Chapter 1 Introduction

Table of Contents/The JAL Group Corporate Policy
JAL REPORT 2023 ｜ Table of Contents
Message from JAL Group CEO

3

Special Feature: Looking Back on the COVID-19 Pandemic

Safety andPeace of Mind

9

Chapter 2｜The JAL Group Value Creation Story
24③Responsible Procurement
Special Feature: Dialogues with Stakeholders25
Risk Management27
27①Risk Management Structure②Efforts27
Corporate Governance
29
29①Corporate Governance System
33②Management Structure36③Officer Remuneration
37④Effectiveness Evaluation
⑤Message from Outside Directors and Chair of the Board of Directors 39
5. The Trails of Challenges
43

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

62
64
65
67
69
69
70
72
75
77
80

Growth Strategy④Travel and Regional RevitalizationNew Businesses Promoted Through Open Innovation and 
Venture Capital
（2）DX Strategy（3）Human Resources Strategy
①Human Resources Portfolio
②DEI
③Career/Reskilling④Engagement（4）GX strategy
4. Financial StrategyCommunication with Institutional Investors

Build a better
future where
everyone can feel
fulfilled andhopefulTo become the worldʼs most preferred and valued airline group,by helping to create a vibrant society and a future
where many people and goods freely move around

Chapter 3｜Growth Strategy
1. Overall Strategy
45
2. ESG Strategy
49
3. Business Strategy
5151（1）Business Model Reform
Air Passengers
52
53①Portfolio/Aircraft②FSC55
57③LCC
Cargo and Mail
58
Mileage, Lifestyle, and Infrastructure 59
59①Mileage and Lifestyle
60②Air Mobility Area/MaaS61③Contract Business

Sustainability

The JAL Group Value Creation Story

1. Materiality
11
2. JAL Group's Value Creation Story
13
3. JAL Group's Value Creation Process
15
4. Foundations of Value Creation
1717（1）Safety Charter
20（2）JAL Philosophy
21（3）Divisional Profitability Management System
（4）Governance22
JAL Group Code of Conduct (Information Disclosure and Compliance) 22
Initiatives based on the JAL Group Code of Conduct22
22①Information Disclosure and Dialogue
23②Fair Business Practices

JAL
Vision2030

Introduction

Chapter 1｜Introduction

Chapter 4｜Sustainability
Special Feature: Sustainable Charter Flight
Sustainability Initiatives
（1）Overall Sustainability（2）Key Initiatives (Metrics and Targets)
Environment
Environmental Management
Addressing Climate Change (TCFD)
Biodiversity Conservation (TNFD)

Precaution of Environmental Pollution
101
Noise Reduction
101
Effective Use of Limited Resources
101
Special Feature: Sustainability of Restaurants in the Sky103
Respect for Human Rights
105Special Feature: Eleven Priority Issues, Indicators and Targets Related to Respect for Human Rights 107
Efforts by Corporate Citizenship Activities
109
Major External Evaluations
110

111
113
117
119
121
122

4. Financial Data
Evaluation and Analysis of Financial Conditions5. Other Data
Stock Information
Company Profile
Other Media

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

Chapter 5｜Data Section
1. Data Highlights
2. ESG Data
3. Business Data
International Route MapDomestic Route MapConsolidated Subsidiaries

123
125
133
133
134
134

Sustainability

81
83
84
85
89
89
90
99

Editorial Policy
Editorial Policy

Reference guidelines

The International Integrated Reporting Framework issued by the International Integrated
Reporting Council (IIRC) and the Guidance for Collaborative Value Creation issued by the
Ministry of Economy, Trade and Industry were used as references in preparing thisreport. The GRI Standard issued by the Global Reporting Initiative (GRI) was used as areference for ESG information.

Period covered by the report
Primarily April 2022 to March 2023 (FY2022)
Scope of the report
This report covers 191 JAL Group companies, comprising Japan
Airlines Co., Ltd., 137 subsidiaries and 53 affiliates.
1

JAL REPORT 2023

The JAL Website
WEB

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

Offers a comprehensive insight into JAL Group’s business approach, activities ingeneral, Investor Relations (IR) information and sustainability information.

Products, Services, and Events
Some of the products, services, and events contained in this report have beensuspended due to extenuating circumstances.
For the latest information, please refer to sources such as the JAL Website.

Data Section

The JAL Group has published JAL REPORT 2023 to inform stakeholders about our businessactivity outcomes in the previous financial year, our strategies for the future, and to provide
an understanding of the Group’s pursuit of social and economic values, and sustainablegrowth. This report has been collated from a wide range of both financial and nonfinancial
information that the JAL Group has deemed to be of particular importance to Groupmanagement, all of which is made available on the JAL Website.

Forward-looking Statements
This report includes forward-looking statements about the JAL Group’s businesses
and forecasts. These statements are based on our analysis of existing informationand various trends. Actual results may differ materially from forecasts set forth inforward-looking statements due to business risks and uncertainties.

Date of publication August 2023

TOP

JAL REPORT 2023

2

Chapter 1 Introduction

Table of Contents/
The JAL Group Corporate Policy

Messagefrom
Message fromJAL
CEOJAL GroupGroup CEO

FeatureMessage from JAL Group CEO
Introduction

As the third year of the Medium Term Management Plan FY2021 to
FY2025, JAL Group has formulated its Rolling Plan 2023, and placed their
ESG strategy, one of the three pillars of the management strategy, as
the top-tier strategy to realize JAL Vision 2030. How to achieve carbon
neutrality and to secure human resources is a major issue for the airline
industry. We will work together to realize our purpose to become theworld’s most preferred and valued airline group, by helping to create
vibrant society and a future where people and goods can move aroundfreely, and to improve our corporate value over a long term.

The JAL Group Value Creation Story

By placing ESG strategy at the top of
our strategy, we will create a society ofsafety and peace of mind and asustainable future by solving social
issues, and realizing long-term
improvement in corporate value.
AKASAKA Yuji
Representative Director,
President
Japan Airlines Co., Ltd.
JAL Group CEO

Growth Strategy
Sustainability
Data Section

3

JAL REPORT 2023

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JAL REPORT 2023

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Chapter 1 Introduction

Table of Contents/
The JAL Group Corporate Policy

Message fromJAL Group CEO

human well-being. In fact, some studies state that active
people are happier.
Going forward, we would like to provide the movement ofpeople and goods as well as new social values by creating
connections and relationships between people beyond their
movement. We will develop new businesses other than in
the aviation field to generate new revenue. We believe thatthe newly generated connections between people andgoods can stimulate the air transport demand and lead toincreased profits in the airline business.
We believe that this ESG strategy will realize the sustainabilityof air transportation and the improvement of corporate value.
[Figure 2]

ESG Strategy for JAL Vision 2030
In JAL Vision 2030, I am drawn to create a society withsafety and peace of mind and a sustainable future towards
2030, in which many people and various goods can movearound freely. With the aim of accelerating the JAL Group's
initiatives for a sustainable growth towarsd this Vision,
we have decided to review and reorient our MediumTerm Management Plan based on lessons learned fromthe COVID-19 pandemic into our Rolling Plan 2023. A
particularly important revision is the repositioning of our ESG
strategy to the top strategy in Medium Term Management
Plan.

■ Redefining Business Objectives
We have defined four main business domains for the
future and are diversifying our business by restructuring
our business structure. We have redefined our businessobjectives in order to align our top ESG strategy with eachbusiness strategy to strongly promote our ESG strategy.
The FSC business domain aims to achieve both
environmental measures and network expansion. We aim tocreate a more efficient fluid network not only for aviation but
also for the entire transportation system by cooperating withother airlines such as oneworld alliance, other transportation
modes such as railways and regional aviation, among others,
while enhancing competitiveness by introducing fuel-efficientand state-of-the-art aircrafts.
The mission of the LCC business domain is to create newflows of people. We will offer easy-to-understand services
especially for the younger generation, families with children,■ The Value of Air Transportation and Societal Connections
Originally, air transportation is essential for both people andgoods. To date, we have developed air transportation asa means to achieve this goal into a safe and secure social
infrastructure, thereby generating social value. Recently,
we aim to improve sustainable value by realizing carbon
neutrality even further. On the other hand, through the
COVID-19 pandemic, the movement of people and goods
created not only physical values, but also connections andpermanent relationships between people and goods, which
are connected to fundamental social values such as theenvironment, biodiversity, the local economy, and above all,Figure 1 :Revenue Performance and Plan

SalesSales(Billions(Billionsof yen)of yen)

EBIT/Operating
EBIT/Operating
ProfitProfit(Billions(Billionsof yen)of yen)

1,850
1,850

or aboveor above

1,6581,658

1,4871,487
1,3861,386

185 185or aboveor above

176 176

1,3761,376

100 100
65 65

89 89

683 683
481 481-239-239-398-398

2018 20182019 20192020 20202021 2021
2022 2022
2023 2023
2025（FY）
2025（FY）
results）
results）（Actual（ActualFigure 2 :JAL Group's Value Creation Story
For details, please see the following pages.
p.49 ESG Strategy

2018 20182019 20192020 20202021 2021
2022 2022
2023 2023
2025（FY）
2025（FY）（Planning）（Planning）

Movement of people and goods

results）
results）（Actual（ActualSocial values✓Conserve the environment and biodiversity✓Social infrastructure network✓Revitalize the local economy✓Carbon neutrality✓Improve of people's well-being

Customer base

Human capital baseSocietal
Connections

Expand New Air Transport Demandby Societal Connection

JAL REPORT 2023

LCC

Cargo and Mail

Develop New Businesses that Expand
Societal Connection

Data Section

Expansion of aviation revenues
FSC（Planning）（Planning）

Societal Connection✓Safety and security

Air
Transportation

5

Sustainability

To Become the World’s
Most Preferred and Valued Airline Group,
Where Many People and Goods Freely
Move Around.

Growth Strategy

For details, please see the following pages.
p.9 Special Feature "Looking back on the COVID-19 pandemic"
p.11 Materiality

were causing considerable environmental impact. As the
COVID-19 pandemic brought travel to a standstill, as a social
infrastructure, I decided to make it my business mission tosolve these problems. [Figure 1]

The JAL Group Value Creation Story

Thank you very much for your continued support to JAL
Group. From May 2023, COVID-19 has been downgradedin the Infectious Diseases Control Law, bringing back thebright wonderful days. I am truly delighted to see the smilingfaces of our customers and workers at the airport and on
board our flights. We would like to express our deepest
gratitude again for the tremendous support and cooperation
we received from our stakeholders during the COVID-19
pandemic.
The outbreak of the COVID-19 pandemic in the early2020s brought about the disappearance of demand, an
unprecedented crisis that the airline industry had neverexperienced before. Amid the uncertainty of the future, wetook a step forward towards the post-COVID period byformulating our Medium-Term Management Plan in May
2021 in order to unite all employees and move forward. Witha great deal of their support, we had to feel our way throughthe darkness, our revenue recovered to pre-COVID levels lastyear. We were able to generate profits and pay dividends
for the first time in three years. Although it is necessary tocontinue to respond to global risks, including the Ukrainiansituation, the business performance of this fiscal year has
been on track due to the further acceleration of the pent-up
demand.We feel that our Medium Term Management Plan
is close to achieving the target of 1.85 trillion yen or morein sales and 185 billion yen or more in EBIT in the final fiscal
year of FY2025. The three-year battle against COVID-19 has
been a series of hardships and challenges, but I also feel thatthe lessons learned have been tremendous.

First, I realized the importance of preparing of all risks. We
were able to overcome this unprecedented crisis not only
because of the strong financial base we had accumulated
prior to COVID-19, but we also realized that this was notenough in terms of business continuity and employee
motivation. We are accelerating our business structurereform to build a more resilient and sustainable business
management system by diversifying our business beyond
just aviation.
Next, we reaffirmed the underlying strength of the humanresources gathered in the JAL Group. I saw that everyone
in JAL Group practiced JAL Philosophy under the slogan"What we can do now" by taking up challenges to develop
new businesses and services. Also 2,000 employees, whowere relocated outside the company received high praise
wherever they went and returned with great confidence.
I can now believe that we have an unlimited potential in
our staff. At the same time, I was keenly aware of myresponsibility to make better use of these human resource
capabilities.
The other realization was the deep relationship betweensocial issues and our business. Encountering the COVID-19
pandemic, a human crisis, increased my awareness ofglobal issues, including environmental problems. I also thinkthat restricting the movement of people affected people'sconnections, which expanded further to various social
problems. I felt responsible, as an airline operator, that we

Introduction

Looking Back on Three Years of the COVID-19 Pandemic

FeatureTurn non-aviation business into a new revenue source

Economic values

Mileage, Lifestyle, and InfrastructureTOP

JAL REPORT 2023

6

Chapter 1 Introduction

Messagefrom
Message fromJAL
CEOJAL GroupGroup CEO

Table of Contents/
The JAL Group Corporate Policy

For a Sustainable Air Transport

FSC

LCC

Balancing environmental measuresand network expansion

Cargo and Mail

Mileage, Lifestyle and Infrastructure

Creating connections between people and goods
Milage and Card

Travel and Retail

Ground Handling

Regional Solutions

Air Mobility

Figure 5 :JAL Style Human CapitalManagement

To Conclude: Work to Further Enhance
Corporate Value Based on Safety and Security
This year, exactly 120 years after the Wright brothers'
first flight, we believe that the reason the aviation industry
has grown through the numerous event risks is because
the safety of airplanes has improved dramatically andhas established as a social infrastructure. Now, as newtechnologies such as drones and eVTOL air mobility arebeing developed, and as we prepare to fly in EXPO 2025
OSAKA, KANSAI in 2025, it is of utmost importancethat they will be accepted by society as safe and secure
vehicles. Our mission has always been and always will be tocontribute to the progress and development of society by
flying safely and securely.
The JAL Group will fulfill its responsibilities as a social
infrastructure lifeline with a more resilient business structure.
We will grow into a corporate group that further enhances
the power of human resources and creates connections andrelationships among people through air transportation, while
thanking our customers who always warmly support us. We
will work together to become “the world's most preferredand valued airline group" for all stakeholders. We lookforward to your continued support.

Use of digital and new technologies

Diverse investments in human resources and education

Automation, labor-saving, and multi-functionality

Improving skills and organizational skills

Same output with fewer people

Growth of each individual

Increased productivity

Increased value creativity

Sustainability● Young people and their families, and inbound tourists● Development of simple services and new points● Transport of medical, pharmaceutical, andregional products● Cooperation with other transport modes and drone logistics

185 or above

EBIT (Billions of yen)

Approx. 50％ FSC plus Cargo and Mail

132
65

100

Data Section

For details, please see the following pages.
p.51 Business Model Reform

Creation of new flows of people● Introduction of fuel consumption and state-of-the-art aircraft● Cooperation with alliances, other transportation modes, andregional airlines■ JAL Style Human Capital Management
The population in Japan is declining, and the time has cometo reconsider how to operate conventional labor-intensive airservices. In addition to strengthening our ability to secure andnurture airline personnel, we need to increase productivity
and value creativity both individually and as a team.
It is thus essential to reform operations to achieve thesame output with fewer people by utilizing digital andnew technologies and promoting automation and multiskilling. The other important factor is diversity equity andinclusion (DEI). In our past efforts, there were many cases
where creating a work environment where diverse humanresources can play an active role and adding new educationand experiences to the people who work there have led tothe creation of novel ideas and new systems. This has led to
the growth of individual employees and organizations. There
are various regulations and restrictions on aviation, but if theenigmatic power of DEI can be used in workplaces such as
in airports and cabins, it will lead to a significant change inaviation. I would like to add that we are on track to achieve

30 percent of female managers, one of our managementtargets, by FY2025.
In order to further unleash the power of human resources,
which is the JAL Group's greatest strength, we will actively
invest in human resources such as wages, promotion, andeducation, while promoting human capital management
by enhancing productivity and value creativity through twopillars: technology and diversity. [Figure 5]

Growth Strategy■ Toward Carbon Neutrality in the Sky
We have been working to achieve carbon neutrality in Net
Zero CO2 Emissions by 2050 (NZE) as one of the mostimportant issues for the global environment. I, however, feelthat the importance of this is growing day by day. In Europe,a law to replace short-haul air routes with railways came into
effect, and the Japanese government's broad policy clearlystates the direction of carbon neutrality in the aviation sector.
One of the pillars of CO2 reduction is the renewal to fuelefficient aircrafts. In addition to the Airbus A350 and Boeing
787, which are our main fleets, we decided to introduce the
Boeing 737MAX in FY2026. In all the number of aircrafts*,
the share of these advanced fuel-efficient aircrafts is
expected to be more than 70 percent in FY2030, up fromabout 30 percent before the COVID-19 pandemic, and wewill continue to steadily promote aircraft renewal.
Another pillar is the use of sustainable aviation fuel or
SAF. SAF is a new fuel that can reduce CO2 emissions byapproximately 80 percent compared to conventional aviation
fuel. In FY2030, we plan to replace 10 percent of all onboard

fuel with SAF. Heretofore we have been procuring SAF fromoverseas as European and North American countries havebeen preceding Japan in the SAF production. Hereafter,
we will procure domestic SAF for use in Japan. If SAF
cannot be refueled at Japanese airports, overseas airlines
may find it difficult to continue flights to Japan. Thus SAF in
Japan is definitely essential to support our country's aviation
infrastructure. At present, we are rapidly developing andmanufacturing SAF in Japan in cooperation with suppliers
that provide various technologies and raw materials,
including the petroleum and plant industries.
*Passenger aircrafts with more than 100 seats

The JAL Group Value Creation Story

During the COVID-19 pandemic, the entire airline industry
lost substantial revenue, but at the same time, theimportance of air transport was acknowledged, such as
being able to meet people quickly and being able to go
anywhere. In order to make air transportation sustainable in
the future, we currently have two major management issues.
One is to realize carbon neutrality in air transportation, andthe other is to secure human resources in a society with adeclining population.

Connecting goods, people, and communities throughhigh-speed transportation

Figure 4 :Profit by Business Domain

Introduction

domains, we hope to achieve a business structure in whichapproximately half of our profits will be generated through
LCC and Mileage, Lifestyle, and Infrastructure in FY2025.
[Figure 3 and Figure 4]

and inbound passengers traveling around Japan. We also
want to develop new destinations that FSC cannot cover.
The Cargo and Mail business domain plays a role inconnecting goods and people, and regions through highspeed transportation that leverages the strengths ofaviation. In particular, we will focus on the transportation of
goods that are directly connected to people's lives, suchas e-commerce, medical products and pharmaceuticals,
and local specialties. We will also contribute to solving
logistics problems by linking with other transportation modes
and using new technologies such as drones. In order toreinforce the mobility required for such meticulous cargotransportation, we will introduce new midsize cargo aircrafts.
In addition to aviation, the Mileage, Lifestyle, andInfrastructure business domain will grow into a core businessfor creating connections between people and goods, taking
advantage of the JAL Group's strengths in customer base,human resource base and brand strength. We will particularly
focus on solution businesses that address serious local
problems such as the declining and aging population by
expanding the number of people engaged in nature, food,culture, medical care, education, and events. In the travelbusiness, we will propose and disseminate new forms oftravel, such as Adventure Tourism, that can create deeper
relationships with local communities.
In the Milage and Card and Retail business domains, we willoffer convenient and affordable products and services otherthan those offered by airlines. Our 37 million JAL Mileage
Bank members and four million JAL Card members can use
our services in many situations other than transportation.
We will also take on the challenge of stable ground handling
operations at regional airports, which are important for
attracting inbound demand and the regional economy, andthe development of new infrastructures, such as the DroneeVTOL, which will connect daily life and is useful for disastercountermeasures.
As we strive for growth in each of these four business

Figure 3 :Business Objectives Redefined toPromote ESG Strategy (by Domain)

FeatureApprox. 10％ LCC
Approx. 40％ Milage, Lifestyle, and Infrastructure

Beforethe COVID-19 pandemic *1

FY2023
FY2025（Plans）（Plans）*1 B
 efore the COVID-19 pandemic: FY2019 results excluding the impact of the novel coronavirus(Earnings forecast Value (IFRS) disclosed at the time of FY2019 Q3 financial results announcement)

7

JAL REPORT 2023

FY2022TOP

JAL REPORT 2023

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Table of Contents/
The JAL Group Corporate Policy

Chapter 1 Introduction

Message fromJAL Group CEO

FeatureFeatureSpecial Feature Looking Back on the COVID-19 Pandemic

Impact of COVID-19 on Aviation Business ～Trends in the Number of Newly Confirmed Cases and Quarterly Revenue～

COVID-19 has been repositioned as an infectious disease since May 2023 putting an end to the COVID-19
pandemic, which has been uncontrollable for roughly three and a half years. We can now look back and reflect on
the struggle we experienced over the COVID-19 pandemic and recognize its tremendous impact. We will use ourknowledge and experience gained through the pandemic to improve our resilience and enhance the sustainabilityof the JAL Group.
JAL Amabie JET planned and painted by our maintenance engineers

Initiated a Crisis Management System led by the President Immediately After the Outbreak■Enacted a BCP to Establish a Task Force to make Prompt Decisions
Task Force Meetings

150

6,000

100

4,000

50

2,000

Chair of Task Force (President)

In January 2020, in line with the spread of the virus in Asian countries, we launched a task force headed by the
President based on our Business Continuity Plan (BCP), under the emergence of an unknown virus spreading
an infectious disease. Thereafter, we have held weekly meetings in the task force headquarters until May 2023
to address issues with a sense of speed and determination such as the prevention of infections among ourcustomers and employees, our fleet plan, and improvement of the income and expenditure.

0

Secretariat (Senior Vice President of General Affairs Division)
Each Executive Officer

FY19 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY20 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY21 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY22 Q1 FY22 Q2 FY22 Q3 FY22 Q4
Int'l passenger (FSC) revenue
Domestic passenger (FSC) revenue
Cargo and mail business revenue
Number of newly confirmed cases (Source: Open Data from Ministry of Health, Labour, and Welfare)State of emergency

Vice Presidents of each department

0

The JAL Group Value Creation Story

152 times

Held(between January 2020 to May 2023)

Task Force System(1,000 people)
8,000

Introduction(Billions of yen)
200

Quasi-emergency measures *Both periods are in Tokyo.

① Protecting Customers - For Safety and Peace of Mind

■Promote a Wide Range of Initiatives not only to Prevent the Spread of Infection, but also to Ensure Safe Travel

For details of our efforts, please refer to "Safety and Peace of Mind" on p.48.

Improvement of Hygiene
and Cleanliness

JAL SMART AIRPORT automates check-ins and baggage check-ins. Touchless sensors are installedin the check-in computers, and QR orders are installed in the lounge. Anti-viral and anti-bacterial
coatings were applied in the cabin. We have worked to improve hygiene and cleanliness in order toensure safe use everywhere.

Communication with Customers

After verifying the air circulation in the aircraft using the Fugaku supercomputer, we made efforts to make the announcement objective andeasy to understand, such as asking people to wear masks. Due to the increase in inquiries about reservations and airline tickets, and theinconvenience caused by the difficulty in making telephone connections, we are working on opening new channels such as using the LINE
application and strengthening our contact center.

Providing Support During Travel

New support services were provided, such as the mobile app VeriFLY, which provides travel
documents for each country changing day by day, JAL Covid-19 Cover, which pays for medicalcare and other expenses in case of infection during travel, and PCR Anshin Support, which provides
access to PCR tests even on miles.

Compatibility of Stronger Quarantine
Systems and Convenience

To make the flow at the quarantine as smooth as possible, we worked with relevant authorities to address issues such as changing thepeople flow so that customers could receive enhanced measures at the border of Japan to stop the spread of infection. At Narita and Haneda
airports, the JAL Group's Airport Customer Service staff took charge of the quarantine support services and made use of their experience tostrengthen quarantine at the same time as providing convenience to customers.

The "Safety and Security Initiative" is the first in Asia toreceive a double award of the world's highest rating.

② Protecting the Route Network - To Meet the Social Demands for Transportation as an Infrastructure

Strict immigration restrictions in each country made it necessary to avoid overnight stays for our crew. Their work and flight schedule was advertently reconsidered. While inbound traffic halted, demand fortransit through Japan recovered quickly. Based on immigration regulation trends, we worked hard to capture the demand by forecasting the trend, flexibly adjusting manpower, and adjusting schedules tofacilitate transit. In June 2020, ZIPAIR began operating LCC flights exclusively for cargo during a period when passenger demand was significantly declining. In June 2021, Spring Japan (currently) became aconsolidated subsidiary to prepare for demand recovery.

③ Protecting the JAL Group- To Expand Our Customer Base by Maintaining and Strengthening Our Human Resources andFinancial Base in Preparation for a Pent-up DemandMonthly flight hours per cabin attendant< Before Corona > 71.8 hours/month (May 2019) ➡ [the COVID-19 pandemic] 8.3 hours/month (May 2020)■Human Capital: Maintaining and Strengthening Human Resources Base who can Transform to Face the Challenges in Creating New and Diverse Values

Training

Pre-corona
FY2018 70.8 hours/year
FY2019 72.3 hours/year

FY2020 277.1hours/year
FY2021 162.3 hours/year

With the use of an online conference system, we have advanced the acquisition of new knowledge and skills thatcannot be acquired through work alone.
[Training contents (one example)] Safety/Service/Language/Management Planning/financial results/Knowledge ofother types of work/Laws/Cross-cultural understanding/Information systems/Health management, and the like

Consolidated Employees
Voice

FY2019 to 35,653*Relocating extra human resources
Relocating extra human resources

1,801 a month

After confirming their intentions, including an open recruitment process, employees from the airport department,
including cabin attendants, were relocated to various fields to acquire new knowledge and values.
[Relocated areas (examples)] City Hall/Town Hall/car dealers/delivery distribution centers/ customer contact
centers/telecommunications companies/integrated construction companies, to name a few. About 140 companies➡

FY2022 end 36,039 *Including LCC and non-airline domains.

An Unusual Case Among LCCs- ZIPAIR Sets the Stage for Early Profitability by Launching Freight-only Flights

JAL REPORT 2023

< Before Corona > 41 flights/year (FY2018)➡ [the COVID-19 pandemic] Flight 12,934/year (FY2020)

Disruptions in shipping and a sharp decline in supply from passenger services led to tighter supply and demand, as well as new demand for vaccine shipments and home deliveries. In response to this, we expanded our capacity
to meet the demand by operating freight-only flights by ZIPAIR, a newly established LCC, and by utilizing freight-only aircraft from other companies. We were able to realize high-quality transportation utilizing our know-how.

■Financial Capital: Aglie Financing and Strong Financial Base/Aircraft Renewal for CO2 Reduction During the COVID-19 Pandemic(Before corona) About 300 billion yen/year ➡【 the COVID-19 pandemic 】Approx. ▼ 200 billion yen/year (FY2020)

Operating cash flows

Increase in Committed credit lines

Interest-bearing debt
Approx.

Public Offering

250 billion yen

460 billion yen＋

Approx.

(Maximum Amount during the Period)

180 billion yen

Hybrid Finance350 billion yen➡

Equity ratio
End of FY2022 39.3%(For Rating Evaluation)

To reduce cash outflows, we immediately and thoroughly reduced all costs throughout the company (p.21). As a financial response, we flexibly secured liquidity on hand in a short period of time while
recapitalizing our equity ratio, which indicates the soundness of our financial base, decreased from 57.4 percent at the end of FY2018, but remained at a sound level of 39.3 percent (based on the ratingassessment). We will continue to rebuild a strong and risk-tolerant financial base.

11

Introduction of Airbus A350
aircraft(FY2019 Q4 -FY2022)

6

Introduction of Boeing 787 aircraft(FY2019 Q4 -FY2022)

Despite the difficult financial situation, we quickly made the necessary investments to achieve post-COVID-19
pandemic recovery and further growth. In particular, the renewal to fuel-efficient aircraft has been carried out asplanned before the COVID-19 pandemic, which has led to a reduction in CO2 emissions and an improvement inpreferences and has ensured a production system that can respond to the rapid recovery of demand.

CO2 emissions ▼15 to 25% (compared to conventional models)

Voice

Funding Based on Decisions and Measures from Lessons Learnt from our Past Bankruptcy

Data Section

The COVID-19 pandemic occurred when Japan's first medium and long haul LCC-ZIPAIR was preparing to start operations. For this reason,
the Bangkok Line, which opened in June, and the Seoul Line, which opened in September 2020, launched as a freight-only flight. This was
unusual for an LCC as its business is to generate profits with high passenger boarding rates. Being a freight-only flight was considered when we
NISHIDA Shingo
wondered what we could do to help society at that time. ZIPAIR is now responding to the demand recovery period through a total of six routes (8President, Representative Director
routes as of August 2023), which operated during the COVID-19 pandemic. As a result, ZIPAIR achieved profits in FY2022.
ZIPAIR Tokyo

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Freight-only flight*Financing from FY2019 Q4 to FY2022

External secondment

Pre-corona
0 per month

Cargo and Mail

Sustainability

Although the number of flights decreased significantly due to the sharp decline in the volume of operations, our top priority was to protect the employment of our human resources, the most important capital in the JAL
Group. We worked to maintain and improve the knowledge, skills, and motivation of our employees working in the frontline to be prepared for the pent-up demand when the COVID-19 pandemic subsided. In order to secure
employment, while retaining our dignity, our employees were relocated to other regions and companies. We also made use of the public support framework, such as employment adjustment subsidies, by providing training
programs to nurture our human resources. In addition, JALUX, a core non-airline subsidiary, helped expand our customer base. Going forward, regarding our human capital management, we will further enhance the potentialof employees who have developed skills through training and relocation. We will also promote corporate restructuring by shifting our human resources from FSC business to future growth areas.

We worked to maintain the network to fulfill our mission as a social infrastructure for the movement of medical workers to outlying islands and other areas. On the other hand, in response to the declarationof a state of emergency in environmental changes, we flexibly reviewed flight frequencies and our fleet plan in order to secure profitability.

Growth Strategy< Before Corona > 146.9 flights per day on 57 routes, 83.4% boarding rate (August 2019)➡ [the COVID-19 pandemic] 17.5 flights/day on 28 routes, 14.4% boarding rate (April 2020)

International Passengers< Before Corona > 860.3 flights per day on 126 routes, 78.9% boarding rate (August 2019)➡ [the COVID-19 pandemic] 437.0 flights/day on 115 routes, 19.6% boarding rate (April 2020)

Domestic Passengers

Around February 2020, when international flight demands were lapsing, we raised funds with interest bearing debt for one year after experiencing
flight demand after SARS returned in six months. However, we prepared for a prolonged risk impact for another year after the state of emergency
was declared. By taking advantage of our financial position, we devised an equity story that would satisfy investors and undertook a public offering.
KIKUYAMA HIdeki
From a management, perspective, it was absolutely unacceptable not to procure adequate funds when possible because of a change in environment
Senior Vice President of Finance and Accounting
and end up facing the risk of being short of funds. As the timing was feasible, we continued to procure funds through hybrid financing.
(As of FY2019 to FY2022)TOP

JAL REPORT 2023

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