA L R E P ORT 2 015

JAL REPORT 201517

Medium Term Management Plan: Key Initiatives 1

Safety Initiatives
Many professionals are involved in ensuring the safety and comfort of passengers during flight.

Protecting Safety throughan All-Hands Effort

Nobuhiro Sato
(General Manager of Safety)
Representative Director, Vice President, Japan Airlines Co., Ltd.

This year marks the thirtieth year since the Mount Osutaka accident.
As we look back on the past thirty years, we are united in reaffirming
our commitment to safety, as we take to heart the gravity of being
entrusted with the precious lives of our customers and pursue operations by putting safety first in any situation.
We will steadfastly work in concert to accumulate our safety layers
so that our customers can continue to fly with confidence in JAL.

Safety Initiatives in the JAL Group Medium Term
Management Plan FY2012–2016 Rolling Plan 2015
To firmly maintain the safety of flights, which is the very foundation of the JAL Group, we have been seeking to achieve
our management target as the leading company in safety inthe transportation sector. We are doing this mainly by evolving
systems to protect safety, developing human resources to protect safety, and cultivating a culture to protect safety.
With a focus on preventive measures, we will further
strengthen our proactive risk management by adopting themost advanced and outstanding systems in the airline industry and combining them with our original initiatives. This will
enable us to create a safety management system of the highest standard.

Evolving Systems to Protect Safety
Expansion of Risk Assessment• Overview
When a safety-related malfunction occurs, we will determine
the cause, formulate measures to prevent a recurrence, andput them into action.
In addition to this conventional approach, we constructed
and put in place a mechanism that allows us to predict anaccident, which may occur when a malfunction aggravates. It
also enables us to identify and implement required preventive
measures.
While seeking to reduce safety-related malfunctions with theconventional approach, we are going a step further by preparing measures to ensure that accidents are prevented evenwhen a malfunction occurs.

Safety Initiatives
JAL Group’s Risk Assessment
Safety Awareness Education

CultureA culture of reporting

Human
Resources

Countermeasure

A culture of polishing manuals

Improve skills and knowledge ofeach staff member

Countermeasure

Countermeasure

Countermeasure

Initiatives uniqueto the JAL
Group
Cause

Safety Leaders

Safetymalfunction

Accident

SMS Education (Safety Knowledge Training)
Normal Operations Monitoring

Systems

Expansion of Risk Assessment

Initiatives basedon global
standards

Safety Performance Monitoring

Here we introduce the major efforts we took during fiscal 2014as part of our safety initiatives.

18

JAL REPORT 2015

Conventional risk assessment

Expanded risk assessment

Focus on the malfunction thathas occurred and investigate
the causes to implement preventive measures.

Assess the risk that the malfunction may lead to an accident
and implement measures toprevent that risk.

Highlights

President’s Message

Developing Human Resources to Protect Safety
Safety Leaders• Overview
To consolidate our safety-related systems through a concerted effort involving everyone from top management to front-line
operations staff, we began appointing Safety Leaders in fiscal
2013. These specially designated staff are responsible for promoting safety initiatives in each department and for ensuring
the close collaboration of departments responsible for safety
management.
The responsibilities of the Safety Leader include:(1) Promoting PDCA cycles for safety by gathering and analyzing information, planning and implementing necessary measures, and reviewing outcomes to make further
improvements; and(2) Ensuring two-way communication flows by gathering andrelaying information to safety management departments
and management while also delivering information provided
by those sources as well as messages from management
to each workplace.

The Medium Term Management Plan to Date

CSR

Financial Section

Cultivating a Culture to Protect Safety
Safety Awareness Education• Overview
From October 2012 to March 2015, we conducted JAL Group
Safety Education for all JAL Group employees to cultivate“safety professionals.”
The training was intended to raise awareness of safety indaily operations by having participants observe wreckage from
the Mount Osutaka accident and watch video interviews withpeople who were in some way involved in the incident. In thesesessions, participants learned the objective facts and formed
an emotional connection to the incident together, leading themto consider deeply what they could do to maintain safe operations. Participants declared their own safety pledges during
the training to ensure their personal commitment to safety
in their daily operations and shared these with colleagues,
thereby raising the awareness of each employee.

President
Corporate Safety
and Security
General Manager
Front-line
Operations
Safety Leaders

Safety Leaders act as key
personnel in facilitating
active two-way communication, bridging distancesand developing an evermore robust safety management system.

Safety Departments

Safety Leaders

Safety Leaders• Initiatives
We organized face-to-face gatherings with experts in the Safety Advisory Group to raise the awareness of Safety Leadersand expand their perspectives. In addition, to enhance theoverall knowledge of Safety Leaders, we compiled a “Safety
Leader’s Manual” which contains comments on safety madeby top management during board meetings as well as simple
explanations of JAL’s ongoing safety initiatives.

A Culture of Reporting• Overview
Proper reporting and active information sharing are directly
linked to the prevention of accidents and serious incidents. To
further encourage voluntary reporting, JAL adopted a non-disciplinary policy with respect to human error in 2007 and aims
to cultivate a Group-wide culture of reporting.
• Initiatives
We published a manga in the corporate
magazine to facilitate understanding
among employees of the importanceof reporting and information sharing forsafe operations. We also focused on
the culture of reporting as a key issue
and created an opportunity to reconfirm its importance during the Transport Safety Overhaul at the beginningand end of the year.

JAL REPORT 201519

Safety Initiatives

Safety Troubles and Measures in Fiscal 2014
The JAL Group proactively discloses safety-related information
so that passengers can board our flights with peace of mind.
Two aircraft accidents occurred in fiscal 2014. We deeply
apologize to those who were affected for the inconvenienceand concerns associated with these incidents.
Aircraft Accident (2 incidents)• Cabin attendant injured due to turbulence on JAL1252
On April 29, 2014, a cabin attendant on JAL1252 (operated by
J-AIR) fell and fractured her hip when the aircraft experienced
sudden turbulence during its descent into Haneda Airport. No
passengers were injured. The incident was investigated by
the Japan Transport Safety Board, which determined that theincident was probably caused by the aircraft being shaken by
the strong wake turbulence from a preceding aircraft during
descent.
• Cabin attendants injured due to turbulence on JAL93
On September 12, 2014, during its descent toward Gimpo
International Airport, JAL93 encountered sudden turbulence.
As a result, seven cabin attendants who were preparing forlanding were injured, of which one was subsequently diagnosed with serious injuries (including a cervical sprain andspinal sprain) upon a detailed examination. Three passengers
also reported physical problems.
The incident was investigated by the Japan Transport Safety
Board, which determined that it was caused by the aircraft
encountering turbulence, resulting from redeveloped convective clouds, as it flew at an altitude of about 16,000 feet.
The JAL Group Safety Report contains information about
safety-related problems and measures.

Number of Safety-Related Incidents
In brackets: number of incidents per 1,000 flights
Type of Incident

FY2014FY2013

FY2012

Aircraft Accident*1

2 (0.006)

0 (0.000)1 (0.003)

Serious Incident*2

0 (0.000)1 (0.003)

4 (0.011)

Irregular Operation*3

70 (0.195)

75 (0.209)

69 (0.194)

Safety-Related Issue*4

262 (0.728)

226 (0.630)

276 (0.776)

Total Annual Flights

359,736

358,629355,489*1 F atal or serious injury of a person as a result of the operation of an aircraft,or an aircraft crash, collision, fire or damage to an aircraft during flight (thatrequires major repairs), as classified by the Japanese Ministry of Land,
Infrastructure, Transport and Tourism (MLIT).
*2 Incident involving circumstances that indicate there was a high probabilityof an accident, such as overrunning, emergency evacuation, fire or smoke
inside the cabin and abnormal depressurization, as a result of encountering
abnormal weather conditions, etc., as classified by the MLIT.
*3 Incidents resulting in a flight schedule change, such as a change of the flight
destination. When a malfunction occurs in part of the multiple systems of anaircraft, the aircraft is turned back to ensure maximum safety after the flightcrew has completed actions in accordance with the flight manual. In general,these incidents do not pose any immediate risk to flight safety.
*4 Legally mandated incident reports to the MLIT under regulations that went
into effect on October 1, 2006 (Civil Aeronautics Act, Article 111-4; and theOrdinance for Enforcement of the Civil Aeronautics Act, Article 221-2 (3) and(4)). Such incidents include situations in which the aircraft sustains damage or
critical safety systems fail to function normally. In general, these incidents do
not immediately result in an aircraft accident.

Safety Targets for Fiscal 2015
The JAL Group will continue its efforts in fiscal 2015 to achieve
the following safety targets.
(1) Reduce aircraft accidents and serious incidents
We will strive for zero aircraft accidents and zero serious
incidents.
(2) Reduce irregular operations
We will reduce irregular operations that not only cause discomfort to passengers but also affect their itineraries.

Disclosure of the JAL Group Safety Report
Information about the safety-related initiatives of the Group’s six air transportcompanies is disclosed every year in the
JAL Group Safety Report in accordancewith the rules of Article 111-6 “Release of
Safety Report by Domestic Air Carrier” of
the Civil Aeronautics Act. The JAL report
simply and concisely explains the safety
initiatives of these companies.

(3) Protect passengers from injury
We will safely deliver every passenger to their destination
without onboard or airport injuries.

The JAL Group Safety Report (in Japanese) is available for download from:

Safety Advisory GroupThe JAL Group established its Safety Advisory Group on August
3, 2005 to receive advice from a third-party perspective andbecause of repeated occurrences of safety-related problems
even after the Japanese Ministry of Land, Infrastructure, Trans-

http://www.jal.com/ja/flight/safety/report/

20

JAL REPORT 2015(4) Reduce malfunctions caused by human error
We will continue our key initiatives for reducing high-risk
malfunctions due to human error that have been identifiedin each area of our operations.

Highlights

President’s Message

port and Tourism (MLIT) issued a Business Improvement Order
to JAL on March 17, 2005.
The Safety Advisory Group is a panel of five experts fromoutside the JAL Group who have extensive knowledge andexperience in areas such as human factors, analysis of failure
and imperfection, organizational management and culture, andsafety. The group is chaired by Mr. Kunio Yanagida, a nonfiction
writer and critic.
Members of the Safety Advisory Group

Mr. Kunio Yanagida(Chairman)

Non-fiction writer, critic

Mr. Yotaro Hatamura

Professor at Kogakuin University, Professor
Emeritus of the University of Tokyo
Areas of expertise: nano-micro machining,production processing, medical support
engineering, study of human error, study of
danger, creative design theory

Mr. Shinichi Kamata

Professor Emeritus at the National Defense
Academy of Japan
Areas of expertise: organizational theory,business administration

Mr. Shigeru Haga

Professor at Rikkyo University
Areas of expertise: traffic psychology,
industrial psychology, human engineering

Mr. Akinori Komatsubara

Professor at Waseda University
Area of expertise: human life engineering

Follow-up Meeting with Management
Meetings are held with JAL management, where the members
check the progress of the JAL Group’s safety activities andoffer recommendations and advice.
During the follow-up meeting held in March 2015, Mr. Hatamura gave a lecture on the importance of creating a culture oftaking personal initiative in thinking and actions to add anothersafety layer. He offered advice on citing the effectiveness of“output-based thinking,” of developing a pattern of thinking inwhich we draw out knowledge by thinking for ourselves, verbalizing thoughts and taking action, rather than seeking only toincrease knowledge through education and training.
We have begun applying output-based learning to some of
the training sessions for cabin attendants, who take part inrole-playing exercises that enable them to think and act on
their own under unexpected circumstances. The JAL Groupwill continue to reflect the feedback and advice offered by the
Safety Advisory Group to the management and safety operations of the Group.

The Medium Term Management Plan to Date

CSR

Financial Section

Safety Promotion Center
On August 12, 1985, JAL123 crashed on the ridges of Mount
Osutaka, and 520 valuable lives perished. In face of the pain
and grief of the bereaved families and public distrust in airline
safety, we pledged that we would never again allow such a
tragic accident to occur.
We opened the Safety Promotion Center on April 24, 2006
to reconfirm the importance of flight safety and to embed in
our minds the lessons learned from this accident. In December 2013, the center was relocated to the Haneda Shin-Seibijo
area with a bigger exhibition space equipped with larger monitors, allowing a more effective presentation of debris from theplane crash. A newly added library providing a compilationof safety initiatives being undertaken by the JAL Group also
made the center more useful for learning about safety in depth.
All of us in the JAL Group utilize the Safety Promotion Center as a “fortress of safety” and the starting point of safe andreliable operations. Every Group staff member is reminded thatvaluable lives and property are entrusted to us in our work.
The Safety Promotion Center is open to anyone interested
in airline safety as long as the visit does not interfere with JAL
Group employee training activities, and it has received 160,815
visitors from inside and outside the Group as of March 31,
2015.Those who wish to visit should submit an application on
the JAL corporate website in advance. For more information,please visit the JAL corporate website.
https://www.jal.com/en/flight/safety/center/

JAL REPORT 201521

Safety Initiatives

JAL Group Employees Unite to Protect Safety
Doing what we can to safely deliver our customers to their destinations.
Each one of us plays a part through our thinking and actions.

Reservations
SafetyPledgePutting Customers at Ease withAccurate Guidance

Sales
セールス
SafetyPledgeSeeking Verbal Confirmation Even
When I Think it’s Safe

Mio FuruhataD omestic Division Third Group,

Haruka Ogura

I receive general calls on reservations and ticketing for domestic
flights operated by the JAL Groupand answer queries on issues suchas baggage and boarding.
Every day, I strive to enhance myknowledge of our operations and tooffer accurate and swift responses
that put our customers at ease. My
work is conducted over the phone
and is not directly connected toflight operations, but I can playa part in ensuring the safety ofcustomers by accurately relaying to relevant departments theinformation that I obtain during conversations with customers. I
will continue my efforts to provide our customers with safe andsecure flights by working more closely with my colleagues in the
JAL Group.

I make seating arrangements on domestic flights for customers
on packaged tours and group tours.
My goal is to generate maximum revenue per flight bydetermining demand according to destination and season,and ensuring as many customers as possible take our flights.
Although we are not directly involved in flight operations, maximizing revenue allows us to sufficiently invest in safety, and in
this way we can contribute to safe operations. In my daily work, I
place great value on communication. I believe I can alleviate theburden placed on frontline staff by accurately
relaying requests fromgroup customers to relevant departments, sothey can concentrate on
maintaining safe operations.

JAL Navia Co., Ltd.

Cargo
SafetyPledgeDomestic Passenger Sales Department, Reservation Group, Head Office,
JAL Sales Co., Ltd.

Ground Handling“Pitfalls are Seldom Visible” – A ConstantReminder for Protecting Safety

SafetyPledgePreventing Accidents by Making Sure
Aircraft are Never Damaged

Mayumi Oguchi

Daisuke Kizawa

Export Traffic Group 2, Team 1, Export Second Division, Export and Postal
Business Department, JAL Cargo Service Co., Ltd.

#2 Marshalling Division, #1 Maintenance Service Department
JAL Ground Service Tokyo Co., Ltd.

I am responsible for aprocess that begins
with the accepting ofexport cargo and continues up to the point ofloading it.
My work includes
deciding whether or not
to allow the transport ofhazardous materials and confirming the weight of loaded cargo,
and is directly related to the safe operation of an aircraft. It isimperative that I execute my duties without fail, which involves
communication such as verbal confirmation with related departments and making clear decisions that are vital to ensuring safe
operations.
In addition to fulfilling my responsibility of delivering cargo
entrusted to us with speed and accuracy, I also think about thepassengers on that flight as I go about my work.

I handle the push-back procedures in preparation for departureand also the marshalling procedure for safely guiding aircraft tothe parking apron.
When marshalling an aircraft, I aim to work efficiently while
paying close attention so as not to damage the aircraft or otherwise affect operations.
In addition, I meticulously conduct the external inspection ofan aircraft prior to its departure.
This is also done by a flight crew
and mechanics, but I do it as well,rather than leaving it all up to others, so I can spot any signs of amalfunction on my own before it
can occur.

22

JAL REPORT 2015

Highlights

President’s Message

Airport
SafetyPledgeSeeking Verbal Confirmation during theBusiest Moments until Safety is EstablishedThe Medium Term Management Plan to Date

CSR

Financial Section

Cabin
SafetyPledgeUsing All Five Senses to Offer a
Levelheaded Response

Eri Saito

Megumi Matsushima

Passenger Service First Division, Narita Office,
JAL SKY Co., Ltd.

Second Cabin Attendants Department,
Japan Airlines Co., Ltd.

I handle departure control operations at Narita Airport, which
involves managing procedures leading up to departure anddealing with seating adjustments on international flights as well
as checking baggage load and boarding status.
The departure of an aircraft relies on the work of many staff,
each applying the expert knowledge and experience they bring totheir respective tasks. Safe operations require the perspectives of all
those people, so information must
be shared smoothly for decision
making in order to ensure safe
operations on a daily basis. In our
position, we receive a lot of information. I try to exercise initiativein communicating with staff indifferent departments to maintainmutual verbal confirmation.

I work as a cabin
attendant on domestic
flights.
The baton of safety
and service is carefully passed by manycolleagues behind thescenes, and I am always
thinking about making
sure customers feel secure. I am often pressed for time when on
duty, which makes daily training and image training all the more
important for quickly sensing any risks and making levelheaded
decisions. I think that carrying out each of my responsibilities bysticking to the basics and making thorough verbal confirmations
to eliminate any ambiguity not only leads directly to safety but
also creates a sense of security for customers observing theprocess.

Maintenance
SafetyPledgeSafety Pledge: Don’t Depend on Others,
Check Everything Yourself

Flight Crew
SafetyPledgeTake Nothing for Granted

Shinya Ueno

Kenji Nakamura

International Flight Aircraft Maintenance Department, Aircraft MaintenanceCenter, Haneda, JAL Engineering Co., Ltd.

787 Flight Crew,
Japan Airlines Co., Ltd.

My job mainly involves
aircraft inspection, in
preparationforthenext departure after aflight has arrived at theinternationalterminal
in Haneda Airport, andmaintenance related toany problem that may
have arisen during the flight.
When I attended technical school, I was amazed by the safety
technology for aircraft. But I know that no matter how high thatsafety level is raised, some minor mistakes can still result in a serious accident, which keeps me thinking during my maintenancework about what I can do to prevent them from ever happening.
I aspire to continuously accumulate knowledge, skills and experience to catch up with my veteran colleagues, and instead of simply
carrying out instructions, I consider the entire setting as I do my job.

I work on Boeing 787s as a co-pilot and mainly on flights to theAmericas, Europe and Southeast Asia.
Aircraft accidents occur as a result of various factors, suchas weather conditions, the characteristics of each airport, andthe different approaches taken by those involved. For safe
operations, we must meticulously prepare for each flight. It’s also
important to avoid becoming overconfident or holding too strongly
to preconceptions, and instead make a daily effort to listen toopinions and accept them after careful consideration. Thanks tothe cooperation of many
people, aircraft are recognized as being among
the safest vehicles. We
will continue to protect
safety without compromise through a unitedeffort.

JAL REPORT 201523

Medium Term Management Plan: Key Initiatives 2 and 3

Route Network, Products and Services
We are quickly enhancing our route network, products and services to become the most loved, and number one airline of choicein the world.

International Operations

International Passenger BusinessWe expanded our route network and enhanced our products
and services, including aircraft with new cabin interior, to maximize profit and capture the robust demand for inbound visits
and transit services.
In our route operations, we launched daytime flights fromHaneda to London, Paris, Singapore and Bangkok, and latenight and early-morning flights from Haneda to Ho Chi Minh
City. To bolster our capacity to meet promising growth indemand from routes between North America and Asia, weincreased our flights from Narita to New York and Jakarta.
Outside the Tokyo metropolitan area, we became the only
Japanese airline to operate direct routes between Chubu andBangkok, and Kansai and Los Angeles, thereby contributing toeconomic revitalization in the Chubu and Kansai areas throughinternational exchange and providing customers with greater
convenience.

With respect to alliances, through Finnair’s participation in
our joint business with British Airways on European routes,
we sought to enhance our network by improving joint fares
and expanding routes through codesharing with Finnair onroutes beyond Helsinki. In our alliance with American Airlines
on Pacific routes, we sought to bolster our capacity to meetthe demand for North America-Asia routes by integrating oursales activities. We also began codesharing with TAM Airlines,
which joined the oneworld alliance in March 2014, on routes
connecting the U.S. and Europe to Brazil. In addition to theJapan-Brazil route that we offer via the U.S. through codesharing with American Airlines, we now offer routes via Europe.
Alliances and Business Strategy
Implemented

ScheduledExpanded codesharing beyond Helsinki through Finnair’s participationin joint business on European routes
Bolstered capacity to meet demand for North America-Asia routes
through integrated sales activities with American Airlines

Route Network
Implemented

Scheduled

Began codesharing with TAM Airlines on U.S.-Brazil and Europe-Brazil
routesLaunched Haneda-London and Haneda-Ho Chi Minh City routes
Increased flights on Haneda-Singapore and Haneda-Bangkok routes
Increased flights on Narita-New York route

Member Airlines of the oneworld Alliance (as of July 1, 2015)

Increased flights on Narita-Jakarta route
Launched Chubu-Bangkok route
Launched Kansai-Los Angeles route

Flight Operations Using JAL SKY SUITE (as of July 1, 2015)

LondonHelsinki

Paris Frankfurt
Narita/HanedaDelhi

Kuala Lumpur
Singapore

Chicago New YorkSanFrancisco

Hanoi
ManilaLos Angeles

Honolulu

Jakarta

JAL SKY SUITE 777

JAL SKY SUITE 767

Narita – inbound/outbound routes

Narita – inbound/outbound routes

Haneda – inbound/outbound routes

Haneda – inbound/outbound routes

JAL SKY SUITE 787
Narita – inbound/outbound routes

24

JAL REPORT 2015

On the product side, we introduced 787-8 aircraft equippedwith the new JAL SKY SUITE 787 on the Europe and North
America routes. These aircraft feature full-flat business classseats for more direct access to the aisle, and the new JAL
SKY WIDER economy class seat, offering passengers more
legroom. Moreover, we adopted an eight-seat format to provide more space and comfort compared to the predominantnine-seat row arrangement in economy class among international airlines.
We renovated and reopened the JAL first class lounge in theinternational terminal of Haneda Airport and will continue totake on new challenges to offer an ever-refreshing experiencefor customers while enhancing comfort.

Highlights

President’s Message

Products and Services (High Quality, Full Service)
Implemented

ScheduledCompleted installment of JAL SKY SUITE for thirteen 777-300ER andnine 767-300ER aircraft
JAL SKY SUITE 787 introduced to routes between Narita and New
York, and Paris
Number of JAL SKY Wi-Fi service users passed the 40,000 markOperating Revenue(JPY Bn)

385.2 406.6

2011

SKYTRAXAIRlogo/ 30mmMOS BURGER from the popular

437.5 454.8(Mn passenger-km, Mn seat-km)

43,036201220132014 (FY)2011

Revenue Passengers Carried

AIR Series in-flight meal (as of July
2015)

JAL SKY SUITEJAL SKY WIDER Economy Class Seats

Financial Section

Revenue-Passenger-Kilometer (RPK) /Available-Seat-Kilometer (ASK)30,313

JAL BEDD-SKY AUBERGE from thefirst class in-flight menu

CSR

As a result, international supply for fiscal 2014 increasedby 3.2% year-on-year measured by available-seat-kilometer(ASK), demand in terms of revenue-passenger-kilometer (RPK)
increased by 2.0% year-on-year, load-factor (L/F) decreased
by 0.8 point to 75.7%, and international passenger revenue
increased by 3.9% year-on-year to 454.8 billion yen.

New Sakura Lounge opened in the international terminal of Haneda
AirportRenovated JAL First Class Lounge opened in the international terminalof Haneda Airport, featuring the Teppan Dining, cooking food on aplate in front of customers in a spacious and lively atmosphere

The Medium Term Management Plan to Date

44,74534,036

46,23535,390

2012

2013

RPK

ASK

47,696

36,1092014 (FY)

Load-Factor(Thousand passengers)

6,844

7,525

7,723

(%)

7,793
76.1

76.5

75.7

70.4
2011

Japan Airlines received the Best
Economy Class Airline Seat Award at
the World Airline Awards 2015 hosted
by SKYTRAX.

SKYTRAX logo / 25mm

2012

2013

2014 (FY)

2011

2012

2013

2014 (FY)International Cargo
Amid particularly strong demand from North America, wesought to maximize revenue by aggressively capturing automobile-related outbound demand in Japan and efficiently taking on transit cargo. In sales, we bolstered our system
in Haneda Airport, where there was an increase in inboundand outbound flights, by enhancing the J-LINK service thatoffers efficient, seamless connections between internationaland domestic flights. We also transported cargo using theaircraft of other companies through the airline charter systemafter minimizing the risks. As a result, the volume of international cargo increased 16.0% year-on-year on a revenue-cargo-ton-kilometer basis (RCTK) and revenue increased by
11.2% to 60.3 billion yen year-on-year.

Renovated JAL First Class Lounge opens at Haneda Airport

JAL REPORT 201525

Route Network, Products and Services

Domestic Operations

Domestic Passenger BusinessWe strove to improve profitability by taking action to stimulate
demand and adjusting capacity to fit demand.
In our route network, in addition to increasing flights connecting Haneda with Itami, Okayama and Kita Kyushu, welaunched seasonal flights on six of the local routes in whichflights had been suspended, and increased the Haneda-Yamagata flights as a “competition slot” in which municipal
governments and airline companies collaborate to enhance
local routes. We also sought to add to customer convenienceby increasing flights on routes expected to grow in demand,such as Itami-Naha.
Route Network
Implemented

In sales we offered products and services promoting domestic travel by foreigners visiting Japan, whose numbers are
expected to rise with the increase of inbound and outboundslots for international flights at Haneda Airport. We also collaborated with JTB Global Marketing & Travel Inc. and launched
the JAL Special Package for individual tourists visiting Japan.
By using JAL’s extensive network of domestic flights to bringforeign travelers to various cities around Japan, we have contributed to regional revitalization. Moreover, we introduced
new services and offered upgraded functions targeting mobile
devices, which included for tablets the JAL Flight Navi app for
placing reservations, making purchases and gathering information about trips, as well as a major update to the smartphone app JAL Domestic.

Scheduled

Launched (resumed) seasonal flights on New Chitose routes to Izumo
and Tokushima, Chubu routes to Kushiro and Obihiro, and Itami routes
to Memanbetsu and Matsumoto

Smartphone Apps

JAL Domestic
Customers can reserve and purchase air tickets and also
confirm flight reservations and check arrival/departure
status. The app offers a “Which side is Mount Fuji?”search to indicate the side of the aircraft that will afford aview of this iconic landmark.

JAL SKY Wi-Fi on Domestic Flights
This useful app provides customers with easy in-flight
access to JAL SKY Wi-Fi by first registering a Gogo user
account and then logging into the app.

JAL Flight NaviFirst class in-flight menu (photo shows a dish on the menu fromthe JAPAN PROJECT No. 49, featuring Miyazaki for July 2015)

JAL and Universal Studios Japan sign a corporate marketing partnershipagreement.

26

JAL REPORT 2015

For tablets, this JAL app allows customers to reserveand purchase air tickets for domestic and international
flights. Users can gather and share information on theirdestination while enjoying seeing maps with airplaneicons moving over them.

In terms of products and services, we began operating the
new JAL SKY NEXT aircraft on domestic flights to offer more
space and comfort by using genuine leather seats to present
a sense of luxury and by streamlining economy class seatsto create more legroom compared to conventional seating.
We are gradually expanding the JAL SKY Wi-Fi in-flight Internet service as the first airline in Japan to do this on domestic
flights. We also began offering the JAL Express Tag service atthe domestic flight counter of Haneda Airport to enable customers to check in their baggage quickly and conveniently.

Highlights

President’s Message

Products and Services (Convenience and Simplicity)
Implemented

Scheduled

JAL SKY NEXT received the Good Design Best 100 award for 2014
from the Japan Institute of Design Promotion
Expanded applicable routes for JAL SKY NEXT and JAL SKY Wi-Fi
Began offering the JAL Express Tag service at the domestic flightcounter of Haneda Airport

The Medium Term Management Plan to Date

Operating Revenue(JPY Bn)

481.1 485.2 487.4

487.5

Revenue-Passenger-Kilometer (RPK) /Available-Seat-Kilometer (ASK)(Mn passenger-km, Mn seat-km)

35,523
22,264

2011

2012

2013

2014 (FY)2011

Revenue Passengers Carried

36,44323,01237,08423,745

2012

2013

RPK

ASK

36,30623,9932014 (FY)

Load Factor(Thousand passengers)

Class J Seats

Financial Section

As a result, domestic supply for fiscal 2014 decreased by
2.1% year-on-year when measured in available-seat-kilometer(ASK), demand in terms of revenue-passenger-kilometer (RPK)
increased by 1.0%, load-factor (L/F) increased by 2.1 points
year-on-year to 66.1%, and domestic passenger revenue waslittle changed at 487.5 billion yen.

Enhanced lounge facilities at New Chitose, Itami and Fukuoka airports“Pioneering Standard” – JAL SKY NEXT

CSR

66.1

31,218 31,644
28,965 30,020

(%)

64.0
62.7

2011

Economy class seats

2012

2013

2014 (FY)

2011

63.1

2012

2013

2014 (FY)

Domestic Cargo
While demand rose due to factors including a shift fromland transport to air transport caused by a shortage oftrucks, supply fell. As a result, the volume of domestic cargo decreased by 2.8% year-on-year on an RCTK basis, andrevenue decreased by 4.5% year-on-year to 24.2 billion yen.

LED cabin lights create a sense of the passage of time during
the day.

JAL REPORT 201527

Route Network, Products and Services

Aircraft Investment and Fleet

Other Businesses

We plan to invest 348.0 billion yen between fiscal 2015 andfiscal 2016. The JAL Group’s fleet will consist of 224 aircraft(82 international and 142 domestic aircraft) by the end of
fiscal 2016.

We strove to enhance customer convenience and maximize
the JAL Group’s corporate value. The financial results of two
major companies in this segment were as follows.
JALPAK Co., Ltd. sought to maximize revenue by selling special tours commemorating the 50th anniversary of the launchof the JALPAK brand and rolled out its Internet-based JAL
Dynamic Package offerings to meet trends in demand. The
number of overseas travelers handled by JALPAK was 275,000,
down 9.0% from the previous year, while the number of domestic travelers was 2,301,000, up 7.4% year-on-year. As a result,operating revenue (prior to intercompany transaction elimination) increased by 1.1% from last year to 169.8 billion yen.

Aircraft Investment and Fleet
JAL Group Aircraft Investment Plan
(JPY Bn)
200

187.0

161.0

150
100
50
0

2015

2016

(FY)

JAL Group Fleet (Actual and Planned)(Number of aircraft)
250

224

224

224

2014

2015

2016

200
150

Large
Medium
Small
RJ

100
50
0

(FY)

Figures are as of the end of the fiscal year. Large: 777, Medium: 787/767, Small:
737, RJ (regional jet or smaller): ERJ/CRJ/Q100–Q400/SAAB

JALCARD, Inc. actively conducted new membership campaigns and approached the organizations of sports enthusiasts to expand its customer base and increase membership,
while issuing the JAL JCB Platinum, a new top-tier Platinum
Card, to enhance its lineup of products. As a result, membership increased to 3.038 million, including the addition of
120,000 members from March 31, 2014, and operating revenue (prior to intercompany transaction elimination) increased
by 6.2% from the previous year to 19.6 billion yen.

28

JAL REPORT 2015

Highlights

President’s Message

The Medium Term Management Plan to Date

CSR

Financial Section

Medium Term Management Plan: Key Initiative 4Group Management
By instilling the JAL Philosophy and introducing the divisional profitability management system at JAL Group companies, we will
promote “management by all” and establish autonomous and sound management by each company to attain higher levels of
productivity and profit.

JAL Philosophy
We uphold the JAL Philosophy as a mindset, a set of values
or an attitude that everyone working on JAL products and services should share. By deepening our understanding of the
JAL Philosophy and using it as a common criterion for decision
making in daily operations, all employees are united throughmutual trust in the JAL Group.
To instill the JAL Philosophy, we provide JAL Philosophy
Sessions for everyone – employees and executives alike – whokeeps JAL flying in Japan and around the world. We conduct
these sessions across workplaces and departments to deepen mutual understanding.
Facilitators for the JAL Philosophy Session are selectedfrom each workplace, including cockpit, cabin, maintenance,
airport and sales. They create educational materials eachquarter and carry out sessions in Tokyo and occasionally inother regions nationwide. Local facilitators are responsible for
conducting sessions using materials in Japanese and English
in the U.S., Europe, Asia-Oceania and China.
Every JAL Group employee participates in studying, understanding and practicing the JAL Philosophy by attending thesesessions and participating in voluntary study workshops. We
believe this will enable us to provide unparalleled services,increase our corporate value and contribute to the bettermentof society.

Divisional Profitability Management System
We are promoting a divisional profitability management systemthroughout the JAL Group with the intention of introducing it to
35 major consolidated subsidiaries encompassing the areasof air transport, passenger handling, ground handling, cargo,
maintenance, travel and sales.
In fiscal 2014, we introduced the system to six more companies, raising the total to 25. We also shared improvements andchallenges in implementing the system and sought to improveand firmly establish it at each company. As more companies
embrace the system, we have begun to see results, such asa change in employee awareness of revenues and expenditures and an increase in independent, creative thinking by
employees that leads to actual improvements in business
operations. The system is clearly helping companies establish
autonomous and sound management to attain higher levels of
productivity and profit.
In fiscal 2015, we will continue introducing the divisional
profitability management system to Group companies toward
constructing a more robust organizational system throughwhich each Group employee participates in management andseeks to maximize revenues and minimize expenses.
Number of Companies with the Divisional Profitability
Management System (Cumulative)(Companies)
40

35

30

25
19

20

10

10
0

1
2011

2012

2013

2014

2015
(Target)(End offiscal year)

JAL Philosophy training for facilitators in overseas regions

JAL REPORT 201529

Medium Term Management Plan: Key Initiative 5

Human Resources Management
We actively develop human resources for the next generation that will embody the JAL Group Corporate Policy by practicing the
JAL Philosophy.
Focusing on supporting the career success of our diverse workforce including our female employees and as one of ourmanagement strategies, we intend to create a dynamic, energetic JAL Group together with our human resources powered byenriching experiences, strong core values and fresh perspectives.

Everyone Plays an
Active Role
I am responsible for helping each individual employee grow as awell-rounded individual. We are developing systems and educational programs to expand their potential and the fields where theycan excel while also cultivating leaders with talent and personality
by emphasizing opportunities for senior colleagues to mentor theirjunior colleagues. In addition, efforts are underway to promote diversity and changing working styles so that every employee of the
JAL Group can advance to higher levels of excellence, regardlessof gender, nationality or age.

JAL Group’s Common Education and Training Programs
We are enhancing our Group-wide education and training
programs with a particular focus on developing leadershipand safety and service professionals. Under the leadershipof the JAL Education and Training Center, we will further
strive to raise the quality of our programs so they achieve
maximum effect.

Shinichiro Shimizu
Managing Executive Officer(Human Resources)
Japan Airlines Co., Ltd.

JAL Group Training for 800 New Employees
A four-day new employee training session took place in Tokyo
beginning on April 1, 2015, and was attended by more than
800 employees from 32 Group companies and senior colleagues, who would serve as their instructors. New employees learned about the JAL Philosophy, safety and brand, andthey will seek to offer unparalleled services by paying close
attention to what customers are experiencing, while also
maintaining safe operations.

JAL Wins the First Position for the Most Attractive Employer Brand in“Good Training” by the Randstad Award Survey
JAL received the honor of being Japan’s most attractive employer brand in the “Good Training”
category of the Randstad Award 2015 survey, conducted by Randstad Holding NV, a world leading employment services provider. JAL won recognition for the way all our educational activities
are anchored in the JAL Philosophy, which serves as a mindset, a set of values or an attitude
shared by all employees. Going forward, we will further enhance our education and training.

30

JAL REPORT 2015

Highlights

President’s Message

The Medium Term Management Plan to Date

CSR

Financial Section

Promoting the Talents in the JAL Group’s Diverse Human Resources
Message from the President (excerpt)
For the JAL Group to remain the most preferred airline, we

JAL’s Diversity

must continue to create higher value. To this end, everyone

Merit-oriented assignments based on demonstration of talent,
regardless of attributes such as gender, Group company,
nationality or age

in the JAL Group must engage in candid exchanges ofideas and in-depth discussions on how we intend to be firstin the world for creating value that customers appreciate.
The key is to elicit a sense of vitality by mobilizing thefull capabilities of an even more diverse pool of humanresources, representing different experiences, values andperspectives.

Excelling Regardless of the Group Company
For all Group companies, we provide a common program inwhich candidates for leadership roles can receive training andopportunities to enhance their abilities mutually and beyond
the boundaries of companies. Furthermore, we specify the
positions recognized as important for our business and management as “Group Management Posts” and have adopted asystem for assigning highly motivated employees with strong
potential to these positions regardless of the Group companies at which they have worked.
 eveloping Successful Careers across NationalD
Boundaries
We have formulated a Global HR* Policy to focus on the development of staff hired in countries or regions outside Japan.
We encourage the nurturing of competent human resourcesfrom any nationality or place of residence through programs
in which participants gain work experience in Japan and Japanese proficiency, as well as global training. For employees
hired in Japan, we strive to cultivate human resources who candemonstrate leadership based on world-class expertise andcharacter by advancing their development with assignments tooverseas posts and programs with a global perspective.
* HR: Human Resources

Overseas hires and staff hired in Japan exchange ideas reflecting their national
perspectives and create rapport at our global training program.

Development of working
environments
Flexible working styles
and systems

Strengthened humanresource development

Group’s centralized
personnel database

Development of
workplace cultureGroup’s development
program pplying Experience from Other Industries for Our
ABusiness
The rapidly changing business environment of the airline industry makes it more important than ever to retain competent personnel who are capable of taking the lead and transforming
challenges into business opportunities. Since fiscal 2013, wehave been recruiting workers with experience in operational
planning to invigorate our corporate organization by leveraging
the diverse experience and expertise of our human resources.

Participants in new employee training discuss the type of airline theywould like to create, drawing from their own experiences.

Hiring Persons with Disabilities
In collaboration with JAL Sunlight C., Ltd., a special subsidiary,
we are hiring persons with disabilities and striving to create anenvironment in which they can work with greater vitality.
Developing Successful Careers Regardless of Age
Since fiscal 2014, we have been conducting career seminars
by age group to create an environment in which employees
can continue working with a sense of security. We organize
Senior Life Support Programs and Life Plan Seminars for the
post-retirement lives of employees.

JAL REPORT 201531

Human Resources Management

 romoting Women’s Careers as an Essential Element
Pof JAL Group Growth
Half of all JAL Group employees are women, so further
expanding their career paths is essential to the developmentof the Group’s future. We also believe that actively incorporating women’s viewpoints into the management of our businesswill generate new value. We are therefore clearly promoting
women’s career development as a commitment by top management and have been pursuing concrete initiatives to that
end. Instead of viewing this as an issue unique to women, we
will also focus on men’s issues and strive to change the mindset and working styles of all our employees.

Action 1: Support for Balancing Work and Family
We have established a system that supports both men andwomen in balancing the demands of work with childcare andnursing care needs. Information on programs, role models andspecific activities is provided through our corporate intranet.
Support for Childcare• Childcare Leave
Employees can take up to three years of childcare leave. In fiscal 2014, 759 employees took childcare leave. The reemployment rate after taking childcare leave was 72.5%.
• Working Hours
We offer programs including exemption from late night duty
and shortened working hours for childcare, depending on
work shift.

JAL Group Targets for Raising
the Ratio of Women in Management
As in the past, we will be guided by our merit-based appointment policy as we take action to increase the numberof female managers in the JAL Group*1 to 20% and thenumber of female managers in organizational management posts in Japan Airlines*2 to 15% or higher by the endof fiscal 2023.

• Subsidy System
The system was expanded in fiscal 2014 to cover costs for
temporary childcare, hiring babysitters, monthly childcare,rented childcare items and housekeeping services.

Number of Female Managers and Ratio of
Women in Management in the JAL Group

Support for Nursing Care
• Nursing Care Leave and Working Hours
Employees can take up to one year and a half of nursing careleave. We also provide programs for taking specific days andhours off for nursing care. In fiscal 2014, 50 employees took
nursing care leave.

(Persons)
800
750

13.1

700
650
600

15.1

14.3

14.1

700

691

756

14
13

646

2011

(%)
15

12

2012

2013

2014

11

Other Programs (Actual Results for Fiscal 2014)• Ratio of paid leave taken: 81%• Average monthly overtime: 11.8 hours(End of fiscal year)*1 1
 5.1% as of March 31, 2015, up 1% year-on-year.
*2 1
 2.6% as of March 31, 2015, up 1% year-on-year. In view of these objectives,
the number of women in organizational management posts has been
calculated to include managerial posts for flight operations and maintenance,
departments primarily consisting of men. Women account for 10% of directors
and 3% of executive managers at Japan Airlines Co., Ltd., as of April 2015.

JAL Selected as a Nadeshiko Brand Enterprise for the First Time
JAL was for the first time selected for inclusion on the “Nadeshiko Brand” list of enterprises pursuing
diversity management in fiscal 2014 by the Ministry of Economy, Trade and Industry and the Tokyo
Stock Exchange, Inc. We were recognized for positioning the career development of diverse humanresources including women as a key management strategy for surviving intensifying future competition and engaging in various initiatives. The JAL Group will continue to make a concerted effort tobecome a company that offers career opportunities for diverse human resources.

32

JAL REPORT 2015

Japan Airlines has beencertified with the “Kurumin”
mark as a company that
supports raising the next
generation of children.

Highlights

President’s Message

Action 2: Flexible Working Styles
We are introducing greater flexibility into the workplace forboth men and women so that our diverse human resources can fully demonstrate their abilities. In fiscal 2014, welaunched a program whereby employees can work at home
one day per week, primarily for the approximately 4,000 JAL
Group staff working regular shifts. We also introduced a flexible work hour system that allows full-time employees to finish
work at 4 p.m. as needed.

CSR

Financial Section

Action 4: Enhanced Women’s Career Development
Committed to placing the right talent in the right job, we havebeen adding more positions for women, including overseas
assignments, for gaining new experiences and enriching theircareers. We have also introduced an open application system for selected overseas posts. To ensure successful longterm careers for women, we are expanding training programs
aimed at further developing their abilities.

Action 3: Project for Changing Working Styles
In fiscal 2014, we set up the Office for Promoting Change in
Working Styles to accelerate the raising of awareness of suchchange among all employees and establish a new infrastructure environment for doing work so they can develop theircareers with a greater sense of satisfaction.
So far, we have taken a close look at all of our operations, reviewed our processes, expanded teleworking andflexible working hours, and bolstered the IT communication
environment toward providing an infrastructure that enables
employees to work efficiently wherever they are.

We are creating an infrastructure that matches thecharacteristics of each workplace, including the useof mobile devices.

The Medium Term Management Plan to Date

Participants present their plans for offering new value to customers on
the final day of a four-month training program for developing women’s
skills.

Action 5: Creation of a Corporate Culture
The cooperation of supervisors is crucial in promoting the
careers of female employees. We are seizing every opportunity, from grade-based training to training for performance
evaluators, to raise awareness within the company on theimportance of organizational diversity. We also set up meetings between managers with female subordinates as well as
the Human Resources Department to confirm that women arebeing given challenging assignments that will help them grow.

JAL among the First Selection of Health & Productivity Stock
JAL was among the first-ever selection of Health & Productivity Stock by the Ministry of
Economy, Trade and Industry and the Tokyo Stock Exchange, Inc. Under the management
message of “Let’s become the world’s No. 1 airline with the vitality of our employees,” weformulated the JAL Wellness 2016 plan centered on measures for lifestyle-related diseases,
cancer and mental health. In fiscal 2014, we organized walking competitions, nationwide
tours of body composition monitors, and staircase exercises, with the participation of about 1,300 employees.
Preparing the mind and body before
flight operations by doing stretches witha trainer.

JAL REPORT 201533

Human Resources Management

Each of Us Making JAL What It Is
Human resources embodying a diverse array of experiences, values andviewpoints have come together to keep JAL brimming with vitality.

01

Leading a Satisfying Life in Japan
with Many Helping Hands
Hou Yonghui
Human Resources Management, Japan Airlines Co., Ltd.

I was transferred from the Shanghai Branch to the Personnel Department at the head
office in April 2014 on a long-term assignment. My job includes formulating projects
for global human resource development and providing support at the receiving end
for joint global training in Japan and abroad, and for staff who are overseas nationals
dispatched to Japan. At the head office, I was made aware of the utmost importanceJAL places on global human resource development and the significant effort it makes toimplement various initiatives. Over the past year, I benefitted from the generous supportof my supervisor and colleagues. I have changed the way I approach problem solving
and have gained a number of business skills. I am also a mother on an unaccompanied
assignment, and back home my child is in the first grade of elementary school. I wasable to get this far by keeping sight of my goal of balancing work and family to develop
my career, and with a lot of help from family and friends. During my assignment in Japan,
I will do my best to lead a fulfilling life happily.

02

Putting Myself in the Customer’s Position and
Applying Experience from Outside the Industry
Keitaro Kitadani
Haneda First Cabin Attendant Department, Japan Airlines Co., Ltd.

I joined JAL in 2013 as a new hire with experience and spent myfirst year in passenger service at the international lounge of Haneda
Airport. In my second year with the company, I started working as acabin attendant on international and domestic flights. When I joined
JAL, I had no experience in customer service, so I became constantly
mindful of putting myself in the customer’s position, whether I was at
the airport or on a flight. I spent each day fumbling about, trying tounderstand what our customers wanted and what I could do to makethem happy. Also, I have been analyzing customer survey results tocontribute to enhancing airport services, applying my strengths andrelated experience from a previous job. In my current position, I am
working to improve on-time performance, aside from my job as acabin attendant. Going forward, I hope to demonstrate my abilities
and contribute to the growth of the JAL Group by using the experience I am gaining through serving our customers.

34

JAL REPORT 2015

Highlights

President’s Message

The Medium Term Management Plan to Date

CSR

Financial Section

Balancing My Job with Child Rearing while
Harnessing the Empathy of Women at Work
Emiko Takano
Ticket Group, JAL Plaza Office, JAL Navia Co., Ltd.

As head of the Ticket Group in the JAL Plaza Office, I am responsible for overseeing the entire
counter and managing the operations of about 30 employees. I joined JAL in 1996 and becamea manager in 2014.
After my daughter was born, I took a one-year childcare leave before balancing parenting
and my job by working shorter hours until she was three. When she was small, I sometimes
felt guilty going to work and, frankly, I still struggle to strike a balance between my job andparenting. I have come this far only because of my love for JAL and belief that my workplaceallows me to reflect on myself. Above all, I am motivated by my daughter, who tells me: “Mom,
don’t ever quit! I like you working at JAL.” Now, as a manager, I often come home late, so I makeup for it by cooking meals with loving care.
More employees in my workplace are having children. I think they will be able to take evengreater steps forward, with unique sensitivities and an awareness of women. I hope to continue
working in my own way, with a deep appreciation for my family and colleagues.

03

04

Supporting the IT System of the
Entire JAL Group with Expertise andLeadership
Yoshiyuki Uchida
Airline Systems Department, JAL Information Technology Co., Ltd.

Since I was hired, I have been refining my skills specialized in the area of IT systems at JAL
Information Technology. After being assigned to my current position in Group Management inApril 2014, I took on more responsibility for providing and safely operating the IT infrastructurethat all JAL Group services depend on. When building and operating a system, I always keep
in mind how our customers are using JAL. My greatest mission for IT infrastructure is to ensurethat nothing goes wrong and operations are consistently maintained. To fulfill this mission, I
strive to secure the robustness of the system from the design and construction stages, takegreat care to prevent system maintenance work and upgrades from affecting operations, andhone my IT techniques so I can promptly solve any problem. As I go about each day, I feel thegravity of the fact that all JAL customers depend on the IT infrastructure we provide as well as
the responsibility of being one of those who are holding up the very foundation of the business.
I make maximum use of the power of IT, which will continue to be a driving force in becoming
the most loved, and number one airline of choice in the world.

JAL REPORT 201535

JAL Group’s
Corporate Social Responsibility
JA L R E P ORT 2 015

36

JAL REPORT 2015

Preparations for an early evening departure; determined
faces reflected on the body of the aircraft.
The safety of the skies begins with their work on the ground.
Reassuring gazes express the strength of their commitment.

JAL REPORT 201537

JAL Group’s Corporate Social Responsibility
The JAL Group promotes CSR activities through its core business of air transport to contribute to the advancement anddevelopment of society.

JAL Group’s CSR Activities
The JAL Group will carry out corporate social responsibility
activities that embody its code of conduct, the JAL Philosophy,
which is closely aligned with our Corporate Policy.

Basic CSR Policy of the JAL GroupThe JAL Group will engage in corporate social responsibility activities in accordance with its code of conduct and
the JAL Philosophy as the company carries forward its
corporate policy.

 ctivities to Present New Value to Society that OnlyA
JAL Can Perform
We will strive to address and alleviate social issues throughour core air transport business, and present new value that
only JAL can deliver.

JAL Group Corporate
Policy ctivities that Meet Society’s Expectations of theA
Airline BusinessWe will increase corporate value through activities that meetsociety’s expectations of the airline business, such as byimproving our network, tourism promotion and social contribution activities.

JAL Philosophy
CSR
CreateValue ctivities that Form the Foundation of the CompanyA
as a Member of Society
Referring to ISO 26000 Guidance on Social Responsibility,
the JAL Group will fulfill its responsibility as a corporate citizen by incorporating a CSR approach to activities that create the basis of the company in order to build a relationshipof trust with society.

Increase Value
Build Trust

We will introduce the JAL Group’s CSR activities under categories titled: E (Environmental); S (Social); and G (Governance).

E nvironment

S ocialThe Environment

Safety and Security

G overnanceBridging Japan andthe World

Nurturing the Next
Generation

Governance

Page

18

Page

Page

39

44

Page

Page

46

Page

48

50

Foundation of CSR

Four Key Areas of JAL Group’s CSR Activities
ColumnJAL Charity Miles
With the cooperation of our customers, we operate the JAL Charity Mile program year round as a CSR activity that only an airline
can deliver. JAL supports NPOs in their environmental conservation and other social impact activities by assisting with air transportand publicity campaigns. We also encourage JAL Mileage Bank (JMB) members to donate their mileage and then we donate theequivalent amount in cash, in an effort to provide other forms of support for these initiatives.
Initiatives in Fiscal 2014
Total donated miles

Recipient of donation

March 25 to May 6: “Let the Fukushima Children Play” Charity Mile Project

2,205,000 miles

May 20 to August 17: “Help Provide Solar Lights to Medical Clinics in the Philippines!” Charity Mile Project

3,522,000 miles

Kopernik Japan

August 29 to October 20: “August 2014 Rain Relief Effort Miles”

4,782,000 miles

Central Community Chest of Japan

December 1 to March 15: Sky Baton Tohoku Support Mileage Donation “Chance for Children”

6,378,000 miles

Chance for Children

38

JAL REPORT 2015

Save the Children Japan

Highlights

E

President’s Message

The Medium Term Management Plan to Date

CSR

Financial Section

The Environment

JAL Group promotes “Sky Eco” today for a greener tomorrow.

CO2 Emissions

CO 2 Emissions
CO 2 per Revenue-Ton-Kilometer(comparison with fiscal 2005)

Environmental Guidelines
As an airline company in control of important social
infrastructure, the JAL Group is fully aware of its responsibility to the global environment. We have therefore
placed control of our environmental impact and protection of the environment as core themes in our business
operations and will continue to implement “Sky Eco” inorder to pass on this rich Earth to those of the next generation so they will always be able to see the beautiful
Earth from the sky.

Our Eco-First Commitment
In 2010, the JAL Group made an“Eco-First” commitment to renew its
efforts for preserving the global environment and received certification
as an “Eco-First Company” from the
Ministry of the Environment of Japan.

JAL Group’s CO2 Emission Reduction Goal
We are working to reduce CO2 emissions per revenue-ton-kilometer from JAL Group aircraft by 23% in fiscal
2020 as compared to the fiscal 2005 level.

(10,000 tons)
2,500
2,000
1,500
1,000

100
96

1,687

(%)

99
94

1,578 1,502

93

1,393

100

89

89

89

90

87

90

77

80

1,191
928

840
734 787 820

70

500
0

60

2005 2006 2007 2008 2009 2010 2011 2012 2013 20142020 (FY)
Target50

Sky Eco Project
Pilots at JAL actively engage in environmental practices during
flight operations as members of the Sky Eco Project. In addition to pilots, specialists from areas such as procurement, flight
operation technology and CSR also participate to consider
environmental activities related to flight operations primarily
from the pilot’s perspective, so they can be put into practiceduring flights. For example, while safety is a top priority, theyalso seek to reduce CO2 emissions by devising procedures fortaxiing an aircraft to the parking spot using only one of the twin
engines. In addition, pilots are provided with feedback on theimpact and execution rates, which deepens their understanding of the environment.

CO2 Emissions by JAL Group AircraftIn fiscal 2014, CO2 emissions by JAL Group aircraft per unittransport volume (revenue-ton-kilometer) were reduced by
13.4% compared to the fiscal 2005 level. Total CO2 emissions
increased by 200,000 tons from the previous fiscal year as aresult of expanded operations. CO2 emissions per unit transport volume decreased by 3% from the previous year due tothe increase in fuel-efficient Boeing 787-8 aircraft, improvements to flight operations efficiency, and regular engine washing for more efficient fuel consumption.

JAL REPORT 2015

39

The Environment

Aviation Biofuels
Many countries are developing aviation biofuel toward significantly reducing CO2 emissions. In January 2009, JAL became
the first airline in Asia to conduct a test flight using nonfood
biofuel on a Boeing 747-300. We continued to exchange information with related organizations in Japan and abroad, andparticipated in the founding of the Initiatives for Next Generation Aviation Fuels (INAF), which explores the potential forbiofuel production in Japan. INAF was launched in May 2014
with “All-Japan” membership that comprises 46 organizations
spanning companies, government and academia. As an active
member, JAL serves as the secretariat of the subcommittee on
producing aviation biofuel from municipal waste. We have seenpromising results from several manufacturing processes (seediagram) using municipal waste, which offers a significant costadvantage in terms of procuring raw material.
Looking ahead, we will participate proactively in an effort torealize domestic biofuel production by around 2020 with commercialization in the near future. Moreover, we hope to take a

Production Path of Alternative Fuels (Aviation Biofuels) in Japan
Gasification(gasification furnace)

Raw material(municipal waste)

JFE Engineering

Ethanol production bysaccharification andfermentation

major step forward in realizing a zero waste society, a common
goal of many countries, through the recycling of resources thatare otherwise discarded as waste into fuel.
Cabin Waste Recycling
Since 2007, JAL has been endeavoring to recycle waste
generated inside aircrafts. Specifically, we have been recycling
beverage cans, newspapers, in-flight magazines and plastic
bottles at each airport using standardized procedures. As forfood waste, such as leftover meals on international flights,
we incinerate all of it due to quarantine and other restrictions.
Disposal methods differ from country to country, and weare actively working with the International Air Transport
Association (IATA) to formulate common international rules toincrease the volume of recycled waste. While this is a difficult
task involving revisions in the regulations and systems ofdifferent countries, we will continue to collaborate with the
IATA and airport companies in activities for steadily raising theratio of recycled waste.

Designed by Toyo Engineering

Syngas

F-T synthesis

Alternate fuels

Upgrading

Ethanol production
by fungi

ATJ (Alcohol to Jet)

Foreign company technology(Unapproved)

Hitachi Zosen (completed a verification
plant in January 2015)

Airports, Offices,
Maintenance Centers(Japan)Airports, Offices,
Maintenance Centers(Japan)Heat Use (crude oil equivalent)

Industrial Waste

3,415
tons

Airports, Offices,
Maintenance Centers(Japan)Electricity Use

125

million kWh

40

JAL REPORT 2015

48,494kiloliters

Highlights

President’s Message

CONTRAIL Atmospheric Greenhouse Gases
Observation Project by Passenger Aircraft
The JAL Group has been participating in the “CONTRAIL
Atmospheric Greenhouse Gases Observation Project byPassenger Aircraft” as an environmental effort that can only
be implemented by airline companies. This joint project withJapan’s National Institute for Environmental Studies, the Meteorological Research Institute, JAMCO Corporation and the
JAL Foundation has been advancing through ongoing systemenhancements since 1993. Eight Boeing 777-200ER aircraftin our fleet, two of which bear the CONTRAIL project logo,
and one Boeing 777-300ER aircraft incorporated in 2014
have been modified to allow for the installation of air sampling
equipment (ASE and CME) for atmospheric observations. The
project has been widely recognized for the global scale of its
environmental activity, and received the “Environment Minister’s Award” and “Environmental Excellence Award” under the
40th Environmental Awards, sponsored by the Hitachi Environment Foundation, and the “19th Asian Environmental Awards,”
sponsored by the Mainichi Newspapers Co., Ltd. and otherorganizations in fiscal 2013, as well as the “Special Award”
under the 24th Global Environment Awards sponsored by the
Fuji Sankei Communications Group in fiscal 2014.

The Medium Term Management Plan to Date

CSR

Financial Section

VOICE

Working on a Joint
Government-Industry
Project with Environmentally
Conscious JAL Staff
Dr. Toshinobu MachidaHead of the Office of Atmospheric andOceanic Monitoring, Center for Global
Environmental Research,
National Institute for Environmental
Studies

Is global warming progressing? Is CO2 really increasing in
the atmosphere? These are questions I am often asked.
While a dazzling display of simulated data on the atmosphere may be useful, there is nothing more convincing
than the results of actual observation. Today, a large
amount of observed data on atmospheric CO2 is being
collected during JAL flights. The CONTRAIL Project began
in 2005, with two types of equipment for observing greenhouse gases installed in aircraft operated by JAL. Since
then, these atmospheric observations have continued at a
global scale. This pioneering project has been hailed as an
excellent example of government-industry collaboration.
It has been made possible through the cooperation ofmany staff in several JAL departments, who are deeply
aware of the environment and have a can-do attitude.
While I conduct research every day, they always make me
feel that this is a Japanese company with world-class capabilities in fields other than manufacturing.

Airports, Offices,
Maintenance Centers(Japan)Water Use

445

thousand m3

Aircraft in Flight(Japan, International)

CO2 Emissions

8.4

million tons

JAL REPORT 2015

41

The Environment

Action Plan
We have placed the control of our environmental impact and the protection of the environment as core themes in our business
operations, and create action plans for these areas. Our philosophy and dedication toward them are set out in the “Action Plan.”

Action Plan 1 We actively conduct initiatives to prevent global warming.
Commitment

StatusWe are working to reduce CO2 emissions per revenueton-kilometer from JAL Group aircraft by 23% in fiscal
2020 as compared to the fiscal 2005 level.

• We increased the number of 787-8 aircraft with reduced fuel consumption, and because they logged
a significantly higher proportion of operational time, CO2 emissions per revenue-ton-kilometer for
fiscal 2014 improved by 3% year-on-year and declined by 13.4% from the fiscal 2005 level.
•W e achieved our target of 1.5% average annual improvement (average figure for fiscal 2005 to fiscal
2014).

We are upgrading our fleet to lower fuel consumption
and low noise aircraft (e.g., Boeing 787, 737-800 and
Embraer 170).

• We introduced five 787-8 aircraft with reduced fuel consumption and retired five aircraft (777-200,
767-300 and 737-400).

We are conducting “Eco Flights.”• We achieved annual reductions in CO2 emissions of approximately 42,000 tons, mainly through five
“Eco Flight” activities in our daily operations: engine out taxi, idle reverse, reduced flap, delayed flap
and delayed gear.

We are endeavoring to reduce weight.

• We introduced 1,080 of the world’s most advanced cargo containers, which are approximately 40%
lighter than conventional units. We achieved annual reductions in CO2 emissions of approximately
7,000 tons.

We are cutting CO2 emissions by washing engines andpursuing other CO2 reduction methods.

•W e implemented engine water washing at intervals of between 190 days and 300 days for the 777,
767 and 737-800 aircraft. We installed new Eco Power equipment to enhance washing efficiency.
Result: Annual CO2 emissions were reduced by approximately 25,000 tons.
• Reduction in auxiliary power unit (APU) usage time for the 777 and 737-800 aircraft was little changed
from the previous year as a result of our maximum effort.

We work together with the associated ministries andaviation authorities such as air traffic control in various
countries to introduce leading methods for fuel efficientaviation and will actively continue to do so in the future.

• Our Haneda-San Francisco route obtained certification for adopting operation methods that reduce
environmental impact.
• We have been implementing CDO (continuous descent operations) at San Francisco International
Airport, Kansai International Airport and Naha Airport.
• We have been operating UPR (user preferred route) on flights to Hawaii, Australia, the West Coast of
North America (Los Angeles, San Francisco and Vancouver) and Palau.
• We extended the efficient selection of alternative airports (alternatives for Boston, Sydney and Haneda).
• Estimated annual reduction in CO2 emissions as a result of the above efforts was around 6,000 tons.

We are collaborating in the research and developmentof aviation biofuel made from inedible plants.

•A s part of an all-Japan team of industry, government and academia, we are promoting a project toproduce aviation biofuel from municipal waste, which we aim to realize by around 2020 (the year of
the Tokyo Olympics and Paralympics). The project will also contribute to the creation of a recyclingbased society (see page 40).

We promote energy-saving activities in our groundfacilities (offices, factories, etc.).

•W e continued to adopt LED lighting in maintenance facilities (hangars and docks), conduct various
energy-saving activities and upgrade to electricity-saving lighting in our offices.

Action Plan 2 We actively promote social and environmental activities and environmental awareness activities.
Commitment

Status

By continuing to conduct environmental and social• We implemented our Sky Eco Project, in which our pilots have taken the initiative (see page 39).
activities, we are able to contribute to long-term• In fiscal 2014, we held 28 Sky Eco classes, in which our captains offered environmental awarenessconservation of the environment, and we strive to
education for children.
improve the environmental awareness of children who•W e contributed to reducing CO2 emissions with cooperation from passengers by implementing thewill lead the next generation, as well as all of society and“Shades Closed Exercise” and improving on-time performance.
our own employees.

We will continue to participate in the atmosphericobservation project and the forest fire reporting projectusing our aircraft.

42

JAL REPORT 2015•T
 he “CONTRAIL Atmospheric Greenhouse Gases Observation Project by Passenger Aircraft”
received the Special Award under the 24th Global Environment Awards sponsored by the Fuji Sankei
Communications Group (see page 41).
•W
 e have been participating in the “Siberian Forest Fire Reporting Project.” Since 2003, pilots havebeen reporting any fires detected during summer flights over Siberia to a research team led by
Hokkaido University in a cooperative research effort on early fire detection by satellites (306 fires
were reported in fiscal 2014).

Highlights

President’s Message

The Medium Term Management Plan to Date

CSR

Financial Section

Action Plan 3 We work toward the realization of a recycling-based society and for the preservation of the environment.
Commitment

StatusWe are aiming for a final disposal rate of less than 2%
for industrial waste from domestic worksites.

•T otal waste volume in fiscal 2014 was reduced by 9% from fiscal 2013. The final disposal rate was
1.2%, achieving our target of less than 2%.

We work to reduce water usage.

• We reduced water usage by 2% year-on-year by reusing wastewater and implementing water-saving
measures.

We work to reduce the amount of emissions ofchemicals (governed by the PRTR Act).

•T otal volume of PRTR substances handled in fiscal 2014 (462 chemicals) decreased 11% year-onyear to 59 tons (following last year’s increase, the volume of trichloroethylene decreased as a result of
improvements in recovery equipment).

We work to recycle uniforms and items used in aircraft
cabins such as in-flight magazines, newspapers,
aluminum cans, plastic bottles and cargo packing
materials.

• We continuously recycled beverage cans, newspapers, in-flight magazines and plastic bottles inaccordance with our rules. We are promoting comprehensive efforts to dispose of in-flight waste incollaboration with the IATA and airport companies (see page 40).
• Total amount of recycled waste in fiscal 2014 was 2,400 tons.

Action Plan 4 We work to conserve the environment around airports.
Commitment

We introduce low-noise aircraft and noise abatement
operational procedures, and respond to other airport
noise issues.

We work to reduce NOx emissions from aircraft,
automobiles, etc.
(NOx, HC, CO and other aircraft engine emissions arestrictly regulated by the ICAO. Similar restrictions havebeen established under Japan’s Civil Aeronautics Act.
NOx emission restrictions are particularly stringent.)

Status•W e actively practice “Reduction of Noise at Source” and “Noise Abatement Operational Procedures”
as responsibilities of airlines under the “Balanced Approach” recommended by the ICAO. All JAL
aircraft are compliant with ICAO Chapter 4, the most stringent standard for noise.
•W e practice noise abatement procedures at takeoff and operate under more stringent rules when
taking off from Haneda Airport and Itami Airport.
•A s for noise abatement procedures upon landing, we practice reduced flap, delayed flap and idle
reverse. At San Francisco International Airport and Kansai International Airport, we conduct CDO(continuous descent operations) to significantly reduce both noise and CO2 emissions.

• All JAL aircraft engines are compatible with all regulation values and the ICAO’s CAEP6 andCAEP8 NOx standards (the applicable standard differs depending on when a plane’s Certificate of
Airworthiness was issued).

Action Plan 5 We give due consideration to biodiversity.
Commitment

Status

We convey to customers and society at large theimportance of biodiversity and follow the “JAL Group
Policy on Biodiversity” in our business operations.

•W e formulated and adhere to the “Biodiversity Policy of the JAL Group” in recognition of the fact that
the JAL Group’s air transport business may indirectly impact biodiversity.

We take part in the “United Nations Decade of
Biodiversity” initiative. In addition, we promote activities
that convey the importance of protecting the natural
beauty of Japan, including cranes, etc.

• We painted the “United Nations Decade of Biodiversity” logo on our aircraft, contributed to the JAL
Endemic Rabbit’s Forest and served certified coffee on our flights in consideration of biodiversity.

JAL REPORT 201543

Safety and Security

S

Here are some of our programs designed to ensure that all our customers can comfortably enjoy their flights.
For initiatives on safety P. 18

Becoming a JAL that is Friendly to Everyone
We aspire to provide products and services that ensure asafe and comfortable flight for every passenger on JAL Groupflights, from small children to elderly customers and customers who require special assistance, by fulfilling the “Friendly
JAL = Universal Design”* initiative. We extensively apply universal design from “JAL SKY NEXT” and other aircraft seating arrangements and customer service desks at JAL Smile
Support Counters, to our broad range of special in-flight meal
options for passengers with allergies or health conditions.
Furthermore, we strive to deliver a “universal design for theheart,” as reflected by the sincere actions of each employee
in the hospitality they provide,
developed with what they havelearned in an experience-based
program.
* A concept for the development of“design that is easy for everyone,”regardless of age, physical capability or
environmental conditions.

Flight Training Programs for Children with
Developmental Disorders
The JAL Group cooperates in handling requests from organizations serving persons with disabilities by providing flighttraining as part of the treatment program for children with
autism or other developmental disorders.
While the ability to use public transportation freely is essential for facilitating the social engagement of children with
developmental disorders, the enclosed aircraft environment
and loud noises during takeoff and landing raise a hurdle totheir use of air travel. To eliminate such concerns, we workwith psychiatrists to offer flight training as an opportunity forchildren to learn about boarding procedures and in-flight rules.
Participation in the
program has shown
some success. For
example, one participating family wasable to take a trip to
Hawaii.

http://www.jal.com/en/ud/

Priority Guest Support
The JAL Group refers to customers with reduced mobility or
who are sick or injured as “Priority Guests” who merit precedence in service over other customers.
The Priority Guest Center we launched in 1994 is the firstof its kind in the airline business in Japan and has handled awide range of situations. Its experienced staff members are on
standby to respond with care to customer needs.
•	Transport support for para-sports organizations in events
such as the Paralympic Games•	M edical transportation using stretchers for patients,
including those traveling for overseas heart transplant
operations•	J oint Priority Guest operations with American Airlines andBritish Airways•	A ctivities to raise public awareness through events for people with disabilities

JAL Smile Support (Domestic Flight)
The JAL Group has a dedicated support desk for customers
requiring assistance and provides various types of assistanceto ensure comfortable trips for as many customers as possible, including pregnant women, children, the elderly and passengers requiring the use of a wheelchair on our domestic
flights. We have also set up JAL Smile Support
Counters at major domestic airports to provide assistance that helps to send off customers on safe journeys.
Mother and Baby
Travel Support Guide

Baby Travel Support Service
For passengers traveling with babies
or infants

Expectant Mother Travel
Support Service
For pregnant passengers to travelin comfort

Kids Travel Support Service
For children traveling on their own

Senior Citizen Travel
Support Service
For elderly passengers

0120-25-0001 (7:00–20:00)
http://www.jal.co.jp/en/smilesupport/
Airports with JAL Smile Support Counters
Passengers with walking disabilities

0120-747-707 (9:00–17:00)
http://www.jal.co.jp/en/jalpri/

44

JAL REPORT 2015

Physically challenged passengers
requiring service dogs

Domestic Flights

New Chitose, Haneda, Narita, Chubu, Itami, Kansai,
Fukuoka, Naha

International Flights

Haneda, Narita

Highlights

President’s Message

Tour for Children with Food Allergies
The number of people who suffer from food allergies continues
to rise every year, and while improvements are being made inprocuring food for meals at home, challenges remain when it
comes to eating out at a restaurant or traveling, due to the lackof information about the ingredients. In view of this, the JAL
Group has created an environment where families affected byfood allergies can comfortably enjoy their trips.
In its third such initiative since 2010, JALPAK collaborated
with the Parents’ Association for Food Allergy Patients, NH
Foods Ltd. and JAL Private Resort Okuma to organize a fourday tour to Okinawa during the spring break in 2015, paying
due consideration to food allergies throughout the entire trip.
Twelve families participated and shared positive comments,
such as: “I used to spent each day under a lot of pressure,but this trip made me realize that I can manage better, and if amother can change, so can the child. It gave me fresh resolve
to continue facing up to food allergies.”

The Medium Term Management Plan to Date

CSR

Financial Section

VOICE

Collaborating to Spread
Understanding Far and Wide to
Create a Society that is Kind to All
Sumiko Takeuchi
President, Parents’ Association for Food
Allergy Patients

The Tour for Children with Food Allergies is for children
with severe allergies who must always carry an epinephrine auto-injector. During the tour, we were dazzled by thesmiles on the children’s faces as they watched and learned
about marine life as well as Okinawan culture, and also
enjoyed eating anything they wanted. The tour-takers told
us how they had been placing limitations on themselves
as a result of uncertain knowledge and that they now felt
confident about what they could do. JAL Group tours are
immaculately prepared, providing a sense of security forparticipants and reliable skills for staff through actual experience. I am convinced that with the JAL Group’s ability
to spread its wings and reach out to remote regions tobuild understanding, it holds the key to helping children
grow and creating a society that is kind to everyone
through collaboration with others.

Aid for Areas Affected by Torrential Rains in August 2014
Hiroshima City was hit by localized downpours that caused
large-scale landslides, while parts of Western Japan, including
Kyoto and Hyogo prefectures, suffered damage from torrential
rains in August 2014. To support these areas, we collected
donations through a JAL Charity Miles campaign as well asfrom employees. The donations along with a matching donation from the JAL Group were delivered through the Central
Community Chest of Japan to people who were affected.
ColumnCooperation for Transporting Ambulances in Support of the Battle against Ebola in Guinea
The Society for Promotion of Japanese Diplomacy donated six ambulances to the Republic of Guinea in West Africa to support the country’s ongoing battle against the Ebola
contagion. JAL cooperated by arranging air transport, making maximum use of the networks and know-how possessed by JAL CARGO.
JAL currently does not have freighters, and we were unable to carry the ambulanceson our own flights due to their size and to weight limitations. Nevertheless, we sought tolive up to expectations and play our part in supporting Africa by requesting and entrusting
the flight operations to a partner airline company, which made speedy transport possible.
In February 2015, the ambulances were received at Narita Airport and loaded onto aregular cargo flight operated by the partner airline, drawing upon the accumulated knowhow of the JAL Group. Upon arrival at the transit point in Belgium, the cargo staff we had dispatched liaised with the partner airline toassist in the cargo’s smooth transfer to the connecting flight. The ambulances arrived safely at Conakry in Guinea and were delivered
to the consignee.

JAL REPORT 201545

Bridging Japan and the WorldS

We will bridge Japan and the world as the “Wings of Japan” and as a network carrier that contributes to the revitalization of Japaneseindustry and regional economies while enhancing mutual understanding in the international community.

JAL × Kopernik: “Connecting People to People,
Bridging Japan and the World” Project
Kopernik is a non-profit organization that delivers innovative technologies to developing countries toward addressing
social issues such as improving the quality of life and eradicating poverty. Since 2013, JAL has endorsed their workthrough various assistance and collaboration activities. In
2014, we delivered 612 solar-powered lanterns to health clinics and schools in the Philippines using donations equivalent
to 3,522,000 miles from 903 JMB members through a JAL
Charity Miles Campaign, and sent a university student and a
graduate student to report on subsequent improvements inlocal living conditions. In addition, “Tech Caravans!” conducted in Akita in June and in Kita Kyushu, Fukuoka in November,
visited manufacturers and universities to discover technologies made in Japanthat could serve
people in developing countries andrevitalize industries
in Japan.

JAL Tohoku Support Project “VISIT TOHOKU!”
In June 2013, more than two years after the Great East Japan
Earthquake, we launched the JAL Tohoku Support Project“VISIT TOHOKU!” as our response to the current needs andhopes of residents in the affected areas. They feared being
forgotten and hoped more people would visit, take in the sights
and spend money to support revitalization. We have been
facilitating regional development andencouraging people there through our
air transport business.
Facilitating Regional Development• Bringing more visitors to Tohoku by operating international
charter flights and expanding organized tours• Holding employee study tours in the affected areas to encourage our staff to visit Tohoku• Working in collaboration with local governments in the Tohoku
region to assist in the sales of local products and selecting
products from the area as items to offer during flights and in
the airport lounge, or to be obtained by redeeming mileage• Stimulating interest in Tohoku by providing a variety of information to customers
Encouraging People in the Affected Region• Supporting student volunteers and the education of children affected by the earthquake through the JAL Charity Miles program• Offering trips to families affected by the earthquake to provide
moments of enjoyment

VOICE

Working Together to Present
Meaningful Forms of Social
Contribution to the World
Toshihiro Nakamura
Co-Founder and CEO,
Kopernik

I am truly grateful for JAL’s support for improving people’s
lives in developing countries through the JAL × Kopernik:“Connecting People to People, Bridging Japan and theWorld” Project. Areas reached by the project have shown
growing interest in the products you have donated and ourongoing efforts, which have helped to advance the spreadof the products.
The “Tech Caravan!” familiarizes people with the realitiesof developing countries, and I feel there is a genuine senseof expansion in the business fields of the Japanese companies and the kind of world that children imagine.
Recently, many CSR-related staff in other companies
have expressed to us their desire to do CSR activities like
JAL. I hope to continue working with the people of JAL topresent meaningful forms of social contribution to the world.

46

JAL REPORT 2015

 acilitating Regional Development 1: Employee StudyF
Tour in Affected Areas
Training programs launched in September 2013 and attended
by JAL directors and other employees were held in the affectedareas in an effort to expand our onsite activities. In fiscal 2014,
we changed the location for the programs to Miyako and Otsuchi in Iwate Prefecture, and held eight tours that were attended
by about 260 employees. They boarded the Sanriku Railway’s
Disaster Education Train, listened to the storytelling guides ofTaro Town’s “Learning Disaster
Prevention” program, and participated in volunteer activities
in Otsuchi Town. They also contributed to the local economy bystaying at local hotels, dining out
and purchasing souvenirs.
 acilitating Regional Development 2: “Otsuchi
F
Reconstruction Rice”
We first heard about “Otsuchi Reconstruction Rice” during ourstudy tour in the affected areas. In the autumn of 2011, the people of Otsuchi discovered in the tsunami-devastated area of thetown three roots of a rice plant that could still produce grain,

Highlights

President’s Message

which are being cultivated as a symbol of the town’s recovery efforts. We used this rice for first-class meals on domestic
flights through November and December, 2014, which madethe people of Otsuchi very happy, while illustrating the miracle ofreconstruction in a way that many customers could appreciate.
Facilitating Regional Development 3: Tohoku Cotton Project
The Tohoku Cotton Project began in 2011 as a reconstruction
effort for tsunami-stricken fields with the goal of reviving agriculture and creating new industries and jobs by planting andspinning cotton, developing commercial products and sellingthem in a cooperative effort involving local agricultural corporations and companies, mainly in the apparel industry. In addition to publicity and the voluntary participation of employees tohelp with farming, the JAL Group continued to make original
products from the harvested cotton in fiscal 2014. We support
the project by offering these products in
exchange for mileage
and to passengers on
our flights.

 acilitating Regional Development 4: Helping Sales ofFSpecialty Products from Tohoku
Since June 2013, we have been collaborating with the local governments of the Tohoku region to stimulate tourism by distributing brochures and helping to sell specialty products as partof our activities for JAL Nikko Day, which takes place aroundthe 25th of every month. In
March 2015, we held the Second Tohoku Market @ Tennozu Building at our head office.
Many employees purchased
local Tohoku products to show
their support for the region.

The Medium Term Management Plan to Date

CSR

Financial Section

 ncouraging People in the Affected Region 1: Gifts ofE
Smiles Project
JAL launched the Gifts of Smiles project in the summer of 2013
to assist children suffering from stress caused by the Great
East Japan Earthquake, by helping them participate in family
trips and get away from everyday reminders of the disaster. We
offer them a new start through refreshing, encouraging experiences. The cost of this project is covered by donations fromJAL Group employees matched by JAL. Employees volunteer
to accompany the families. In the summer of 2014, we invited
14 families (33 people) from Miyagi Prefecture and 12 families(30 people) from Iwate Prefecture to a four-day trip to Okinawa.
As in the previous year,
we observed delighted
smiles on the faces ofthe participants while
they enjoyed the brilliant sunshine and bluesea.
 ncouraging People in the Affected Region 2: Charity
E
BazaarIn support of the Tohoku region, JAL held a charity bazaar
in March 2015, where we sold various airline-related items,
stocked by JAL, at reasonable prices. About 70 employees
volunteered to help organize and run the event. Nearly 900 visitors came and purchased model airplanes and in-flight goods
with the old corporate logo, as well as JAL original goods. They
also bought rice and handcrafted products made in Tohoku.
The total proceeds from the sales,
excluding Tohoku products, wereapproximately 2.7 million yen, andall of it will be used for projects to
support children affected by theearthquake.

Column

あ つ し お岩手72

よ き や どかみのやま

December 2014青森秋田

Photographs by Shinji Abe

撮影 阿部伸治

山形

や げ ん

うましさかな

Text by Masahiko Shinagawa

文 品川雅彦

各県１カ所の温泉地を訪ね、それぞれの個性豊かな魅力に焦点を当てる第２弾。

今回は青森、秋田、山形の３県を巡る。青森県はむつ市の「薬研温泉」。

秋田県は湯沢市の「秋の宮温泉郷」。山形県は上山市の「かみのやま温泉」。

/

東北には数々の名湯あり。秘湯あり。佳宿あり。銘酒あり。美肴あり。

87/November 201414.10.9 11:17:27 AM

日本文化の泉が、こんこんと湧く場所へ。大らかで、温かいなぁ、東北は。

温かい泉は心 も 温める♨

Photographs by Kazuhisa Natori

撮影 名取和久

vol.2

宮城

Text by Masahiko Shinagawa

文 品川雅彦/November 2014

P72_83_JAPAN_PROJECT_int_1008.indd 72-73

福東
島北と お が っ た

福島県は喜多方市の熱塩温泉。日本文化の泉が湧く場所へ。

東北には数々の名湯あり。佳宿あり。銘酒あり。美肴あり。

各県１カ所の温泉地を訪ね、それぞれの個性豊かな魅力に73/焦点をあてる第１弾。今回は岩手、宮城、福島の３県を巡る。

vol.1

岩手県は盛岡市のつなぎ温泉。宮城県は蔵王町の遠刈田温泉。

温かい泉は心 も 温める♨

Since May 2011, we have been undertaking the JAPAN PROJECT to revitalize local communities by communicating the splendors of Japan using every tool available to us, including in-flightmagazines, onboard videos, in-flight meals and the JAL Group website. The project focuses
on a single region each month and reveals the attractive features of the area in collaboration
with local governments and companies. We are also making an effort to provide information
overseas through links with the Guide to Japan information website for foreign visitors to Japan.
As of March 2015, we have worked with 32 prefectures. The JAL Group will continue to buildon the JAPAN PROJECT in order to generate demand for tourism and contribute to revitalizing
regional communities.
http://www.world.jal.com/world/en/guidetojapan/

東北JAPAN PROJECT

December 2014

P86_97_JAPAN_PROJECT_int_1107.indd 86-87

86

14.11.10 5:53:02 PM

JAL REPORT 201547

Nurturing the Next GenerationS

The JAL Group strongly hopes that children will have their own dreams to pursue and supports them through programs forchildren of diverse age groups.

JAL SORAIKUThe JAL Group has been organizing and conducting “JALSORAIKU” educational programs for nurturing the next generation. These include the “JAL Origami Hikoki” course, inwhich children learn how to fold paper planes incorporating
the mechanism of an actual aircraft and enjoy playing together, and the “JAL Sky Eco” course, in which a uniformed pilot
describes changes in the global environment as seen from thesky at 10,000 meters. We also offer courses introducing jobs
related to air travel.
In fiscal 2014, we conducted a total of 180 courses for fiveprograms at schools and public facilities around Japan as well
as at Japanese schools in other countries in Asia and Oceania.
The courses were attended by about 13,000 people.

“JAL Origami Hikoki” course

JAL Career Talk Events for Students
We held the “JAL Career Talk Events for Students” for the second year in a row during summer vacation in 2014 in responseto requests from junior high school and high school students
around Japan who wanted to hear stories from people withinteresting professions. JAL Group employees, including apilot, cabin attendant, ground staff member and mechanic,
answer students’ questions about their jobs. The events wereattended by about 100 junior high school and high school students and their guardians, all of whom engaged in an enthu-

siastic dialog. We plan
to continue holding JAL
Career Talk Events forStudents to encouragechildren to create theirown ways of life associated with their preferredjobs in the future.
JAL Factory Tours – SKY MUSEUM
JAL offers tours of its aircraft maintenance center, free ofcharge, as part of its social contribution activities. We havedone so since the mid-1950s, soon after the airline’s founding, and the center was renovated and reopened in July 2013
as the “JAL Factory Tours – SKY MUSEUM.” In the exhibitionarea, we display materials chronicling JAL’s history of opening up new air travel routes since its establishment in 1951,
and introduce the work of staff behind JAL Group flights. The
facility enables visitors to deepen their knowledge about theairline industry in general through airline classes, where theylearn about aircraft and tour the hangar to observe airplanes
under maintenance up close. In fiscal 2014, the SKY MUSEUM
received over 120,000 visitors.

JAL Origami Hikoki:
Fun Paper-Aeroplane
Activity

JAL Sky Eco: Talks on
Environmental Issues

JAL Career Talk forStudents

JAL Safety
Demonstrations by
Cabin Attendants

JAL Job Interview
Simulation for Students

Age groupSix years old and older

Elementary
schoolchildren (fromthird grade), junior highschool students,
high school students,
college students (adultonly class available)

Elementary
schoolchildren (in fifthand sixth grades), juniorhigh school students,
high school students

Junior high school
students, high school
students

Junior high school
students, high school
students

FormatOnsite course

Onsite course

Onsite course

JAL Haneda facility

JAL Haneda facility

Time required

90 minutes

90–120 minutes

60 minutes

60 minutes

40 minutes (including
20 minutes of travel)

Number ofcourses permonth (in general)332 (arranged by job)

2

4

Number ofparticipants percourse30 to 10030 or more

30 or more

20 to 50

3 to 1548

JAL REPORT 2015

Highlights

President’s Message

Support for UNICEF
In 1991, JAL launched the “Change for Good®” fundraising
campaign for UNICEF on its flights between Tokyo (Narita) and
New York to collect spare change in foreign coins from passengers. The campaign was expanded in 2006 to include all international flights operated by JAL. Coins collected through thisinitiative are donated to support UNICEF activities for protecting
children’s lives, health and human rights. As a member of theSteering Committee for UNICEF’s Foreign Coin Collection Program, we also provide support by transporting foreign coins
collected on the ground in Japan to different countries for free.
SKY BATONThe JAL Group launched the charity project SKY BATON
in December 2013 with the aim of passing the baton to theyounger generation toward creating the future of the Tohoku
region. We have been consistently engaged in the development of the next generation while simultaneously supporting
the affected regions.
The second phase of this project in fiscal 2014 supported theactivities of Chance for Children, a public interest corporation,
which issues education vouchers that children facing financial
difficulties due to the earthquake can use to pay for tutoring andprivate lessons, with the goal of creating an environment wherechildren can envision the future and pursue their hopes anddreams through study. We extended a total of 12,756,000 yen
by matching the JAL Charity
Miles program points, providing the equivalent of one
year of educational opportunities for 55 elementary
schoolchildren.

The Medium Term Management Plan to Date

CSR

Financial Section

VOICE

A Project that Gives
Courage to Children
Affected by the
Earthquake
Yusuke Imai
Representative Director,
Chance for Children

With the cooperation received from JAL and its many JMB
members, we were able to provide education vouchers
to children affected by the Great East Japan Earthquake.
Thanks to them, children faced with adverse circumstances due to the disaster can move forward.
One child said: “The support I received made me realizethat other adults outside my family were giving me encouragement.” The presence of such supporters gives children
the courage and energy needed to move on with hope for
their futures.
I would also like to express my heartfelt gratitude for yoursupport and cooperation for this wonderful project, whichconnects JMB members with children who will shoulder
the future of the Tohoku region.

The Wings of Japan Scholarship – Establishment of a
Benefit-based Scholarship for Pilots
JAL seeks to contribute to Japan’s airline industry and to
the progress and development of society by addressing thepressing need to train pilots to meet growing future demand by
establishing a benefit-based scholarship that provides financial support to students enrolled in pilot training courses atprivate universities.

ColumnJAL Scholarship Program
The JAL Scholarship Program invites college students from across Asia and Oceania to Japan to promote mutual understanding and develop young men and women
who will assume future leadership roles in the region. It offers opportunities to experience Japanese culture, such as the tea ceremony and Zen meditation, and toparticipate in workshops with Japanese students. In 2014, the program was held forthree weeks starting on July 2 in locations near Tokyo and in Ishikawa Prefecture.
The program was established in 1975 and is currently run by the JAL Foundation
and JAL. To date, a total of 1,514 students have been invited to take part. We haverecently started organizing alumni organizations in various countries to develop a
vertical network connecting past participants in an effort to encourage collaboration
among alumni who have gone on to pursue successful careers around the world.

JAL REPORT 201549

GovernanceG

Stakeholder Dialog

JAL Aspirations for
Corporate GovernanceCorporate governance in Japan has reached a major turning point
and is attracting attention from observers both inside and outside thecountry. In May 2015, Executive Officer Hiroyuki Hioka sat down withtwo experts – Professor Iwao Taka of Reitaku University and External
Director Kimie Iwata – to discuss the current state and future of JAL’s
corporate governance.

50

JAL REPORT 2015

High transparency and robust
monitoring in JAL’s corporate
governance
Hioka Our basic stance on corporate
governance is to realize the JAL Group
Corporate Policy while protecting flightsafety, which represents the very foundation of our business. This means wewill work to realize the objective: theJAL Group will pursue the material andintellectual growth of all our employees;
deliver unparalleled service to our customers; and increase corporate value
and contribute to the betterment ofsociety. To this end, we must establish
a corporate governance structure that
produces high management transparency and robust monitoring while also
facilitating rapid, appropriate decision
making. While JAL is a company witha board of corporate auditors, we have
opted to set up four committees that
include the Nominating Committee
and Compensation Committee, which
are characteristic of a Company with
Committees, and we pride ourselves inhaving this hybrid system.
Taka
In the Nominating Committee, for example, do you discuss theappointments of corporate officers?
Iwata
In appointing corporate officers, we offer advice from a third-party
perspective, pointing out, for example,
that promoting younger candidates
may be better than simply adhering to a seniority rule, or that more
female candidates should be sought,
or encouraging the appointment ofpromising JAL leaders to the positionof president at subsidiaries so they
can gain experience. We serve, in asense, as escorts guiding the appointment process up to the president’s
final decision. Meanwhile, we participate right from the beginning in theappointment of external officers, fromidentifying the desired qualifications to
selecting the final candidates.
Taka
JAL is to be commended formaintaining a mechanism that serves
as a brake by referring to overall trends
or pointing out that the appointment of
an officer who is approaching retirement to a post at a subsidiary is inappropriate. The external directors arefunctioning well.
Iwata The compensation of officers

Highlights

is handled in a similar way. While this is
typically discussed by internal officers
who prepare and present a proposal
to the committee for deliberation, there
are no predetermined conclusionsat JAL. We participate in the discussions from the beginning by sharing anawareness of the issues and reviewing
cases from other companies.
Taka To what extent do external officers speak up at the Board of Directors
meetings?
Iwata
On major issues, nearly all ofus have more to say than the internal
officers.
Taka Foreign shareholders may feelthat a company with a board of corporate auditors is behind the times.
This misunderstanding comes fromthe fact that auditors have no voting
rights on the Board of Directors. This
makes it all the more important toemphasize how much active discussion goes on among members of theBoard of Directors and how well yoursystem works, especially since external directors play a role that is close to
the executive level at JAL.
Iwata
Yes, we are encouraged toattend executive meetings as often as
possible.
Hioka The external directors provide
outstanding support.
Taka
So JAL does not hesitate inrevealing everything to people outside
the Company, from whom the Company seeks verification on all issues.
While most companies talk about
management transparency, JAL actually practices it.

Kimie Iwata
External Director, Japan Airlines Co., Ltd.

President’s Message

The Medium Term Management Plan to Date

CSR

Financial Section

The Verification Committee
of Independent Executives –objectivity on and understandingof in-house issues
Hioka In our corporate governance,
JAL places particular emphasis on
management transparency. In September 2014, illegal access to our customer
information system led to the leakage
of information about JAL Mileage Bank
members, causing significant publicconcern and inconvenience. To review
our response, we set up the Verification Committee of Independent Executives comprising five external officers,
including two external directors andthree external auditors. We asked Ms.
Iwata to chair the committee.
Iwata
I received the request as
results were coming in from an internal
investigation of the appropriateness ofthe current investigation method andvalidity of its results, whether JAL had
undertaken sufficient IT security measures before the incident, and what weshould do to strengthen those measures. I understood that our job was toverify these points and ensure transparency by disclosing our results to the
public. JAL had not been sufficiently
aware of the fact that customer information is a corporate asset with significant attendant risks. I commented on
this in the results we reported to theBoard of Directors. JAL should makebetter use of customer information as
an asset, and I would also like to see
the Company do more to address theassociated risks.
Taka It is quite rare for independent
officers to set up a verification committee.
Iwata I was told that this was the firstsuch case in Japan. I think its effectiveness was due to the dual role of external
officers. First, we were able to conduct
an objective verification because all fiveof us have an independent status. And
second, we possess a deep understanding of internal issues from our daily
involvement in the Company. In addition,
I had worked on CSR and risk management in my position as a corporate manager, and other members were expertson law and corporate accounting, so
the five of us gave the committee an
extremely well-balanced composition.

Iwao Taka
Professor, School of Economics and Business
Administration, Reitaku University

Taka
In my view, it was good thatexternal officers conducted the verification while at the same time a working
group of outside professionals in areas
beyond their expertise, such as information and security, were incorporated into the process and involved in theseries of discussions. I think this added
substance to the report.
Harnessing the JAL Philosophy
and JAL Brand to drive us
forwardHioka
I think we can say that
JAL management and the efforts of
employees have been sustained by thedivisional profitability management system and the JAL Philosophy.
Iwata
Daily study groups are being
held at each worksite to deepen understanding of the JAL Philosophy and tostrengthen the ability to put it to practice.
I have been involved in the managementof several companies, but I have nevercome across a company like JAL.
Hioka The JAL Philosophy was created five years ago at the time of ourcorporate bankruptcy, when we had tounite employees and management. It
serves as an action guideline and criteria for decision making, as well as thedriving force that has kept us moving
forward.
Taka
I feel that the JAL Philosophy
has been the greatest source of JAL’s
competitive strength.
Hioka
Today, whenever there aresigns that we may revert to our oldways, employees who have studied andgained a solid understanding of the JAL
Philosophy caution that we are goingagainst the spirit of the JAL Philosophy.

JAL REPORT 2015

51

The sense that the JAL Philosophy is ouranchor is also connected to our ongoing
efforts to rebuild the JAL Brand.
Iwata The JAL Brand was not created by a single person; it is the result ofa joint effort through JAL’s relationshipwith various stakeholders. I am particularly aware that it is something wecreate with our customers, and in theirminds and hearts. Our employees arealso important stakeholders. The JAL
Brand is something we create also inthe minds of our employees.
Taka
Brands can be dangerous in
a way. Customers who have faith in abrand are convinced of its value, evenwhen they may be receiving less thanthe best service.
And the JAL Philosophy is whatstops inadequate service from happening. In particular, I would like to point to
the “Attitude” in “The Result of Life andWork = Attitude × Effort × Ability.” Youmust share this as a core value whenreflecting on and renewing your attitude whenever excessive pride raises
its head. And I think it is important torepeat this process.
The power of diversity as an
essential aspect of corporate
governance
Iwata In JAL’s case, almost all cabin attendants serving customers on
our flights are women. Now, having an
officer who has risen through the ranks
from a cabin attendant strengthens
the ties between management and theworksite. The need for developing the
careers of diverse employees, including women, has been incorporated
into the corporate governance codeand is growing in importance. Individuals, having various attributes in regard

52

JAL REPORT 2015

to gender, nationality and experience,bring diverse values, expertise and ahuman network to a company. At the
management level, for example, thisdiversity produces the best decisions
out of a wide range of options. Diversity
is essential for corporate governance.
The JAL Group has set its target of
raising the ratio of women in management from 14% in fiscal 2013 to 20% by
fiscal 2023. Two things will be required
to achieve this goal. One is to earnestly strive to train women and provide
opportunities. The other is to change
conventional work styles so that women can develop their careers. I hope
JAL will serve as a leader for Japanese industry. Half of our customers
and employees are women. And fromthe perspective of creating a corporate
brand with customers and employees,
JAL cannot expect future growth unless
it promotes women playing active roles.
Hioka JAL was recently selected as a
women-friendly “Nadeshiko Brand” anda “Health & Productivity Management
Brand”. As we make a point of declaring our will to “pursue the material andintellectual growth of all our employees”
at the very top of our corporate policy,
we can only provide unparalleled service when we offer an environment inwhich employees are happy, healthy,
and able to demonstrate their potential
with vitality. I believe JAL was selected
because we are continuing to move forward, even if that progress is made one
step at a time.
Taka
At the level of the Board of
Directors, JAL set in motion a fundamental change by embracing diversity,
appointing members who had served
as pilots, maintenance crew and cabin attendants. In the JAL Philosophy
sessions that I observed, I noticed that

Hiroyuki Hioka
Executive Officer, General Affairs
Japan Airlines Co., Ltd.

employees from different worksites
who had never spoken to each otherbefore had been brought together. I feelthat JAL is truly making strategic use ofdiversity and turning it into a competitive advantage.
Moving toward a brighter future
through the united effort of all
JAL employees
Iwata
I believe JAL is becoming agood company in terms of corporate
governance as well, precisely becauseof its experience. I hope it will remain
vigilant to signs of any regression andcontinue moving forward.
Hioka
Our president takes every
opportunity to point out that employees are our assets. We hope the energy of our employees will propel us to
the next level, and we must spread far
and wide the message that management and employees should be working hand in hand.
Taka
I think JAL had a time when
there was little communication between
management and the front lines of operations. While I do not foresee the Company reverting to how it was in thosedays, governance should not be left tomanagement alone. It requires a collaborative effort with the worksite. And
while those of you who experienced thecorporate bankruptcy seek to advanceby learning from that, younger generations have different mindsets. Because
JAL is currently enjoying great success,I think this is a good time for the Company to create a mechanism for smoothlytransitioning into the next management
group so that JAL can move on to abrighter future.

Highlights

President’s Message

The Medium Term Management Plan to Date

CSR

Financial Section

Governance
We are striving to increase corporate value by establishing a corporate governance structure that produces high managementtransparency and robust monitoring, by promoting compliance, and by developing and operating a solid risk management structure.

Status of Corporate Governance
The JAL Group has established the Fundamental Policies ofCorporate Governance with the primary goal of enhancing
management transparency and monitoring.
JAL Group Fundamental Policies of Corporate Governance
We maintain an awareness that our corporate group is a member of society at large with the duty to fulfill our corporate social
responsibility and contribute to society as we develop our business, in addition to fulfilling our financial responsibility of earning
adequate profits by providing high quality products through faircompetition while maintaining flight safety, which is the core ofour business, and providing the finest service to our customers.
Taking this into account, we have established the JAL Philosophy in accordance with the JAL Group Corporate Policy, “theJAL Group will pursue the material and intellectual growth of all
our employees, deliver unparalleled service to our customers,
and increase corporate value and contribute to the bettermentof society.” We will strive to increase corporate value and achieve
accountability by establishing a corporate governance structurethat results in high management transparency and strong management monitoring, while at the same time engaging in speedy
and appropriate management decision making.
The Board of Directors has established corporate governance by adopting the Fundamental Policies of Corporate
Governance as a key set of rules subsequent to the Companies Act, relevant laws and regulations and the Articles ofIncorporation, and reviews it at least once a year. The directors
aim to realize our Corporate Policy by putting the JAL Philosophy into practice, and report the progress of implementation of
the JAL Philosophy at Board of Directors meetings.
Basic Explanation of Company Organs
To speed up the decision-making process, we adopt the executive officer system, consisting of 9 directors (including 2 women) and 25 executive officers (including 2 women) excluding
those with concurrent duties as directors.
 trengthened Supervision and Checks on Executive
S
Management
1. Board of Directors
In order to separate the management monitoring function andbusiness execution function, the director and chairman takes
the chair at Board of Directors meetings and an appropriate
number of two or more external directors with a high level of
independence are appointed.
In addition, in order to carry out efficient decision making, theBoard of Directors may delegate decision making concerning
matters set forth in the Administrative Authority Criteria Table
to the Managing Executive Officers Committee, which is com-prised of directors and managing executive officers or higher
executive officers, pursuant to Regulations for Kessai and
Administrative Authority approved by the Board of Directors.
Amendment to and abolishment of Managing Executive Officers
Committee Regulations are decided by the Board of Directors.
2. Directors and Corporate Auditors
In order to promote transparent and fair corporate activities
and establish corporate governance, the management monitoring function is strengthened through the appointment of an
appropriate number of two or more external directors and half
the number or more corporate auditors.
Legal considerations are explained to directors to ensurethat they are aware of the duties of directors, including the“fiduciary duty of loyalty” and the “duty of care of a prudent
manager.” Moreover, the term of office of directors is one year
in order to confirm their accountability for each fiscal year.
In order to ensure diversity, external directors with vast
knowledge and experience in various fields are appointed. In
addition, in order to ensure independence, individuals who are
not substantially independent under the Company’s Independence Standards of External Officers are not appointed asexternal directors.
Corporate auditors monitor important matters concerning
corporate management and business operations and the execution of duties by reviewing important Ringi (internal approval
process) documents, as well as participating in Board of Directors meetings and other important meetings.
External corporate auditors are appointed from persons withvast knowledge and experience in various fields. Individuals
who are not substantially independent under the Company’s
Independence Standards of External Officers are not appointed as external corporate auditors. External corporate auditors,
together with other corporate auditors, coordinate with theinternal audit department and accounting auditors to ensure
sound management by conducting audits from a neutral andobjective standpoint.
Furthermore, corporate auditors, together with staff members of the corporate auditors’ office, carry out an annual auditof each business location, subsidiary and affiliated company
and report the results to the representative directors. Corporate auditors also share information with the audit department
and corporate auditor, hold meetings several times a year withthe full-time corporate auditors of subsidiaries to ensure andenhance auditing of the JAL Group.
3. Independence Standards for External Officers
We have established the following standards to determine
independence of external officers of the Company in order toestablish a high corporate governance structure that resultsin high management transparency and strong management

JAL REPORT 201553

Governancemonitoring and increased corporate value. (Basically individuals who do not correspond to any of the following items are
determined to be independent.)
Independence Standards of External Officers
1. An individual who has executed business* of JAL and JAL
Group consolidated subsidiaries at present or in the past ten
years.
2. An individual who corresponded to any of the items from a tof in the past three years.
a.	A business counterpart or a person who executed businessof such business counterpart, whose transactions with theCompany for one business year exceeded 1% of consolidated revenue of the Company or the business counterpartb.	A major shareholder or a person executing business ofsuch shareholder having an equity ratio of 5% or more in
the Companyc.	A major lender of borrowings of the Company or a person
executing business of such lenderd.	An individual receiving contributions of over 10 million yen
a year from the Company or a person belonging to an organization receiving such contributionse.	An individual receiving remuneration of over 10 million yen
excluding director’s remuneration from the Company or aperson belonging to an organization receiving remuneration exceeding 1% of consolidated revenue of the Company
f.	In case a person executing business of the Company isassigned as external director of another company, the person executing business of such other company
3. The spouse or relative within second degree of kinship of individuals corresponding to 1 and 2.
* A person executing business refers to an executive director or executive officer.

Management Transparency and Information Disclosure
1. Nominating Committee
When submitting a proposal to the general meeting of shareholders concerning the appointment of candidates to the positions of director and corporate auditor, the Board of Directors
consults the Nominating Committee in order to make a comprehensive judgment of the personality, knowledge, ability,
experience and performance of a candidate, and takes into
account the Nominating Committee’s report on such matters
before passing any resolutions. The Nominating Committee is
led by a chairman elected through a mutual vote among no
more than five committee members comprising the President and directors appointed with the approval of the Boardof Directors. The majority of directors in this committee (otherthan the President) are external directors.
2. Compensation Committee
When submitting a proposal to the general meeting of shareholders concerning the total amount of compensation for

54

JAL REPORT 2015

directors and corporate auditors, setting compensation
amounts within the limits approved at the general meeting ofshareholders and setting compensation amounts for executive officers, the Board of Directors ensures transparency andfairness in the decision making process by consulting theCompensation Committee, which is comprised of two or more
external directors and the President, and taking into accountthe Compensation Committee’s report on such matters before
passing any resolutions.
3. Personnel Committee
When appointing or discharging an executive officer, the Boardof Directors consults the Personnel Committee and takes into
account the Personnel Committee’s report on such matters
before passing any resolutions. The Personnel Committee iscomprised of a maximum of five members, including the President and other directors appointed by approval of the Boardof Directors. The majority of directors in this committee (otherthan the President) are external directors.
4. Officers Disciplinary Committee
Decisions concerning disciplinary action against directors andexecutive officers are made by the Officers Disciplinary Committee. The Officers Disciplinary Committee is composed of
not more than five members, including the President and otherdirectors appointed at a Board of Directors meeting. “Other
directors” consist of a majority of external directors. Any submission of proposals to the general meeting of shareholders
concerning the removal of directors requires the approval of
the Board of Directors.
5. Information Disclosure
To enable our stakeholders including the customers to easily
access the JAL Group’s corporate stance, the Fundamental
Policies of Corporate Governance is made publicly available
at all times.
JAL Philosophy Education
The representative director and president conducts JAL Philosophy Education for JAL Group directors, including himself,and employees in order to penetrate the JAL Philosophy into
the JAL Group.
Meetings of Management Boards (fiscal 2014)
Organ

Number of meetings

Average attendance ofofficers

Board of Directors

19

95%

Board of Corporate
Auditors

14

100%

Highlights

President’s Message

Other Organs Concerning Corporate Governance
Other organs concerning corporate governance are established in the Company as follows.
• Executive Committee
The Executive Committee, as the decision-making organization of management equivalent to the Board of Directors, discusses in advance matters to be decided at Board of Directors
meetings, shares information between directors, and discusses and decides on matters requiring checks and approval by
the Executive Committee.
• Management Liaison Committee
The Management Liaison Committee checks progress of management matters between directors and shares information.
• Group Earning Announcement Session
The Group Earning Announcement Session is attended bydirectors, executive officers and presidents of major subsidiaries to share the JAL Group’s business results and consider
ways to improve them.

The Medium Term Management Plan to Date

CSR

Financial Section• Group Council for Safety Enhancement General Meeting
The Corporate Safety and Security Department is placed
directly under the President to rigorously maintain safety.
The Group Council for Safety Enhancement General Meeting, in which the Corporate Safety and Security Department
serves as the Secretariat, shares information on safety in daily
operations, decides on countermeasures, considers important measures concerning safety and checks policies.
• Corporate Brand Promotion Council
The Corporate Brand Promotion Council formulates important
policies concerning the corporate brand and based on the JAL
Group’s corporate policy and guidelines. It also keeps track of
the actual state of corporate activities, manages progress andshares information on the various ongoing initiatives aimed atenhancing the corporate brand.
• CSR Committee
The CSR Committee checks on the status of progress in promoting Group CSR activities by referring to ISO 26000 standards to implement an effective plan-do-check-act cycle withthe aim of building on and promoting the Group’s CSR activities.

General Meeting of Shareholders
Appointment/
Dismissal

Appointment/Dismissal
Audit

Board of Directors
Instruction (Prior Deliberation)/
Delegation of Authority
Appointment/Dismissal,
Instruction/Command

ReportRecommendation

Executive Committee
ReportInstruction/
Delegation of
Authority

Report Significant
IssuesCorporate Brand
PromotionCouncilNominating Committee
Compensation Committee

Financial Audit
Group Council
for Safety
Enhancement
Group Operational
Safety Promotion
Committee

Executive Officers

Management
LiaisonCommittee

Collaboration

ReportOfficers Disciplinary Committee

PresidentGroup Earning
Announcement
SessionBoard of Corporate
Auditors

Personnel Committee

Instruction/Delegation of Authority

Appointment/
Dismissal

Accounting Auditor
Collaboration

Audit

Risk Management Committee
Financial Risk Committee
JAL Philosophy Committee
CSR Committee

Guidance/Advice

Collaboration

Legal Advisors

Departments and Subsidiaries

JAL REPORT 201555

GovernanceFundamental Policies on the Internal Controls System
To provide unparalleled service to the customers, increase corporate
value, and contribute to the betterment of society, the JAL Group has
established the Fundamental Policies of Corporate Governance. To
increase its effectiveness, we have established rules and organizations
concerning the following systems and matters, and ensure that business
operations are conducted appropriately in accordance with the Companies
Act and Companies Act Enforcement Regulations. We evaluate and verify
development and operation of the internal control system and implement
corrective action when correction is required.
1. We have developed a system to ensure compliance with the
Articles of Incorporation and laws and regulations governing theexecution of the duties of directors.
1. We have established the JAL Philosophy as behavioral guidelines of
the Company. Directors and employees are encouraged to abide bythese practices.
2. 
The Board of Directors decides on the Fundamental Policies on
the Internal Controls System and the General Affairs Department
promotes development of the internal control system.
3. The General Affairs Department supervises compliance operations
and monitors development and operation of relevant Company
regulations.
4. We have developed an audit system to ensure the duties of directors
and employees are executed in compliance with applicable laws andregulations.
2. W
 e have developed a system concerning the preservation andmanagement of information concerning the execution of theduties of directors.
We preserve and manage information concerning the execution ofduties of directors in compliance with applicable laws and regulations
and Company regulations.
3. W
 e have developed regulations and other systems concerning
risk management of losses.
In order to manage risks to the JAL Group, we have established aCouncil for Safety Enhancement, a Risk Management Committee, aFinancial Risk Committee, etc., to appropriately manage risks, and theGeneral Affairs Department has established Guidance for JAL GroupInternal Control to monitor the appropriateness of duties and proactively
prevent risks of losses. In addition, we are prepared in the event of a riskof losses and strive to minimize losses.
4. We have developed a system to ensure that the duties of directors are executed efficiently.
1. We hold ordinary Board of Directors meetings once a month andextraordinary meetings when it is necessary to make important
decisions regarding Group management policies and plans. In
addition, to ensure the duties of directors are executed efficiently,
we have established meeting structures such as the Executive

Risk Management System
The JAL Group manages risks by dividing them into three categories: (1) operational risks associated with aviation safety,
aviation security and other issues related to air transportation;(2) corporate risks associated with management in general,
excluding risks related to air transportation; and (3) strategicrisks associated with business management that may have amaterial impact on corporate revenue and expenditures.
We manage operational risks by establishing the GroupCouncil for Safety Enhancement General Meeting chairedby the President of Japan Airlines Co., Ltd. and composed

56

JAL REPORT 2015

Committee and Group Earning Announcement Session.
2. We have defined administrative authority, authority of managerial
posts, division of duties, etc., in accordance with Company
regulations and have segregated authority in order to ensure that
duties are executed efficiently.
5. We have developed a system to ensure that duties in the JAL
Group are executed appropriately.
1. We have established JAL Group Business Management Regulations
to ensure that each subsidiary has established a system to carry out
management in a fair and efficient manner in accordance with the
JAL Philosophy. The General Affairs Department has also enacted
Guidance for JAL Group Internal Control and continuously monitors
the appropriateness of duties.
2. 
We have developed a system to report matters concerning theexecution of the duties of directors of subsidiaries, etc., to theCompany.
3. We have developed regulations and other systems for risk
management of losses of subsidiaries.
4. We have developed a system to ensure the duties of directors, etc., of
subsidiaries are executed efficiently.
5. We have developed a system to ensure that directors, employees,
etc., of subsidiaries execute duties in compliance with applicablelaws, regulations and the Articles of Incorporation.
6. W
 e have developed a system concerning employees in case corporate auditors require the assignment of employees to support
their duties, a system concerning independence of such employees from directors, and a system to ensure that instructions bycorporate auditors to those employees are effective.
7. We have developed a system concerning reports, etc., to corporate auditors.
1. We have developed a system for directors and employees to reportto corporate auditors.
2. 
We have developed a system for directors, corporate auditors,
employees or persons who receive reports from them to report tocorporate auditors.
3. We have developed a system to ensure that persons who report are
not subjected to disadvantageous treatment as a result of reporting.
8. W e have developed a system for advance payment or repaymentof costs arising from the execution of the duties of corporate auditors and the policy for processing of costs or liabilities arisingfrom the execution of other duties.
9. We have developed other systems to ensure that audits by the
Board of Corporate Auditors or corporate auditors are executed
effectively.

of directors appointed by the President and the presidents ofGroup airline companies. We have also established the GroupOperational Safety Promotion Committee under the Council,
headed by the executive officer of Corporate Safety & Security at Japan Airlines Co., Ltd. Membership includes the vicepresidents of the Safety Management Departments and board
members in charge of safety at Group airline companies. The
Group Operational Safety Promotion Committee monitorsand evaluates the safety management system based on thestatus of flight operations. By formulating and evaluating theplans, policies and measures on aviation safety, making over-Highlights

President’s Message

all adjustments and offering recommendations, advice andguidance, this committee seeks to maintain and strengthen
collaboration between departments and between Group airline companies on issues related to safety and enhance thelevel of safety.
To stabilize Group management by comprehensively managing risks other than those associated with aviation safety,
which includes safety and security management, we haveestablished the Risk Management Committee based on the
JAL Group Basic Policies on Risk Management. Chaired by the
executive officer of General Affairs at Japan Airlines Co., Ltd.,
this committee formulates basic risk management guidelines,
submits progress reports, and shares information on measurestaken when risks are identified. On an annual basis, the Risk
Management Committee conducts a fixed-point observation
related to risks faced by each department of Japan Airlines Co.,
Ltd. and major Group companies. At the management level weendeavor to build a common awareness of the results of thereview and policies formulated in response to the results. We
also assess and analyze risks identified by the review and provide support to responsible organizations so they can promptly
implement measures to prevent risk from materializing. In addition, we have established an Information Security Committee
headed by the executive officer of General Affairs and executive
officer for IT Planning at Japan Airlines Co., Ltd. to strengthen
our controls over personal and corporate information handled
by the entire Group.
We have also established the Financial Risk Committee,
headed by the executive officer of Finance and Accounting
at Japan Airlines Co., Ltd., to provide corporate management with an appropriate understanding of financial risks. The
Financial Risk Committee regularly monitors the results of simulations on the financial condition of the Company, estimates
the potential impact of risks that may materially and quantitatively affect corporate performance, and responds to risks asnecessary in tandem with the Risk Management Committee.
Business Continuity Plan
In dealing with specific risks that threaten our ability to fulfill
our responsibility as a provider of public transportation, suchas an unidentified viral infectious disease, including pandemic
influenza, or an earthquake, we have established a BusinessContinuity Plan (BCP) system that enables us to effectively continue business under emergency situations based on
guidelines set up in collaboration with regulatory bodies andother relevant institutions. The BCP covers the basic points ofpolicies and procedures that are necessary for ensuring thesafety of our employees and their families and for maintaining
air transport operations, including reservations and guidance,
which are important to the JAL Group, as well as payment

The Medium Term Management Plan to Date

CSR

Financial Section

and settlement operations. We regularly conduct reviews andimplement revisions as required to improve the practical application of the BCP.
In 2014, we responded to the rapid spread of the Ebola
epidemic in West Africa by implementing our BCP for “Unidentified Viral Infectious Disease, Including Pandemic Influenza.”
We also collaborated with government institutions and set up
necessary systems, consequently adding the “Policy on Handling Ebola Virus Disease (International Flights)” to the BCP.
The JAL Group introduced a safety confirmation system in2007 to quickly confirm the safety of all JAL Group employees and their families in the event of an earthquake disaster,and launched an upgraded version of the system for the entire
Group in 2014 to accelerate information gathering. In addition,
through measures that include regular reporting drills, we are
striving to instill in each employee an awareness of crisis management in preparation for contingencies.
Information Security Measures
An incident involving the leakage of personal information
occurred in September 2014 at the JAL Group caused by anillegal login to the JAL Mileage Bank and illegal access to thecustomer information management system. We deeply regret
the inconvenience and concern this has caused to many customers and persons involved. In response, we are strengthening information security as a top priority and are taking steps
to prevent a reoccurrence.
Specifically, we advanced previously planned measures forreinforcing information security to establish a robust system fordetecting and monitoring increasingly advanced and complex
cyber-attacks from outside the Company while continuing to
upgrade preventive measures to the highest level. The Risk
Management Committee is following up to ensure steadyprogress is being made.
Compliance System
To ensure thorough compliance with all laws, regulations andrules governing our corporate activities, we have designatedthe General Affairs Department of Japan Airlines Co., Ltd.
to act as the supervising division for compliance issues andare making a focused effort to raise employee awareness byadopting various measures.
We have organized the JAL Group Compliance Network
comprising directors from each Group company, which seeks
to cultivate a compliance culture throughout the entire Groupby regularly publishing the compliance information magazine
and mail magazines and providing information via the intranet.
Our compliance education and legal seminars by the Legal
Affairs Department are broadly conducted through face-toface sessions and e-learning to promote actions that comply

JAL REPORT 201557

Governancewith social norms while preventing legal risks by actively raisingGroup-wide knowledge of these areas.
Whistleblower System
The JAL Group has set up a Group Hotline as a contact
point for consultation on issues related to compliance and forreporting legal violations based on the Group Hotline Regulations. The Group Hotline is available to all staff employedby the JAL Group, including temporary staff and employeesof subcontractors, with full guarantee that persons using theGroup Hotline will not be treated adversely for doing so.
Good Partnership with Business Associates
Recognizing that our flight operations, services and products
are made possible through the cooperation and support of ourbusiness associates, we strive to establish solid partnerships
of mutual trust, not only through fair and transparent procurement, but by maintaining a sense of gratitude.
1. Fair and Transparent Procurement
When we select business associates, we take full consideration of the quality of their services and products, pricing anddelivery times, as well as overall reliability and ongoing CSR(corporate social responsibility) efforts.
Since August 2010, we have been centralizing all the procurement operations in the Purchasing Department of Japan
Airlines Co., Ltd. We have sought to provide excellent opportunities for business associates in Japan and abroad andto consistently maintain fair and transparent procurement
practices.
Our goal for centralized procurement also includes cost
reduction as well as standardization and higher efficiency inthe operational process of procurement.
2. Providing Safe and Comfortable Service to Passengers
To ensure the comfort of all passengers aboard our flights,
we are working with our business associates to nurture a culture in which the highest priority is placed on safety while also
promoting thorough quality control to offer premier hospitality.
3. Promoting Procurement Activities with Due
Consideration of Corporate Social Responsibility
In accordance with the Basic CSR Policy of the JAL Group, we

58

JAL REPORT 2015

are working with our business associates to promote procurement activities with due consideration of CSR, including legal
compliance, protection of the global environment, respect forhuman rights, proper labor practices, fair operating practices
and consumer issues.
Reinforcing Supply Chain Risk Management
The JAL Group has decided to join the Global Membership,
hosted by Sedex Information Exchange Limited (Sedex), tostrengthen risk management throughout the supply chain andbolster the supply chain’s sustainability.
Sedex is a London-based nonprofit organization that promotes ethical and responsible business practices. It sharesinformation with suppliers around the world via an online
information platform and monitors ongoing improvements
in issues faced by suppliers in an effort to expand ethicalbusiness practices.
The JAL Group plans to use the CSR information platform
offered by Sedex, starting with suppliers who provide goods
that are directly connected to our customers, such as in-flightmeals and products, to further develop the mutual understanding and relationships of trust that undergird responsible
procurement.

Develop mutual
understanding
and relationshipsof trust

Review supplierdata andmonitor ongoing
improvements
Provide CSR
information incompliance withinternational standards*

Suppliers

Provide CSR information
and report on progress

Assess CSR activities,
advise on improving
actions and monitor
situation* International standards: ISO 14001, SA 8000, OHSAS 18001, ETI (Ethical
Trading Initiative) Base CodeHighlights

President’s Message

The Medium Term Management Plan to Date

CSR

Financial Section

Environmental, Social and Governance (ESG) Data
The JAL Group actively discloses information on its CSR activities.

Environmental Data

(As of the end of each fiscal year)
FY2012FY2013

FY2014

Unit

787
88.8
6.08
3.76
0.64

820
89.6
6.26
4.39
0.72

840
86.6
6.12
4.38
0.70

10,000 tons%
1,000 tons
1,000 tons
1,000 tons

Electricity Use*1
Heat Use (crude oil equivalent) *1
Water Use*1

134
50,997–

129
49,633452

125
48,494445

Million kWh
1,000 liters
1,000 m3

Industrial Waste*1
Ratio of Final Disposal*1

4,327
0.9

3,720
1.2

3,415
1.2

Environment
CO2 Emissions
CO2 Emissions/RTK (comparison with FY2005)
NOx (LTO cycle)
CO (LTO cycle)
HC (LTO cycle)

Tons%*1 Airports, offices, maintenance centers (Japan)

Social Data
FY2012FY2013

FY2014Unit

30,88222,8582,293
5,731

31,472
23,084
2,405
5,983

31,53423,0932,446
5,995

Persons
Persons
Persons
Persons

Average Age*2
Ground Jobs
Flight Crew
Cabin Crew

38.0
38.4
43.1
34.9

37.4
37.5
42.1
35.0

38.3
38.7
42.7
35.1

Years
Years
Years
Years

Ratio of Men*2
Ratio of Women*2

53.8
46.2

53.3
46.7

53.2
46.8

%
%

Managerial Staff*2
General Staff*2
Ratio of Staff with Disabilities*3
Ratio of Female Managers*2

15.9
84.1
1.91
14.3

15.6
84.4
2.00
14.1

15.9
84.1
2.06
15.1

%
%
%
%

59.6
295,71362.5
311,70460.2
318,249

Childcare Leave ApplicantsNursing Care Leave Applicants

747
69

702
62

779
51

Persons
Persons

Ratio of Local Hires at Overseas Offices*2
Ratio of Locally Hired Managers at Overseas Offices*2

92.3
64.7

92.0
62.1

90.8
62.8

%
%

444
1,491

915
3,144

1,044
4,436

Persons
Hours

Human Resources
Consolidated Number of Employees*2
Ground Jobs
Flight Crew
Cabin Crew

Training Period per Person*4
Training Cost per Person*4

Community Contribution
Participation in Voluntary Activities
Total Hours of Voluntary Activities

Hours/Person
Yen/Person*2 As of the end of the fiscal year. *3 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.
*4 Past data have been revised in accordance with improvements made in the accuracy of data collection.

Governance Data (Japan Airlines Co., Ltd.)(As of the end of each fiscal year)
FY2012FY2013

FY2014

Unit

Executives
Female Directors
External Directors

7
1
2

7
2
2

9
2
2

Persons
Persons
Persons

Auditors
External Auditors

5
3

5
3

5
3

Persons
Persons

235
172
63

294
228
66

386
320
66

Governance

Executive Remuneration
Directors Total (including external directors)
Auditors Total (including external directors)

Millions of yen
Millions of yen
Millions of yen

Note: There have been 9 directors (including 2 external directors) and 5 auditors (including 2 external auditors) since the 65th ordinary general meeting of shareholders held on June 17, 2015.

JAL REPORT 2015

59

Executive Officers

60

External Director

External Director

Eizo Kobayashi

Kimie Iwata

Director, Senior Managing
Executive Officerr

Director, Senior Managing
Executive Officerr

Director, Senior Managing
Executive Officer

Director, Senior Managing
Executive Officer

Tadashi Fujita

Toshiaki Norita

Junko Okawa

Norikazu Saito

JAL REPORT 2015

Director, Chairman

Representative Director,
President

Representative Director,
Executive Vice President

Masaru Onishi

Yoshiharu Ueki

Nobuhiro Sato

Highlights

President’s Message

The Medium Term Management Plan to Date

CSR

Financial Section(As of July 1, 2015)

Members of the Board of Directors
Director, Chairman

Masaru Onishi

Chairman of the Board of Directors

Representative Director, President

Yoshiharu Ueki

Chairman of the Board of Managing Executive Officers, Chairman of the Council forGroup Safety Enhancement, Chairman of the Corporate Brand Promotion Council ,Chairman of the JAL Philosophy Committee, Chairman of the CSR Committee

Representative Director, Executive Vice President

Nobuhiro Sato

Aide to the President, Safety General Manager

Director, Senior Managing Executive Officer

Junko Okawa

Corporate Brand Promotion

Director, Senior Managing Executive Officer

Tadashi Fujita

General Manager, Managing Division Passenger Sales Domestic Passenger Sales,
President of JAL Sales

Director, Senior Managing Executive Officer

Norikazu Saito

Finance and Accounting

Director, Senior Managing Executive Officer

Toshiaki Norita

Corporate Planning, Business Creation Strategy

External Director

Kimie Iwata

External Director

Eizo Kobayashi

Auditors
Audit and Supervisory Board Member

Hisao Taguchi

Audit and Supervisory Board Member

Yasushi Suzuka

External Audit and Supervisory Board Member

Eiji Katayama

External Audit and Supervisory Board Member

Hiroyuki Kumasaka

External Audit and Supervisory Board Member

Shinji Hatta

Executive Officers
Managing Division Route Marketing

Executive Officer

Hideki Kikuyama
Toshinori Shin
Nobuyoshi Gondo
Kiyoshi Ishizeki
Ryuzo Toyoshima
Shinichiro Shimizu
Tsuyoshi Yamamura
Arata Yasujima
Tetsuya Onuki

Executive Officer

Munemitsu Erikawa

Senior Vice President, China Vice President and Regional Manager, Beijing District SalesManager, Beijing

Executive Officer

President of Japan Transocean Air Co., Ltd.

Executive Officer

Kiyoshi Marukawa
Akira Yonezawa
Toshiki Oka
Jun Kato
Hiroyuki Hioka
Tadao Nishio
Hidetsugu Ueda
Hoshiko Nakano
Hiroki Kato
Tomohiro Nishihata
Takahiro Abe
Hideki Oshima
Yuji Akasaka
Eri AbeExecutive Officer

Hideo Ninomiya

Deputy General Manager, Managing Division Passenger Sales, International Passenger
Sales, Web Sales, Senior Vice President of Eastern Japan area

Senior Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Managing Executive Officer
Executive Officer
Executive Officer

Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer
Executive Officer

Flight Operations
Corporate Safety & Security
IT Planning
Corporate Control
Human Resources
Cargo & Mail
President of Japan Air Commuter Co., Ltd.
President of J-AIR Co., Ltd.

Managing Division Route Marketing (International Route Marketing)Purchasing
Managing Division Route Marketing (Products and Services Planning)
General Affairs
Managing Division Route Marketing (Domestic Route Marketing)
Human Resources in charge of Education, Vice President, Human Resources Management
Senior Vice President of Western Japan area
Vice President, Haneda Airport, President of JAL Sky Co., Ltd.
Managing Division Route Marketing (Passenger System Planning)
Airport Operations
Managing Division Route Marketing (International Relations and Alliances)
Engineering & Maintenance, President of JAL Engineering
Cabin Attendants

JAL REPORT 2015

61

62

JAL REPORT 2015

Financial Section
JA L R E P ORT 2 015

A line of lights floats on the cockpit window.
Beyond the runway lie the homes of those onboard.
We deliver lasting memories of contentment, on time.

JAL REPORT 201563

Consolidated Balance Sheets
Japan Airlines Co., Ltd. and Consolidated Subsidiaries

As of March 31

Millions of yen

Thousands of U.S.
dollars (Note 4)

2015

2014

2015

¥ 364,988¥ 368,774$ 3,037,263

ASSETS
Current assets:
Cash and time deposits (Notes 5, 7 and 10)
Short-term investments in securities (Notes 5, 7 and 8)
Notes and accounts receivable—trade (Note 7)

—

58

—

142,150

143,807

1,182,907

Flight equipment spare parts and supplies

19,754

20,680164,383

Deferred income taxes (Note 12)12,448

4,532

103,586

Other

76,931

68,082640,184

(817)

(926)

(6,798)

Total current assets

615,455

605,009

5,121,536

Investments in securities (Notes 6, 7, 8 and 10)

93,18564,931

775,443

Flight equipment (Notes 10 and 17)

491,295

447,021

4,088,333

Ground property and equipment (Notes 10 and 17)

50,21052,263417,824

Advances on flight equipment and other purchases

97,752

61,992

813,447

Total tangible fixed assets

639,258

561,277

5,319,613

Software61,66847,336513,173

Allowance for doubtful accounts

Tangible fixed assets, net:

Long-term loans receivable (Note 10)

9,343

10,74577,748Deferred income taxes (Note 12)

3,860

10,57032,121

Asset for retirement benefits (Note 11)

1,974

275

16,426

48,86840,392406,657

(258)

(371)

(2,146)

Other (Note 10)
Allowance for doubtful accounts
Total fixed assets
Total assets

64

JAL REPORT 2015

857,899

735,158

7,139,044¥1,473,354¥1,340,168$12,260,580

Highlights

President’s Message

As of March 31

The Medium Term Management Plan to Date

CSR

Financial Section

Millions of yen

Thousands of U.S.
dollars (Note 4)

2015

2014

2015

¥ 144,846¥ 148,999$ 1,205,342

106

287

882

LIABILITIESCurrent liabilities:
Accounts payable—trade (Note 7)
Short-term borrowings (Notes 7 and 10)
Current portion of long-term loans payable (Notes 7 and 10)

7,807

8,062

64,966

Lease payable (Notes 7 and 10)

25,12332,455

209,062

Accounts payable—installment purchase (Notes 7 and 10)
Advances received
Reserve for reconstruction on businessReserve for loss from business of subsidiaries
Deferred income taxes (Note 12)
Asset retirement obligations (Note 20)
Other
Total current liabilities

174

196

1,447

78,77072,830655,488

—

332

—

3,889

—

32,362

181

122

1,506

—

1,048

—

112,174

69,931

933,460

373,074

334,265

3,104,551

Non-current liabilities:
Long-term loans payable (Notes 7 and 10)

43,80945,084

364,558

Lease payable (Notes 7 and 10)

22,54846,996

187,634

Long-term accounts payable—installment purchase (Notes 7 and 10)

1,025

1,200

8,529

Deferred income taxes (Note 12)

2,317

91

19,281

Liability for retirement benefits (Note 11)

191,635

166,6431,594,699

Reserve for loss on antitrust litigation

5,858

6,352

48,747

Asset retirement obligations (Note 20)

3,419

3,356

28,451

28,914

25,112

240,609

Total non-current liabilities

299,528

294,838

2,492,535

Total liabilities

672,603629,1035,597,095

1,509,128

OtherContingent liabilities (Note 18)

NET ASSETS (Note 13)
Stockholders’ equity:
Common stock:
Authorized: 700,000,000 shares in 2015 and 350,000,000 shares in 2014
Issued: 362,704,000 shares in 2015 and 181,352,000 shares in 2014

181,352

181,352

Capital surplus

183,042

183,043

1,523,192

Retained earnings

421,137

332,067

3,504,510

(538)

(130)

(4,476)784,992

696,332

6,532,345

Net unrealized gains on other securities (Note 8)

24,3346,450

202,496

Deferred gain (loss) on hedges (Note 9)(15,612)6,887(129,915)

Treasury stock, at cost: 203,395 shares in 2015 and 33,659 shares in 2014
Total stockholders’ equity
Accumulated other comprehensive income

Foreign currency translation adjustments(4,101)(5,187)(34,126)

Accumulated adjustments for retirement benefits (Note 11)(13,136)(14,193)(109,311)

Total accumulated other comprehensive income(8,516)(6,044)(70,866)

Minority interests

24,275

20,775

202,005

Total net assets

800,751

711,064

6,663,485¥1,473,354¥1,340,168$12,260,580

Total liabilities and net assets
The accompanying notes are an integral part of these consolidated financial statements.

JAL REPORT 201565

Consolidated Statements of Income andComprehensive Income
Japan Airlines Co., Ltd. and Consolidated Subsidiaries
Millions of yen

Thousands of U.S.
dollars (Note 4)

2015

2014

2015

Domestic¥ 487,555¥ 487,414$ 4,057,210

International

454,857

437,5783,785,112

Incidental and other revenues

402,299384,351

3,347,749

Total operating revenues

1,344,711

1,309,343

11,190,072

Years ended March 31

Operating revenues:
Passenger:

Operating expenses:
Wages, salaries and benefits

240,208

235,278

1,998,901

Aircraft fuel282,561

283,380

2,351,343

Landing fees and other rent

81,65080,205

679,454

Aircraft maintenance

40,603

41,147

337,879

Aircraft rent

27,20231,509226,362

Depreciation and amortization

85,89782,718714,795

Other

406,897388,311

3,386,011

Total operating expenses

1,165,021

1,142,550

9,694,774

179,689

166,792

1,495,290

6,723

Operating income
Non-operating income (expenses):
Interest income

808

784

Dividend income

1,097

987

9,128

Interest expense(1,665)(2,078)(13,855)

Gain on sales of flight equipment

3,154

1,136

26,246

Loss on sales and disposal of flight equipment(6,954)(4,716)(57,868)

Equity in losses of affiliates(2,609)(3,749)(21,710)

Exchange gains, net

1,889

1,234

15,719Gain on sales of investments in securities

121

929

1,006

Gain from compensation

846

8,411

7,040

(1,454)(4,554)(12,099)

Lease penalties
Loss on impairment of fixed assets (Note 15)(881)(1,497)(7,331)

Write-down of flight equipment spare parts and supplies(922)(1,663)(7,672)(3,889)—(32,362)672(1,970)

5,592

Reserve for loss from business of subsidiaries
Other
Total non-operating income (expense)
Income before income taxes and minority interests(9,788)(6,745)(81,451)

169,901

160,047

1,413,838
121,960

Income taxes—current (Note 12)

14,656

11,159

Income taxes—deferred (Note 12)

1,319(21,498)

10,976

Total income taxes

15,976(10,338)

132,944

Income before minority interests

153,925

170,386

1,280,893

4,880

4,134

40,609149,045

166,251

1,240,284

Minority interests
Net income

4,880

4,134

40,609

153,925

170,386

1,280,893

Net unrealized gains on other securities, net of taxes

17,6104,026

146,542

Deferred gain (loss) on hedges, net of taxes(22,515)

280(187,359)

Foreign currency translation adjustments

1,333

1,512

11,092Adjustments for retirement benefits

1,058

—

8,804

355

71

2,954

Minority interests
Income before minority interests
Other comprehensive income (Note 14)

Share of other comprehensive income of associates accounted for using the equity method
Total other comprehensive income
Comprehensive income(2,157)

5,891(17,949)¥ 151,768¥ 176,277$ 1,262,944¥ 146,572¥ 171,822$ 1,219,705

5,196

4,455

43,238Comprehensive income attribute to
Owners of the parent
Minority interests
The accompanying notes are an integral part of these consolidated financial statements.

66

JAL REPORT 2015

Highlights

President’s Message

The Medium Term Management Plan to Date

CSR

Financial Section

Consolidated Statements of Changes in Net Assets
Japan Airlines Co., Ltd. and Consolidated Subsidiaries

Years ended March 31

Millions of yen

Thousands of U.S.
dollars (Note 4)

2015

2014

2015

¥181,352¥181,352$1,509,128

—

—

—

Stockholders’ equity
Common stock:
Balance at beginning of year
Changes during the fiscal year
Total changes
Balance at end of year

—

—

—

181,352

181,352

1,509,128

183,043

183,043

1,523,200

(0)

—

(0)

Capital surplus:
Balance at beginning of year
Changes during the fiscal year:
Change in equity

(0)

—

(0)

183,042

183,043

1,523,192

Balance at beginning of year

332,067

198,196

2,763,310

Cumulative effect of changes in accounting policies(30,965)—(257,676)

Restated balance

301,102

198,196

2,505,633

Total changes
Balance at end of year
Retained earnings:

Changes during the fiscal year:
Cash dividends(29,010)(32,379)(241,408)

Net income

149,045

166,251

1,240,284

Total changes

120,034

133,871998,868

421,137

332,067

3,504,510

(130)

(122)

(1,081)

(408)

(8)

(3,395)

Balance at end of year
Treasury stock, at cost:
Balance at beginning of year
Changes during the fiscal year:
Purchases of treasury stock

(408)

(8)

(3,395)

(538)

(130)

(4,476)

Balance at beginning of year

696,332

562,469

5,794,557

Cumulative effect of changes in accounting policies(30,965)—(257,676)

Restated balance

665,367

562,469

5,536,881

Total changes
Balance at end of year
Total stockholders’ equity:

Changes during the fiscal year:
Cash dividends(29,010)(32,379)(241,408)

Net income

149,045

166,251

1,240,284

(408)

(8)

(3,395)

(0)

—

(0)

Purchases of treasury stock
Change in equity
Total changes
Balance at end of year

119,625

133,863995,464¥784,992¥696,332$6,532,345

JAL REPORT 2015

67

Millions of yen

Thousands of U.S.
dollars (Note 4)

2014

2015

2015

Years ended March 31

Accumulated other comprehensive income
Net unrealized gains (losses) on other securities, net of taxes (Note 8):
Balance at beginning of year

¥

6,450

¥

2,353

$

53,673

Changes during the fiscal year:
Changes other than to stockholders’ equity, net

17,883

4,097

Total changes

17,883

4,097

148,814

24,3346,450

202,496

6,887

6,603

57,310Changes other than to stockholders’ equity, net(22,499)

283(187,226)

Total changes(22,499)

283(187,226)(15,612)6,887(129,915)(5,187)(6,378)(43,163)

Changes other than to stockholders’ equity, net

1,085

1,190

9,028

Total changes

1,085

1,190

9,028

(4,101)(5,187)(34,126)(14,193)—(118,107)

Changes other than to stockholders’ equity, net

1,056(14,193)

8,787

Total changes

1,056(14,193)

8,787(13,136)(14,193)(109,311)(6,044)

2,578(50,295)

Changes other than to stockholders’ equity, net(2,472)(8,622)(20,570)

Total changes(2,472)(8,622)(20,570)(8,516)(6,044)(70,866)

20,775

18,141

172,880

Changes other than to stockholders’ equity, net

3,499

2,634

29,117

Total changes

3,499

2,634

29,117

24,275

20,775

202,005

5,917,150

Balance at end of year

148,814

Deferred gains on hedges, net of taxes (Note 9):
Balance at beginning of year
Changes during the fiscal year:

Balance at end of year
Foreign currency translation adjustments:
Balance at beginning of year
Changes during the fiscal year:

Balance at end of year
Accumulated adjustments for retirement benefits
Balance at beginning of year
Changes during the fiscal year:

Balance at end of year
Total accumulated other comprehensive income
Balance at beginning of year
Changes during the fiscal year:

Balance at end of year
Minority interests
Balance at beginning of year
Changes during the fiscal year:

Balance at end of year
Total net assets
Balance at beginning of year

711,064

583,189

Cumulative effect of changes in accounting policies(30,965)—(257,676)

Restated balance

680,099

583,189

5,659,474

Changes during the fiscal year:
Cash dividends(29,010)(32,379)(241,408)

Net income

149,045

166,251

1,240,284

(408)

(8)

(3,395)

(0)

—

(0)

1,026

(5,988)8,537

Purchases of treasury stock
Change in equity
Changes other than to stockholders’ equity, net
Total changes
Balance at end of year
The accompanying notes are an integral part of these consolidated financial statements.

68

JAL REPORT 2015

120,651

127,875

1,004,002¥800,751¥711,064$6,663,485

Highlights

President’s Message

The Medium Term Management Plan to Date

CSR

Financial Section

Consolidated Statements of Cash Flows
Japan Airlines Co., Ltd. and Consolidated Subsidiaries

Years ended March 31

Millions of yen

Thousands of U.S.
dollars (Note 4)

2015

2014

2015

¥169,901¥160,047$1,413,838

Operating activities
Income before income taxes and minority interests
Adjustments to reconcile income before income taxes and minority interests to net
cash provided by operating activities:
85,89782,718714,795

Gain and loss on sales and disposal of fixed assets and loss on impairment of
fixed assets, net

6,108

6,875

50,827

Decrease in liability for retirement benefits(5,686)(2,129)(47,316)

Interest and dividend income(1,905)(1,772)(15,852)

Interest expense

1,665

2,078

13,855

Exchange loss, net

943

652

7,847

Equity in losses of affiliates

2,609

3,749

21,710Decrease (increase) in notes and accounts receivable—trade

1,975(22,131)

16,435

851

380

7,081

(4,392)

12,883(36,548)

Depreciation and amortization

Decrease in flight equipment spare parts and supplies
Increase (decrease) in accounts payable—tradeOther

15,73017,194130,897

Subtotal

273,700

260,546

2,277,606

2,360

2,303

19,638Interest and dividends received
Interest paid

(1,768)(2,232)(14,712)

Income taxes paid

(13,152)(12,675)(109,444)

Net cash provided by operating activities

261,139

247,941

2,173,079(3,561,288)

Investing activities
Purchases of time deposits(427,960)(471,404)

Proceeds from maturity of time deposits

396,645506,8673,300,699

Purchases of fixed assets(198,635)(164,590)(1,652,949)

Proceeds from sales of fixed assets

3,538

2,893

29,441

Purchases of investments in securities(5,287)(8,176)(43,996)

243

1,206

2,022

76

145

632

169

—

1,406

Loans receivable made(287)

(4,293)(2,388)

Collection of loans receivable

1,859

6,138

15,469Proceeds from sales and maturity of investments in securities
Proceeds from purchase of subsidiaries resulting in change in scope of
consolidation (Note 16)
Proceeds from sales of subsidiaries resulting in change in scope of consolidation(Note 16)

Other
Net cash used in investing activities

(920)

(24)

(7,655)(230,559)(131,237)(1,918,606)

Financing activities
Increase (decrease) in short-term borrowings, net
Proceeds from long-term loans

(84)

23

(699)

15,342

17,880127,669

Repayment of long-term loans(18,465)(9,833)(153,657)

Dividends paid

(28,989)(32,283)(241,233)

Dividends paid to minority interests(2,046)(1,929)(17,025)

Payments for lease payable(32,638)(36,112)(271,598)

Other
Net cash used in financing activities

(441)

342

(3,669)(67,323)(61,912)(560,231)

1,037

1,045

8,629

Net increase (decrease) in cash and cash equivalents(35,705)

55,836(297,120)

Cash and cash equivalents at beginning of year

155,252

99,413

1,291,936

Increase in cash and cash equivalents by merger

4

2

33

Effect of exchange rate changes on cash and cash equivalents

Decrease in cash and cash equivalents resulting from exclusion of subsidiaries
from consolidation
Cash and cash equivalents at end of year (Note 5)

(264)

—

(2,196)¥119,287¥155,252$ 992,652

The accompanying notes are an integral part of these consolidated financial statements.

JAL REPORT 201569

Notes to Consolidated Financial Statements
Japan Airlines Co., Ltd. and Consolidated Subsidiaries

1. BASIS OF PRESENTING FINANCIAL STATEMENTS
Japan Airlines Co., Ltd. (the “Company”) and its domestic consolidated subsidiaries maintain their accounting records and prepare
their financial statements in accordance with accounting principles
generally accepted in Japan, which are different in certain respects
as to the application and disclosure requirements of International
Financial Reporting Standards. The accompanying consolidated
financial statements have been compiled from the consolidated
financial statements filed with the appropriate Local Finance Bureauof the Ministry of Finance as required by the Financial Instruments
and Exchange Act of Japan and include certain additional financial
information for the convenience of readers outside Japan. Some
supplementary information included in the statutory Japanese language consolidated financial statements, but not required for fairpresentation, is not presented in the accompanying consolidated
financial statements.
As permitted by the Financial Instruments and Exchange Act ofJapan, amounts of less than one million yen have been omitted. As aresult, the totals shown in the accompanying consolidated financial
statements (both in yen and U.S. dollars) do not necessarily agreewith the sum of the individual amounts.
Certain amounts previously reported have been reclassified toconform to the current year’s classification.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa. Principles of Consolidation and Accounting forInvestments in Unconsolidated Subsidiaries and Affiliates
The accompanying consolidated financial statements include theaccounts of the Company and all significant subsidiaries controlled
directly or indirectly by the Company. Companies over which theCompany exercises significant influence in terms of their operating
and financial policies have been included in the accompanying
consolidated financial statements on an equity basis.
The balance sheet date of 9 of the consolidated subsidiaries is December 31. Any significant differences in intercompany
accounts and transactions arising from intervening intercompany
transactions during the period between the balance sheet dateof each subsidiary and the consolidated balance sheet date havebeen adjusted, if necessary. The differences between the acquisition and the fair value of the net assets at the respective datesof acquisition of the consolidated subsidiaries and companies
accounted for by the equity method are recorded as goodwill
amortized by the straight-line method over a period of from 3 to
5 years.
All significant intercompany accounts and transactions andunrealized gain or loss on intercompany accounts and transactions are eliminated in consolidation.
b. Securities
Securities, except for investments in unconsolidated subsidiaries
and affiliates, are classified as trading securities, held-to-maturity
securities or other securities. Trading securities are carried at fairvalue. Held-to-maturity securities are carried at amortized cost.
Marketable securities classified as other securities are carried atfair value with any unrealized gain or loss reported as a separate
component of net assets, net of taxes. Non-marketable securities
classified as other securities are carried at cost. Cost of securities
sold is determined principally by the moving-average method.

70

JAL REPORT 2015

c. Inventories
Inventories are valued at the lower of cost and net realizable value
with cost determined by the moving-average method.
d. Tangible Fixed Assets (excluding leased assets)
Tangible fixed assets, excluding leased assets, are stated at cost,
net of accumulated depreciation and accumulated impairment losses, if any, except as indicated in the following paragraph.
Accumulated depreciation of tangible fixed assets at March 31,
2015 and 2014 amounted to ¥336,569 million ($2,800,773 thousand) and ¥297,802 million, respectively.
Depreciation of tangible fixed assets is computed as follows:Flight equipment: the straight-line method based on its estimated useful lifeOther: principally the straight-line method based on the estimated useful lives of the respective assets
The estimated useful lives are as follows:
Flight equipment: from 12 to 20 years
Other: from 2 to 65 years
e. Software (excluding leased assets)
Computer software intended for internal use is amortized by thestraight-line method based on its estimated useful life which ranges
principally from 5 to 7 years.
f. Leased Assets
Depreciation of leased assets is computed as follows:
Leased assets arising from finance lease transactions thattransfer the ownership of leased assets to the lessee are depreciated by the same method applied to assets arising from purchasetransactions.
Leased assets under finance lease transactions that do nottransfer the ownership to the lessee are depreciated to a residual
value of zero by the straight-line method using the lease term as
the useful life.
As for certain consolidated subsidiaries, finance lease transactions that do not transfer the ownership of the leased assets to thelessee contracted prior to April 1, 2008, continue to be accounted
for by a method corresponding to that used for ordinary operatinglease transactions.
g. Allowance for Doubtful Accounts
General provision for doubtful accounts is provided by applying areserve percentage to receivables based on experience from pasttransactions. When considered necessary, specific reserves are
made based on the assessment of individual accounts.
h. Accounting Method for Retirement Benefits
In calculating the retirement benefit obligation, the method of
attributing expected benefits to the accounting period is based on
the benefit formula basis.
The unrecognized benefit obligation at transition is being amortized by the straight-line method principally over a period of 15
years.
Actuarial gain and loss are amortized by the straight-line method
over a period ranging from 5 to 15 years, which is less than the
average remaining years of service of the active participants in theplans. Amortization is computed from the fiscal year subsequent

Highlights

President’s Message

to the year in which the difference was recorded.
Past service cost is principally charged to income as incurred.
However, at certain subsidiaries, past service cost is being amortized by the straight-line method over a period which is less than
the average remaining years of service of the active participantsin the plans.
i. Reserve for Loss on Antitrust Litigation
Estimated future loss is accrued in order to provide for penalty andcompensation potentially arising from price cartel in cargo.
j. Reserve for Loss from Business of Subsidiaries
Reserve for loss from business of subsidiaries is provided for estimated future loss generated from subsidiaries’ businesses.
k. Foreign Currency Translation
Income and expenses in foreign currencies are translated at therates prevailing at the time of the transaction. Except as noted inl. Derivatives and Hedge Accounting, Foreign currency receivables and payables are translated into yen at the applicableyear-end foreign exchange rates and any gain or loss on translation is included in current earnings.
Foreign currency translation adjustments arising from thetranslation of assets, liabilities, revenues and expenses of foreign
consolidated subsidiaries and affiliates accounted for by the equity method into yen at the applicable exchange rates at the year
end are presented as foreign currency translation adjustments
and minority interests in the accompanying consolidated balance
sheets.
l. Derivatives and Hedge Accounting
Derivatives positions are stated at fair value.
Gain or loss on derivatives designated as hedging instruments
is deferred until the gain or loss on the underlying hedged items isrecognized with any unrealized gain or loss reported as a separate
component of net assets, net of taxes. Foreign currency receivables and payables are translated at the applicable forward foreignexchange rates if certain conditions are met.
m. Revenue Recognition
Passenger and cargo revenues are recognized when the transportation services are rendered.
n. Income Taxes
Deferred tax assets and liabilities are recognized for expected
future tax consequences attributable to temporary differences
between the financial statement carrying amounts of existing
assets and liabilities and their respective tax basis, and operating
loss and tax credit carryforwards. A valuation allowance is recorded to reduce deferred tax assets to their net realizable value if it
is more likely than not that some portion or all of the deferred tax
asset will not be realized.
The Company and certain domestic consolidated subsidiaries
adopted the Japanese consolidated corporate tax return system.
o. Cash Equivalents
Cash equivalents are defined as highly liquid, short-term investments with an original maturity of 3 months or less.

The Medium Term Management Plan to Date

CSR

Financial Section

3. CHANGES IN ACCOUNTING POLICY(Application of Accounting Standard for Retirement Benefits, etc.)
Effective from the year ended March 31, 2014, the Company andits consolidated domestic subsidiaries have applied the “Accounting Standard for Retirement Benefits” (ASBJ Statement No. 26,
May 17, 2012 (hereinafter, the “Statement No. 26”)) and “Guidanceon Accounting Standard for Retirement Benefits” (ASBJ Guidance
No. 25, May 17, 2012 (hereinafter, the “Guidance No. 25”)) except
article 35 of the Statement No. 26 and article 67 of the Guidance
No. 25, and actuarial gains and losses and past service costs thatare yet to be recognized have been recognized and the difference
between retirement benefit obligations and plan assets has beenrecognized as a liability (asset) for retirement benefits.
In accordance with article 37 of the Statement No. 26, the effectof the change in accounting policies arising from initial application
has been recognized in accumulated adjustments for retirement
benefits in accumulated other comprehensive income.
As a result of the application, accumulated other comprehensive income has decreased by ¥14,193 million, at the end of thecurrent fiscal year. The effects of this change on net assets per
share have decreased by ¥78.28.
Effective from the year ended March 31, 2015, the Company
and its consolidated domestic subsidiaries have adopted article
35 of the Statement No. 26 and article 67 of the Guidance No. 25
and have changed the determination of retirement benefit obligations and current service costs. In addition, the Company andits consolidated domestic subsidiaries have mainly changed themethod of attributing expected benefits to periods from a straightline basis using a discount rate based on estimated averageremaining years of service of the eligible employees to a benefit formula basis using a discount rate that is a single weighted
average reflecting the projected benefit payment period and the
projected payment per period.
In accordance with article 37 of Statement No. 26, the effect ofchanging the determination of retirement benefit obligations andcurrent service costs has been recognized in retained earnings at
the beginning of the current fiscal year.
As a result of the application, retained earnings has decreasedby ¥30,965 million ($257,676 thousand) at the beginning of thecurrent fiscal year. In addition, operating income has increased by¥2,301 million ($19,147 thousand) and income before taxes has
increased by ¥2,302 million ($19,156 thousand) in the current fiscal year.
Due to these changes, net assets per share of common stock
have decreased by ¥79.17 and net income per share of common
stock have increased by ¥6.25.
For the effects on segment information, please refer to “Note 21.
SEGMENT INFORMATION”.
(Application of Accounting Standard for Business Combination,
etc.)
Effective from the fiscal year beginning on or after April 1, 2014,“Revised Accounting Standard for Business Combination” (ASBJ
Statement No. 21, September 13, 2013 (hereinafter, “Statement No. 21”)), “Revised Accounting Standard for Consolidated
Financial Statements” (ASBJ Statement No. 22, September 13,
2013 (hereinafter, “Statement No. 22”)) and “Revised AccountingStandard for Business Divestitures” (ASBJ Statement No. 7, Sep-

JAL REPORT 201571

tember 13, 2013 (hereinafter, “Statement No. 7”)) (together, the“Business Combination Accounting Standards”), are permitted
to be applied. The Company and its domestic subsidiaries haveadopted these accounting standards from this current fiscal year,
except for article 39 of Statement No. 22 and, as a result, changed
the accounting policies: to recognize differences as capital surplus
arising from the changes in the Company’s ownership interest of
subsidiaries, over which the Company continues control; and torecord the acquisition related costs as expenses in the fiscal year
in which the costs are incurred. In addition, the Company haschanged the accounting policies for the reallocation of acquisition costs due to the completion of the provisional accounting toreflect such reallocation in the consolidated financial statements
for the fiscal year in which the business combination took place.
With regard to the application of the Business Combination
Accounting Standards, the Company has followed the provisional treatments in article 58-2 (4) of Statement No. 21, article 44-5
(4) of Statement No. 22 and article 57-4 (4) of Statement No. 7
with application from the beginning of the current fiscal year into
the future.
As a result, the effects of these changes on income before tax
for the current fiscal year and capital surplus at the beginning of
the current fiscal year were immaterial.
In the consolidated statements of cash flows of the current fiscal
year, cash flows from acquisition of the shares of subsidiaries withno changes in the scope of consolidation are included in “Cashflows from financing activities” and cash flows from acquisition
related costs of the shares of subsidiaries with changes in thescope of consolidation are included in “Cash flows from operating
activities”.
The effects of these changes on capital surplus at the end of thecurrent fiscal year in the consolidated statements of changes in
net assets, net income per share of common stock and net assets
per share of common stock were immaterial, respectively.
For the effects on segment information, please refer to “Note 21.
SEGMENT INFORMATION”.
4. U.S. DOLLAR AMOUNTS
Amounts in U.S. dollars are included solely for the convenienceof the reader. A rate of JPY 120.17 = USD 1.00, the approximate
exchange rate prevailing on March 31, 2015, has been used in translation. The convenience translations should not be constructed as
representations that the Japanese yen amounts have been, could
have been, or could in the future be, converted into U.S. dollars at
this or any other rate of exchange.
5. CASH AND CASH EQUIVALENTS
The components of cash and cash equivalents in the accompanying consolidated statements of cash flows at March 31, 2015 and2014 were as follows:
Millions of yen

Thousands of
U.S. dollars

2015

2014

2015

Cash and time deposits¥ 364,988¥ 368,774$ 3,037,263

Time deposits with a maturity of more than threemonths(245,700)(213,580)(2,044,603)

As of March 31

Short-term investments in securities with amaturity of three months or less
Cash and cash equivalents

72

JAL REPORT 2015

—

58

—

¥ 119,287¥ 155,252$ 992,652

6. I NVESTMENTS IN SECURITIES OF NON-CONSOLIDATEDSUBSIDIARIES AND AFFILIATES
Investments in securities of non-consolidated subsidiaries andaffiliates which were included in “Investments in securities” inthe consolidated balance sheets at March 31, 2015 and 2014
amounted to ¥34,302 million ($285,445 thousand) and ¥31,227
million, respectively, and bonds of affiliates which were included
in “Investments in securities” in the consolidated balance sheetsat March 31, 2015 and 2014 amounted to ¥3,330 million ($27,710
thousand) and ¥3,330 million, respectively.
7. FAIR VALUES OF FINANCIAL INSTRUMENTS
The Company and consolidated subsidiaries (the “JAL Group”)
manages 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, finance lease transactions, and derivatives. Funds from short-term borrowings are utilized for ordinary
operations. Funds from long-term loans payable and financelease transactions are utilized for flight equipment and facilities.
Derivatives are utilized for the purpose of reducing the risk on
fluctuations of interest rates and foreign currency exchange rates,
not for the purpose of speculation.
With respect to trade receivables, the JAL Group exercisesdue date management and outstanding balance managementin accordance with internal policies. The JAL Group makes best
efforts to identify and mitigate risks of bad debts from major
customers with financial difficulties by periodically monitoring
their creditworthiness. Short-term investments in securities andinvestments in securities are composed of mainly the sharesof companies with which the JAL Group has business relationships. The JAL Group reviews the fair values of such financial
instruments and the financial position of the issuers periodically in order to identify and mitigate risks of impairment. Most ofaccounts payable—trade is due within one year. As for derivatives, the JAL Group believes that the credit risks are extremely
low, as it enters into derivative transactions only with reputablefinancial institutions with a sound credit profile.
In order to mitigate the risks of fluctuations in interest rates andforeign currency exchange rates on receivables and payables, theCompany utilizes derivatives. The JAL Group utilizes currencies
options to reduce the risk of foreign currency exchange rate fluctuations for specific foreign currency denominated receivables
and payables, mainly for overseas travel service payables.
The JAL Group also utilizes commodity derivatives in order tomitigate the risk of fluctuations in commodity prices of fuel andstabilize such fuel costs.
There are internal policies for derivative transactions which set
forth authorization levels and upper limits on transaction volumes
and the JAL Group enters into derivative transactions in accordance with such policies. Moreover, monthly meetings are heldwith the attendance of board members responsible for derivatives
to determine methods and ratios for minimizing risks as well as toreport and confirm results of derivative transactions.
The fair value of financial instruments is based on the quoted
market price, when it is available. When there is no market priceavailable, fair value is reasonably estimated. Since various assump-

Highlights

President’s Message

tions and factors are reflected in estimating the fair value, different
assumptions and factors could result in a different fair value.
The book value of financial instruments in the consolidated balance sheets, their fair value, and the difference as of March 31,
2015 and 2014 were as follows:
Millions of yen
As of March 31, 2015

Book value

Fair value

Differences¥364,988¥364,988¥ —142,150

142,150—

Assets(1) Cash and time deposits(2) Notes and accounts receivable—trade

Financial Section

Millions of yen
As of March 31, 2014

Book value

Fair value

Differences(1) Cash and time deposits¥368,774¥368,774¥(2) Notes and accounts receivable—trade143,807

143,807—

13,865

12,367(1,498)Assets—(3) Short-term investment securities and investment
securities(i) Investments in securities of non-consolidated
subsidiaries and affiliates(ii) Other investment securities

25,19925,199—

Total

551,645

550,147(1,498)(1) Accounts payable—trade(i) Investments in securities of non-consolidated
subsidiaries and affiliates

14,648

14,462(186)(ii) Other investment securities

50,10550,105—

Total

571,893571,706(186)

Liabilities
144,846(1) Accounts payable—trade144,846—(2) Short-term borrowings

106

106

—

(3) Long-term loans payable

51,61751,617—(4) Lease payable

47,67147,671—(5) Long-term accounts payable—installment purchase

1,200

1,200

—

Total

245,442

245,442—

Derivatives*¥ (14,086)¥ (13,876)¥ 209* Derivatives assets and liabilities are stated on a net basis, and a net liability position is enclosed in parentheses.

Thousands of U.S. dollars
As of March 31, 2015

Book value

Fair value

Differences(1) Cash and time deposits$3,037,263$3,037,263(2) Notes and accounts receivable—trade

1,182,907

1,182,907—(i) Investments in securities of non-consolidated
subsidiaries and affiliates

121,893

120,346(1,547)(ii) O ther investment securities

416,950

416,950—

4,759,033

4,757,476(1,547)1,205,342

1,205,342

—

882

882

—

(3) Long-term loans payable

429,533

429,533—(4) Lease payable

396,696396,696

—

9,985

9,985

—

2,042,456

2,042,456—$ (117,217) $ (115,469)$ 1,739

Assets$—(3) Short-term investment securities and investment
securities

Total
Liabilities(1) A ccounts payable—trade(2) Short-term borrowings(5) Long-term accounts payable—installment purchase
Derivatives*

CSR

Liabilities(3) S hort-term investment securities and investment
securities

Total

The Medium Term Management Plan to Date

* Derivatives assets and liabilities are stated on a net basis, and a net liability position is enclosed in parentheses.

148,999

148,999—(2) Short-term borrowings

287

287

—

(3) Long-term loans payable

53,14653,146—(4) Lease payable

79,45279,452—(5) Long-term accounts payable—installment purchase

1,396

1,396

—

Total

283,281283,281—

Derivatives*¥ 14,823¥ 15,157¥ 334* Derivatives assets and liabilities are stated on a net basis, and a net liability position is enclosed in parentheses.

(i) Methods of calculating the fair value of financial instruments,
including securities and derivatives transactions
Assets(1) Cash on hand and in banks and (2) Notes and accounts receivable—trade
The fair value equates to the book value due to the short-term
nature of these instruments.
(3) S hort-term investment securities and investment securities
The fair value of securities is determined based on the market
price. These investment securities are described further in “Note
8. INVESTMENT SECURITIES”.
Liabilities(1) A ccounts payable—trade and (2) Short-term borrowings
The fair value equates to the book value due to the short-term
nature of these instruments.
(3) Long-term loans payable, (4) Lease payable and (5) Long-term
accounts payable—installment purchase
The fair value of long-term loans payable, lease payable andlong-term accounts payable—installment purchase with fixedinterest rates is based on the present value of future cash flows
discounted using the current borrowing rate for similar debt of acomparable maturity.
Derivatives
Derivatives are described further in “Note 9. DERIVATIVES ANDHEDGING ACTIVITIES”.
(ii) Financial instruments for which the fair value is extremely
difficult to measure
Millions of yen

Thousands of
U.S. dollars

2015

2014

2015

¥19,653¥17,362$163,543

Held-to-maturity securities

3,330

3,330

27,710

Other securities

5,447

5,234

45,327

As of March 31
Investments in unconsolidated subsidiaries andaffiliates

JAL REPORT 2015

73

The above are not included in “(3)(ii) Other investment securities”
in the fair value of financial instruments because there is no market
value and it is difficult to measure the fair value.
(iii) R edemption schedule for monetary claims and securities withmaturity date subsequent to the consolidated balance sheet dateMillions of yen

As of March 31, 2015

Within one
year

More than
one year,within fiveyears

Cash and time deposits¥364,988¥ —Notes and accounts receivable—trade142,150—More than
five years,
within ten
years
¥ —

As of March 31, 2015

Carrying
value

Unrealized
gain (loss)

Unrealized gain:
Stocks$132,420$416,950$284,521

132,420

416,950

284,521

—

—

—

—

—

—

Total

$132,420$416,950$284,521

As of March 31, 2014

Acquisition
costs

Carrying
value

Unrealized
gain (loss)¥15,595¥24,884¥9,28915,59524,884

9,289

318

314

(3)

318

314

(3)

¥15,913¥25,199¥9,285

Unrealized loss:
StocksMore thanten years¥—

Millions of yen——

Short-term investment securities andinvestment securities
Held-to-maturity securities

Thousands of U.S. dollars
Acquisition
costs

Unrealized gain:
Stocks
—

—

—

3,330
Unrealized loss:
StocksThousands of U.S. dollars

As of March 31, 2015

Within one
year

More than
one year,within fiveyears

More than
five years,
within ten
years

Cash and time deposits$3,037,263

$ —

$ —

Notes and accounts receivable—trade

1,182,907

—

—

—

—

—

—

27,710

As of March 31, 2014

Within one
year

More than
one year,within fiveyears

More than
five years,
within ten
years

Cash and time deposits¥368,774¥ —¥ —Notes and accounts receivable—trade143,807

—

—

—

—

—

—

3,330

Total
More thanten years$—

Short-term investment securities andinvestment securities
Held-to-maturity securities

Millions of yen

More thanten years¥—

Short-term investment securities andinvestment securities
Held-to-maturity securities

Redemption schedule for short-term and long-term debt subsequent to the consolidated balance sheet date is described in “Note
10. SHORT-TERM BORROWINGS AND LONG-TERM DEBT”.
8. INVESTMENT SECURITIESNo trading securities were held at March 31, 2015 and 2014. Securities classified as other securities are included in “Short-term
investments in securities” and “Investments in securities” in theaccompanying consolidated balance sheets.
The components of unrealized gain or loss on marketable securities classified as other securities at March 31, 2015 and 2014 weresummarized as follows:
Millions of yen
As of March 31, 2015
Unrealized gain:
Stocks
Unrealized loss:
StocksTotal

74

JAL REPORT 2015

Acquisition
costs

Carrying
value

Unrealized
gain (loss)¥15,913¥50,105¥34,191

15,91350,10534,191

—

—

—

—

—

—

¥15,913¥50,105¥34,191

Proceeds from sales of securities classified as other securities
for the years ended March 31, 2015 and 2014 amounted to ¥54
million ($449 thousand) and ¥1,190 million, respectively. For theyears ended March 31, 2015 and 2014 the aggregate gain realizedon those sales totaled ¥0 million ($0 thousand) and ¥930 million,
respectively. For the years ended March 31, 2014 the aggregate
loss realized on those sales totaled ¥0 million.
9. DERIVATIVES AND HEDGING ACTIVITIES
Certain consolidated subsidiaries utilize forward foreign exchange
contracts and currency options on a consistent basis to hedge
certain foreign currency transactions related to foreign purchase commitments, principally for flight equipment and foreign
accounts receivable and payable, and other items. The Company also enters into a variety of options in its management of risk
exposure related to the commodity prices of fuel.
The Company and certain 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. Gain and loss
on hedging instruments and the assessment of hedge effectiveness, which are performed both at inception and on an ongoingbasis, are reported at meetings of the related department managers on a timely basis. Other consolidated subsidiaries haveadopted procedures for hedging transactions which are more
simplified than those adopted by the Company.
The contract amount and the estimated fair value of the open
derivatives positions at March 31, 2015 and 2014, which met thecriteria required for the application of hedge accounting, are summarized as follows:Highlights

President’s Message

The Medium Term Management Plan to Date

Millions of yen
As of March 31, 2015
Major hedged items

Financial Section

Thousands of U.S. dollars

Contract amounts

Type of derivatives

CSR

Contract amounts

Total

Maturing
after 1 year

Estimatefair value

Total

Maturing
after 1 year

Estimatefair value

Forward foreign currency exchange contracts:
Buy:
USD

Accounts payable—trade¥ 37,248¥ 1,690¥ 3,624$ 309,960$ 14,063$ 30,157

EUR

Accounts payable—trade

3,284

—

(211)

27,327—(1,755)

Others

Accounts payable—trade

1,303

—

(32)

10,842—(266)

Accounts payable—trade183,843

28,723

19,433

1,529,857

239,019

161,712

Accounts payable—trade97,15826,186(869)

808,504

217,907(7,231)

Aircraft fuel113,996

30,971(36,044)948,622257,726(299,941)

Aircraft fuel158,887—

13

1,322,185—

108

Currencies options:
Buy:
Call option
Sell:
Put option
Commodity swap:
Received variable/pay fixed
Commodity options:
Buy:
Call option

Method of hedge accounting: Special treatment (Note 2. l.)
Forward foreign currency exchange contracts:
Buy:
USD

Accounts payable—trade

1,102

—

226

9,170

—

1,880

EUR

Accounts payable—trade

282

—

(19)

2,346

—

(158)

Others

Accounts payable—trade

80

—

2

665

—

¥(13,876)

Total

All derivative transactions were conducted as over-the-countertransactions. Fair value is estimated based on prices quoted byfinancial institutions and others.
Millions of yen
As of March 31, 2014

Contract amounts
Total

Maturing
after 1 year

Estimatefair value

Accounts payable—trade¥ 25,976¥ 3,047¥ 5,255

EUR

Accounts payable—trade

3,430

—

160

Others

Accounts payable—trade

1,215

—

29

Type of derivatives

Major hedged items

Forward foreign currency exchange contracts:

All derivative transactions were conducted as over-the-countertransactions. Fair value is estimated based on prices quoted byfinancial institutions and others.
10. SHORT-TERM BORROWINGS AND LONG-TERM DEBT
The weighted-average interest rate for short-term borrowings outstanding at March 31, 2015 was 0.1%. Long-term debt at March 31,
2015 and 2014 consisted of the following:

Buy:
USD

Currencies options:
Accounts payable—trade194,217

22,666

7,031

Sell:
Put option

Accounts payable—trade82,331

20,957(1,151)

Commodity swap:
Received variable/
pay fixed

Aircraft fuel105,640

26,964

3,364

Buy:
Aircraft fuel150,001

—

134

2014

2015

2015

¥ 7,807 ¥ 8,062$ 64,966

1.1%

Millions of yen
As of March 31
Current portion of long-termloans payable
Long-term loans payable(excluding current portion)due 2016 to 2029

2015

43,80945,084

364,558

1.0%

Current portion of lease payable

25,12332,455

209,062

0.1%

Lease payable (excluding current
portion) due 2016 to 2025

22,54846,996

187,634

0.5%

174

196

1,447

2.0%

1,025

1,200

8,529

2.0%

¥100,488 ¥133,995$836,215

Long-term accounts payable—
installment purchase (excluding
current portion) due 2021

Forward foreign currency exchange contracts:
Buy:
USD

Accounts payable—trade

EUR
OthersLong-term accounts payable—
installment purchase:
Current portion of Long-termpayable—installment purchase

Method of hedge accounting: Special treatment (Note 2. l.)

Total

Weightedaverageinterest
rates

Lease payable:

Commodity options:
Call option

Thousands
ofU.S. dollars

Long-term loans:

Buy:Call option

16$(115,469)

2,969

—

319

Accounts payable—trade

217

—

15

Accounts payable—trade

157

—

Total

(0)
¥15,157

JAL REPORT 2015

75

The aggregate annual maturities of long-term debt within 5 years
subsequent to March 31, 2015 are summarized as follows:

For the years ended March 31, 2015 and 2014
a. Defined benefit plans(1) Balances of retirement benefit obligations, excluding plans
adopting the simplified method

Millions of yen

Thousands of
U.S. dollars

2016¥ 33,104$275,476

2017

20,394

169,7092018

10,65388,649Years ended March 31

2019

6,929

57,659Balance at beginning of year
Cumulative effect of changes inaccounting policies

30,229—251,551

Restated balance

426,678

397,6073,550,619

Service cost

12,813

10,244

106,623

Interest cost

3,221

8,119

26,803

Actuarial loss

4,176

1,454

34,750Benefit paid

(22,353)(20,966)(186,011)

Past service costs

(6)

—

(49)

Other

143

(9)

1,189

¥424,673¥396,449$3,533,935

Years ending March 31,

2020

6,792

56,5192021 and thereafter

22,613

188,175¥100,488

Total$836,215

Assets pledged as collateral at March 31, 2015 for long-term andshort-term debt of ¥49,448 million ($411,483 thousand) are flightequipment and others of ¥171,605 million ($1,428,018 thousand).
Assets pledged as collateral at March 31, 2014 for long-term andshort-term debt of ¥53,791 million are flight equipment and othersof ¥183,558 million.
Also included as part of pledged assets are certain assets set
aside for revolving pledges on obligations accompanying syndicated loans taken out by an affiliate, Tokyo International Airport
Terminal Corporation, for core business purposes. The amounts
include security deposits paid to the banks regarding derivativetransactions.
The Company entered into loan commitment agreements
amounting to ¥50,000 million ($416,077 thousand) with three banks.
There were no loan payables outstanding at March 31, 2015 underthese loan commitment agreements.
11. RETIREMENT BENEFIT PLANS
Outline of Current Retirement Benefit System
An employee whose employment is terminated is entitled, in mostcases, to pension annuity payments or to a lump-sum severance
payment determined by reference to the employee’s basic rate ofpay, length of service and the conditions under which the termination occurs.
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.
As of March 31, 2015, the Company and 43 consolidated subsidiaries had adopted a lump-sum severance indemnity plan.
Additionally, there were 3 corporate pension funds, including theJapan Airlines Welfare Pension Fund. Certain foreign subsidiaries
have also established contributory defined benefit pension plans.
The Japan Airlines Welfare Pension Fund also introduced an
option similar to a cash-balance plan as well as other alternatives.
The JAL Group Pension Fund, which was established by certain
consolidated subsidiaries, introduced a cash-balance plan option.
Some of the consolidated subsidiaries adopt the simplified method for the calculation of retirement benefit obligations.

76

JAL REPORT 2015

Millions of yen

Balance at end of year

Thousands of
U.S. dollars

2015

2014

2015

¥396,449¥397,607$3,299,067(2) B alances of plan assets, excluding plans adopting thesimplified method
Millions of yen

Thousands of
U.S. dollars

2015

2014

2015

¥233,331¥229,229$1,941,674

Expected return on plan assets

3,613

3,538

30,065

Actuarial gain

3,102

2,207

25,813Contributions paid by the employer

16,586

16,478138,021

Years ended March 31
Balance at beginning of year

Benefit paid

(18,522)(18,122)(154,131)

Balance at end of year

¥238,110¥233,331$1,981,442(3) 
Reconciliation from retirement benefit obligations and plan
assets to liability (asset) for retirement benefits, applying the simplified method
Millions of yen
Years ended March 31
Balance at beginning of year

Thousands of
U.S. dollars

2015

2014

2015

¥3,249¥3,050$27,036Retirement benefit cost

192

171

1,597

Contributions paid by the employer

(190)

(205)

(1,581)

Benefit paid

(254)

(228)

(2,113)

Increase (decrease) on partial
termination of defined benefit plan

17

(20)

141

Increase by merger

43

464

357

Other

39

17

324

¥3,098¥3,249$25,780

Balance at end of year

Highlights

President’s Message(4) Reconciliation from retirement benefit obligations and plan
assets to liability (asset) for retirement benefits
Millions of yen

Thousands of
U.S. dollars

2015

2014

2015

Funded retirement benefit obligations¥339,880¥299,952$2,828,326

Plan assets(241,887)(237,004)(2,012,873)

97,99362,948815,453

Years ended March 31

Unfunded retirement benefit obligations

91,667

103,419

762,811

Total net liability (asset) for retirement
benefits

189,661

166,367

1,578,272

Liability for retirement benefits

191,635

166,6431,594,699

Asset for retirement benefits(1,974)(275)(16,426)¥189,661¥166,367$1,578,272

Total net liability (asset) for retirement
benefits

The Medium Term Management Plan to Date

CSR

(8) Plan assets
2015

Years ended March 31

89

General insurance fund
Bond

3

6

8

15

Total

100

100

Current and target asset allocations, historical and expected returns
on various categories of plan assets have been considered in determining the long-term expected rate of return.
(9) Actuarial assumptions
2015

Thousands of
U.S. dollars

2015

2014

2015

Service cost

¥12,813¥10,244$106,623

Interest cost

3,221

8,119

26,803

Expected return on plan assets(3,613)(3,538)(30,065)

Past service costs amortization

(24)

(18)

(199)

Net actuarial loss amortization

1,475

1,884

12,274

Amortization of unrecognized severance
benefit obligation at transition

680

684

5,658

Retirement benefit cost based on thesimplified method

192

171

1,597

Other

(685)

(671)

(5,700)Subtotal

14,05916,876116,992

20

25

166

¥14,079¥16,901$117,159

2015

Millions of yen

Thousands of
U.S. dollars

2014

2015

¥ (18)¥ —$ (149)Actuarial losses

401

—

3,336

Benefit obligation at transition

680

—

5,658

¥1,063¥ —$8,845

Past service costs

0.6–1.8

1.0–2.1

Long-term expected rate of return

1.0–2.5

1.0–2.5

b. Defined contribution plans
The Company and its consolidated subsidiaries contributed to thetotal of ¥1,579 million ($13,139 thousand) and ¥1,545 million for the
fiscal years ended March 31, 2015 and 2014, respectively.
12. INCOME TAX
The significant components of deferred tax assets and liabilities
and the related valuation allowances at March 31, 2015 and 2014
were as follows:

As of March 31

As of March 31

2015

Millions of yen
2014

2015

Past service costs that are yet to berecognized¥ (417)¥ (435)$ (3,470)

Actuarial losses that are yet to berecognized

13,881

14,282

115,511

Unrecognized benefit obligation attransition

—

680

—

¥13,463¥14,527$112,032

Thousands of
U.S. dollars

2015

2014

2015

¥ 60,834¥ 57,417$ 506,232

Deferred losses on hedges

12,845416

106,890

Lease payable

11,284

22,381

93,900Accounts payable—trade

9,413

8,947

78,330Non-recurring depreciation

3,634

3,497

30,240Deferred liability on aircraft andaircraft equipment

3,018

4,760

25,114

Reserve for loss on antitrust litigation

1,837

2,176

15,286

Asset retirement obligations
Other

Thousands of
U.S. dollars

Millions of yen
Deferred tax assets:

Tax loss carryforwards(7) Accumulated adjustments for retirement benefits%

Discount rate

Liability for retirement benefits(6) Adjustments for retirement benefits

Years ended March 31

2014

%

Millions of yen

Total

%
79

Other

Years ended March 31

Loss on partial termination of defined
benefit plan, net

2014

%

(5) Retirement benefit costs

Years ended March 31

Financial Section

Valuation allowance

1,075

1,513

8,945

247,720

308,571

2,061,412

8,060

7,339

67,071

359,723

417,020

2,993,450(316,836)(377,712)(2,636,564)

42,88739,307356,886
90,396

Deferred tax liabilities:
Net unrealized gain on other securities

10,863

3,273

Leased assets

7,181

13,65859,757

Deferred gain on hedges

6,373

4,104

53,033Other
Net deferred tax assets

4,659

3,381

38,77029,077

24,418

241,965¥ 13,809¥ 14,889$ 114,912

JAL REPORT 201577

A reconciliation between the Japanese statutory income tax rate
and the Company’s and the consolidated subsidiaries’ effective
tax rates for the years ended March 31, 2015 and 2014 were as
follows:
Years ended March 31

2015

2014

%
34.3

Statutory rate
Equity in earnings/losses of affiliates
Changes in valuation allowance

%
36.7

0.5

0.9

(27.5)(42.4)

Decrease in deferred tax assets due to the change in tax rate

1.0

0.5

Other

1.1

(2.2)

Effective tax rate

9.4

(6.5)

Income taxes in Japan applicable to the Company and its domestic
consolidated subsidiaries consist of corporation tax, inhabitants’taxes and enterprise tax. Income taxes of foreign consolidated
subsidiaries are based generally on the tax rates applicable in theircountries of incorporation.
On March 31, 2014, the “Act for Partial Revision of the Income
Tax Act etc.” (Act. No. 10 of 2014) was officially issued and,accordingly, the special Japanese reconstruction corporate tax
applicable to the Company and its domestic subsidiaries will not
be applied effective the year ending March 31, 2015.
Corresponding to this change, the statutory tax rate applied in
calculating deferred income taxes was reduced from 36.7% to34.3%. The effect of this change on the accompanying consolidated financial statements of the Company was immaterial.
On March 31, 2015, amendments to the Japanese tax regulations were enacted into law. Based on the amendments, thestatutory income tax rates utilized for the measurement of deferred
tax assets and liabilities expected to be settled or realized from
April 1, 2015 to March 31, 2016 and on or after April 1, 2016 arechanged from 34.3% for the fiscal year ended March 31, 2015 to
31.9% and 31.4%, respectively, as of March 31, 2015.
Due to these changes in statutory income tax rates, net deferred
tax assets (after deducting the deferred tax liabilities) decreasedby ¥992 million ($8,254 thousand) as of March 31, 2015, deferredincome tax expense recognized for the fiscal year ended March
31, 2015 increased by ¥1,627 million ($13,539 thousand), net
unrealized gains on other securities increased by ¥1,020 million($8,487 thousand), deferred gain (loss) on hedges decreased by¥370 million ($3,078 thousand), and accumulated adjustments for
retirement benefits decreased by ¥16 million ($133 thousand).

78

JAL REPORT 2015

13. NET ASSETSThe Companies Act of Japan (the “Act”), provides that an amountequal to at least 10% of the amount to be disbursed as distributions of capital surplus (except for distributions from additional
paid-in capital) and retained earnings (except for distributions
from the legal reserve) be appropriated to additional paid-in capital and the legal reserve, respectively, until the sum of additional
paid-in capital and the legal reserve equals 25% of the capitalstock account. Such distributions can be made at any time byresolution of the stockholders, or by the Board of Directors if certain conditions are met, but neither additional paid-in capital nor
the legal reserve is available for distribution by resolution of theBoard of Directors.
A company may, by a resolution of its board of directors, designate an amount not exceeding half of the price of new sharesas additional paid-in capital, which is included in capital surplus.
The maximum amount that a company can distribute as dividends
is calculated based on its unconsolidated financial statements inaccordance with the Act.
At the annual stockholders’ meeting held on June 17, 2015,
the stockholders approved cash dividends amounting to ¥37,707
million ($313,780 thousand). Such appropriations have not been
accrued in the Consolidated Financial Statement as of March 31,
2015. The total number and changes in the total number of sharesof stock authorized and in issue and common stock in treasury forthe year ended March 31, 2015 were as follows:
Thousands of shares
At April
1, 2014

Increase

Common stock

350,000

Preferred stock

50,000400,000

Year ended March 31, 2015

Decrease

At March
31, 2015

350,000—

700,000——

50,000350,000—

750,000

Number of shares of stock authorized:

Total
Number of shares of stock in issue:
Common stockTotal

181,352

181,352—

362,704

181,352

181,352—

362,704

Number of shares of common stock intreasury:
Common stock
Total

33

169

—

203

33

169

—

203

Highlights

President’s Message

The Company undertook a two-for-one stock split of common
stock on October 1, 2014. The increase in common stock of
181,352 thousand shares during the year ended March 31, 2015
resulted from the stock split.
The increase in common stock in treasury of 169 thousand
shares during the year ended March 31, 2015 resulted from theCompany’s purchases of 136 thousand shares and the stock splitof 33 thousand shares.
The total number and changes in the total number of shares ofstock authorized, in issue and common stock in treasury for theyear ended March 31, 2014 were as follows:
Thousands of sharesYear ended March 31, 2014

Preferred stock
Total

Total

Total

Less: Reclassification adjustment included in net
income2015¥25,198¥ 5,936$209,686—

Tax expense(7,588)(2,103)(63,143)

Net unrealized gains on securities, net

17,6104,026

146,542(29,577)

13,045(246,126)

Deferred gains (losses) on hedges, net of taxes:
Deferred gains (losses) arising during the period
Less: Reclassification adjustment included in net
incomeDeferred gains (losses), net of taxes
Foreign currency translation adjustments:

Pre-tax amountTax benefit

50,000——50,000400,000——

400,000

Translation adjustments arising during the period

181,352

Less: Reclassification adjustment included in net
income181,352

Foreign currency translation adjustments

—

2014

209,686

350,000

—

2015

194

—

181,352

Thousands of
U.S. dollars

6,130

—

—

Millions ofyen—

350,000—

Financial Section

25,198Pre-tax amountAt March
31, 2014(1,546)(13,033)(12,865)(31,123)

11(258,991)

8,608

268

71,631(22,515)

280(187,359)

1,333

1,512

11,092

(0)

—

(0)

1,333

1,512

11,092(1,068)—(8,887)

Adjustments for retirement benefits:

Number of shares of common stock intreasury:
Common stock

Unrealized holding gains arising during the period

Decrease

181,352CSR

Net unrealized gains on other securities, net of taxes:

Increase

Number of shares of stock in issue:
Common stock

Years ended March 31

At April
1, 2013

Number of shares of stock authorized:
Common stock

The Medium Term Management Plan to Date

31
31

1
1

—
—

33
33

Adjustments for retirement benefits arisingduring the period
Less: Reclassification adjustment included in net
incomePre-tax amountThe increase in common stock in treasury of 1 thousand shares
during the year ended March 31, 2014 mainly resulted from theCompany’s purchases of the equivalent of 1 thousand shares byaffiliates accounted for by the equity method.
14. OTHER COMPREHENSIVE INCOME
Reclassification adjustments for each component of other comprehensive income including tax effect for the years ended March
31, 2015 and 2014 were as follows:

Tax expense
Adjustments for retirement benefits

2,131

—

17,733

1,063

—

8,845

(4)

—

(33)

1,058

—

8,804

Share of other comprehensive income ofassociates accounted for by the equity method:
Share of other comprehensive income ofassociates accounted for by the equity method
arising during the period
Total other comprehensive income

355

71

2,954

¥ (2,157)¥ 5,891$ (17,949)

15. LOSS ON IMPAIRMENT OF FIXED ASSETS
Assets are attributed or allocated to cash generating units which
generated largely independent cash flows for calculating impairment losses. Assets to be sold and idle assets are written down totheir respective recoverable amounts.
The Company and its consolidated subsidiaries estimatedrecoverable amounts at the higher of fair value less costs to selland value in use. Fair value is based on reasonable estimates madeby the Company and its consolidated subsidiaries in accordancewith the contract amounts of sales for the periods ended March 31,
2015 and 2014, respectively.

JAL REPORT 2015

79

The Company and certain consolidated subsidiaries have recognized impairment losses on the following groups of assets in theaccompanying consolidated statements of income and comprehensive income for the year ended March 31, 2015:

The assets and liabilities of a subsidiary included in consolidation
following the purchase of its shares during the year ended March
31, 2014 were as follows:

Assets utilized in the Company’s andconsolidated subsidiaries’ operations

Current assets
Groups of assets

Locations

Assets to be soldFlight equipment—

Year ended March 31, 2014

Groups of assets

Locations

Assets to be soldFlight equipment—(7)

Minority interests

3

Expenditure for purchase of shares of common stock2

Gain on step acquisition(2)

Cash and cash equivalents held by subsidiaries(145)

Net proceeds¥145

The assets and liabilities of a subsidiary excluded in consolidation
following the sales of its shares during the year ended March 31,
2015 were as follows:

Current assets

16. SUPPLEMENTARY CASH FLOW INFORMATION
The assets and liabilities of a subsidiary included in consolidation
following the purchase of its shares during the year ended March
31, 2015 were as follows:
Millions of yen

Thousands of
U.S. dollars¥579$4,818Fixed assets

876

7,289

Current liabilities(503)(4,185)

Non-current liabilities(422)(3,511)

Minority interests(243)(2,022)
2,379

Expenditure for purchase of shares of common stock

286

Gain on step acquisition

(80)

(665)

Cash and cash equivalents held by subsidiaries(282)(2,346)

Net proceeds

¥ 76

$ 632

JAL REPORT 2015(329)

Non-current liabilities

Year ended March 31, 2015

An impairment loss of ¥1,497 million on flight equipment was recognized as non-operating expense in the accompanying consolidated
statements of income and comprehensive income for the year ended March 31, 2014.

80

12

Current liabilities

Assets utilized in the Company’s andconsolidated subsidiaries’ operations

Current assets¥323

Fixed assets

An impairment loss of ¥881 million ($7,331 thousand) on flightequipment was recognized as non-operating expense in theaccompanying consolidated statements of income and comprehensive income for the year ended March 31, 2015.
The Company and certain consolidated subsidiaries have recognized impairment losses on the following groups of assets in theaccompanying consolidated statements of income and comprehensive income for the year ended March 31, 2014:

Year ended March 31, 2015

Millions of yen

Fixed assets
Current liabilities

Millions of yen

Thousands of
U.S. dollars¥560$4,660

2

16

(217)

(1,805)

Minority interests

(9)

(74)

Foreign currency translation adjustments

(7)

(58)

Gain on sales of shares

72

599

Proceeds from sales of shares of common stock

401

3,336

Cash and cash equivalents held by subsidiaries(231)(1,922)

Net proceeds¥169$1,406

17. LEASESAs Lessee
The following amounts represent the acquisition costs, accumulated depreciation and net book value of the leased assets at
March 31, 2015 and 2014, and the related depreciation and interest
expense for the periods ended March 31, 2015 and 2014, which
would have been reflected in the accompanying consolidated balance sheets and the related consolidated statements of income
and comprehensive income if finance lease accounting had been
applied to the finance leases currently accounted for as operatingleases whose contracts were entered into prior to April 1, 2008:

Highlights

President’s Message

Millions of yen

As of March 31, 2015
Machinery, equipment and vehicles
Total

Acquisition
cost

Less
accumulated
depreciation

Netbook value

58

55

2

¥ 58

¥ 55

¥ 2

Thousands of U.S. dollars

As of March 31, 2015

Acquisition
cost

Less
accumulated
depreciation

Netbook value

Machinery, equipment and vehicles

482

457

16

Total

¥482

¥457

¥ 16

The Medium Term Management Plan to Date

Millions of yen

As of March 31, 2014
Flight equipment
Machinery, equipment and vehicles

Acquisition
cost

Net
book value

¥ 988

¥ 939

¥49

118

100

17

Other

407

385

22

Total

¥1,514¥1,424¥89

Millions of yen

Thousands of
U.S. dollars

Years ended March 31

2015

2014

2015

Lease expenses

¥93

¥320

773

Depreciation equivalent

85

296

707

Interest equivalents

1

10

8

The present value of future rental expenses under finance leases
accounted for as operating leases outstanding at March 31, 2015
and 2014 were as follows:

Millions of yen

Thousands of
U.S. dollars

As of March 31

2015

2014

2015

Within 1 year

¥ 2

¥92

$ 16

Over 1 year

—

2

—

Total

¥ 2

¥94

$ 16

Depreciation equivalent is calculated by the straight-line method on
the assumption that the useful lives of the related assets are the

Financial Section

same as the lease term and the residual value is zero.
Interest expense equivalent is calculated on the assumption thatthe difference between aggregate lease rentals and the acquisition
cost of leased assets is deemed to be the interest portion and isapportioned over the term of the lease by the interest method.
No impairment loss has been recognized on leased property
under finance leases accounted as operating leases for the years
ended March 31, 2015 and 2014.
Future rental expenses under noncancelable operating leases
outstanding at March 31, 2015 and 2014 were as follows:
Millions of yen
As of March 31
Within 1 yearLessaccumulated
depreciation

CSR

Thousands of
U.S. dollars

2015

2014

2015

¥ 24,024¥ 28,079$ 199,916

Over 1 year

101,071

117,398

841,066

Total¥125,096¥145,478$1,040,991

18. CONTINGENT LIABILITIESAt March 31, 2015 and 2014, contingent liabilities for guarantees,
principally for employees, amounted to ¥227 million ($1,888 thousand) and ¥281 million, respectively.
19. AMOUNTS PER SHARE
Basic net income per share is computed based on the net income
available for distribution to or allocable to the stockholders ofcommon stock and the weighted-average number of shares ofcommon stock outstanding during each year. Diluted net income
per share is computed based on net income available for distribution to the stockholders and the weighted-average number ofshares of common stock outstanding during each year after giving
effect to the potentially dilutive securities to be issued upon theconversion of convertible bonds. However, diluted net income pershare had not been presented for the years ended March 31, 2015
and 2014 since the Company had no equity instruments issuedthat had a dilutive effect on earnings per share.
Yen

U.S. dollars

2015

2014

2015

Basic

¥411.06¥458.45$3.42

Diluted———Years ended March 31
Net income per share of common stock:

JAL REPORT 2015

81

The following table sets forth the computation of basic net income
per share of common stock and diluted net income per share ofcommon stock for the years ended March 31, 2015 and 2014:

Years ended March 31

Millions of yen

Thousands of
U.S. dollars

2014

2014

2015

Net income (allocable to) available forstockholders of common stock:
Net income
Appropriations for payment of preferred
dividend

calculated with expected useful lives ranging from 2 to 46 years
and discount rates ranging from 0.1% to 2.5%.
The following table summarizes the changes in the aggregate
carrying amount of asset retirement obligations for the years ended March 31, 2015 and 2014:
Millions of yen
Years ended March 31¥149,045¥166,251$1,240,284

—

—

—

¥149,045¥166,251$1,240,284

Balance at beginning of year
Increase due to purchases of tangible fixed
assetsAccretion due to the passage of time
Decrease due to settlement
Changes in estimated obligations and accretion
Balance at end of year

Thousands of
U.S. dollars

2015

2014

2015

¥4,405¥4,271$36,656

—

111

—

62

61

515

(1,049)(38)(8,729)———¥3,419¥4,405$28,451

Thousands of shares
Years ended March 31
Weighted-average number of shares of common stock outstanding

2015

2014

362,584

362,639

Net assets per share are computed based on the net assets available for distribution to the stockholders of common stock and thenumber of shares of common stock outstanding at each balance
sheet date.
Yen
As of March 31
Net assets per share of common stock

U.S. dollars

2015

2014

2015

¥2,142.00¥1,903.53$17.82The Company undertook a two-for-one stock split on October 1,
2014. The previous year’s figures for net income per share of common stock and net assets per share of common stock have beenadjusted accordingly.
20. ASSET RETIREMENT OBLIGATIONS
a. Asset retirement obligations recognized in the consolidated balance sheets at March 31, 2015 and 2014
The Company and its consolidated subsidiaries, in connection
with some buildings and land, have entered into real estate lease
contracts with terms ranging from 2 to 46 years for the years ended March 31, 2015 and 2014. Asset retirement obligations havebeen recognized in respect of the obligation of the Company andits consolidated subsidiaries to the owner of the buildings and land
to remove the facilities from leased real estate at the end of thosecontracts. The liabilities at March 31, 2015 and 2014 have been82

JAL REPORT 2015b. Asset retirement obligations not recognized in the consolidatedbalance sheets as of March 31, 2015 and 2014
The Company and its consolidated subsidiaries have rented lots
and buildings from domestic service airports based on the permission of national property use and the real estate rental contract
about national property, and have obligation to remove the facilities from leased real estate. The Company and its consolidated
subsidiaries have a large role of public traffic, and depend on thetrend of the aviation administration of a country. For this reason,
the time of building withdrawal and leaving cannot be determined
only by discretion of the Company and its consolidated subsidiaries about the rented airport related facilities. Moreover, since there
is also no schedule of building withdrawal and leaving at present,
asset retirement obligations cannot be estimated rationally. Therefore, the asset retirement obligations corresponding to the debt
concerned are not added up.
21. SEGMENT INFORMATIONThe reportable segments of the Company and its consolidated
subsidiaries are components for which discrete financial information is available and whose operating results are regularly reviewed
by the Board of Directors to make decisions about resource allocation and to assess performance. Air transportation includes
international and domestic passenger operations, cargo operations and other transportation services.
The accounting policies of the segments are substantially thesame as those described in the significant accounting policies
in Note 2. Inter-group sales are recorded at the same conditions
used in transactions with third parties.

Highlights

President’s Message

The Medium Term Management Plan to Date

CSR

Financial Section

Millions of yen
Year ended March 31, 2015

Air transportation

Other

Total

Eliminations

Consolidated¥1,079,073¥265,638¥1,344,711

117,169

32,818

149,988¥—¥1,344,711(149,988)

—

Total

¥1,196,243¥298,456¥1,494,699¥(149,988)¥1,344,711

Operating income¥ 161,593¥ 18,030¥ 179,624¥

65¥ 179,689

Assets¥1,411,174¥166,854¥1,578,029¥(104,674)¥1,473,354

Depreciation and amortization¥

84,269¥ 1,944¥

86,214

¥

(316)

¥

85,897

Impairment losses

¥

881

¥

—

¥

881

¥

—

¥

881

Investments in companies accounted for using the equity method

¥

2,818

¥ 24,011¥

26,830¥—¥26,830Capital expenditure¥ 194,227¥ 2,250¥ 196,477¥(13)¥ 196,464

Net sales
External
Intersegment

Thousands of U.S. dollars
Year ended March 31, 2015

Air transportation

Other

Total

Eliminations

Consolidated$ 8,979,553$2,210,518$11,190,072

975,027

273,096

1,248,131—$11,190,072(1,248,131)

—

Total

$ 9,954,589$2,483,614$12,438,204$(1,248,131)$11,190,072

Operating income$ 1,344,703$ 150,037$ 1,494,749$

540$ 1,495,290

Assets$11,743,147$1,388,482$13,131,638$ (871,049)$12,260,580

Depreciation and amortization$$

16,177$

717,433$(2,629)$Net sales
External
Intersegment

701,248$714,795

Impairment losses

$

7,331

$

—

$

7,331

$

—

$

7,331

Investments in companies accounted for using the equity method$

23,450$ 199,808$

223,267$—$

223,267

Capital expenditure$ 1,616,268$

18,723$ 1,634,992

$

(108)

Air transportation

Other

Total

¥1,048,107¥261,236¥1,309,343$ 1,634,883

Millions of yen
Year ended March 31, 2014

Eliminations

Consolidated¥¥1,309,343

Net sales
External
Intersegment
Total

—

118,574

31,852

150,426(150,426)—¥1,166,681¥293,089¥1,459,770¥(150,426)¥1,309,343

Operating income¥ 149,135¥ 17,648¥ 166,784¥

8¥ 166,792

Assets¥1,279,671¥155,475¥1,435,146¥ (94,978)¥1,340,168

Depreciation and amortization¥

80,643¥ 2,080¥¥¥

82,724(5)

82,718

Impairment losses

¥

1,497

¥

—

¥

1,497

¥

—

¥

1,497

Investments in companies accounted for using the equity method

¥

3,121

¥ 20,613¥

23,735¥—¥23,735

Capital expenditure¥ 159,406¥ 3,945¥ 163,351¥—¥ 163,351

JAL REPORT 201583

Up until March 31, 2013, the Company and five consolidated subsidiaries of transport operators were reported in the reporting
segment (air transport segment). However, as the cost structureof the air transport business practically covers many JAL Group
company businesses relating to air transportation, the Company
changed the reporting segment (air transport segment) to theCompany and 31 consolidated subsidiaries beginning with theyear ended March 31, 2014 in order to build a more appropriate
cost management system.
(Application of Accounting Standard for Retirement Benefits, etc.)
As mentioned in “CHANGES IN ACCOUNTING POLICY”, the Company and its consolidated domestic subsidiaries have changed themethod of attributing expected benefits to periods from a straightline basis using a discount rate based on estimated averageremaining years of service of the eligible employees to a benefit formula basis using a discount rate that is a single weighted
average reflecting the projected benefit payment period and the
projected payment per period.
As a result of the application, operating income of the air transportation segment has increased by ¥2,303 million ($19,164
thousand) and operating income of other has decreased by ¥1
million ($8 thousand) in the current fiscal year.
(Application of Accounting Standard for Business Combination,etc.)
As mentioned in “CHANGES IN ACCOUNTING POLICY”, the Company has recognized differences as capital surplus arising from thechanges in the Company’s ownership interest of subsidiaries, overwhich the Company continues control; and recorded the acquisition related costs as expenses in the fiscal year in which the costs
are incurred. The effects of these changes on operating income forthis consolidated fiscal year were immaterial.
Information by Geographical Area
Operating revenues from overseas operations, which include international passenger and cargo services of domestic consolidated
airline subsidiaries rendered during the years ended March 31,
2015 and 2014, export sales of domestic consolidated subsidiaries, and sales of consolidated subsidiaries outside Japan, for theyears ended March 31, 2015 and 2014 were as follows:84

JAL REPORT 2015

Thousands of
U.S. dollars

Millions of yen
2015

2014

2015

Asia and Oceania¥247,832¥235,696$2,062,345
1,610,260

Years ended March 31
North America

193,505

171,803

Europe90,944

99,918756,794

Total¥532,282¥507,418$4,429,408

Information about amortization and unamortized balances of
goodwill by segment for the years ended March 31, 2015 and 2014
were as follows:
Millions of yen
Year ended March 31,
2015

Air
transportation

Other

Amortization during the
year

¥22

¥ 849

¥ 871

¥ —

¥ 871

Unamortized balance

—

1,305

1,305

—

1,305

Total Eliminations

Consolidated

Thousands of U.S. dollars
Year ended March 31,
2015

Air
transportation

Other

Amortization during the
year

$183

$ 7,064$ 7,248$ —$ 7,248

Unamortized balance—

10,85910,859—10,859Year ended March 31,
2014

Air
transportation

Other

Amortization during the
year

¥ —

¥ 852

¥ 852

¥ —

¥ 852

Unamortized balance

—

2,154

2,154

—

2,154

Total Eliminations

Consolidated

Millions of yen
Total Eliminations

Consolidated

22. RELATED PARTY INFORMATION
There are no material transactions that need to be presented for theyears ended March 31, 2015 and 2014.

Highlights

President’s Message

The Medium Term Management Plan to Date

CSR

Financial Section

Independent Auditor’s Report
To the Board of Directors of Japan Airlines Co., Ltd.:We have audited the accompanying consolidated financial statements of Japan Airlines Co., Ltd. and its consolidated subsidiaries, which comprise the consolidated balance sheets as at March 31, 2015 and 2014, and the consolidated statements of income and comprehensive income,statements of changes in net assets and statements of cash flows for the years then ended, and a summary of significant accounting policies
and other explanatory information.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in Japan, and for such internal control as management determines is necessary to enable the preparation of
consolidated financial statements that are free from material misstatements, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in Japan. Those standards require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements.
The procedures selected depend on our judgement, including the assessment of the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation andfair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, while
the objective of the financial statement audit is not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made bymanagement, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
OpinionIn our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Japan Airlines Co., Ltd. andits consolidated subsidiaries as at March 31, 2015 and 2014, and their financial performance and cash flows for the years then ended in accordance with accounting principles generally accepted in Japan.
Convenience Translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended March 31, 2015 are presented
solely for convenience. Our audit also included the translation of yen amounts into U.S. dollar amounts and, in our opinion, such translation has
been made on the basis described in Note 4 to the consolidated financial statements.

KPMG AZSA LLC
June 18, 2015
Tokyo, JapanJAL REPORT 201585

Consolidated Subsidiaries

Number of Group Companies
Business Segment

Number of Subsidiaries

Consolidated Subsidiaries

Affiliated Companies

Air Transport Business

33

31

3

3

Other

57

27

57

11

Group Total

90

58

60

14

Segment

Company Name

Paid-in Capital (Millions of yen)

Equity Method Affiliates

Ratio of Voting Rights
Direct (%)

Indirect (%)

Total (%)

Air Transport Business
Air Transport Business

4,537
300

72.8
60.0

–
−

72.8
60.0

J-AIR CO., LTD.

200

100.0

−

100.0

HOKKAIDO AIR SYSTEM CO., LTD.
RYUKYU AIR COMMUTER CO., LTD.

490
396

57.3
−

−
74.5

57.3
74.5

JAL SKY CO., LTD.
JALSKY OSAKA CO., LTD.

100
30

100.0
100.0

−
−

100.0
100.0

JALSKY KYUSHU CO., LTD.

30

100.0

−

100.0

JALSKY SAPPORO CO., LTD.

30

100.0

−

100.0

JALSKY NAHA CO., LTD.

30

51.0

49.0

100.0

JTA SOUTHERN SKY SERVICE CO., LTD.

20

−

100.0

100.0

JALSKY KANAZAWA CO., LTD.
JALSKY SENDAI CO., LTD.

10
10

100.0
100.0

−
−

100.0
100.0

JAL GROUND SERVICE CO., LTD.
JAL GROUND SERVICE TOKYO CO., LTD.

474
20

99.8
−

0.2
100.0

100.0
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.
OKINAWA AIRPORT SERVICE CO., LTD.

10
33

−
70.6

97.7
29.4

97.7
100.0

Maintenance

JAL ENGINEERING CO., LTD.
JAL MAINTENANCE SERVICE CO., LTD.

80
10

100.0
100.0

−
−

100.0
100.0

Cargo

JAL KANSAI AIRCARGO SYSTEM CO., LTD.
JAL CARGO SERVICE CO., LTD.

100
50

69.2
100.0

−
−

69.2
100.0

JAL CARGO HANDLING CO., LTD.
JAL CARGO SERVICE KYUSHU CO., LTD.

50
20

−
40.0

100.0
40.0

100.0
80.0

Passenger Sales

JAL NAVIA CO., LTD.
JAL MILEAGE BANK CO., LTD.

50
40

100.0
100.0

−
−

100.0
100.0

Airport-Related Business

JAL ROYAL CATERING CO., LTD.

2,700

51.0

−

51.0

Airport Passenger Handling

JAL HAWAII, INCORPORATED

USD 1,000

100

−

100.0

100.0

Passenger Sales

JAL PASSENGER SERVICES AMERICA INCORPORATED

USD 1,000

205

−

100.0

100.0

Other

PACIFIC INVESTMENT HOLDINGS CORPORATION

USD 1,000

59,701

100.0

−

100.0

Airport Passenger Handling

Ground HandlingJAPAN TRANSOCEAN AIR CO., LTD.
JAPAN AIR COMMUTER CO., LTD.

Other
Maintenance

JAL AIRTECH CO., LTD.

315

66.6

3.4

70.0

Passenger Sales

JALPAK CO., LTD.*1
JAL SALES CO., LTD.
JAL JTA SALES CO., LTD.

80
460
30

96.4
100.0
16.7

1.2
−
83.3

97.7
100.0
100.0

Airport-Related Business

OKINAWA FUELING FACILITIES CO., LTD.
JAL ABC, INC.

100
100

40.0
51.0

20.0
−

60.0
51.0

Other

JAL INFORMATION TECHNOLOGY CO., LTD.
AXESS INTERNATIONAL NETWORK, INC.

702
700

100.0
100.0

−
−

100.0
100.0

JAL AEROPARTS CO., LTD.

490

100.0

−

100.0

JALCARD, INC.

360

50.6

−

50.6

JAL FACILITIES CO., LTD.

180

85.0

−

85.0

JAL BRAND COMMUNICATIONS CO., LTD.

100

100.0

−

100.0

JTA INFORMATION & COMMUNICATION CO., LTD.

50

−

100.0

100.0

JAL SUNLIGHT CO., LTD.
OFFICIAL FILING CO., LTD.

20
10

100.0
50.0

−
4.0

100.0
54.0

Cargo

JUPITER GLOBAL LTD.

HKD 1,000

1,960

46.4

4.6

51.0

Passenger Sales

JALPAK INTERNATIONAL HAWAII, INC.
JALPAK INTERNATIONAL (CHINA) CO., LTD.

USD 1,000
USD 1,000

1,000
600

−
−

100.0
100.0

100.0
100.0

JALPAK INTERNATIONAL (EUROPE) B.V.

EUR 1,000

1,600

−

100.0

100.0

JALPAK INTERNATIONAL (FRANCE) S.A.S.

EUR 1,000

160

−

100.0

100.0

EURO-CREATIVE TOURS (U.K.) LTD.

GBP 1,000

100

−

100.0

100.0

JALPAK INTERNATIONAL ASIA PTE. LTD.

SGD 1,000

146

−

100.0

100.0

JAL SATELLITE TRAVEL CO., LTD.
PT. TAURINA TRAVEL DJAYA*2

HKD 1,000
IDR 1,000

750
500,000

−
−

100.0
49.0

100.0
49.0

JLC INSURANCE CO., LTD.
PACIFIC BUSINESS BASE, INC.

USD 1,000
USD

2,000
400

100.0
100.0

−
−

100.0
100.0

USD

93

−

100.0

100.0

Other

JAL AIRLINES MANAGEMENT CORP.

*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 considered a subsidiary because JAL exerts effective control.

86

JAL REPORT 2015

Highlights

President’s Messagesof Operations
UsMedium
Making Term
JAL What
It Is
CSRto DateGovernance
HighlightsReviewPresident’s
MessageEach of
The
Management
Plan
CSR

Financial Section

Domestic Routes(Schedule for Summer 2015)• Routes between the following cities (airports) are codeshare flights
with Fuji Dream Airlines Co., Ltd. (FDA): Shizuoka-Sapporo (New
Chitose), Shizuoka-Fukuoka, Matsumoto-Sapporo (New Chitose),
Matsumoto-Fukuoka, Nagoya (Komaki)-Fukuoka, Nagoya (Komaki)Yamagata, Nagoya (Komaki)-Niigata, Nagoya (Komaki)-Izumo, Nagoya(Komaki)-Kochi, Nagoya (Komaki)-Kitakyushu, Nagoya (Komaki)Kumamoto, and Niigata-Fukuoka. FDA aircraft and crews are used forflights on these routes.

RishiriMemanbetsu
Asahikawa• Routes between the following cities (airports) are codeshare flights
with Hokkaido Air System Co., Ltd. (HAC): Sapporo (Okadama)-Rishiri,
Sapporo (Okadama)-Hakodate, Sapporo (Okadama)-Misawa, andHakodate-Okushiri. HAC aircraft and crews are used for flights onthese routes.
• Routes between the following cities (airports) arecodeshare flights with Amakusa Airlines Co., Ltd.
(AMX): Fukuoka-Amakusa and Kumamoto-Amakusa.
AMX aircraft and crews are used for flights on theseroutes.
Some flights for the Osaka (Itami)-Kumamoto route arealso codeshare flights with AMX.

Okushiri

Obihiro (Tokachi Obihiro)

Hakodate

Aomori
MisawaTajima(Konotori Tajima)• Routes between the following cities (airports) areseasonal routes and there are periods when these
are not in service: Tokyo (Haneda)-Kumejima, Osaka(Itami)-Matsumoto, Osaka (Itami)-Asahikawa, Osaka(Itami)-Memanbetsu, Osaka (Itami)-Tanegashima,
Sapporo (New Chitose)-Izumo, Sapporo (New
Chitose)-Tokushima, Nagoya (Chubu)-Kushiro, andNagoya (Chubu)-Obihiro.

Akita

Hanamaki (Iwate Hanamaki)

Yamagata(Oishii Yamagata)
Niigata
Sendai

Komatsu
Izumo(Izumo Enmusubi)

Oki

Fukuoka

Kitakyushu

MatsumotoTokyo(Shinshu Matsumoto) (Narita)

Okayama

Hiroshima

Yamaguchi Ube

Kushiro (Tancho Kushiro)

Sapporo (Okadama)
Sapporo (New Chitose)

Takamatsu

Matsuyama

Shizuoka(Mt. Fuji Shizuoka)

Oita

Nagasaki
Kumamoto (Aso Kumamoto)AmakusaTokyo(Haneda)Nagoya (Komaki)
Nagoya (Chubu)

Kagoshima

Osaka (Itami)
Osaka (Kansai)
Nanki Shirahama

Tanegashima
Yakushima

Tokushima (Tokushima Awaodori)
Amami-Oshima

Kikaijima

Tokunoshima(Tokunoshima Kodakara)
Yoron

Kochi (Kochi Ryoma)
Miyazaki (Miyazaki Bougainvillea)

Okinoerabu
Kita-Daito

Kumejima
Okinawa(Naha)

Minami-Daito

Tarama Miyako
Yonaguni

Ishigaki(Painushima Ishigaki)

JAL REPORT 201587

International Routes(Schedule for Summer 2015)

Newcastle
DublinManchester
BelfastGlasgow
Edinburgh
Aberdeen

Copenhagen
Stockholm
Gothenburg

Hamburg
Dusseldorf

Amsterdam

Brussels

Oslo

KittilaIvalo

Rovaniemi
Oulu
Helsinki

Tallinn
St. Petersburg

Riga
Vilnius

Moscow

Khabarovsk
Nizhny Novgorod

LondonParis
Stuttgart

ViennaFrankfurt
MunichIstanbul

Basel
Lyon
GenevaLisbonMadridMalagaKazan

Warsaw
BerlinHannoverPragueBudapest

SamaraUfa

Volgograd

Chelyabinsk
Perm

Shenyang

Rostov

Sochi

Malta

YantaiChongqing

Bologna

Marseille

Doha

Toulouse

Mandalay
Chiang Mai
Dhaka
Nay Pyi Taw
Delhi
Dubai
MumbaiHyderabadBangalore
Koh Samui
ColomboMale
Langkawi
PenangJohannesburg

Tianjin
Qingdao

Xi'an

Chiang Rai

Nice
Barcelona

Vladivostok

Beijing

ZurichAthensRome

Seoul

DalianKrasnodar

Milan
Sao Paulo

Yekaterinburg

KunmingChengdu

Wuhan

Nanjing

Busan
Jeju
Shanghai

Guangzhou

Shenzhen

Hanoi

YangonTaipei
Kaohsiung
Hong Kong

Chennai

Guam
ManilaLuang Prabang
Siem Reap
Vientiane
Phnom Penh
Ho Chi Minh City

BangkokPhuketKuantan
Kuala Lumpur
Singapore

Kota Kinabalu
JakartaSurabayaDenpasar
Kuching

DarwinCairnsBrisbane

PerthSydneyMelbourne

88

JAL REPORT 2015

Highlights

President’s Messagesof Operations
UsMedium
Making Term
JAL What
It Is
CSRto DateGovernance
HighlightsReviewPresident’s
MessageEach of
The
Management
Plan
CSR

Financial Section

Yellowknife
ToledoCleveland
Detroit
Buffalo
TorontoWhitehorse

Edmonton

Calgary
Kelowna
Vancouver

Minneapolis

Grand Rapids
Kalamazoo
Milwaukee

Burlington

Madison

Syracuse

Winnipeg

Redmond

Chicago

Japan

Omaha

Salt Lake City

EugenePeoriaDes Moines

Reno

Bloomington

Kansas City

Sacramento
San Francisco
San Jose

FresnoSanta Barbara
Los Angeles

Denver
Wichita
Tulsa
Las Vegas
AlbuquerqueOklahoma CityEl PasoSan Diego
Phoenix
Tucson

North West
Arkansas

St. Louis
MemphisLouisville
Nashville

Evansville
New Orleans

Dallas

HoustonAustinSan Antonio
Monterrey

Long Beach

Honolulu

RochesterMontreal

Knoxville

Columbus
PortlandPittsburgh
BostonHartford
New York
Philadelphia
Harrisburg
Baltimore
DaytonWashington
Lexington
Richmond
Norfolk
Indianapolis
Cincinnati

HuntsvilleJacksonville

Tampa
Sarasota

Raleigh DurhamCharlotte
AtlantaOrlandoWest Palm Beach
Fort Lauderdale
Miami

CancunGuadalajara

Mexico City

Paris
Frankfurt

Fort Myers

LondonFortaleza

Birmingham
SalvadorManausPapeeteGold Coast

Brasilia

RecifeBelo Horizonte
Lima
Campo Grande
Londrina
IguazuAucklandSantiago

Port Alegre
Curitiba• The routes above include codeshare flights.

Sao Paulo
Rio De Janeiro• The map has been altered to highlight the cities on JAL’s route network.

JAL REPORT 201589

Fly into Tomorrow

90

JAL REPORT 2014

JAL REPORT 201491

Japan Airlines Co., Ltd.
Finance Department and CSR Group, General Affairs Department
Nomura Real Estate Bldg., 2-4-11 Higashi-Shinagawa,Shinagawa-ku, Tokyo 140-8637, Japan
TEL: +81-3-5460-3068 (Finance Department) +81-3-5460-6837 (General Affairs Department)
Corporate Website:www.jal.com
Corporate Information: http://www.jal.com/en/outline/corporate/
CSR Information:
http://www.jal.com/en/csr/
Investor Relations:
http://www.jal.com/ja/investor/