JAL REPORT 2016
Fiscal year ended March 2016

Contents

JAL Group Business Foundation

2 We are JAL
4 Financial / Non-financial Highlights
6 Top Management Interview
14 JAL Group Value Creation Cycle
20 Becoming the Leading Company in Safety
24	All JAL Staff Are United in Efforts to Ensure Customer
Safety from Check-in to Arrival at Their Destination
26 JAL Philosophy
28 Amoeba Management System
30 Introducing JAL’s Top Management Team“To become the world’s most preferredand valued airline group.”

JAL Group Business Operations and Financial Status

Six years have passed since the JAL Group emerged from bankruptcy in 2010 and was
bestowed the opportunity to rebuild the company.
I express my sincerest appreciation for the tremendous support we have enjoyedduring this time from customers who use JAL services, our domestic and overseas
shareholders, and our business associates.
July 201634 Financial Summary
35 A Message from the CFO
36 International Passenger Operations

		 38 Route Network Reinforcement
		 40 Product and Service Enhancement

42 Domestic Passenger Operations
		 44 Participation in Regional Revitalization Efforts
		 46 JAL Group Route Network

48 Aircraft Investment Strategy and JAL Group Fleet
50 Other Businesses

Yoshiharu Ueki

JAL Group Corporate Policy

The Quality of Service Envisionedby the JAL Group

Representative Director, President

52 On-time Performance:
		 JAL’s provision of essential quality
54 On-time Performance:
		 Collaborative system supporting		 the world’s No.1 on-time arrival rate
56 Comfort:
		 Making travel increasingly comfortable
58 Comfort:
		 A spirit of hospitality engendering		 unparalleled service

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 the betterment ofsociety.

Human Resources in the JAL Group
62
64
65
66
68

Creating Workplaces Where Diverse Human Resources Can Participate
Changing Workstyles
Health Management
Promoting Divercity Including Promotion of Women’s Careers
Practicing Diversity

JAL Group CSR
72
74
76
78
80
84

CSR Policy
Safety and Sense of Security
The Environment
Environment: Action Plan
Bridging Japan and the World
Nurturing the Next Generation

JAL Group Corporate Governance88 Corporate Governance
92 Risk Management System
94 Lead Independent Outside Director Discusses
		 JAL Corporate Governance
95 Members of the Board of Directors
96 Corporate Auditors and Executive Officers

Financial Data

98 Evaluation and Analysis of Financial Conditions by Management
102 Consolidated Financial Statements

Corporate Data
124
126
127
128
130

Group Companies
ESG Data
Domestic Route Map
International Route Map
Stock Information / Corporate Information

Editorial Policy

 eriod coveredP
by the report
Scope of thereportDate ofpublication

This JAL Report 2016 is an
integrated report on JAL’s financial
performance and CSR activities,
based on various guidelines, toprovide a deeper understanding ofsuch matters as the JAL Group’s
corporate value and growth potential.
Primarily April 2015 to March 2016
(fiscal 2015)
The JAL Group
September 2016

JAL corporate website http://www.jal.com/en/
Offering a comprehensive introduction to JAL’s perspectives and business activities.
About JAL

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

http://www.jal.com/en/flight/
CSR Information

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

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

JAL REPORT 2016
This report provides
information on themain initiatives
implemented infiscal 2015 andother content weparticularly wish toshare.

J A PA N A I R L I N E S R E P O R T 2 0 1 6

131 Glossary1JAL Group Business Foundation(As at March 31, 2016)

We are JAL.

Spreading Japanese hospitality toskies around the world

On-time performance – World No.1
Winner in three eligible categories
Major Airline Companies
Category
World No.1

Asia-Pacific Major
Airlines Category
No.1

Alliance
Category
No.1

JAL on-timearrival rate

JAL on-timearrival rate

JAL affiliates’ on-timearrival rate

89.44 %

89.44 %

80.97%

Awarded “Best Economy
Class Airline Seat”

ALLIANCE

JAL won the award for the best economy class seat at the Skytrax
2015 World Airline Awards.

be global. be one.
Connecting the world
Air Berlin

American Airlines

British Airways

Cathay PacificFinnair

Iberia Airlines

Japan Airlines

LAN Airlines

TAM Airlines

Malaysia Airlines

Qantas Airways

Qatar Airways

Royal Jordanian Airlines

S7 Airlines

Sri Lankan Airlines

Welcome to the oneworld alliance,
comprising 15 of the world’s leading
airlines and offering the highest levels ofservice and convenience at 1,000 cities in
150 countries.
JAL Mileage Bank mileage can be
accrued and used with all member airlinesof the oneworld alliance. JMB Diamond,
JMB Sapphire and JGC members are
eligible to use more than 600 Premium
airport lounges and enjoy a wide array of
special services and privileges.

Revenue cargo ton kilometers (RCTK)

Employee headcount40,194,998

2,087,791

31,986thousandNumber of operated routes(passenger flights)

171

routesJ A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

2

Revenue passengers carried per year

Number of regions served

53
311

countries/regions

airports
Contents

3

JAL Group Business Foundation

Financial / Non-financial Highlights

Operating revenue

Operating income / Operating margin

Net income attributable toshareholders of the parent company

Customer injuries

Irregularities due to human error

Irregular operations(Billions of yen)
1,500(Billions of yen)
250

(Billions of yen)200

(Number of cases)
30(Number of cases)
80(Number of cases)
80

1,200

1,238.8(%)
25.0

1,309.3 1,344.7 1,336.6
200

195.2
166.7

150

900
600

100

300

50

171.6

209.1

20.0

179.6

15.7

15.8

23

149.0

150

20

100

11

10

5.0
0

0

2012

2013

2014

2015

2012

(FY)

2013

2014

2015

50

Interest-bearing debt / D/E ratio

(%)
60.0

(Billions of yen)
200

50.0

51.5

(Times)
1.0

160.1
150

0.8

134.2

40.0

0.6

100.5

100

92.6

30.0

0.4
50

20.0

0.3

10.0

0.2

0.2

0.1

2013

2014

2015

(FY)

EBITDA*3 / EBITDA margin*4(Billions of yen)
300

297.7

276.2
249.5

250

19.1

2013

2014

2015

0

2014

2015

ROE
ROA

36.0
26.5

20.0

20.3
16.9

21.5

2013

2014

2015

(FY)

95.00

0
(FY)

2012

2013

2014

2015

(FY)

*	Effective October 1, 2014, Japan Airlines Co., Ltd. undertook a stock split to create two new shares for one
common share. Figures for net income per share and dividend per share have thus been calculated and presented
on the premise that the stock split occurred at the start of fiscal 2012.

4

2nd

2

nd

1

2012

2013

60

2nd

1

1

2015

8.8

(%)
30.0

700

691

756

799

2013

2014

2015

(FY)

400

14.3

2014

2015

2014

2015

(FY)

14.1

90.0

88.8

0

2013

2014

2015

(Tons)
5,000

3,720

89.6

15.0
10.0

Volume of industrial waste*
4,327
3,415

3,475

2014

2015

3,000

85.1

2,000

80.0

1,000

5.0

2012

(FY)

*1	Investment cash flows: Excludes fixeddeposit account deposits and withdrawals*2	Free cash flows: Operating cash flows +Investment cash flows*3	EBITDA: Operating profit + Depreciation*4	EBITDA margin: EBITDA ÷ Operating revenue*5	ASK (Available Seat Kilometers): Unit ofpassenger carrying capacity. Number ofseats available × Distance flown (km).
*6	Air transport revenue per ASK: (Air transport
revenue – fuel surcharge – revenue fromresale of fuel to related companies) ÷ ASK*7	Unit cost: Consolidated air transport
costs (excluding fuel costs, and matching
revenue/costs in transactions with affiliatedcompanies) ÷ ASK

2013

4,000

86.6

15.6

0

2013

(Compared to fiscal 2005 level)

25.0
20.0

200

2012

2012

3rd

*	Repeat intention rate and recommendation intention rate: Japanese Customer Satisfaction Index (JCSI) announced by
the Japan Productivity Center, Service Productivity & Innovation for Growth.

800

9.3

2nd

*	Excludes cases in which problems with the JAL Groupare not specified.

12.9

8.9

3rd

55

2012

(FY)

3rd

st

60

2014

5th

6th

65

0

3rd

65

3rd

1

6th

1st

70.0

0

2012

(FY)

2013

2014

2015

2012

(FY)

2013

Electric power consumption*

Heat consumption (crude oil equivalent)*

Water consumption*(Million kWh)
150

(Kiloliters)
60,000(1,000 m3)
600

134

129

125

50,997 49,633

120

48,494 46,770

475

100

40,000400

50

20,000

200

2012

2013

2014

2015

(FY)

445

430

2013

2014

2015

0

0

0

452

(FY)

2012

2013

2014

2015

(FY)

2012

(FY)

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

104.00

100

2015

13.7

Terminology

50

2014

1

Repeat intention rate
Recommendation intention rate

1st

3

600

8.5

120.00
100

12.7

10.0

80.00

2013

(FY)

6.0

2012

300

2012

Repeat intention rate
Recommendation intention rate
st

15.1

0

481.29

0

2015

(FY)

(Index)70

Investment cash flow

8.0

(Yen)
150

200

2014

2015

(Index)75

Serious incidents
Aircraft accidents

1

12.0

12.8 13.7

13.0

(FY)

411.062013

Air transport revenue per ASK
Unit cost

12.5

Dividend per share

400

2012

2014

Repeat intention rate / Recommendation
intention rate (domestic routes)

2

Operating cash flow
Free cash flow

2013

Repeat intention rate / Recommendation
intention rate (international routes)(Number of cases)
6

3(199.2) (207.2)

2012

(FY)

Aircraft accidents / Serious incidents

2(166.7)2015*	Occurrences such as aircraft system malfunctions
resulting in diversion, etc., without potential
immediate effect on flight safety.

2(129.0)2014* 	Cases of irregularities due to human error, for which
resolute action should be taken in each division suchas flight operations and maintenance, in view of theirimpact on overall flight safety. (In-house statistics)

0

-200

2013

70

105.1

73

0

2012

(FY)

70

*	Cases in which customers sustained injuries inside
an aircraft or airport and were examined at a medical
institution. (In-house statistics)

4

14.0

(Yen)
600

473.36 458.45

61.8

2015

(%)
100.0

Net income per share

500

81.2

2014

CO2 emissions per revenue ton kilometer

5.0

2013

135.8

20

5

312.3

200
100

20

(persons)
1,000

10.0

2012

261.1

40

Number/ratio of women in management positions

20.0

0

247.9

40

(Yen)
16.0

10.0

50

264.8

54

0

2013

75

60

(%)
40.0

19.8

100

(FY)

69

63

Air transport revenue per ASK*5*6 /Unit cost *7

30.0

15.0

300

(FY)

25.0

22.3

2015

62

65

ROE / ROA

265.5

22.3

150

(%)
30.0

(Billions of yen)
400

0

2012

2014

Operating cash flows / Investment
cash flows*1 / Free cash flows*2

-300

0

2012

2013

-100

0.1

200

2012

53.4

46.4

12

0

0

(FY)

Equity ratio
52.7

12

10.0

2012
0

60

15.0

13.4

12.7

174.4

166.2

* Airports, offices, maintenance centers (Japan)

Contents

5

JAL Group Business Foundation

Top Management Interview

Targets of the Medium Term
Management Plan
Management Targets (Three Targets)

1.

JAL recognizes maintaining flight safety as thefoundation and social responsibility of the JAL
Group. As a leader of safety in the transport sector,
JAL maintains the highest standards of safety.

Top Interview
Three strategies for differentiation to survive
in an era of intense competition“To become the world’s most preferred and valued airline group.”This is the JAL Group vision I presented upon assuming the positionof president. The Group’s Medium Term Management Plan for fiscal
years 2012–2016 (henceforth Medium Term Management Plan) is a
strategy for differentiating the JAL Group clearly from competitors byrealizing this vision in three areas: enhancement of the JAL Brand;route network, products and services; and cost competitiveness. To
achieve differentiation, we have established initiatives in five key areasin which we have begun working toward solutions: safety; route
network; products and services; group management; and humanresources management. To assess progress in these undertakings,
we have set three management targets by which we monitor the
degree of accomplishment each fiscal year: maintain flight safety;
become No.1 in customer satisfaction; and attain an operating
margin of 10% or above for 5 consecutive years and an equity ratioof 50% or above by fiscal 2016.
We achieved our targeted operating margin and equity ratio
a year early in fiscal 2015, and we are progressing favorably interms of financial standing. Meanwhile, the results of our activities
aimed at maintaining flight safety and becoming No.1 in customer
satisfaction reveal challenges that remain to be overcome. In fiscal
2016 and beyond, all our executives and employees will continue
to work as one to realize our Corporate Policy and reach ourmanagement targets under the keywords autonomy (armed withcrisis awareness at all times), challenge (ready to undertake new
actions without fear of failure) and speed (prepared to respondpromptly to changes in the environment).

With the proliferation of open skies agreements in recent years,
the airline industry has experienced deregulation of routes, flightfrequency, new entrants, fares and other areas, which has led to an
era of intensified competition. Low cost carriers (LCCs) and various
other types of airline companies have also been established aroundthe world. This has dramatically expanded the choices available
to customers and contributed to further intensified competition.
Only companies that are attractive enough to inspire strong
customer loyalty can expect to survive in this fiercely competitiveenvironment. In other words, customers must actively “choose
JAL” if we are to survive. These are the circumstances behind our“The JAL Brand enhancement” strategy.
The JAL Brand comprises three elements: Tradition,
Innovation and the Spirit of Japan.
“Tradition” refers to an ability to provide universal value, orauthenticity, backed by JAL’s history of supporting Japan’s humanexchanges and economic activities with the world as the “Wings ofJapan” since its founding in 1951 as Japan’s first scheduled airline.
Meanwhile, our experience with bankruptcy has taught us not to becontent to rely on tradition. While continuing to value tradition, wemust always be prepared to take up the challenge of creating newvalues by introducing changes. This is “Innovation.”
Finally and just as importantly, we continue to refine the “Spiritof Japan” such as Omotenashi (Japanese hospitality) and Shitsurae(thorough preparation) imbued in our corporate tagline, “Fly into
Tomorrow, JAL.”

Enhancement of the JAL Brand

3.

These three differentiation strategies are the sources of JAL’s
unique brand values. Executives and employees throughout the
JAL Group endeavor to keep them in mind at all times in the
conduct of their daily business affairs.

JAL aims to establish sufficient levels of profitability
and financial stability to absorb the impact of
economic fluctuations and risk factors by achieving
an operating margin of 10% or above for 5
consecutive years and an equity ratio of 50% orabove by fiscal 2016.

Route Network / Products and Services

Increasing the value of the JAL Brand will require constructing aroute network and providing products and services that enable
customers to experience true convenience and comfort. Our goal
is to carry customers to the destination of their choice safely andon time. Along the way, we must do everything possible to assure
them a pleasurable flight, with comfortable seats that alleviate
fatigue and delicious meals and beverages.
As for route networks, we continue to optimize our routes,
giving careful consideration to profitability, and to supplement themby making effective use of the routes of partner airlines. In the areaof products and services, we are concentrating on developing
innovative products and services such as JAL SKY SUITE seating
to provide customers with new values.
In the end, I believe it is the level of personal services that
ultimately determine success or failure in competition. This isbecause expanding routes, enhancing equipment, developing
convenient reservation systems and other measures are essential
for differentiation. But nearly any airline with sufficient funds andtime is highly capable of providing these. Superior personal services
at touchpoints with customers, however, cannot be attained
overnight. In this respect, I have absolute confidence that JAL
Group employees will outperform those of other companies.” Thecustomer who chooses JAL-based human interaction will continue
to choose JAL over other airlines. Human resources are the JAL

Fiscal years 2012–2013

Fiscal years 2014–2015

Fiscal 2016

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

A period for establishing our business foundation andtaking the first step toward achieving growth

A year for realizing the targets of the Medium Term Management Plan throughstable growth and a period of preparation for fiscal 2017 and beyond

Drawing on lessons learned from a past in which we created plans without
fully executing the measures decided on and without adequate analysis, all themembers of the JAL Group worked to demonstrate that it has changed into a
company that keeps its promises to its stakeholders. Under the harsh businessenvironment prevailing during this two-year period due to such factors as thegrounding of Boeing 787 aircraft and a rapid decline in the yen, we neverthelessstrove to introduce new products, enhance our services and improve productivity.
We succeeded in achieving our target of raising our operating margin to above
10% as a result. While our revenues increased, however, our earnings decreased
year-on-year, and we realized that we needed to cultivate an ability to respond tosevere business environments.

We entered the period expecting extremely severe business conditions, including intensifying
competition at Tokyo metropolitan area airports resulting from a significant increase ininternational flight slots at Haneda as well as a negative impact on demand for air travel in
response to the consumption tax increase and rising fuel costs due to the weaker yen. In
the end, the increase in the consumption tax had only a limited impact on demand for air
travel, however, while robust demand for inbound flights and lower fuel prices helped tomitigate the severity of the business environment. All our Group companies were united
in ongoing concerted efforts to reduce costs and improve our products and services. We
consequently achieved higher revenues again in fiscal 2015, as in fiscal 2014. In addition tothis favorable turn in our business environment, we used our key initiatives to establish thesought-after business foundation and succeeded in taking a first step toward growth.

We are constructing a system that can withstand external environmental risks, such as sharp fluctuations
in exchange rates and fuel prices. To this end, rather than simply pursuing expansion of scale, we
continue to focus on preparations to survive future competition through differentiation. The keywords
for our differentiation are “autonomy,” “challenge” and “speed.” Enhancement of the JAL Brand andimprovement of our products and services will inspire more customers to choose JAL. These steps,
together with strict management of revenues and expenses, will lead to the stable growth required forcertain achievement of our targets in the final fiscal year of the Medium Term Management Plan. Looking
ahead to fiscal 2017 and beyond, we are exploring fresh strategies for surviving the competition. In
the lead-up to the Tokyo 2020 Games, expansion of airport capacity in the Tokyo metropolitan area
and increasing demand for inbound flights can be expected. We are preparing to meet it by building a
corporate structure that will facilitate flexible responses to diverse changes in the future.

Key initiatives (5 categories)
Safety initiatives
Route network
Products and services
Group management
Human resources management

Surviving future competition(3 areas for differentiation)
Enhancement of the JAL Brand
We will maintain safety and provide customers with
unparalleled services to reinforce the JAL Brand as afull-service carrier.

Route network, products and services
We will build a network of highly convenient routes
and provide products and services ahead of thecompetition to become the customers’ preferred
airline group.

Cost competitivenessWe will strive continually to improve cost efficiency,
maintain and enhance cost competitiveness toreinforce our resilience to risks, and construct abusiness foundation for sustainable growth.

Contents

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

6

The JAL Group seen from the perspective of
the Medium Term Management Plan

2.

JAL will provide unparalleled service to delivera refreshing and inspiring travel experience. Our
goal is to attain the No.1 ranking in Customer
Satisfaction by fiscal 2016.

7

Top Management Interview

Group’s greatest strength, and enhancing the quality of personal
services is an area in which our human resources can display
their talents and the decisive point for the company to survive thecompetition.

Cost CompetitivenessBesides the risks accompanying intensified competition, theairline industry is strongly impacted by various other risks,
including geopolitical risks, event risks such as terrorism andnatural disasters, price change risks, and foreign currency risks.
Regardless of whether or not these risks are actualized, we mustoutperform other airlines in terms of cost competitiveness tosecure steady profits to maintain safety, secure financial resources
for investments needed to sustain growth, and pursue the JAL
Brand. This is the thinking behind our efforts to achieve costcompetitiveness through differentiation.

Review of Fiscal 2015
Business Environment

On the whole, airlines in Japan enjoyed a positive businessenvironment in fiscal 2015 spurred by the ongoing economic
recovery, a sharp drop in fuel prices and an increase in international
visitors to Japan. The number of foreign visitors rose by 47% fromthe previous year to a record high of 19.74 million. On domestic
routes as well, Japan’s economic recovery, demand created by
low-cost carriers (LCCs) and other factors contributed to increased
demand for travel. Despite an economic slowdown in emerging
nations and resource rich nations, geopolitical risks centered in the
Middle East, and other negative factors, it is expected that economic
recovery in Japan and overseas will continue, and demand primarily
on international routes will continue to rise. The declining demand forcargo transport is also expected to bottom out.
Number of passengers on international flights /International visitors to Japan(10,000 passengers)
8,000

Number of passengers on international flights
International visitors to Japan

7,000
6,000
5,000

Fiscal 2015 management indicators and results
Indicators Results

OutlineFebruary 23, 2016

Aircraft
Accident1
case

JAL 3512
A malfunction occurred in the starboard engine of theaircraft while taxiing at New Chitose Airport in Hokkaido.
An emergency evacuation was conducted, in the courseof which three passengers were injured (one of themsustaining a bone fracture).

June 3, 2015
Japan Transocean Air 610
The aircraft landed on a runway at Naha Airport that was
being used by another aircraft.

June 30, 2015
Serious
Incidents

3*1 Japan Transocean Air 002 (while cruising in the vicinity of
Tanegashima island)cases The aircraft was forced to descend to about 3,000

7,330

Preliminary data

(2) Becoming No.1 in Customer Satisfaction
The JAL Group has dedicated itself to enhancing customer
satisfaction. In fiscal 2015, for example, we progressively
introduced JAL SKY SUITE configured aircraft on internationalroutes and JAL SKY NEXT configured aircraft on domestic
routes to provide greater comfort and amenity. We also conductongoing internal and external evaluations, followed by analysis
and action in response to the results, with the aim of improving
the level of personal service provided by individual personnel. Afterthe fiscal 2013 and 2014 terms, JAL again ranked No.1 in therepeat intention rate (customers’ intention to fly with us again) on
international routes. On domestic routes, however, JAL fell from
3rd to 5th place in the repeat intention rate. At the same time, therecommendation intention rate on international routes dropped
from 1st in fiscal 2014 to 2nd in fiscal 2015. The recommendation
intention rate for domestic routes remained at 3rd, unchanged fromthe previous fiscal year.
I regret to say that, despite our efforts to achieve the No.1
ranking in customer satisfaction, our level of achievement is still
inadequate. Nevertheless, our determination remains intact.
Working from analyses of our fiscal 2015 results in this final year of
our Medium Term Management Plan, we are accelerating measures
to improve products and services, such as expanding routes
operated with JAL SKY NEXT aircraft on regional domestic routes,
in order to push forward toward our targets so that customers cansay, “Just what I expected of JAL!”.
Repeat intention rate / Recommendation intention rate
(FY)

2012

2013

2014

2015

Repeat intention rate

3rd

1st

1st

1st

Recommendation
intention rate

2nd

2nd

1st

2nd

International flights

Domestic flights
Repeat intention rate

6th

6th

3rd

5th

July 12, 2015

Recommendation
intention rate

3rd

2nd

3rd

3rd

*1	Problems with the JAL Group have not yet been identified in two of the three serious
incidents.

(3)	Operating margin of 10% or above for 5 consecutive years /Equity ratio of 50% or above by fiscal 2016
Our Medium Term Management Plan specifies an operating margin
target of 10% or above for 5 consecutive years and an equity ratio
target of 50% or above by fiscal 2016. The operating margin has
risen for four consecutive years, from fiscal 2012 to fiscal 2015, andwe have reached our targeted equity ratio for three consecutive
years, from fiscal 2013 to fiscal 2015.
The operating margin in fiscal 2015 was 15.7%, up 2.3
percentage points from 13.4% in fiscal 2014. The equity ratio forthe same period also rose, improving by 0.7 percentage point fromfiscal 2014, to 53.4%. Our results continue to surpass the figures
we promised when we announced our Medium Term Management
Plan in 2012. This can be seen as a result of customers choosing
our company, and the unwavering efforts of JAL employees eachday as represented in numerical values.
We continue to assume, however, that the environment in
the airline industry will continue to grow increasingly harsh. Without
being complacent with these results, therefore, we will continue toconcentrate on reaching our targets for fiscal 2016, the final fiscal
year of our Medium Term Management Plan.
Operating margin
(%)
25.0
20.0
15.0

13.4

TargetAt least 10%

2013

2014

2015

0

2012

Equity ratio
(%)
60.0

55.0

5,022

53.4
51.5

50.0

3,000

(FY)

52.7

TargetAt least 50%

2014

2015

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

8

12.7

5.0

4,000

1,974

2,000
1,000

15.7

15.8

10.0

meters due to sudden loss in cabin pressure.

JAL 38The aircraft began take-off preparations while still on a
taxiway at Singapore’s Changi Airport.

6,366

5,917

5,705

Management Targets – Progress and Challenges(1) Maintaining flight safety
The JAL Group is focused on preventing aircraft accidents andserious incidents in order to maintain flight safety. In fiscal 2015,
however, we experienced one aircraft accident and three serious
incidents.*1 In my capacity as Representative Director of the JAL
Group, I offer my sincerest apologies to the customers on theaffected flights and to everyone affected for the significant worries
and inconvenience caused. Taking these occurrences seriously, we
have conducted investigations into the causes and are reinforcing
countermeasures to prevent recurrence.
Other safety indicators remained at the previous year’s levels:
12 cases of customers sustaining injuries in either an aircraft or an
airport, 73 cases of irregular operations caused by aircraft system
malfunctions, amongst others, and 63 cases of irregularities due
to human error. We will continue to identify the direct causes of theoccurrences and delve deeper to uncover underlying causes andsolve problems so that customers can put their confidence in ourservices.

622

836

1,036

45.0

1,341

0

2011

2012

2013

2014

2015

(Year)

Sources: Ministry of Land, Infrastructure, Transport and Tourism / Japan National Tourism Organization

46.4

40.0

2012

2013

(FY)

Contents

9Top Management Interview

Key Initiatives in Five Areas

2016, we will progressively introduce Embraer 190 aircraft offering
Class J on these routes.

Safety Initiatives

Maintaining safety is the foundation for the JAL Group’s existence.
That is why we continue to implement measures to deepen all
staff members’ awareness and understanding of SMS (Safety
Management System). At the same time, we continue to hold
New Employee Safety Seminars and New Managerial Post Safety
Seminars. Our Normal Line Operation Monitoring mechanism
is being expanded to cover all JAL Group airlines. We are also
considering rebuilding our safety information database, given thegrowing volume of data and enhancement of analytical functions.

Route Network

In fiscal 2015, we opened three new routes in our international
network with the aim of improving and developing functions at
Japan’s two major hubs, Haneda and Narita. In fiscal 2016, we
aim to further improve our network and provide greater comfort forcustomers.
In our alliances, we further improved our oneworld alliancenetwork by launching code-sharing with TAM Airlines. We also
expanded code-sharing and increased customer comfort in our
joint business with British Airways and Finnair on European routes
and our joint business with American Airlines on transpacific routes,
and strived to maximize revenues through these operations.
In domestic passenger operations, JAL has set strengthening
competitiveness with other companies as a primary objective. We
are consequently launching JAL SKY NEXT configured aircrafton routes in and out of Haneda Airport as a priority. Seasonal
summer flights flown on six local routes since fiscal 2014 (Itami—
Matsumoto / Itami—Memanbetsu / New Chitose—Izumo / New
Chitose—Tokushima / Chubu—Kushiro / Chubu—Obihiro) havebeen continued in collaboration with regional communities. Our
Haneda—Yamagata route, which was allotted to us in the Haneda
Airport Arrival & Departure Slot Policy Plan Contest, has beenhighly appraised for our joint sales promotions with the regional
government. As a result, the Ministry of Land, Infrastructure,
Transport and Tourism has extended our slot allocation for three
more years. As for our Itami Airport arrival and departure routes, wehave increased flight frequency on the New Chitose route. In fiscal

MoscowFrankfurt
San Francisco

Shanghai
Guangzhou
Delhi Hanoi
Bangkok

Los Angeles

ChicagoHonolulu

ManilaSydneyJAL SKY SUITE 777
Narita routes
Haneda routes

JAL SKY SUITE 767
Narita routes
Haneda routes

Boston
New York

Dallas / Fort WorthKuala Lumpur
Singapore
Jakarta

Group Management

We continued to hold JAL Philosophy Education for all JAL
Group staff. In fiscal 2015, a total of 69,165 staff participated insessions in the Tokyo area. The amoeba management system wasintroduced to six companies in the JAL Group in fiscal 2015, andwill be extended to another four companies in fiscal 2016. As aresult, we are building a strong organizational management system
which promotes “management by all” with each staff member
aware of the need to maximize revenues and minimize expenses.

JAL recruits human resources with the will to shape JAL with theirown hands, and provides them with education centered on the
JAL Philosophy to foster a sense of Group unity. Simultaneously,
we are cultivating human resources who bring both competence
and humanity to their jobs. We are also seeking to nurture
professionals through programs held at the JAL Education Center.
We are planning to increase the number of women in management
positions in the JAL Group based on the merit system, moreoverby 20% or more by the end of fiscal 2023. In fiscal 2015, wesponsored the Women’s Career Advancement–Workstyle Reform
Forum and established a cross-sectional project team called theNadeshiko Lab.

Tohoku Support Measures

Four Areas of Vital Concern

The JAL Group meets society’s expectations by engaging in avariety of activities that contribute to society through our corebusiness of air transportation.
Among our broad range of CSR activities, we consider
four areas to be of special significance for enabling us to makethe best use of JAL’s capabilities: safety & sense of security; theenvironment; bridging Japan and the world; and nurturing the next
generation.
(1) Safety and Sense of Security ( P. 74)
Aside from maintaining flight safety as our top priority, all staff
members are committed to providing an enjoyable passenger
experience with peace of mind and cooperation in disaster relief
operations which only an airline can deliver.
(2) Environment ( P. 76)
We are deeply conscious of the environmental impact of ouroperations and are striving to promote ecological improvements invarious areas. JAL is actively involved in such ecological activities
suited to the nature of our business as using aircraft to conduct
atmospheric observations and contributing to protecting ourbeautiful global environment.
(3) Bridging Japan and the World ( P. 80)
As an airline company that interconnects various regions ofJapan with other parts of the world, we promote a diverse rangeof human, economic and cultural exchanges. Our focus is on
advancing activities that contribute to regional promotion and apeaceful society.
(4) Nurturing the Next Generation ( P. 84)
The JAL Group wants children, who will become the leaders of
the next generation, to face the future positively with dream-filled
minds. We are conducting employee participation programs to suitevery age group to this end.

Maintaining safe operations strictly,
providing every passenger witha safe, comfortable flight, andcontributing to building a safer, moresecure society.

Safety and Sense
of Security
Bridging Japanand the WorldIn Taipei – A charter flight to Aomori and Akita

Assistance for people in disaster-affected areas: Engaging
in activities aimed at bringing smiles to faces, especially those ofchildren.

“Wings of Tomorrow” – Experiencing flights
to three Tohoku prefectures

Acknowledging our environmental
burden, alleviating climate change
and conserving biodiversity.

Four keyareas of the JAL
Group’s CSR
activities

Revitalizing Japan’s industries andregional economies, and improving
mutual understanding withinternational society.

We continue to conduct various activities under the JAL “Visit
Tohoku!” support project set up in June 2013 from the dual
perspectives of regional promotion and assistance for people indisaster-impacted areas. Our efforts to support the Tohoku region
are continuing in fiscal 2016.
Regional development: The JAL Group aims to contribute topromotion of tourism and industry by transporting more passengers
to Tohoku, encouraging employees to visit Tohoku, and stimulating
greater interest in Tohoku.

The Environment

Nurturing Future
Generations

Providing support to help children
advance into the future in good
health and with hearts filled withhopes and dreams.

Regional Revitalization Measures

In fiscal 2015, we established the NEW JAPAN PROJECT under
the themes “tourism promotion” and “agricultural & marine
products,” and began working on measures to increase regional
vitality in collaboration with each region. Our contributions include
helping them stimulate international and domestic demand for
tourism to their regions and supporting their marketing of regional
specialty products.

JAL SKY SUITE 787
Narita routes

Contents

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

10

Narita / Haneda

LondonParis

Regarding human services, we are improving strategies throughan internal and external evaluation process, based on efforts topractice the JAL Philosophy and embody the JAL Brand. In thisrespect, our aim is to rank No.1 in customer satisfaction in this final
year of the Medium Term Management Plan. Meanwhile, we areendeavoring to expand opportunities for earning and using miles in
our JAL Mileage Bank program.
On international routes, the JAL Group is pursuing “High
Quality & Full Service,” beginning by advancing introduction of
spacious JAL SKY SUITE configured aircraft. Depending on thetype of aircraft, installing JAL SKY SUITE reduces the number ofseats by about 20%. It was a major decision that ran counter tothe industrial norm, but by offering greater seating comfort, JAL
ranked No.1 in the repeat intention rate on international routes forthree consecutive years. In fiscal 2015, JAL won the Best Economy
Class Airline Seat at the SKYTRAX 2015 World Airline Awards, thefirst-ever award received by a Japanese airline. JAL SKY SUITE
configured aircraft, currently operating mainly on European and U.S.
routes, will be progressively expanded to Southeast Asia, Honolulu
and other medium-to-long-distance routes to provide the world
with the highest level of comfort in air travel.
On our domestic routes, we are pursuing “convenient &simple.” During fiscal 2016, a total of 77 aircraft will be revamped to
the JAL SKY NEXT configuration offering Internet access and free
videos. The JAL Express Tag Service initiated at Haneda Airport will
be deployed in other airports as well.

Human Resources Development

JAL SKY SUITE operated routes (as of July 1, 2016)

Helsinki

Products and Services

CSR Activities

11Top Management Interview

Heightening management transparency
through corporate governance2016 Rolling Plan and Beyond

Since emerging from bankruptcy, the JAL Group has madeevery effort to secure management transparency and build
an organization that invites open discussion. Our corporate
governance system also precludes arbitrary decisions on such
issues as managers’ appointments, remuneration and disciplinary
action by establishing appropriate committees. The number ofoutside directors has been increased to three as of fiscal 2016.
Issues in the Corporate Governance Code remain to be resolved,
such as the method of appointing a successor to the CEO anddetermining remuneration for management, but progress is being
made toward resolving these issues.
Although our corporate governance mechanisms are in theprocess of ongoing improvement, I am convinced that no amountof improvement will have any great significance unless “spirit”
is instilled in corporate governance. Without spirit, erroneous
management decisions and scandals will occur no matter how
finely tuned the mechanisms may be. For the JAL Group, the JAL
Philosophy is the decisive factor in raising awareness of governanceamong all our executives and employees, and for instilling themechanisms with spirit. Executives and employees alike spend agreat deal of time on education in the JAL Philosophy. Continual
education will promote proper action based on correct thinking.
For the JAL Group, this is the most effective method of inspiring
spontaneous governance instilled with spirit. Esteem for the JAL
Philosophy should be the foundation for the mindset and actionsof all our executives and employees, and for the construction ofhighly transparent mechanisms. If I, for example, as the executive
responsible for our overall corporate management, am about tomake an erroneous decision or action, I can count on someone
around me to stop me.

When we drafted the Medium Term Management Plan, we
expected achieving an “operating margin of 10% or above for 5
consecutive years and an equity ratio of 50% or above by fiscal
2016” to be the most difficult of our three management targets. In
the end, however, a strong possibility of their achievement became
apparent in fiscal 2015.
Although our performance forecasts predict reduced
operating profit, sound implementation of our Rolling Plan,
combined with the efforts of all JAL Group employees to increase
revenue and profit, will provide the basis for finishing up the
Medium Term Management Plan and for progress toward future
growth. This is now the greatest challenge facing the JAL Group.
As concerns our other two targets, having initiated steps toward
their achievement in my capacity as CEO, I am keenly aware of the
difficulties involved.
Maintaining flight safety, which means reducing the numberof human errors that can lead to aircraft accidents and serious
incidents, is a formidable challenge. JAL Group employees haveextremely high safety awareness, but as people make mistakes,
we are continually upgrading our training and enhancing our safety
management systems. At the same time, all our executives andemployees put in concerted efforts to implement safety measuresin the workplace.
With respect to our third target, No.1 in Customer
Satisfaction, customer satisfaction remains low, especiallyon regional domestic routes and at regional airports. We are
implementing countermeasures to correct this situation. We expect
to complete revamping of all targeted aircraft to JAL SKY NEXTin fiscal 2016. Without customer satisfaction, we cannot possibly
realize our vision. The JAL Group will continue its efforts to enhance
its highly user-friendly networks, while improving our products andservices from both the facilities and services perspectives.

Key Points of the 2016 Rolling Plan

Toward the Next Medium Term Management Plan

Seeking “to become the world’s most
preferred and valued airline group”
Now that we have entered the final fiscal year of the current
Medium Term Management Plan, I have begun considering the
JAL Group 50 years and 100 years from now. With the trend
toward deregulation, today’s airline industry is being exposed to
an intensely competitive environment. In our efforts to become theworld’s most preferred and valued airline group in this environment,
we are constantly reviewing the unique strength of the JAL Groupand considering the kind of air travel we should be offering ourcustomers.
What, then, is the source of the JAL Group’s strength?
Since becoming president, I have acquired the strong belief thatthe source is our human resources composed of about 32,000
employees in the JAL Group. I feel that they are the lifeline of the
JAL Group. The Group’s current strong performance is an outcomeof the day-to-day efforts of each employee, aimed at realizing flightsafety and unparalleled service. The JAL Philosophy and amoeba
management system adopted after we emerged from bankruptcy
resulted in dramatic changes in staff awareness and actions. Today,
we are united in providing customers with air travel on the world’s
highest level in terms of safety, on-time performance, comfort andconvenience. Our next Medium Term Management Plan will further
clarify the direction of the JAL Group to maximize the strength
provided by its employees.
I am the first person in our Group’s history to have worked
as a pilot before being appointed president. “Do what needs tobe done naturally” is the essential mindset I cultivated on thejob during my time as a pilot. It remains the cornerstone of mythinking concerning management today. It is “natural” for the JAL
Group, as a profit-making enterprise, to pursue profit based on thefundamental premise of maintaining flight safety, while at the sametime fulfilling our responsibilities as a public transport operator. One
objective does not take precedence over the other. The mission
entrusted to JAL Group management is to achieve a delicate
balance between the two.

There is another element that should be mentioned
as essential to the mission of management: developing anenvironment that enables each employee to apply his or her values
and individuality freely, and to work with vitality. Without this vitality,
we cannot hope to enhance our human resources comprising
the strength of the JAL Group further. We will continue to listen to
employees’ opinions and support them in the workplace so thatthey can pursue their daily business with peace of mind.
During the press conference held after the decision on myappointment as president was announced, I declared the JAL
Group vision: “To become the world’s most preferred and valued
airline group.” Since becoming president, I have maintained the
deepest commitment to this vision. “Number one in the world” isnot simply a matter of scale. This phrase incorporates our strong
desire to have customers the world over feel wholeheartedly,“Just what I expected of JAL!” With all JAL Group executives andemployees working as one, we can and will realize this vision.
The JAL Group will continue its efforts to become the number
one airline of choice among customers everywhere by providing thehighest-quality hospitality on an unshakeable foundation of safety.
Thank you for the tremendous support you have given the JAL
Group on our journey so far. We will not stop striving to deserve
your continued patronage.

Yoshiharu Ueki

Representative Director, President

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

12

Economic and social circumstances, the level of competition andother environmental factors affecting the JAL Group are expected
to change significantly from fiscal 2017 forward. In the lead-up to
the Tokyo 2020 Olympic and Paralympic Games (the Tokyo 2020
Games), airport capacity in the Tokyo metropolitan area will be
expanded, providing JAL with new opportunities to serve morecustomers.
We will move proactively to make the most of theseopportunities. In Japan, our base of operations, we will takeadvantage of the resulting new currents of business and tourism torealize corporate growth, and to contribute to regional and social
development. Accordingly, we are now working to meet a diverse
range of challenges. These include creating mechanisms for
capturing demand in countries and regions with growth potential
and building systems to raise our profile further in mature markets

to become the customers’ airline of choice. Looking ahead 10 to
15 years from now, we will design a business portfolio that is ideal
in terms of both growth potential and risk tolerance.
With regard to aircraft procurment, we are advancing
preparations to take delivery of the A350, which will be introducedin fiscal 2019, and the MRJ (Mitsubishi Regional Jet), which will
follow in fiscal 2021. The JAL Group is thus laying the groundworkfor the success of its next Medium Term Management Plan and forrealizing sustainable growth.

Contents

13

JAL Group Business Foundation

JAL Group Value Creation Cycle

By maintaining flight safety, practicing the JAL Philosophy
and conscientiously implementing the amoeba
management system, we are creating added value while
fulfilling the expectations of customers and society.

CapitalHuman capital
Diverse global human resources

Human capital
Diverse global
human resources

We are actively applying the JAL Philosophy to nurture the next generation of human resources who are prepared torealize the JAL Group Corporate Policy. The JAL Group believes that employing a wide variety of human resources andpromoting diversity are the origins of corporate value creation.
Employee headcount (consolidated) 31,986

Ratio of women in management 15.6%

Production capital
Fleet management

Production capital
Fleet management

SafetyOperational expertise and brandIntellectual capital
Operational expertiseand brand

On-time performance

Financial capital
Stable financial foundation
facilitating sustainable growth

Operating margin 15.7%

Equity ratio 53.4%

Natural capital
Environmental impact control
and protection

Dialog with stakeholders

The JAL Group has identified environmental impact reduction and environmental protection as priority issues for
management. We engage in various undertakings in our efforts to achieve CO2 emission reduction targets, including the
Sky-Eco Project, test flights by bio fuel-powered aircraft and recycling of on-board waste.
Annual CO2 omissions 8.54 million tons

Social capital
Route network

Shareholders / Investors
Social capital
Route network

Air routes serve as essential transportation infrastructure supporting people’s lives and tourism in both metropolitan andregional areas. The JAL Group considers establishing a route network as social capital serving every region of Japan tobe an important mission.
International route destinations 252 airports

Domestic route destinations 59 airports

Contents

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

14

The JAL Group has devoted itself to building a strong financial foundation and high-profitability structure to ensure resilienceagainst wars, terrorism, epidemics, natural disasters and other global risks. Implementation of the amoeba management
system has leveraged the accumulated actions of every employee to produce this level of readiness.

Environmental impact control and protection

Regions

Business associates

JAL Brand

Natural capital

Environment

Creditors

Flight safety

Stable financial foundation facilitating sustainable growth

Convenience

Society

The JAL Philosophy presents the awareness, values and mindset required of every employee involved in JAL products
and services, anchored in flight safety. Employees acquire a profound awareness that they create the JAL Brand throughthe JAL Philosophy.

Financial capital

ComfortSustainable growth

Number of aircraft in fleet 226

Intellectual capital

Issues confronting JAL
Quality Improvement

The JAL Group is proactively introducing equipment with high economic and environmental performance. In the interestof passenger comfort, we are steadily introducing JAL SKY SUITE configured aircraft, while offering a variety of onboard
services such as JAL SKY Wi-Fi Internet access and inflight entertainment.

15

JAL Group Business Foundation

JAL Group Value Creation Cycle

By maintaining flight safety, practicing the JAL Philosophy
and conscientiously implementing the amoeba
management system, we are creating added value while
fulfilling the expectations of customers and society.

CapitalValue

Human capital
Diverse global
human resources

Maintaining
flight safety

To become the world’s
most preferred and valued
airline group

Corporate
PolicyProduction capital
Fleet management

Sales
Reservations

Issues confronting JAL
Quality Improvement
SafetyFlightOperations

Intellectual capital
Operational expertiseand brand

Cabin
Attendants

Maintenance

Convenience
Financial capital
Stable financial foundation
facilitating sustainable growth

JAL Philosophy

GroundHandling

Amoeba Management System

Achieving sustainablegrowth in profits

Financial foundation

Environment
RegionsJ A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

14

Fostering the next generationof human resources
Cargo

ComfortSociety

Airports

SafetyCharter

On-time performance

Sustainable growth

Providingunparalleled service

Corporate governance
Natural capital
Environmental impact control
and protection

Minimizing
environmental impact

Dialog with stakeholders
Shareholders / Investors
Creditors
Business associates

Social capital
Route network

Contributing to the world’s
peoples, nations and regions

Contents

17

JAL Group Business Foundation

Maintaining flight safety / Practicing the JAL Philosophy /Implementing the amoeba management system
We aim to realize our Corporate Policy through all of the above

SafetyCharter

JAL Philosophy“Deliver unparalleled service to our customers” and “Increase corporate value and contribute to the betterment ofsociety” are two tenets of the JAL Group Corporate Policy. The most crucial factor for realizing them is “maintaining
flight safety.” This is the foundation and social responsibility of the JAL Group. Flight safety is built on a soundbase of values shared by all employees and an awareness of their responsibility as members of the Group.
The JAL Philosophy and the amoeba management system are the cornerstones of our approach tomaintaining flight safety in accordance with our Corporate Policy. The JAL Philosophy reflects the awareness,values and mindset required of everyone involved in JAL products and services, and provides a basis for all
decisions and actions taken by JAL Group employees each day.
The introduction of the amoeba management system has given us a clear view of the results of actions taken
by each organization based on practice of the JAL Philosophy. We use this input to motivate each employee andstimulate his or her creativity with the aim of increasing profitability.
Disseminating the JAL Philosophy and implementing the amoeba management system contribute tosound, independent management in every Group company and flight safety. We will pursue them to realizing our
Corporate Policy.

SafetyCharterContents

AmoebaJ A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

18

AmoebaManagement
System19

Amoeba
Management
System

JAL Philosophy

JAL Group Business Foundation

Becoming the Leading Company in Safety
SafetyCharter

As safety professionals, all JAL staff endeavor to provide
customers with safe, comfortable flights.

AmoebaManagement
System

JAL Philosophy

SafetyCharter

Safety Charter

JAL Philosophy

Flight safety is the foundation and social responsibility of the
JAL Group. Our primary mission is to secure safety. This is why
we are developing our expertise and capabilities to the highest
possible degree to ensure safe operation of every flight. This
commitment is founded on the firm resolve of our management
team and an awareness of all employees of their personal roles
and responsibilities.
We are taking the actions below to fulfill our responsibilities.
•Observe rules and follow the basics faithfully.
•Do not rely on assumptions, but always check.
•Relay information without omission, immediately and accurately,and ensure transparency.
•Deal with problems and issues promptly and appropriately.
•Maintain a constant awareness of problems, and make necessarychanges with courage.

The Safety Charter is printed on a single card, and handed out toevery employee in all JAL Group airlines.

Message

Safety issues occurring in fiscal 2015 andmeasures implemented to resolve them
To assure customers’ ability to fly with us with peace of mind, theJAL Group actively discloses safety-related information.
One aircraft accident and three serious incidents*1 occurred
In fiscal 2015. Other safety indicators included 12 cases ofcustomers’ injuries onboard or in airports. In addition, aircraft
system malfunctions and other factors resulted in 73 irregularflights, and human error was responsible for malfunctions inanother 68 cases. These indicators are about the same as in fiscal
2014. We deeply regret the inconvenience and concerns caused.
As regards the aircraft accident and serious incidents
reported below, the JAL Group is fully cooperating with investigative
bodies and introducing all necessary countermeasures.
*1	The JAL Group has not yet been informed of the details concerning the sourceof the problem in two of five serious incidents.

Aircraft accident*2

Toshinori Shin
Director, Senior Managing Executive Officer
Flight Operations, Safety General Manager
As clarified in the JAL Group Safety Charter, flight safety is thefoundation and social responsibility of the JAL Group. Safety has toppriority in every situation. Our mission is to provide customers withsafe, comfortable air travel.
To maintain the highest safety standards and attain further
improvement, we have established a Safety Management System(SMS) for managing risks to flight safety. We continuously strive
to improve and strengthen the system. Under SMS, for example,
an employee with high safety awareness will report in detail on
any event, however trifling it may appear, occurring in day-today flight operations. Hazards (risk factors) are then systematically
identified based on details of the report. The risks are evaluatedand appropriate action is taken to alleviate them to ensure thatfactors threatening safety are dealt with before they develop into real
dangers. We will continue to implement and enhance this kind of
preventive safety management.
In our five-year Medium Term Management Plan preparedin fiscal 2012, we have promoted three safety initiatives (Develop
human resources to maintain safety; Evolve systems to maintainsafety; and Cultivate a culture of maintaining safety) that havereinforced the foundations of safety. We will continue to advancethese initiatives in fiscal 2016, the final year of the Medium Term
Management Plan.
Last fiscal year marked the thirtieth year since the Mt. Osutaka
accident. We will never forget the lessons of that terrible day. Every
employee is keenly aware that we are entrusted with precious lives
in our work. All employees remain united in maintaining the highest
safety standards to enable customers to fly on JAL’s wings withcomplete peace of mind.

Safety Management System

JAL
Chairperson

President
Safety general manager

Group safety andsecurity officer

Committee
chairperson

Group Council for
Safety Enhancement

Group Operational Safety
Promotion Committee

Flight Operations
executive officer

Engineering &Maintenanceexecutive officer

Cabin Attendants
executive officer

Airport Operations
executive officer

Cargo & Mail
executive officer

Flight Operations
Safety Promotion
general manager

Engineering &Maintenancegeneral manager

Cabin Safety
Promotion
general manager

Airport Planninggeneral manager

Operations
general manager

J-AIR

JTA

JAC

RAC

HAC

Councilmembers President

President

President

President

President

Safetygeneralmanager

Safetygeneralmanager

Safetygeneralmanager

Safetygeneralmanager

Safetygeneralmanager

Committee Director
members responsible
for safety

Director
responsible
for safety

Director
responsible
for safety

Director
responsible
for safety

Director
responsible
for safety

A problem with the starboard engine on JAL flight 3512 led to an
emergency evacuation. (February 23, 2016)
On February 23, 2016, a malfunction occurred in the starboard engine of
JAL flight 3512 (from New Chitose Airport to Fukuoka Airport) as it taxied
down a taxiway at New Chitose Airport. Smoke entered the cabin, and an
emergency evacuation was conducted. Three passengers sustained injuries
during the evacuation, one of them suffering a bone fracture.
Investigation of this case was referred to the Japan Transport Safety
Board of the Ministry of Land, Infrastructure, Transport and Tourism. Among
measures implemented thus far, all organizations throughout the Group havebeen fully informed of the circumstances in writing. Measures concerning
Boeing 737-800 aircraft include temporarily raising engine thrust andoptimizing procedures to prevent icing to enhance efficacy.

Serious incidents*3
Japan Transocean Air flight 610 landed on a runway after anotherairline’s aircraft aborted takeoff. (June 3, 2015)
An Air Self-Defense Force jet that had taken off without air traffic control
clearance crossed in front of ANA flight 1694 as it accelerated for takeoff
at Naha Airport on June 3, 2015. ANA flight 1694 subsequently aborted
takeoff. At that time, Japan Transocean Air flight 610 was preparing to landon the same runway. The control tower directed Japan Transocean Air toabort landing and go around. Japan Transocean Air flight 610 landed on
the runway, however, before ANA flight 1694 had departed. No passengers
or crew were injured. This incident was classified by the Ministry of Land,
Infrastructure, Transport and Tourism as a serious incident of “an aircraft
landing on a runway in use by another aircraft.”
Investigation of the incident was referred to the Japan Transport
Safety Board of the Ministry of Land, Infrastructure, Transport and Tourism.
The board’s immediate response was to inform all organizations in thecompany in writing of the full circumstances of the incident. All flight crews
were informed of the details, and training on aborted landings was stepped
up to avoid a recurrence.
Japan Transocean Air flight 002 – Drop in cabin pressure (June 30,
2015)
While cruising in the vicinity of Tanegashima Island on June 30, 2015, Japan
Transocean Air flight 002 experienced a drop in cabin pressure. Requesting apriority response from air traffic control, the aircraft descended to about 3,000
meters. Flight 002 landed at its destination, Kansai International Airport. No

AmoebaManagement
Systempassengers or crew were injured in the incident. This incident was classified
by the Ministry of Land, Infrastructure, Transport and Tourism as a serious
incident of “an abnormal decrease in aircraft cabin pressure.”Safety
Charter
Investigation of the incident was referred to the Japan Transport Safety
Board of the Ministry of Land, Infrastructure, Transport and Tourism. The
AmoebaManagement
board’s immediate response was to inform all organizationsin the company
JAL Philosophy
Systemin writing of the full circumstances of the incident. All Boeing 737-400 aircraft
were inspected, and measures including more frequent regular inspections of
bleed air systems have since been introduced to ensure Flightworthiness.
JAL flight 38 began takeoff operations while still on a taxiway. (July 12,
2015)
On July 12, 2015, JAL flight 38 began takeoff operations while still on a
taxiway at Singapore Changi Airport. The captain, realizing that the taxiway
had been mistaken for the runway, aborted takeoff operations and almost
simultaneously received instructions to stop from the control tower. The
aircraft then stopped on the taxiway. No passengers or crew were injured in
the incident.
On July 31, this incident was classified as a serious incident by
the Singaporean authorities and Japan’s Ministry of Land, Infrastructure,
Transport and Tourism. Investigation of the incident was referred to therelevant authorities. The immediate response was to inform all organizationsin the company in writing of the full circumstances of the incident. Steps
were taken to raise safety awareness among all flight crews, and proceduresfor taxiway operations were clarified.
*2	Aircraft accident: Fatal or serious injury of a person as a result of the operationof an aircraft, or an aircraft crash, collision, fire or damage to an aircraft during
flight (that requires major repairs), as classified by the Japanese Ministry of Land,
Infrastructure, Transport and Tourism (MLIT).
*3	Serious incident: Incident involving circumstances that indicate there was ahigh probability of an accident, such as overrunning a runway, emergency
evacuation, fire or smoke inside the cabin or abnormal depressurization due toabnormal weather conditions, etc., as classified by the MLIT.

The JAL Group will continue efforts in the area ofsafety to achieve the following targets in fiscal 2016.

1
2
3
4

Eliminate aircraft accidents and serious incidents

Our goal is zero aircraft accidents and zero serious incidents.

Reduce cases of irregular operation

We will reduce cases of irregular operation that not only cause
discomfort to passengers but also affect their itineraries.

Protect passengers from injury

We will continue our efforts to protect every passenger frominjury onboard or in the airport.

Reduce malfunctions caused by human error

We will reduce high-risk malfunctions resulting from humanerror in all specified areas: flight operations, engineering &maintenance, cabins, airports, cargo and security.

JAL Group Safety Report
Information about safety initiatives of the Group’s
six airlines is disclosed every year in the JAL Group
Safety Report in accordance with Article 111-6,“Release of Safety Report by Domestic Air Carriers”
of the Civil Aeronautics Act. The JAL Group Safety
Report explains the six airlines’ safety initiatives
simply and concisely.

Contents

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

20

Problems occurring in fiscal 2015 have been handled with the utmost seriousness,
and all possible countermeasures are being implemented.

21

Amoeba
Management
System

JAL Philosophy

JAL Group Business Foundation

Becoming the Leading Company in Safety
SafetyCharter
AmoebaManagement
System

JAL Philosophy

SafetyCharter

JAL Group Safety Initiatives
Three Initiatives for Enhancing Safety

Safety Advisory Group – Applying advice from third-party perspectives
JAL Philosophy

To securely maintain and enhance flight safety, the foundation of the
JAL Group, we aim to achieve our management goal of becoming
the leader in safety in the transport sector. To achieve this, weare cultivating a safety culture, developing human resources formaintaining safety and evolving systems for maintaining safety.
Focusing on preventive measures, we will reinforce ourproactive risk management further by adopting exceptional
cutting-edge systems in the airline industry and combining themwith our original initiatives. This will enable us to create a Safety
Management System that sets the highest standards.
New Employee Safety Seminar

Advancing systems for maintaining safety
Mechanisms of Normal Line Operations Monitoring*2, a system
for identifying newly emerging problems, has been deployedat J-Air, Japan Transocean Air and Ryukyu Air Commuter. The
Safety Information Database for Safety Performance Monitoring*3
has been upgraded to enable easier reporting and analysis.

CultureSafety awareness education
Culture of refining manuals
Culture of reporting

Original initiativesof the JAL Group

Enhancing employee skills and knowledge
Safety Leaders
SMS education (safety knowledge training)
Normal Line Operations Monitoring
Expansion of risk assessment

Initiatives basedon global standards

Safety Performance Monitoring

Safety Promotion Center – the JAL Group’s “foundation of safety”

Safety Leaders
Corporate Safety
and Security
Headquarters

On August 12, 1985, JAL flight 123
crashed on the ridges of Mount Osutaka,and 520 precious lives were lost. In theface of the pain and grief of the bereaved
families and the resulting public distrustof airline safety, we pledged to ensurethat no such tragic accident would everPresident

General manager
Frontline
operations
Safety Leaders

Safety departments

Safety Leaders

Safety Leaders

Safety Leaders are responsible for promoting safety initiatives in their department
and for ensuring its close cooperation with the departments responsible for safety
management. They are key personnel in facilitating active two-way
communications, unifying top management and individual employees on thefrontline, and building an increasingly resolute safety management system.

occur again.
To reaffirm the importance of flightsafety and to instill the lessons learned
from this accident in our minds, weestablished the Safety Promotion Centerin April 2006.
All members of the JAL Group use
this facility as a “foundation of safety” andthe starting point for providing society
with safe, reliable operations. Every
employee is continually reminded thatprecious lives and property are entrusted
to us in our work.
The Safety Promotion Center isopen to anyone interested in airline safety.
As of the end of March 2016, the Center
had received 178,312 visitors from insideand outside the Group.

Those wishing to arrange a visit to the center should submit an application in advance via the JAL website at the following URL:

http://www.jal.com/en/flight/safety/center/

Adding another layer ofsafety and handing on asolemn culture of safety
SafetyWe view safety in terms of “layers.”
Charter
The JAL Group’s approach to safetycomprises a series of ongoing measures.
AmoebaManagement
JAL Philosophy
SystemEvery employee is imbued
with a highawareness of safety, reinforcing the“layers” of safety. Unexpected pitfalls andhuman errors that might lead to accidents
thus become increasingly recognizable
and avoidable.
In the past, JAL caused a grievous
accident and a series of safety issues.
Reflecting earnestly upon these, we
determined to put this negative legacy topositive use in building a better future. This
became the Safety Promotion Center – ourfoundation of safety.
Fewer than 10% of today’s
employees were members of the JAL
Group on the day of that terrible Mount
Osutaka accident. It is up to the younger
generation to adopt this legacy proactively
and pass it on to future generations.
Passengers should be able totake safety for granted. For us, however,this must never be an option. Safety isa condition that can be achieved only
through efforts by every individual in the
JAL Group.
Every employee has an immense
responsibility to consider what he or she
can do to ensure flight safety and act
accordingly.
I began training as a pilot this June. I
am deeply aware of the importance of flightsafety we studied at the Safety Promotion
Center. I will fulfill my responsibility toprotect the lives of our customers, and do
my utmost as a flight crew member.

Kenshiro Kitagawa
Flight Operations Training Department (Worked
in the Group Safety and Security Department
Management Group until June 2016)

Contents

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

22*1	Advocated by Mr. Yotaro Hatamura of the Safety Advisory Group as vital for theunderstanding the true nature of safety issues.
*2	Preventative mechanisms for detecting potential causes of malfunctions.
*3	Mechanism providing a quantitative and timely grasp of the levels ofachievement of safety indicators and targets.

Human
resources

Developing human resources for maintaining safety
The JAL Group aims to assure that all staff engaged in its
business operations acquire fundamental knowledge and asound understanding of the Safety Management System, and be
prepared to apply it. We have introduced and completed SMS
education for all JAL Group employees. Safety Leaders have also
been appointed in each workplace. Measures implemented by the
Safety Leaders extend beyond the boundaries of the workplace
and are shared among all Safety Leaders. Safety awareness andaction preparedness have been revitalized throughout the JAL
Group as a result.

Safety initiatives

Systems

Cultivating a safety culture
Committed to the idea that “all employees work to maintainsafety” and “the PIP Principle” (derived from “place, item andpeople”)*1, we have conducted 28 New Employee Safety
Seminars and eight New Manager Safety Seminars. We are
implementing a program of “sharing reports and information” inevery workplace.

The JAL Group established the Safety“Proposals for Revival as an Enterprise
Advisory Group in August 2005 to obtainwith High Safety Standards,” and received
advice from third-party perspectives following
recommendations for the future.
receipt of an operational improvement order
The JAL Group will continue to reflect
from the Ministry of Land, Infrastructure,
the feedback and advice offered by theTransport and Tourism (MLIT).
Safety Advisory Group in its management
The Safety Advisory Group is aand safety operations.
panel of five experts from outside the JAL
Safety Advisory Group members
Group who have extensive knowledge and
Mr. Kunio
Non-fiction writer, critic
Yanagida (Chair)experience in areas such as human factors,
Prof. Yotaro
Professor, Kogakuin University, Professor Emeritus,
analysis of failures and imperfections,Hatamura
University of Tokyo / Areas of expertise: nano-micro
machining, production processing, medical support
organizational management and culture, andengineering, failure science, study of danger, creative
design theory
safety. The panel is chaired by Mr. Kunio
Prof. Shinichi
Professor Emeritus, National Defense Academy of
Yanagida, a non-fiction author and critic.
KamataJapan / Areas of expertise: organizational theory,business administration
Follow-up meetings with management
Prof. Shigeru
Professor, Rikkyo University / Areas of expertise: trafficHaga
psychology, industrial psychology, human engineering
The members of the Safety Advisory
Professor, Waseda University / Area of expertise:
Prof. Akinori
Group hold annual follow-up meetings
human life engineering
Komatsubara
with management. The
progress of the JAL
Group’s safety measures
is examined, and themembers offer advice as
they consider appropriate.
At the follow-up
meeting held in March
2016, we reviewed
Follow-up meeting with management
the 2005 advisory,

AmoebaManagement
System23

Amoeba
Management
System

JAL Philosophy

JAL Group Business Foundation

All JAL Staff Are United in Efforts to Ensure Customer Safety from Check-in to Arrival at Their Destination
SafetyCharter

Cultivating a culture of safety in every department, all staff
contribute to ensuring the safety of every customer bymaking the “best baton pass.”

AmoebaManagement
System

JAL Philosophy

SafetyCharter
AmoebaManagement
System

JAL Philosophy

SafetyCharter

JAL Philosophy

Sales
Our main business is selling the JAL Group’s
products to customers via the JAL website
and through contracted companies and travel
agencies. We believe our mission is to provide support for safe
and comfortable air travel by customers. Our goal is therefore toaccurately relay customers’ wishes to the relevant departments
through the “best baton pass,” and to strive to maintain safe flight
operations. Efforts to maximize revenues are directly connected
to increased investment in safety. Today and into the future, wewill continue striving to bring the JAL Group closer to customers,
engaging in sales activities with safety constantly in mind. Whether
customers are traveling for business or pleasure, we contribute totheir safety and sense of security through these activities.

Reservations & Ticketing

For airport staff, ensuring security is the mostimportant aspect of safety management. We take thegreatest care at the check-in counter to determine
whether the person checking in is the person with the reservation,
ensure that his or her baggage contains no prohibited items, observe
any suspicious persons or baggage in the vicinity and remain alert toother irregularities. To avoid overlooking risk factors that may affectsafety, we conduct thorough checks repeatedly, always mindful of
potential danger. We keep watch over children and the elderly withparticular care to anticipate possible injuries in the airport. If wenotice someone who looks unwell, we may accompany him or her
to the airport medical clinic or take other measures, as appropriate.
Thus, we take the utmost care in every respect to ensure the safetyof customers until they board the aircraft.

Cargo
We accept cargo for both domestic and international
flights, reconfirm their safety and prepare a loading
instruction sheet according to their weight andshape, all within an allotted time. Our most important concerns
at this point are to prevent loading of explosive materials andensure that cargo are balanced so that the center of gravity is in
the middle of the aircraft. Air cargo is usually accompanied bya regulated agent’s specified freight declaration that guarantees
the safety of the cargo. If no declaration is available, we X-ray thecargo and examine it for explosive materials, and notify the police
if we find anything suspicious. Regarding weight management, we
do not load any cargo if its weight differs from that stated on theconsignment documents until the cause has been determined.

Ground Handling
Ground handling covers a broad range of groundservices related to air transport. These include
marshalling, loading and unloading of baggage,cargo and mail, and cabin cleaning. In loading and unloading
operations, staff with qualifications for the respective aircraft model
pay utmost attention when operating systems inside the cargocompartment and opening and closing cargo doors. Weight andbalance when building up loads is an extremely important factor inensuring safe operation of the aircraft. The balance of the aircraftmust also be considered when unloading cargo at its destination.
We always place the highest priority on safety in all our operations.
We do our best each day to provide customers with safe andcomfortable flights.

Engineering & MaintenanceBesides work related to the aircraft such as
inspections, repairs and modification, mechanics
also work on engines and components removed
from aircraft. Maintenance methods differ according to the type andmanufacturer of the aircraft or component and date of installment.
Responsibility for the work is entrusted to specialists who haveacquired national, in-house and other qualifications. It is essentialthat mechanics notice irregularities in even the smallest details.
Our objective is to keep customers safe from injury. We exercise
our imaginations in our work to provide customers with a highquality space that gives them peace of mind and satisfaction in all
aspects; safety, on-time performance, comfort and convenience.

Cabin Attendants
As safety and security personnel, cabin attendants havethe crucial responsibility of protecting the customers’ safety
during flights. They accumulate knowledge and training
for use in emergency situations, and employ their five senses to provide asafe and reliable flight. On occasion, a cabin attendant may become awareof an aircraft malfunction or abnormality. At such times, they endeavor
to maintain flight safety through prompt collaboration with the flight crew
and mechanics on the ground. Since the cabin environment differs fromthe environment on the ground, some customers may develop physicalconditions resulting from travel fatigue, etc. Cabin attendants remain alert
to their conditions. Medicines and medical equipment are kept on board todeal with injuries or illnesses, and cabin attendants receive repeated training
in their use. The key to maintaining cabin safety is to share information andengage in team efforts to assure prevention of potentially unsafe events.

Flight Operations
The fight crew are responsible for customer safety fromthe time they board the aircraft until they disembark.
They maintain a constant focus on sharing up-todate information, improving their knowledge, monitoring their physicalconditions and remaining calm. It is important for them to stay attuned
to normal sounds and vibrations during flight. If they perceive eventhe slightest reason for uneasiness, they decide on a course of action
through consultation with crew members and Operation Control
Center. They also maintain close communication with the cabincrew. If an unforeseen situation occurs, they deal with it according toregulations with customer safety as the top priority at all times. The
captain plays the additional important role of inspecting the aircraft
exterior before departure to confirm that there are no visible anomalies.
Contents

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 624

Our department handles flight reservations, sales ofairline tickets and inquiries about JAL services. We not
only answer the customers’ questions, but also suggest
optimal fares and routes, provide information on destinations, andsupport safe, comfortable air travel in various other ways. Our measuresfor preventing unsafe incidents start at the reservation stage, where
we confirm and reconfirm, and then share information with the relevant
departments if we sense any reason for concern. When we receive
inquiries about baggage, we are careful to obtain prior confirmationthat no dangerous goods are included. Maintaining safety and ensuringsmooth boarding also require us to pass on necessary information to
airport staff. Through these and other activities, we maintain a constantawareness of safety while conducting our daily business.

Airports

AmoebaManagement
System25

Charter

JAL Group Business Foundation

AmoebaManagement
System

JAL Philosophy

JAL Philosophy

We adhere to the JAL Philosophy as the mindset, values and attitude to
be shared by everyone who is engaged in JAL products and services.
It is a shared criteria for decision-making in daily operations. The JAL
Philosophy unites all JAL Group members while deepening mutual trust,
respect and understanding.

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

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

Chapter 3: Accumulate TediousEfforts with Passion
Work Earnestly
Accumulate Tedious Efforts
Work with Voluntary Attention
Fire Yourself Up
Strive for Perfection

Ability Will Improve

Chapter 1: Each of Us Makes JAL What It Is
Each of Us Makes JAL What It Is
Discuss Frankly
Lead by Example
Be the Center of the Vortex
Valuable Lives Are Entrusted to Us in Our WorkBe Thankful
Put Yourself in the Customer’s Position

Chapter 2: Have a Keen Sense of Profitability
Maximize Revenues and Minimize Expenses
Elevate Our Cost-Consciousness
Pursue Profit Fairly
Manage the Company Based on Accurate Figures

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

JAL Philosophy

Instilling the JAL Philosophy
to unify all employees
We adhere to the JAL Philosophy as themindset, values and attitude to be sharedby everyone engaged in JAL products
and services. As JAL Group employees
deepen their personal understandingof the JAL Philosophy and employ it ascommon criteria for decision-making ineveryday operations, they become united
by mutual trust.
To instill the JAL Philosophy, we
provide JAL Philosophy Education
for all JAL Group members, generalemployees and executives alike, inJapan and overseas regions. Theseseminars extend beyond workplace anddepartmental boundaries to deepen
mutual understanding.
JAL Philosophy Education instructors
are selected from various divisions,
including Flight Operations, Cabin
Attendants, Engineering & Maintenance,
Airports and Sales. They prepare teachingmaterials and conduct classes in the Tokyo
area and sometimes visit regions acrossJapan. In the United States, Europe,
Asia-Oceania and China, local facilitators
conduct sessions with educational
materials in Japanese and English.
In fiscal 2016, the departments andGroup companies have begun to plan andOverview of the approach to instilling the JAL Philosophy
Executives /general managers

Managerial
positions

Generalpositions

Leader workshops
JAL Philosophy
Education

Leadership training follow-up workshops
JAL Philosophy Education
Independent JAL Philosophy permeation activities
in various departments and Group companies

Permeation
activities

JAL Philosophy presentation seminars / in-house news /in-house intranet / employee awareness surveys
Independent voluntary workshops by employees

institute their own approaches to instilling
the JAL Philosophy.
The JAL Group will continue tonurture its human resources throughdiverse activities supporting wider
application of the JAL Philosophy. This
will enable every JAL Group employee
to provide customers with unparalleledservice, increase corporate value andcontribute to the betterment of society.

Chapter 4: Possess a Fighting Spirit
Maintain an Ardent Desire
Never Give Up Until We Succeed
Boast and Make It Come True
Possess True Courage

Chapter 5: Be Creative in Our Work
Today Should Be Better Than Yesterday,
Tomorrow Better Than Today
Conceive Optimistically, Plan Pessimistically,and Execute OptimisticallyThink Through to Visualize the Results
Decide and Act with Speed
Face Challenges with Courage
Aim High
Everyone from general employees to executives seated at the same table (94th Course for Executives held in
fiscal 2015)26

AmoebaManagement
SystemConnecting with employees
engaged in various aspectsof flight operation connected
through the JAL Philosophy“Make the Best Baton Pass” is one tenetof the JAL Philosophy. It requires many
employees for an aircraft carrying many
passengers to take off. I understood thislogically, but the image I had remainedvague. JAL Philosophy Education provided
me with opportunities to exchange
opinions with many colleagues I mightotherwise never have met. This gave me aclearer idea of other employees’ thinking.
Today, I have a distinct awareness of myposition as a member of the JAL Group.
This awareness enables me to pass eachbaton I receive from a colleague securely
to the next person in line. I also apply
this awareness inproviding cabin
service. The JAL
Philosophy is ashared language. I
believe that instilling
the JAL Philosophy
in the minds ofevery employee
is contributing to
improved customer
Mariko Kawaoi
service.
Haneda No. 2
Cabin Attendants
Department

Contents

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

Chapter 4: Ability Will Improve

Part 2: To Become a Wonderful JAL

SafetyCharter27

Amoeba
Management
System

JAL Philosophy

JAL Group Business Foundation

Amoeba Management System
SafetyCharter

We aim to achieve sound, flexible corporate management
by instilling a sense of management in every Group
employee.

AmoebaManagement
System

JAL Philosophy

SafetyCharter

Background to introducing
the amoeba management
systemin a timely manner and to facilitate
prompt responses to changes in market
conditions. We clarified the roles andresponsibilities of each unit in order tocapture the revenues and expenditures ofeach and visualize the results of activities
by employees.

Under the amoeba management system,
corporate management is not left to top
management alone; all employees are
involved. Corporate organizations are
divided into the smallest possible units,
and the results of work undertaken byeach unit are presented in an easily
understandable manner. The systemthus encourages participation in
management by every employee.
Before JAL went into bankruptcy on
January 19, 2010, it was not clear which
departments or posts were responsible
for profit. Sales (revenue) planning andexpenditure planning were undertaken
separately. Because the two sides were
not integrated, declines in revenues were
not promptly followed by curtailment ofexpenditures. Examinations of revenues
and expenditures at the fiscal year-end
repeatedly showed that the Company had
incurred a loss. Employees themselves
had no sense of profitability as membersof the corporation; concern for profitability
was left to others. Crisis awareness and asense of unity were severely lacking. These
factors ultimately led to the bankruptcy.
We emerged from bankruptcy
determined not to make the same
mistakes again. The functions andresponsibilities of each division wereclearly described. We also introduced theamoeba management system at this time.
This business management system wasdesigned to grasp the business situation

Overview and mechanismof the system
A new department, Managing Division
Route Marketing, was established andassigned responsibility for revenues andexpenditures related to the passenger
transport business. The cooperation of
departments throughout the Company
helped make this an excellent system for
operating the passenger transport business.
The value associated with services provided
by organizations within the Company tosupport operation of passenger aircraft wasnamed “Compensation for Cooperation,”and business transactions were establishedbetween each unit. Through thesetransactions between units, it became
possible to capture the situation of revenues
and expenditures of each unit and focus on
generating profit.
The outcome of activities by each unit
could then be recorded as revenues andexpenditures, thereby fostering a sense of
responsibility in every employee, and in turnmotivating them to work efficiently and bringcreativity to the job.
The results of business activities
are reflected promptly in the Targets andResults Table (a profit/loss statement ofeach unit), enabling daily confirmation of theConsolidated revenues and expenditures are the aggregateof revenues and expenditures of each unit

Company

Division

Division

Department

Department

Unit

Unit

Company

Division

Since the introduction of the amoeba
management system, every unit began
preparing an annual plan for revenues
and expenditures (Master Plan) and thenimplemented a monthly management
cycle (PDCA cycle) to accomplish theannual plan.
Under the monthly cycle, at thestart of each month each unit preparesa monthly forecast of its revenues andexpenditures based on the current
environment and clarify measures toachieve the Master Plan.
During the month, progress toward
accomplishing the targets is monitored,
and additional measures may be
implemented to achieve the targets. Oncethe results for the month are computed,
differences between the targets and results
are analyzed and the reasons for thedifferences are clarified. These findings aretaken into account in preparing targets forthe following month.
Thus, monthly targets are establishedin addition to the annual plan preparedat the start of each fiscal year. The
management cycle facilitates prompt
responses to changes in the environment.
This is illustrated by the improvements
outlined in the diagram below, which
occurred before and after introducing theamoeba management system.

In rotating through the monthly earnings
management cycle, the JAL Group holds
meetings at various levels to confirm
profitability and consider necessary
countermeasures.
Each department holds an Earnings
Announcement Session every monthwhen the results become available. The
Targets and Results Table is used tocompare the results with the Master Plan
and targets. The reasons for differences
are analyzed, and the members examine
future measures and targets. A Group
Earnings Announcement Session
attended by top management is held
following the departmental Earnings
Announcement Sessions.
In the Group Earnings
Announcement Session, the divisional
general managers and presidents ofaffiliated companies report to the Group’s
top management on their respective
business results and targets. About 120
people attend the session, including thePresident, all directors, presidents ofmajor affiliated companies and observers.
All senior management members engage
in earnest discussions of JAL Groupmanagement aimed at realizing the
Corporate Policy.

Expansion to Group
companies and yields
Since fiscal 2011, the amoeba
management system has been

progressively introduced to JAL Groupairlines, passenger service companies,
ground handling companies, cargohandling companies, engineering andmaintenance companies, sales-related
affiliated companies and principal
consolidated subsidiaries. Following its
introduction to six companies in fiscal
2015, the amoeba management system is
now operational in 32 companies including
JAL. As a result, some 93% of all JAL
Group employees are currently engaged in
the system.
As deployment of the system inGroup companies expanded, the benefits
to those companies became apparent.
In every company that introduced theamoeba management system, employee
awareness of revenues and expenditures
became higher. Business processes are
improving as employees approach themmore creatively, and workplaces are
becoming energized. As a result, we areseeing establishment of autonomous,sound management in each company,
accompanied by higher profitability andrising profit levels.
Companies to which the amoeba
management system has been introduced
are sharing information on a diverse
range of matters, including successful
examples of improvements in revenues,
expenditures and other issues related
to business operations. Measures toencourage the system’s dissemination
among all JAL Group employees, leading
to “Management by All” and a deepeningof the PDCA cycle, are making steadyprogress.

Approaches to the amoeba
management system by JAL
Navia Co., Ltd.
JAL Philosophy

AmoebaManagement
SystemJAL Navia is a contact center forcustomers who want to makereservations, purchase tickets, makeenquiries and more.
In the past, we were consciousof productivity and the quality of our
responses to customers’ telephone calls.
Aside from that, we had little awarenessof the contribution of our work to the JAL
Group’s profitability. After introductionof the amoeba management system,
however, revenues were linked in detailto the content of our work. This included
the number of telephone calls or thosecalls resulting in reservations andticketing. Work results were translated
into figures to visualize our efforts. We
began to gain awareness of the degreeof our contribution to the JAL Group.
This led to a determination to achieveplans we had prepared ourselves. We
became conscious of our position asa “profit center,” and began focusing
on applying creativity in our work to
maximize revenues.
At the same time, the JAL
Philosophy has penetrated our
employees, and we are working hardto enhance the quality of our services
as a contact point for achieving JAL’s
objective of becoming “the world’s most
preferred and valued airline group.”

Before and after introduction of the amoeba management
systemBeforeToday

Fiscal year budget prepared atstart of fiscal year

Preparation of a Master Plan atstart of fiscal year, followed bymonthly targets

Company

Division

Department

Unit“Management Cycle” under theamoeba management system

Earnings Announcement
Sessions spanning organizations

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

28

Consolidated Group revenues/expenditures

results of business activities.

Unit

Department

Unit

Unit

Comparison of fiscal year
budget adopted at start of fiscal
year with results
Since comparison takes place
while changes occur in theeconomic and businessenvironment, budget analysis
cannot be applied.

A target, or monthly
achievement target is preparedeach month and compared withthe results.
Results analysis based on
anticipated environmental
changes is applied in
preparation of targets for thefollowing month.

Because the budget is anallocation, it is generally
believed it should be used in full.

The Master Plan is preparedindependently with the aim of
maximizing revenues andminimizing expenses.

Contents

29

JAL Group Business Foundation

Introducing JAL’s Top Management Team

Hideki Kikuyama Toshiaki Norita

Norikazu Saito

Director, Senior
Managing Executive
Officer

Director, Senior
Managing Executive
Officer

Director, Senior
Managing Executive
Officer

Director, Senior
Managing Executive
Officer

Flight Operations
Safety General Manager

Managing Division RouteMarketingCorporate Planning
Business Creation
Strategy

Finance and Accounting

Yoshiharu Ueki

Tadashi Fujita

Junko Okawa

Director, Chairman

Representative Director,
President

Representative Director,
Executive Vice President,
Executive Officer

Representative Director,
Senior Managing
Executive Officer

Aide to the President

General Manager ofCommunication

Chairman of the Management
Board Meeting, Chairman of
the Council for Group Safety
Enhancement, Chairmanof the Corporate Brand
Promotion Council, Chairmanof the JAL Philosophy
Committee, Chairman of the
CSR Committee

Kimie Iwata

Eizo Kobayashi

Masatoshi Ito

Outside Director

Outside Director

Outside Director

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 630

Toshinori Shin

Masaru OnishiContents

31

JAL Group Business Foundation

Introducing JAL’s Top Management Team1

2

Masaru Onishi

Yoshiharu Ueki

Director, Chairman

Representative Director, President
Chairman of the Management Board Meeting, Chairman of the Council for Group Safety
Enhancement, Chairman of the Corporate Brand Promotion Council, Chairman of the JAL
Philosophy Committee, Chairman of the CSR Committee

Beginning his career in engineering and maintenance, Chairman Onishi acquired extensive
knowledge and a network of contacts in the airline industry. Appointed President in 2010,
he was involved from an early stage in the process of corporate reorganization following
the bankruptcy. Today, as Director, Chairman of the Board and a member of the Corporate
Governance Committee, he continues to contribute significantly to strengthening thesupervisory functions of the Board of Directors. He also serves as an Outside Director for
the Japan Airport Terminal Co., Ltd., Chairman of the JAL Foundation and Representative
Director of the Air Traffic Service Research Institute (ATSRI).

4

5

Tadashi Fujita

Junko Okawa

Norikazu Saito

Representative Director, Executive Vice President,
Executive Officer

Representative Director, Senior Managing Executive
Officer

Director, Senior Managing Executive Officer

Aide to the President

General Manager of Communication

Executive Vice President Fujita worked in sales
departments at Headquarters and at regional offices in
Osaka, Okinawa, Paris and other regions. As General
Manager of the Passenger Sales Division, he had overall
responsibility for all the Profit Centers and achieved strong
results in that area. Today, while performing the duties ofRepresentative Director and Executive Vice President, healso serves as Aide to the President, making a significant
contribution in all these roles to the further reinforcement
and enhancement of JAL’s management systems.

Director Okawa accumulated a wealth of workplace
experience and expertise as a cabin crew member.
As Cabin Attendant General Manager from 2010,
she applied high level management perspectives andproven capabilities to assuring the division’s success inmeeting a diverse range of challenges and targets. Now
Senior Managing Executive Officer, she is contributing
substantially to implementing promotional measuresdesigned to raise the JAL Brand values ahead of the Tokyo
2020 Olympic and Paralympic Games.

6

7

8

Toshiaki Norita

Hideki Kikuyama

Toshinori Shin

Director, Senior Managing Executive Officer

Director, Senior Managing Executive Officer

Director, Senior Managing Executive Officer

Corporate Planning, Business Creation Strategy

Managing Division Route Marketing

Flight Operations, Safety General Manager

Director Norita compiled a strong record while
engaged in various business areas, including branch
office management, sales planning, human resourcesmanagement and labor, corporate planning and publicity,
in a succession of posts at Headquarters, the Okinawa
and Mexico branch offices, and other locations. He iscurrently responsible for decision-making concerning the
Medium Term Management Plan and is making positive
contributions to ensuring its successful implementation.

Director Kikuyama engaged in work ranging from IT
systems, passenger reservations, and human resourcesmanagement and labor to corporate planning at
Headquarters as well as at branch offices in Osaka, theUnited States and elsewhere. In his current position as
General Manager of Managing Division Route Marketing,
he is using his expertise to assess and implement
improvement and stabilization of reliable route revenues
and expenditures.

While employed as a flight crew member, Director
Shin acquired considerable workplace experience andinsight into flight safety. Today, as General Manager of
Flight Operations, he is applying his highly developed
management perspectives and capabilities to overcoming
challenges and achieving a wide range of targets at
Headquarters.

9

10

11

Kimie Iwata

Eizo Kobayashi

Masatoshi Ito

Outside Director

Outside Director

Outside Director

Outside Director Iwata’s rich fund of experience and resultsin various fields, including support for women’s activities,
diversity, CSR and workstyle reformation, has equipped her
to bring strong direction and solid advice from an objective
perspective to the Company. She also serves as Presidentof the Japan Institute for Women’s Empowerment &Diversity Management and as an audit and inspection
commissioner for the Tokyo Metropolitan Government,
among other capacities.

Outside Director Kobayashi provides the Company withsound direction and advice based on his accumulated
experience and expertise as top management of a general
trading company. He also serves as Chairman of Itochu
Corporation, Outside Director of Omron Corporation andOutside Auditor of Asahi Mutual Life Insurance Co., among
other capacities.

Outside Director Ito has rich experience and deep insightacquired as top management of global enterprises
engaged in marketing from the customers’ perspectives.
He also serves as Representative Director and Chairmanof Ajinomoto Co., Inc. and as President of the Japan
Advertisers Association Inc.

Finance and Accounting

Director Saito has specialized for many years primarily
in finance and accounting, constantly deepening his
knowledge of finance, accounting, IR, and other fields.
Today, as Director, Senior Managing Executive Officer
and General Manager of Finance and Accounting, heis providing guidance in JAL’s development of systems
for highly transparent information disclosure that iscomprehensible to shareholders and investors, while also
promoting management decision-making appropriate toraising shareholders’ profit.

Business Operations

JAL Group Business Operations and Financial Status
Financial Summary.................................................. 34
A Message from the CFO........................................ 35
International Passenger Operations......................... 36
Route Network Reinforcement............................. 38
Product and Service Enhancement...................... 40
Domestic Passenger Operations............................. 42
Participation in Regional Revitalization Efforts....... 44
JAL Group Route Network................................... 46
Aircraft Investment Strategy and JAL Group Fleet... 48
Other Businesses.................................................... 50

7

6

5

1

2

3

4

9

10

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

3

8

32

From his start as a flight crew member, President Ueki has accumulated an extremely highlevel of frontline experience and insight into flight safety. As Representative Director andPresident since 2012, he oversaw preparation of the Medium Term Management Plan. His
strong leadership and decision-making capabilities are driving the sure accomplishmentof the Plan. He is also making a significant contribution to strengthening of the Board of
Directors supervisory functions as a member of the Nominating Committee, Compensation
Committee and other bodies.

11

Contents

33

JAL Group Business Operations and Financial Status

Financial Summary

A Message from the CFO

Major Financial Items

We are committed to enhancing our corporate value, while
improving and maintaining profitability and stability toensure sustainable growth, by responding appropriately to
growing demand for air travel.

(Millions of yen)

FY2012FY2013

FY2014FY2015

Operating revenue¥ 1,238,839¥ 1,309,343¥ 1,344,711¥ 1,336,661

Operating expense

		 1,043,596

		 1,142,550

		 1,165,021

		 1,127,469

Operating income		

195,242

		

166,792

		

179,689		

209,192

Ordinary income		

185,863		

157,634

		

175,275

		

209,219

Net income attributable to owners of parent 		

171,672

		

166,251

		

149,045

		

174,468

Net income per share (yen) *1

		473.36

		458.45

		

411.06

		

481.29

ASK (million seat-km) *2
RPK (million passenger-km) *3

				

81,18957,049				

83,31959,135				

84,00360,103				

84,19662,411

EBITDA margin (%)*4

		

22.3

		

19.1

		

19.8

		

22.3

EBITDAR margin (%)*5

		

24.8

		

21.5

		

21.8

		

24.0

Unit cost (yen) *6

		

8.5

		

8.8

		

8.9

		

9.3

		

11.5

		

12.2

		

12.3

		

12.0

Interest-bearing debt¥

160,145¥

134,282¥

100,592¥

92,629

Shareholders’ equity

		565,048

		

690,288		

776,476

		

843,099

Net assets

		583,189		

711,064		

800,751

		

870,557

Total assets

		 1,216,612

		 1,340,168

		 1,473,354

		 1,578,928

Shares issued (unit: 1,000)*7

		

		

		

		

		

Including fuel cost

181,352

181,352

362,704

Under the JAL Group’s amoeba
management system, every employee
strives to contribute to increasing profits bymaintaining a steady focus on “maximizing
revenues and minimizing expenses.” At thesame time, the Group is seeking to achievea sustainable increase in corporate value by
constructing systems that respond flexibly
to environmental changes.
Enhancing financial stability
We consider enhancing financial stability
as one of our most important challenges.
To this end, we are endeavoring tomaintain our equity ratio, a representative
indicator, at a sufficiently high level toassure preparedness for operating risks
inherent to the air transport business. We
set an equity ratio target of 50% or abovein our Medium Term Management Plan
extending to fiscal 2016 year-end. As it
turned out, we succeeded in recording aratio of 53.4% ahead of schedule in fiscal
2015, thanks to substantial accumulated
profits and prudent management. We arecommitted to making concerted efforts
to raise the equity ratio to 60% and to¥

264,853¥

247,941¥

261,139¥

312,394		

(264,436)		(131,237)

		(230,559)

		(288,915)

Cash flow from financing activities		

(60,643)		

(61,912)		

(67,323)

		

(49,636)*1	Japan Airlines Co., Ltd. conducted a stock split to create two new shares from 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 2012.
*2	ASK (available seat-kilometers). A unit of passenger transport capacity: Total number of seats x distance flown (km)*3	RPK (revenue passenger-kilometers). Total flight distance covered by revenue passengers: Number of revenue passengers x distance flown (km).
*4	EBITDA margin = EBITDA/operating revenue EBITDA = operating income + depreciation expense*5	EBITDAR margin = EBITDAR/operating revenue EBITDAR = operating income + depreciation expense + aircraft lease*6	Unit cost = consolidated air transport cost (excluding fuel cost and transactions with affiliates where revenues and expenses are internally settled) / ASK*7	Japan Airlines Co., Ltd. conducted a stock split to create two new shares from one common share, effective October 1, 2014.

Transportation results
Revenue passengers
carried(No. of passengers)

FY2014FY2015International routes

7,525,038

7,723,293

7,793,704

8,080,676

Domestic routes

30,020,440

31,218,734

31,644,018

32,114,322

Total

37,545,478

38,942,027

39,437,722

40,194,998

International routes
Revenue passenger km Domestic routes(1,000 passenger-km)
Total

34,036,119

35,390,384

36,109,588

38,069,127

23,012,898

23,745,163

23,993,738

24,341,972

57,049,018

59,135,548

60,103,327

62,411,100

International routes

76.1

76.5

75.7

78.8

Domestic routes

63.1

64.0

66.1

67.9

J A PA N A I R L I N E S R E P O R T 2 0 1 6

Revenue passenger
load factor (%)
Available seat-km(1,000 seat-km)
Revenue cargo ton-km(1,000 ton-km)

Total

70.3

71.0

71.5

74.1

International routes

44,745,317

46,235,058

47,696,816

48,327,267

Domestic routes

36,443,994

37,084,260

36,306,359

35,869,126

Total

81,189,311

83,319,319

84,003,176

84,196,394

International routes

1,378,282

1,512,142

1,754,657

1,724,590

Domestic routes
Total

360,176

366,989356,691

363,200

1,738,458

1,879,132

2,111,349

2,087,791

Profitability Pursuing higher profitability rather than
expanding business scale Focusing on asset and capital efficiency

Profit margin

ROE

10%

34

maintain that level consistently. At thesame time, we are seeking to improve
our credit rating and maintain it at a highlevel in order to secure a diverse rangeof flexible financing sources for future
investment purposes. JAL currently has
single A-minus ratings from both R&I(Rating and Investment Information, Inc.)and JCR (Japan Credit Rating Agency,Ltd.). We will continue our efforts toimprove these ratings.
Managing investments and risks
JAL conducts appropriate investment
management to benefit from the fruitsof investment and improve and maintainhigher asset efficiency. Of special note, wehave implemented investment selection
criteria employing a strict hurdle rate andbuilt a mechanism for performing periodic
post-investment monitoring. We also
implement financial simulation procedures
periodically, sharing the simulation resultswith management to help them identify
potential financial risks that may emerge inthe changing business environment.
Constructive dialogs withshareholders and investors
As an IR manager responsible for

Policy for the fiscal year
ending March 31, 2018 andbeyondFrom the fiscal year ending March 31,2018 and beyond, JAL has no plans tochange its policy of focusing on profitability
rather than on expanding business scale.
We are committed to improving ourmanagement rationale to ensure that our
stakeholders fully enjoy the benefits of the
progress in profitability, stability and growthpotential achieved over the past five years.

Stability

Growth potential

 Maintaining the equity ratio at an appropriate
level to assure both financial stability andcapital efficiency
 Improving our credit rating

Supply strategy based on high profitability
Introducing highly efficient new-generation
aircraft

Equity ratio

Credit rating60%

A rating
A-minus rating

Domestic available
seat kilometers(ASK)

International available
seat kilometers(ASK)

Chapter TOP

Contents

J A PA N A I R L I N E S R E P O R T 2 0 1 6

Financial Policy

Cash flow from investing activities

FY2013

Director, Senior Managing Executive Officer, Finance and Accounting Department

362,704

Cash flow from operating activities

FY2012

Norikazu Saito

communicating with our shareholders
and investors, I engage them in frequentdiscussions, hear their opinions andsuggestions, and pass these on to
management for consideration.
Capital policy
Deeply concerned about the cost ofshareholders’ equity, JAL is pursuing asufficient level of capital efficiency to cover
it. Specifically, we are seeking to maintainan ROE (return on equity) of 10% or above
by reinforcing our financial health andensuring profitability and asset efficiency.
JAL believes that distributing profits toshareholders is one of the most important
issues for management. We will distributeprofits to shareholders actively throughcontinued payments of dividends, while
continuing to make investments andaccumulate retained earnings to assure
future business growth. This means
shareholders will receive 25% of theamount of net income attributable to parent
shareholders after deducting deferredincome taxes.
We will flexibly review our financial
targets as necessary in consideration of our
financial condition, stock price movements
and the current economic environment, andconsider improving returns to shareholders.

35JAL Group Business Operations and Financial Status

International Passenger Operations

Review of fiscal 2015
A weaker yen and relaxed visa requirements contributed to boosting the numberof international visitors to Japan to a record high of 19.74 million in fiscal 2015,
an increase of 47% from the previous year. The number of outbound Japanesepassengers decreased year-on-year, resulting in more foreigners visiting Japan thanJapanese going abroad for the first time in 45 years.
JAL took advantage of robust inbound demand to achieve a record high loadfactor, while also employing the revenue management system to raise unit passenger
revenue and expanding marketing channels for new products and services. Despite
these efforts, we saw unit passenger revenue decline by 2.6% from the year before
due to lower fuel surcharges.
At a time when initiatives are being pursued to reinforce and expand thefunctions of Haneda and Narita as Japan’s two largest air transportation hubs, JAL
opened new Shanghai (Pudong) and Guangzhou routes with daytime service fromHaneda and added new flights on its Beijing route in fiscal 2015. We also introduced
service between Narita and Dallas/Fort Worth International Airport, the major hub ofAmerican Airlines, our transpacific joint business partner. This route has improved
connectivity to U.S. and Latin American destinations.
We are continuing to introduce aircraft with the JAL SKY SUITE configuration
centering on our European and Southeast Asian routes. JAL SKY SUITE aircraft
are currently in service on all JAL’s European routes to assure passengers more
comfortable flights.
Other 13 %Business outlook for fiscal 2016
International
43%
routesFiscal 2015
revenue by
category

Domestic routes 44 %Revenue passengers carried

Load factor

Revenue passenger kilometers /Available seat kilometers(Billions of yen)
500

(Thousand passengers)
9,000

(%)
100.0

(Million passenger km)
50,000(Million seat km)
48,327 50,000

40,00038,069

400

406.6

8,080
7,525 7,723 7,793

437.5 454.8 448.7

80.0

76.1

76.5

75.7 78.8

6,000

300
200

3,000

100
0

0

2012

2013 20142015 (FY)2013 20142015 (FY)34,036 35,390 36,109

40,00060.0

30,00030,00040.0

20,00020,00020.0

10,00010,00000

201247,69644,745 46,235

2012

2013 20142015 (FY)02012 2013 2014 2015

(FY)
Revenue passenger kilometers (left axis)
Available seat kilometers (right axis)

Chapter TOP

Contents

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

36

Passenger revenue

Although fuel surcharges are expected to decline in fiscal
2016, JAL plans to increase the load factor and maintain unit
passenger revenue at the same level as in the previous year.
This will involve continuing our efforts to reinforce our sales
channels for new products, improving unit prices througheffective use of the revenue management system and capturing
inbound demand.
JAL will allocate its business resources appropriately
in response to changing supply and-demand conditions toimprove the convenience of our networks and enhance comfort
for our customers. Notable moves will include introducing the787 progressively and expanding JAL SKY SUITE operated
routes after revamping the 777-200ER aircraft with the JAL
SKY SUITE configuration.
Committed to sustaining positive growth, we use unit
revenue as a KPI (key performance indicator) and seek toachieve unit revenue above unit cost by enhancing our route
network and improving our products and services.

37

JAL Group Business Operations and Financial Status(as of March 31, 2016)

International Passenger Operations

Route Network Reinforcement
JAL is not merely seeking to expand its business scale. We will expand our network when we are sufficiently assured ofachieving route profitability, and increase the number of code-share agreements with both oneworld alliance members andnon-members in order to construct convenient networks connecting Japan with other parts of the world.

Opening of the Narita-Dallas/
Fort Worth route

JAL & AA Japan-North American route network

JAL initiated service on a new NaritaDallas/Fort Worth route on November
30, 2015. Dallas/Fort Worth International
Airport is linked to many networks serving
Latin America in addition to networks
connecting U.S. cities. JAL’s opening of
this route has significantly improved theconvenience of connections throughout
the Americas. We introduced the JAL
SKY SUITE configured 787 on the NaritaDallas/Fort Worth route in accordancewith our concept of evoking “a one classhigher feel” in order to greet passengers
with premium hospitality.

Vancouver39

San Francisco
San Diego

HanedaNew York

Dallas/Fort WorthLos Angeles

15

JAL + code-share flights

154

countries/regions

1,011
airports

JAL operated routes
JAL & AA operated routes

10

routes414
citiesflights

Expanding our Latin American network throughour joint business with American Airlines

Alliance with oneworld members and other partners
JAL joined the oneworld alliance in 2007. We provide
the following services in partnership with the other 14
members:
	For JAL Mileage Bank members: joint mileage
accumulation and all privileges of oneworld membership	For JAL status members and JGC members: premium
airport lounge privileges, priority security lanes, priority
boarding, priority baggage allowance and priority
baggage services on oneworld member aircraft	Exclusive oneworld fares such as oneworld Explorer
and Circuit Fares for world tours
	oneworld Global Support ensuring seamlessconnections

on the Haneda-Guangzhou/Shanghai (Pudong) route.
In June 2016, we will initiate code-sharing with Alaska
Airlines on its routes to and from Los Angeles, San Diego,
Vancouver and San Francisco, while also cooperatingwith Alaska in a mileage plan.
Expanding cooperation with other airlines enables us
to continue improving passenger convenience, while
also capitalizing on robust inbound demand and transit
passengers via Japan.
*1	Business activities in a specified business field by participating companies
as if they were a single entity on the precondition of exemption from theAnti-Trust Act. Activities include service quality improvement, schedule
adjustment and sales promotion.

JAL joined the following networks in 2015 in partnershipwith oneworld members:	In April 2015, we initiated code-sharing with Brazil’s
TAM Airlines on the New York-Rio de Janeiro route andon routes between Sao Paulo and New York, London,
Paris and Frankfurt, adding these to our existing
American Airlines’ routes.

J A PA N A I R L I N E S R E P O R T 2 0 1 6

	We also began code-sharing with TAM Airlines on
domestic Brazilian routes with hubs at Sao Paulo and
Rio de Janeiro, expanding the number of Brazilian cities
served by JAL code-share flights from two to 13.

J A PA N A I R L I N E S R E P O R T 2 0 1 6

With its five terminals and seven runways, Dallas/Fort Worth isthe largest hub for American Airlines. It is the world’s third largest
airport in terms of number of flights, 70% of which are on American
Airlines routes.
In addition to many airports in the United States, Dallas/
American Airlines’ main networks centering on Dallas/Fort WorthFort Worth’s network comprises 39 airports in Latin Americancountries including Mexico, where demand
Panama City
for air travel is surging. The airport handles
Dayton
414 flights a week, providing convenient
Detroit
BogotáColumbus
Lexingtonconnections between U.S. cities anddestinations throughout Latin America.
Washington (Dulles)
Dallas/Fort Worth Airport provides
Baltimore
Minneapolis
Philadelphia
seamlessconnections, free from the trouble
Indiana
Washington
Cincinnati(Ronald Reagan)of
retrieving
and checking in baggage, for
St. Louis
Louisville
Lima
Memphispassengers who want to reach destinations
Raleigh-Durham
Dallas/Fort WorthCharlottein Mexico, Brazil, Peru or other countries
Nashville
outside the United States on the same day.
Atlanta
Montreal
Sao Paulo
Orlando
San Luis Potosi
JAL’s joint business with American
Miami
Aguascalientes
New Orleans
San José del Cabo
Airlines, the world’s leading airline, has been
CancunGuadalajara
in effect for six years. Our Japan-North
León
Santiago
Buenos Aires
Querétaro
American network, which began with 11
Mexico City
flights on seven routes, now offers 15 flights
on 10 routes, including the Narita-Dallas/
HoustonAustinFort Worth route.

flights

38

ChicagoNaritaKansai

BostonJAL is reinforcing its alliance activities by advancing a
European joint business with British Airways and Finnairand a transpacific joint business with American Airlines.*1
We are increasing code-sharing in these joint businesses
to maximize cumulative revenues from the respective
business domains.
We also entered partnerships with airlines outside
oneworld, such as code-sharing with China Eastern
Airlines and China Southern Airlines in October 2015

Chapter TOP

Contents

39

Moscow
MoscowMoscow
LondonLondonLondonJAL
Group
Business Operations and Financial Status
FrankfurtFrankfurtFrankfurt
Paris Paris ParisInternational Passenger Operations

Shanghai
ShanghaiShanghai

BostonBoston Boston
ChicagoChicagoSan Francisco
San Francisco
San Francisco Chicago
New
York
New York
New York

Guangzhou
Guangzhou
Guangzhou
HanoiHanoi
Delhi Delhi
Delhi Hanoi

Dallas/ Fort /WorthFort
DallasWorth/ Fort WorthLos Angeles
Los Angeles
LosDallas
Angeles

Product and Service
Enhancement
Honolulu
HonoluluHonolulu
ManilaManila Manila
Bangkok
Bangkok
BangkokAmong strategies for minimizing passenger stress on long flights on international routes, JAL is revamping its aircraft to
the JAL SKY SUITE configuration,
which“New Spacious Economy” seats and full-flat seats.
Kuala Kuala
LumpurLumpurKualaoffers
LumpurSingapore
Singapore
Singapore
We will develop additional routes
in stages
to connect more locations around the world, while enhancing cabin amenity
and comfort.
JakartaJakarta Jakarta

SydneySydney Sydney

JAL SKY SUITE operated routes (as of July 1, 2016)

JAL SKY WIDER

New Spacious Economy

JAL JALSKY SKY
SUITE
JALSUITESKY
777 SUITE
777 777JAL JAL
SKY SKY
SUITE
JALSUITESKY
767 SUITE
767 767
JAL JALSKY SKY
SUITE
JALSUITE
SKY
787 SUITE
787 787
NaritaNaritaroutesroutesNarita routes
NaritaNaritaroutesroutesNarita routes
NaritaNaritaroutesroutesNarita routes
HanedaHanedaroutesHanedaroutes routes

HanedaHanedaroutesHanedaroutes routes

Narita / Haneda

Helsinki
Moscow
LondonParisFrankfurt

Guangzhou
Delhi Hanoi
Bangkok

ChicagoSan Francisco

Shanghai

Los Angeles

New York

Dallas / Fort Worth

Honolulu

ManilaBostonKuala Lumpur
Singapore
Jakarta

In accordance with our concept of evoking “a one class higher
feel,” we equipped the economy class cabin with the “NewSpacious Economy” JAL SKY WIDER seats, which provide more
legroom. The business class cabin is furnished with JAL SKY
SUITE full-flat seats offering unobstructed aisle access from every
seat. In fiscal 2015 we began revamping our 787 aircraft with the
JAL SKY SUITE configuration, in addition to our 777-300ER and
767-300ER aircraft.
A total of 33 JAL SKY SUITE aircraft are operating on 22
routes. The New Spacious Economy Class provides a wider seat
pitch to provide up to 10 cm more legroom, thus offering theworld’s largest class of space compared with other airlines andsignificantly enhancing passenger comfort. The 787 Economy
Class adopts an eight-abreast seating arrangement, compared tothe industrial norm of nine-abreast, to offer 5 cm more seat width.
In recognition of our efforts, JAL Economy Class wasawarded Best Economy Class Airline Seat at Skytrax’s 2015 World
Airline Awards.
We will revamp the 777-200ER with the JAL SKY SUITE
configuration, which will be introduced primarily on Southeast Asianand Hawaiian routes.

9-abreast seating commonly used on 787 aircraft

1

2

3

JAL SKY SUITE 787
Narita routes

9

2

3

4

5

6

7

8

International Cargo
JALCARGO’s products are divided into four categories according
to differing customer needs: temperature control, speed, protection
and care, and guaranteed delivery.
To meet the needs of various industries, JALCARGO offers
systematically categorized products and services that respondaccurately to diverse shipper requirements.

Economy Class / JAL SKY WIDER 	Temperature control: We transport perishables, chemicals,
pharmaceuticals and other products requiring strict temperature
control at the proper temperatures.

	Protection and care: Precision instruments, musical instruments, works
of art and other items that require extreme caution are handled andtransported in a manner that protects them from physical impacts
during transit.
	Guaranteed delivery: This service guarantees loading on flights
specified by the client.

New type of full-flat seat88-abreast seating	Speed: The transport time is shortened. We help customers conduct
efficient production management and inventory planning.

Elegant wood pattern interior

40

Business Class / JAL SKY SUITE III

7

Sufficiently increased legroom[Temperature control]

Fixed-temperature containers
Use of a high-performance heatstorage and vacuum insulationmaterial enables temperature control
free from the influence of external air.
In addition to information on transportconditions, we can provide realtime data on such environmental
parameters as temperature, physical shocks and location.
[Protection and care]

Equipment for finished vehicles
Special equipment equippedwith handles enables the cargocompartment of a passenger plane toaccommodate finished vehicles.

As new initiatives in fiscal 2015, we developed a new passive
container and equipment for carrying finished cars on passenger
aircraft.
Chapter TOP

Contents

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6First Class / JAL SUITE

6JAL SKY SUITE 787 configuration

1

JAL SKY SUITE 767
Narita routes
Haneda routes

59-abreast seating

SydneyJAL SKY SUITE 777
Narita routes
Haneda routes

441JAL Group Business Operations and Financial Status

Domestic Passenger Operations

Review of Fiscal 2015

Business Outlook for Fiscal 2016

In fiscal 2015, we resumed seasonal operations on six local
routes that had been suspended. We also started code-sharing
with Amakusa Airlines as part of our contribution to further
improving convenience and revitalizing regional economies. JAL
SKY NEXT operated routes were expanded to routes to andfrom Itami Airport, following routes between Haneda Airport
and regional airports.
We launched the JAL Express-Tag Service at Haneda,
New Chitose, Itami, Fukuoka and Naha airports in accordancewith our JAL Smart Style concept of “simple, speedy, andconvenient.” We also introduced a smartphone application
to inform users of waiting times at security checkpoints at
Haneda Airport. This service shortens the time required toreach a boarding gate. We installed JAL Charging Stations at
New Chitose, Itami and Naha airports to provide free charging
services for smartphones and computers.
Besides introducing new Ultra SAKITOKU fares, we
increased the number of discount flights during high seasonsfor flying to hometowns or holidaying. Applicable routes ofadvance purchase connection fares were expanded to promote
regional exchanges and revitalization. We participated actively
in regional revitalization programs and events organized by
the central and local governments to promote Furusato Waricoupons, thus contributing to efforts to attract more visitors toregional Japan. Japan Explorer Pass fares were introduced in
December to attract inbound demand and give visitors more
opportunities to visit regions across Japan.
The JAL Dynamic Package service, which permits
users to package their own air tickets and accommodation,
conducted a full renovation of its PC and smartphone sites toimprove viewability and usability. It undertook a full upgradeof available optional plans to provide a wider range ofcombinations.

In fiscal 2016, we will continue operating six summertime local
routes and two flights per day on the Haneda-Yamagata route
under the “competition slot” program*1 to enhance passenger
convenience and contribute to regional development. The new
JAL SKY NEXT configuration will be introduced to all applicableaircraft during fiscal 2016. In addition, we will expand thecontent of free inflight video programs and enhance Internet
access and convenience.
We plan to open a Diamond Premier Lounge at New Chitose
Airport and upgrade our facilities at Itami, Fukuoka and Naha
airports to create new value and an enhanced service offering.
With regard to fares, we are focusing on customizationand online services. We will be proactive in making effective
use of social media and mobile phones, while expanding the
product line offered in the JAL Dynamic Package. We will also
make our Japan Explorer Pass available in multiple languages
to attract visitors from more countries.
*1	If a flight route proves difficult for a single airline to maintain or reinforce,joint proposals for route enhancement will be solicited from local
communities and airlines. These joint proposals will be evaluated, andHaneda Airport’s domestic flight slots will be assigned to those making
the best proposal.

Other 13 %Fiscal 2015
revenue by
category

Internationalroutes43%

Domestic routes 44%

JAL SKY NEXT “Class J”
Revenue passengers carried

Load factor

Revenue passenger kilometers /Available seat kilometers(Billions of yen)
600

(Thousand passengers)
35,000(%)
100.0(Million passenger km)
40,000500485.2 487.4 487.5 501.2

30,000 30,020

31,218 31,644 32,114

36,443 37,084 36,306 35,869

80.0

25,000400

60.0

20,00063.1

64.0

66.1 67.9

200

20.0

5,000
0

0

2012

2013 20142015 (FY)30,00023,745 23,993 24,341

20,00020,00010,00010,00040.0

10,000100

30,00023,012300
15,000(Million seat km)
40,000J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

42

Passenger revenue

0

0

2012

2013 20142015 (FY)2012

2013 20142015 (FY)02012 2013 2014 2015

(FY)

Revenue Passenger kilometers (left axis)
Available seat kilometers (right axis)

A Diamond Premier Lounge at Haneda Airport

Chapter TOP

Contents

43

JAL Group Business Operations and Financial Status

Domestic Passenger Operations

Participation in Regional Revitalization Efforts
The JAL Group conducts a variety of activities targeting domestic and foreign markets aimed at fulfilling our responsibility
as a Japanese airline for assisting local communities in their efforts to revitalize their economies and activities. These
include tie-ups with local governments and initiatives to attract inbound passengers to regional cities.

Regional revitalization × JAL

Approaches to overseas markets

Regional communities seek to revitalize their region throughefforts to make use of their regional characteristics to create
an autonomous, sustainable regional society. In Japan, where
shrinking populations and declining industries in regional cities
are serious issues, every region is encouraged to promote its
traditions and tourism resources worldwide. It is also importantto promote the flow and interaction of people among regions inJapan.
The JAL Group is increasingly taking advantage of its strengths
as a network carrier to create demand for travel to regional
destinations by implementing an effective airfare policy andconducting other marketing initiatives. Under the JAL NEWJAPAN PROJECT, we are carrying out activities aimed atrevitalizing regional communities and enhancing their appeal incooperation with their local governments. We are introducing
initiatives to attract foreign visitors to Japan’s local regions, anddeveloping a number of activities targeting markets in Japan andoverseas.

The number of foreign visitors to Japan has trended upward
in recent years, registering a record high of 19.74 million in
2015. According to a survey by the Japan Tourism Agency,
all Japanese prefectures saw a significant increase from theprevious year in the numbers of hotel guests from abroad in
2015, but these tourists stayed mainly in the three metropolitan
areas*1. As their needs and interests diversify, more foreign
visitors are switching their travel arrangements from group
package tours to personal planning.
We responded to this change in travel planning by launching
Japan Explorer Pass, an online domestic fare plan designed totransport international visitors all over Japan. Flight tickets soldunder this plan, which must be purchased 72 hours prior to theintended flight at the latest, are available even after ticketholders
arrive in Japan. We will continue to develop more flexible tour
schedules to allow international visitors to enjoy pleasant visits tomore tourist spots across the country.

Approaches to domestic markets
	Use of Furusato WARI coupons to promote
regional revitalization

In fiscal 2015, we distributed regional information through the JAL
Tabi Plus Navi travel information site on the JAL website in a tieup with local governments. Other efforts included participation in
the Furusato WARI project—a revitalization program promoted by
the central and local governments.
We formulated a plan in cooperation with eight regional
governments to offer JAL Dynamic Package tickets at discounted
prices to holders of Furusato WARI coupons. This approach was
successful in attracting more tourists from the Tokyo metropolitan
area to regional destinations.
In fiscal 2016, we will continue to support local communities
in the JAL Furusato OEN WARI initiative through sales promotionof the JAL Dynamic Package.

Attracting foreign tourists to various parts of Japan

Shiretoko Peninsula, Hokkaido

Domestic Cargo
Shirakami Mountains and Aoike Pond, Aomori

In connection with the updatingof our core international cargosystem in April 2016, westarted integrated operation
with our core domesticcargo system, updated at the end of September 2014. This
integration has improved the convenience of cargo reservations
and contributed to dynamic management of domestic andinternational transport connections, as well as contributing toregional revitalization and growth in exports of local agricultural
products.

*1	The big three metropolitan areas are the Capital metropolitan area, Chukyoarea and Kinki area.

Benefits to JAL of increasing inboundtourists and regional revitalization

Trends in number of international visitors to Japan(10,000 passengers)

1,974

2,150
Historic villages of Shirakawa-go
and Gokayama

1,341
1,036

861

836
622

2010

2011 2012 20132014

Source: Japan National Tourism Organization

2015

2016 (Year)(Estimate)
Historic structuresof ancient Kyoto

	Creating demand for visiting regions by reinforcing
sales of discount transit fares

INBOUND / 2015 fiscal(April 2015–March 2016)

Itsukushima Shrine

Yakushima

44

21.36

millionSource: Japan National Tourism Organization

Chapter TOP

Contents

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

We encourage travel between regions by offering discount transit
fares for flights from one region to another via Tokyo, Osaka orother major cities. In fiscal 2015, applicable sectors of Advance
Purchase Transit Fare 28 were expanded. At the same time, we
increased the discount rate significantly to create demand forconnections while reinforcing regional promotion activities.
In fiscal 2016, the JAL Groupremains committed to contributing
to the revitalization of interregional
travel by leveraging the Group’sroute network to promote use ofconnections to local airports at
Haneda Airport.

Mt. Fuji

Faced with a shrinking population in Japan, we cannot expect tosee significant growth of demand for domestic flights. Considering
this situation, the inbound market offers new business opportunities
for obtaining new sources of stable year-round revenues, asseasonal patterns in other countries differ from those of Japan.
Boosted by expanding markets, growing numbers of charter andoverseas LCC flights are flying into regional airports directly fromoverseas. Under these circumstances, JAL is faced with growing
competition in the Japanese market from overseas airlines as wellas domestic competitors.
We responded by leveraging the strength of our extensive
domestic route network to launch the Japan Explorer Pass website
in multiple languages and began distributing information on widecircuit tours for Japan Explorer Pass holders. We will continue totake advantage of our network to communicate proposals overseas
and attract more visitors to Japan.
JAL’s partnerships withlocal governments and operators
associated with the inbound market
require it, as a Japanese airline, notonly to play a role in connecting one
location to another, but to play manyother roles for the nation as well. To
contribute to regional revitalization
and JAL’s own sustainable growth,
it is particularly important that we
encourage Japanese citizens torediscover and recognize again
the values of our own culture andYosuke Suzuki
Domestic Route Marketing,communities in cooperation with
Planning Group
stakeholders.

45JAL Group Business Operations and Financial Status(As of July 1, 2016)

Domestic Passenger Operations
Rishiri

JAL Group Route Network
Routes connecting regional cities with isolated islands are indispensable today, not only for business and tour passengers
but also for local residents. The JAL Group is committed to contributing to local communities and their regional
revitalization initiatives by maintaining local routes and offering high-quality services.
SapporoJapan Transocean Air Co., Ltd (JTA).
Okushiri

Kiyoshi Marukawa, President

KushiroEstablished as Southwest Air Lines in 1967, well before the return of Okinawa to Japan, Japan Transocean Air
continues to provide Okinawan residents with “wings” as it commemorates 49 years of service in 2016. The airline
operated on its original routes to provide connections between the main island of Okinawa and smaller, isolated islands
to support the lives of their residents. Today, in addition to these routes, it has twelve 737 aircraft operating on 13 routes
connecting Okinawa to Haneda, Chubu, Kansai, Komatsu, Okayama and Fukuoka airports and making a total of 70
daily flights. In 2015, the number of tourists visiting Okinawa marked a record high, boosted by a remarkable increase
in inbound demand from Asian countries and regions. The majority of JAL customers are tourists, and competition isintensifying among airlines. To survive the competition, the JAL Group attractively promotes the destination incorporating
the features of Okinawa and contributes to regional development as well. We will continue to pursue profitability while
maintaining our local routes.

Hakodate

Aomori
MisawaAkita
Yamagata

Ryukyu Air Commuter Co., Ltd. (RAC)
Takashi Irei, President

Kumejima

Yoron

Naha

Kita-Daito
MiyakoIshigaki46

Okinoerabu

TaramaMinami-Daito

Iwate Hanamaki

Sendai
NiigataOki
Komatsu
Izumo
TajimaNagoyaOkayamaMatsuyama
Kochi

Tokushima

HanedaOsaka

Hokkaido Air System Co., Ltd. (HAC)
Yoichiro Kuwano, President
Operating from Okadama Airport as its
hub, HAC provides Hokkaido residents
with convenient flights linking the cities
of Kushiro, Hakodate and Misawawith the isolated islands of Rishiri andOkushiri. After separating from the JAL
Group in fiscal 2011, HAC returned
under its umbrella in fiscal 2014. Its
three 36-seat SAAB 340B aircraft
fly 26 daily flights. Hokkaido covers
a huge area compared with Japan’s other prefectures, making
air travel particularly attractive: it takes an automobile about five
hours to travel from Sapporo in the southwest to Kushiro on theeast coast, while an airplane takes just 45 minutes. The routeconnecting Okadama to Kushiro and Hakodate is used mainly bybusiness passengers who travel weekly. Hokkaido has recently
seen a sharp increase in the number of inbound flights, and with
the Shinkansen “bullet train” now in operation, more passengers
are expected to visit the isolated islands. We intend to takeadvantage of our small, passenger-friendly aircraft and the JAL
Group’s high quality services to attract more individual travelers
and small groups of tourists in addition to business passengers.

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

Tetsuya Onuki, President
The JAL Group’s principal member airline covering regional routes, Osaka (Itami)
Airport-based J-AIR operates 192 daily flights on 31 routes in a network connecting
various regions to meet customer needs.
J-AIR provides about 20% of JAL’s domestic flights. We expanded our fleet of
50-seat CRJ200 aircraft and 76-seat EMBRAER 170 aircraft with the introduction thisyear of 95-seat EMBRAER 190 aircraft, the first to be furnished with Class J seats, on
the Osaka (Itami)-Kagoshima route in May and on the Osaka (Itami)-Sendai/Fukuoka
route in July. In fiscal 2016, our 20th anniversary, we will expand our local network ofroutes from major local airports.
About 50% of J-AIR flights operate on routes to and from the Tohoku region.
We have engaged actively in social contribution activities, including flight experience events and airline classes forchildren invited from Tohoku, in support of reconstruction efforts in the wake of the Great East Japan Earthquake.
All our J-AIR staff are providing warm-hearted community-based services in accordance with the JAL
Group’s goal, “To become the world’s most preferred and valued airline group.”

Japan Air Commuter Co., Ltd (JAC)
Hiroki Kato, President
JAC was established 33 years ago in 1983 to sustain and develop Amami-gunto archipelago routes.
The airline was funded 60% by JAL and 40% by 12 municipalities in the Amami island group. We beganwith three 19-seat DO228 aircraft flying four routes. Today, we fly ten 74-seat DHC8-Q400 aircraft andnine 36-seat SAAB340B aircraft. JAC now operates 20 routes that link regions and particularly remoteislands throughout West Japan. These include the islands Tanegashima, Yakushima and the Amami-guntoarchipelago in Kagoshima Prefecture from our base at Kagoshima Airport, in addition to the Chugoku andShikoku regions, and the island or Okinoshima in Shimane Prefecture from Fukuoka Airport.
In January 2017, we will introduce 48-seat ATR42-600 aircraft. Produced by the Airbus group, these
are the most advanced turbo-prop aircraft, and they are outstanding in terms of comfort and economy. Bysteadily upgrading equipment, the JAL Group continues to provide a highly convenient network that serves
remote islands of Kagoshima Prefecture and intricately links regions throughout West Japan.

Chapter TOP

Contents

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

A regional airline celebrating its 31st
anniversary in 2016, RAC provides
convenient connections with the isolatedislands of Okinawa. Operating from its
hub, Naha Airport, on the main island of
Okinawa, the airline operates 41 to 43
daily flights on 12 routes, with connections
to the islands of Amami Oshima andYoronjima to
the north,Minamidaitojima and Kitadaitojima to the
Fukuokaeast, Kumejima to the west, and Miyakojima,
Taramajima, Ishigakijima and Yonagunijima
in the Sakishima chain to the southwest.
These routes not only make it easy for
Oita
local residents to travel, but also contribute
Nagasakito the development of local industries inKumamoto
Okinawa, including tourism, the region’s
leading industry. RAC flew four 39-seatMiyazakiKagoshima
DHC8-Q100 aircraft and one 50-seat
DHC8-Q300 until they were replaced in April
2016 with a new fleet of DHC8-Q400 CargoCombi (CC) aircraft. The 50-seat DHC8Q400CC has 30% greater capacity and a
Tanegashimacargo compartment that is some 2.5 times
as large. The new planes will be phased in
until fully replacing the existing fleet by theYakushimaend of fiscal 2017. We believe these newaircraft will improve convenience for island
residents and business passengers as wellas help attract more tourists. RAC makes animportant contribution to the development
Amami-Oshimaof local industries by providing a fast massKikaijimatransportation system for transporting marine
and agricultural products from Okinawa’s
Tokunoshima
isolated islands.

Yonaguni

Memanbetsu

47

JAL Group Business Operations and Financial Status

Aircraft Investment Strategy and JAL Group Fleet

After confirming that investments will prove
effective, we are proceeding with an aircraft plan
to offer comfortable flights.
Introducing Comfortable Environment-friendly
Aircraft
We acquired six new 787 aircraft in fiscal 2015, while
decommissioning our aging 777 and 767 aircraft in stages.
Among JAL Group members, Japan Transocean Air took deliveryof the 737-800, Ryukyu Air Commuter, the DHC8-Q400CC and
J-AIR, two E170 aircraft..
We plan to invest 191 billion yen in aircraft in fiscal 2016.
After introducing seven 787 aircraft, which are 20% more fuelefficient and quieter than the aircraft they replace, our fleet willcomprise a total of thirty-three 787 aircraft. J-AIR will introduce its
initial E190, furnished for the first time with Class J seats, while
Japan Air Commuter will deploy its initial ATR42, a small aircraftfeaturing superior comfort and economy. By the end of fiscal
2016, the JAL Group will own a total of 230 aircraft—85 operating
on international routes and 145 on domestic routes.

Renovating the cabin to enhance comfort
With respect to cabin renovations, we will continue our efforts
to increase customer preferences, including introduction to ourinternational routes of 777-200ER aircraft revamped with JAL SKY
SUITE seats offering greater comfort. On domestic routes, we willcomplete the revamp of all 77 aircraft to JAL SKY NEXT offering
comfort and Internet connections by the end of fiscal 2016.
J-AIR’s ERJ aircraft will also undergo cabin interior renovations
and begin offering new Internet connection services.
From fiscal 2017, we plan to introduce the Airbus A350,
which offers high levels of comfort and fuel efficiency, andMitsubishi Aircraft’s small-bodied MRJ, which generates lessnoise and a lower environmental load. We will continue tomake every effort to improve comfort and convenience for ourcustomers.

Jumbo
777-300ER

13
4

777-200ER11

777-200

12

Mid-size(Billions of yen)

187.0 191.0(Number of aircraft)
224

226

230

161.0

67

aircraft

787-9

3

787-8

23

767-300ER

32

767-300

9

Small-bodied

63

aircraft

737-40012

737-800

51

56

aircraft

EMBRAER170

17

CRJ-200

9

DHC8-Q400

10

DHC8-Q400CC

2

SAAB 340B

13

DHC8-Q300

1

DHC8-Q100

4*1 Regional jet

Total
2014

2015

2016
(Expected)

(FY)

2014

2015

2016
(Expected)

(FY)

226

aircraftJ A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

48

The JAL Group fleet

aircraft

777-300

RJ*1

JAL Group’s aircraft investment

40(As of March 31, 2016)

Chapter TOP

Contents

49

JAL Group Business Operations and Financial Status

Other Businesses

We strive to enhance customer convenience and maximize
the JAL Group’s corporate value.
The financial results for the main two companies in this segment were as follows:

JALPAK Co., Ltd.
JALPAK Co., Ltd. endeavored to increase revenues by developing
and offering products in a timely manner in response to changing
demand.
In fiscal 2015, JALPAK handled 243,000 passengers travelingto overseas destinations, down 11.7% from the previous year,
partly due to uncertainties in Europe. This downturn was offset,
however, by increased sales of the JAL Dynamic Package, which
boosted the number of domestic travelers to 2,429,000, up 5.6%
from the previous year.
As a result, operating revenue (prior to elimination ofintercompany transactions) increased by 1.4% from a year earlier
to 172.2 billion yen.
In fiscal 2016, we are continuing to listen to customer
feedback to enhance our ability to respond accurately todiversifying needs and provide a pleasant travel experiencecustomers can enjoy only with JALPAK.
In planning new products, ourpersonnel in many departments
take advantage of their expertise
to identify the varying needs ofcustomers precisely and develop
an offering of high-quality trips
that assure peace of mind
through rigorous quality control.
We distributed “white
pamphlets” introducing ourdomestic and overseas products
at the beginning of the fiscal year, and are continuing to provide customers
with special product pamphlets for different destinations and seasons as theyear goes by. We also prepare special pamphlets for JMB members only.

JAL’s Commitment to Service Quality
JALCARD, Inc.

The Quality of Service Envisioned by the JAL GroupOn-time Performance:
JAL’s provision of essential quality......................... 52
On-time Performance:
Collaborative system supporting
the world’s No.1 on-time arrival rate...................... 54
Comfort:Making travel increasingly comfortable.................. 56
Comfort:A spirit of hospitality engendering
unparalleled service............................................... 58

Contents

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

50

JALCARD, Inc. sought to increase its membership throughvigorous campaigns using the Internet and a direct-mail strategy
and by encouraging and accepting applications on tablets at major
airports and increasing sales staff. We made concerted efforts toraise awareness of our products by providing short TV programs
and sponsoring cultural events. We also issued a JAL JCB Card
(Disney Design) with Mickey Mouse portrayed in a pilot’s uniform.
Thanks to these efforts, membership increased by 91,000 to
3,129,000 since the end of March 2015.
The number of transactions rose steadily as we increased
the number of partner shops offering double-miles and introduced
initiatives to encourage card usage and to promote card sales anda shift to more prestigious cards. As a result, operating revenue(prior to elimination of intercompany transactions) increased to 20.4
billion yen, a year-on-year improvement of 4.2%.
In fiscal 2016, we will endeavor to provide consumers withmore opportunities to experience the real joy of travel by using ourcredit card.

51

The Quality of Service Envisioned by the JAL GroupOn-time Performance

JAL’s provision of essential quality
The JAL Group’s Corporate Philosophy is to provide customers with unparalleled services.
The most essential quality of an airline, ensuring on-time performance with the highest priority placed on maintaining
safety, is our proud mission. Building on this foundation, the JAL Group embraces service quality distinguished by attention
to every small concern arising from the customer’s perspective.

Mental vector alignment by
every employee
Major Airline Companies
Category
World No.1

Asia-Pacific Major
Airlines Category
No.1

Alliance
Category
No.1

JAL on-timearrival rate

JAL on-timearrival rate

JAL affiliates’ on-timearrival rate

89.44 %

89.44 %

80.97%

Fourth “triple crown” for on-time arrival rate
JAL placed first among all major international airlines in the on-time arrival category on bothits domestic and international routes during the year from January to December 2015 inrankings compiled by the U.S.-based FlightStats flight status and travel planning service
based on various analyses of airline on-time arrival rates. JAL also ranked first in the best
major Asia-Pacific airlines category, and the oneworld airline alliance of which JAL is amember placed first in all three categories with relevance to JAL.
JAL is the only airline in the world to have won this “triple crown” (first place in three
categories) even once, and this marked the fourth time it has achieved this distinction
1(following 2010,* 2012 and 2013).

On-time performance with safety as its firstpriority is an essential factor contributing to
the service quality of a public transportationcompany, which enables passengers
to optimize use of their precious time.
Realizing this performance requires
acquiring passengers’ understanding andcooperation with the on-time departure
concept and marshalling the combined
efforts of every member of the JAL Group.
Aircraft operation involves
cooperation among many divisions,
including the reservations, airport, in-flight,
ground handling, cargo, maintenance,flight, passenger cabin, sales and othersupport and headquarters planning
divisions, among others. To achieve ourcommon goal of on-time performance,
the personnel in all our divisions mustalign their mental vectors for each andevery flight and perform their duties with
precision. It is also essential to make thebest baton pass from division to divisionand from staff member to staff member
between assignments.

Our ability to align our mental
vectors and consider the next person inline in order to make the best baton passis crucial to achieving superior on-time
performance.
To improve our on-time performancefurther, moreover, we must continue tofoster creativity and innovation based on
the concept, “Today should be better
than yesterday; tomorrow better than
today.” We will continue to build on thisfoundation into the future through steadyand consistent efforts to make even minor
improvements and refinements, both insideand outside our divisions.

Achieving on-time
performance by observing
the JAL Philosophy
All JAL Group employees are taught toreflect during the conduct of their daily
duties on the JAL Philosophy, which
provides the awareness, values and wayof thought required for working with JAL
products and services, including on-time
performance.
The 40 tenets of the JAL Philosophy
include “align mental vectors,” “make thebest baton pass” and “today should bebetter than tomorrow; tomorrow better
than today.” Put simply, every employee’s
consistent observance of the JAL
Philosophy enables us to provide safe,
comfortable journeys by air with superior
on-time departure and arrival performance.
Keeping the JAL Philosophy inmind at all times, we shall continue ourefforts to improve on-time performance
while ensuring flight safety, and todisseminate awareness of the proud
on-time performance quality of Japan’stransportation services.

*1	There was no alliance airlines category in 2010, but JAL placed first in the (subsequently discontinued) Asia regional
airlines category that year.

On-time
performanceJ A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

52

Customers
Convenience

Comfort

SafetyChapter TOP

Contents

53

The Quality of Service Envisioned by the JAL GroupOn-time Performance

Collaborative system supporting the world’s No.1
on-time arrival rate
All JAL personnel work as a single coordinated team for the sake of each flight.
Their aim is to make the best baton pass through meticulous work procedures and precise cooperation.

Provision of safe, on-time flights is the most important promise
an airline must fulfill to earn the confidence and trust of its
passengers. The time required to cover a certain route may
change depending on the direction of the wind. Standby status issometimes required when departing and arriving flights overlap.
Even under such conditions, every division and staff member
involved in a flight strives to act with speed and precision to makethe best baton pass and maintain our on-time performance. We
will continue to cooperate and innovate above and beyond ourjob categories to ensure a world-leading level of quality in JAL’s
safety and on-time performance.

Reservations andticketingSpot-inCheck-in

Fueling

Security check area

Flight operation andload control

Trained personnel informcustomers of their departure
times and other requisite
information while handlingreservation and ticketing
operations with precision.

The aircraft marshallers work withthe wing tip wardens to guideaircraft to the proper parking slot
after landing.

Check-in personnel manage
passenger and baggage check-in
procedures, direct passengers tothe boarding gate and keep theminformed of the time required
to reach the gate and the timeboarding begins.

An appropriate amount offuel is pumped into eachaircraft depending on theweather conditions, number ofpassengers and crew, and cargoweight. JAL’s consideration of theenvironment is evident in theseand other efforts to avoid waste.

Obtaining every passenger’s
cooperation in advanceenables security checking to be
conducted both smoothly andrigorously.

All relevant information (suchas information on weather andairport conditions) is gatheredand passed on to the flightcrew for use in determining theappropriate route, direction andaltitude.

Previous day

Pre-departure

Baggage pick-up

After checking reports fromthe flight crew and mechanics
concerning the previous flightand the aircraft’s condition, theflight crew determines a flightplan for the current flight andbriefs the cabin attendants.

Passengers are asked to takecare to make sure they pick up
the correct baggage. Every effort
is made to enable passengers
to round off their trip nicely bypicking up their baggage with nounnecessary delay.

ArrivalIn-flight

Welcoming
passengers at theboarding gate
Connecting passengers are
informed of the shortest routeto their next flight’s boardinggate to help ensure a smoothconnection. Support is provided
to facilitate disembarkation ofpassengers requiring help or
traveling with small children.

Blockout

Pre-departure

Airport

Maintenance checks

Cleaning and stocking

Catering

Boarding gate

Baggage andcargo loading

Cabin attendants

Seating assignments are madeand boarding passes prepared inadvance for passengers travelingin groups. Passengers requiring
assistance are also identified toensure that boarding procedures
go smoothly on the following day.

Mechanics inspect approximately
50 designated points for dents
or other damage to the aircraft
after landing. Measures are taken
in response to reports from theflight crew concerning problems
or malfunctions.

The personnel who clean
the seats, restrooms andother facilities and tidy up or
replenish such items provided
for passengers as blankets,
pillows and in-flight magazines
play a vital role in maintaining a
comfortable cabin environment.

The in-flight meal delivery trucks
must not only be hygienic,
but they must also leave theprocessing center and deliver
meals at the proper time toensure on-time performance.

The various steps taken to
ensure smooth boarding include
priority boarding for passengers
in need of help and handling ofbaby strollers that cannot betaken onto the aircraft.

Precise plans are formulated forquick, accurate weight balancing
based on data on such factors as
the number of passengers andsize and weight of the cargo.

The cabin attendants contributeto on-time departure by preparing
to welcome passengers quickly,
helping them to find their seatsand store their baggage smoothly
and otherwise confirming cabin
safety.

Chapter TOP

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

54

Pre-arrival,
immediately postarrival

Flight crew

Contents

55

The Quality of Service Envisioned by the JAL Group

ComfortMaking travel increasingly comfortable
JAL makes every effort to provide facilities and services that ensure its passengers a pleasant, comfortable flight.
High-quality services reflecting ongoing consideration of comfort and convenience have been developed with a priority on
the passenger’s perspective.

Entertainment

Seats

Lighting

Management

Noise

Management

In-flight
meal

Customers

Wi-Fi

TemperatureManagement

LoungeSeeking to rise a class above oninternational routes

Key improvements in comfort on
domestic routes

We pursue high quality and full service at multiple contact points on
our international routes, including our airport lounges, cabin seats
and in-flight meal service, with the aim of offering unparalleledservices that assure passengers a consistently fresh and enjoyable
travel experience. Our JAL SKY SUITE aircraft, in particular,
developed based on the concept of incomparable, one-classabove quality, realize a completely new level of in-flight comfort.
In-flight entertainment on our current aircraft comprises
over 300 programs, and many JAL SKY SUITE aircraft offer evenmore through Internet connectivity services. An array of services isprovided to enable individual passengers to enjoy their time in thesky in a way that suits their personal tastes.

The products and services provided on our domestic routes
are designed to give passengers full satisfaction by combining
convenience with simplicity. The JAL SKY NEXT aircraft we began
adding to our fleet in May 2014 are flown not only on core routes,
but also on many regional linking routes. We plan to replace all
77 aircraft operating on JAL’s domestic routes with these newgeneration aircraft by the end of 2016. All seats on these aircraft
have leather seat covers and offer in-flight Internet connectivity. Our
subsidiaries are also adopting cabin equipment specifications toimprove quality.
We are also pursuing wide-ranging efforts to enhancecustomer convenience based on the JAL Smart Style concept.
These include introduction of the JAL Express Tag Service for fasterbaggage check-in.

In-flight
sales

JAL SKY NEXT First ClassJ A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

JAL SKY PREMIUM
JAL SKY SUITE III

56

Chapter TOP

Contents

57

The Quality of Service Envisioned by the JAL Group

Comfort

A Spirit of hospitality engendering unparalleled service
We offer personalized service integrating the commitment of every individual staff member into a single whole inaccordance with the JAL spirit of hospitality.
We pay constant attention to every detail during a flight to ensure our passengers a comfortable journey with aminimum of stress.

Conscientious creation of a comfortablecabin environment

In-flight comfort is composed of three personal elements: thefacilities (e.g., the aircraft and seats); the services (e.g., in-flightmeals and entertainment); and the hospitality provided by every
cabin attendant.
JAL cabin attendants take responsibility for passengers’
safety on the aircraft, and do everything in their power to provide
the most attentive possible service based on the Japanese spiritof hospitality. Every passenger has different personal preferencesand expectations concerning in-flight service. Our cabin attendants
treat them as individuals from the moment they board the aircraft,
and respond to each situation as it arises with their sensitivity
attuned to the passenger’s personal feelings in every encounter.
As concerns meal services, the cabin attendants makea special effort to ensure that meals taste as fresh as possible
depending on the ingredients, and serve them in the best possible
condition. They conduct the meal service in a refined, precise
manner reflecting a desire for passengers to enjoy their meals fully
as their highest priority. Our SKY OASIS service makes snacks
and beverages available to passengers whenever they wish onlong flights.

JAL cabin attendants take care to provide high-quality service
in terms of temperature, lighting and sound control to ensure
passengers’ ability to travel in optimal comfort on long journeys
inside the enclosed cabin space.
The cabin temperature is set higher than usual on routes
with resort destinations, for example, on which passengers tend towear lighter clothing, while the cabin is kept as quiet as possible atnight for the comfort of sleeping passengers, with cabin attendants
remaining on standby to serve passengers who stay awake. These
are among the many ways in which we accommodate ourselves topassengers’ needs.
Another important role of our cabin attendants is to maintaincleanliness and harmony in the cabin. As part of their safety
checks, they also make sure passengers can use the restrooms in
comfort, while also keeping watch for passengers who are feelingunwell and sharing a friendly word with them.
In the future we will continue to combine creativity with
innovation to ensure our ability to keep a close watch on ourpassengers at all times, and to assure them a pleasant journeyfrom takeoff to arrival.

External evaluations
JAL earned first place in the International Airlines Loyalty category
in the “Fiscal 2015 Japan Customer Satisfaction Index, 4th Survey
Results” for the third consecutive year. We were also awarded
first-place honors in the Customer Satisfaction category for the
first time.
Since we failed to gain first place in the domestic category,
however, we will continue our efforts to improve the quality of ourservice further on both our domestic and international routes.
The JAL SKY WIDER II seats installed in our Boeing 787s inDecember 2014 won a Good Design Award in fiscal 2015. This
follows our receipt of the same award in fiscal 2013 for the first JAL
SKY WIDER seats we introduced in our Boeing 777-300ERs and767-300ERs. These economy class seats are designed to afford
more legroom on international routes
Encouraged by this external recognition, we will continue
our efforts to provide satisfaction for every passenger flying on thewings of the JAL Group.
J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

Considering the comfort of every individual
passenger

JAL SKY WIDER

58

Chapter TOP

Contents

59

The Quality of Service Envisioned by the JAL Group

ComfortFully configured facilities and amenities with JAL’s uniquepersonal service added. Seeking to provide unparalleledquality through considerate services
the guiding policy that serves as afoundation for all our employees.
We view our services as composedof facilities, amenities and personal service.
Unparalleled services are made possible
by resolutely combining all three. We seek
to give our customers full satisfaction
by providing a highly amenable cabin,delicious in-flight meals and wholehearted
service from our cabin attendants.
All our personnel, from those whoplan our services and those who prepare
and support them to those who actually
serve our customers, practice the JAL
Philosophy. Focusing on our customers’
needs and desires, we will continue ourefforts to provide unparalleled services inthe three areas of facilities, amenities andpersonal service.

Human Resources Management
Hikari Baba (left) andToshiyuki Urasawa (right)[Products and Services Planning Division]Operations Division, Operations Group

Human Resources in the JAL Group
Creating Workplaces Where Diverse
Human Resources Can Participate. ...................... 62
Changing Workstyles.............................................. 64
Health Management................................................ 65
Promoting Diversity Including Promotionof Women’s Careers.............................................. 66
Practicing Diversity.................................................. 68

Contents

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

60

The JAL Philosophy of providing customers
with unparalleled service requires us tooffer customers the world’s highest levelof safety, on-time performance, comfort
and convenience with the aim of achieving
the world’s highest level of customer
satisfaction.
One of the targets of our Medium
Term Management Plan for the fiscal 2012
to 2016 period is to provide customers
with unparalleled services that continuously
deliver fresh, enjoyable travel experienceswith the aim of achieving the No.1
customer satisfaction rating by fiscal 2016.
Our vision of customer satisfaction
calls for stimulating a desire in customers
to fly with us again and a willingness torecommend us to others, raising our
profitability and making a meaningful
contribution as a Japanese airline to theongoing development of society.
All our thinking, values and behavior
concerned with achieving customer
satisfaction originate in the JAL Philosophy,

61

Human Resources in the JAL Group

Creating Workplaces Where Diverse Human Resources Can Participate

We are focused on developing human resources for the
next generation that will practice the JAL Group Corporate
Policy “to become the world’s most preferred and valued
airline group” through action by every member of our staff.
Creating workplaces promoting theengagement of diverse human resources

Changing workstyles

Human resources development

ng
tra
ini

Life-planning seminar

Course for employees
in their 50s

Ca
re
er

Course for employees Course for employees
in their 30s
in their 40s

Mental health andmanagement training

In-company instructor development training

Team building training

New employee education
leadership development training

Leadership trainingSk
tra ills im
inin pg rovementAirline business training

Management performance improvement training

Global development training

Next-generation training

Manager 3rdyear trainingGr
tra adeini -bang se
Leaders’ workshop
d

y
op
h
ty

os

New employee education

Motivation training

Wode menve ’s clo aAc pme reer
Active training
tiv nt
et
ra
ini
Se
ng
Online course
lf-d
eve
lop
me
Specialized education and training for individual companies or divisions Spent
cia
and lizeexe d trarcis inin
es gCreating a corporate climate,changing mindsets

New areamanagertraining

Training to promote the active participation of women

Systems

New manager training

Education and training for corporate career paths

Realizing diversity

Sa
fe

hil

New value creation
Leveraging the abilities, experience,
sensitivity and values of each employee, regardless of
attributes such as gender, original company, nationality or age.

Ma
imp nagerov menem t pent erf
tra orm
inin ang ce

JAL Group fundamental education and training system

Safetyseminars

Promoting diversity
We set targets for promoting women’s careers in fiscal 2014 andare implementing specific measures to achieve them based ona clear management commitment. We set up a new Diversity
Promotion Group in the Human Resources Management Divisionin April 2016 with the aim of further intensifying efforts to mobilize
all employees. This organization is actively engaged in promoting
employment of older people and increasing opportunities forparticipation by the disabled. Courses to increase understandingof LGBT people (sexual minorities) are helping to form a corporate
climate that recognizes diverse values, creates open workplaces
and revitalizes organizations.
We will continue these efforts to establish a corporate climate
to create new values, leveraging the rich diversity of JAL Group
employees.

JAL Group’s fundamental education and training systems
Each JAL Group company and division has formulated its own
carefully structured education and training system to prepare
employees to provide unparalleled service to customers.

Safetyseminars

Promoting workstyle reformIn fiscal 2014, we established the Office for Promoting Workstyle
Reform to change the mindsets of employees and develop
infrastructure that enables everyone to build careers with a greater
sense of satisfaction.

Chapter TOP

Contents

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

62

Every JAL flight requires the efforts of many employees. We
believe that the best way to provide customers with unparalleledservice is by drawing on the energies of individuals in different roles
to create an unbroken, integrated stream of strengths following
a single path. Put simply, the power of our human resources isthe origin of the JAL Group’s strength. To interact with customers
with heartfelt hospitality requires not just improving knowledge,
techniques and other day-to-day skills, but also a refinement ofcharacter. I believe my job is to help each employee grow into a
more attractive human being.
The JAL Group has developed many systems andeducation programs to encourage employees to believe in theirown potential, to challenge new fields boldly to deepen our
experience, and thus to become active as true leaders. Based on
our belief that mobilizing the strength of diverse human resources
with different experiences, values and perspectives to constantly
generate new value is the best business strategy for winning theintensifying competition, we have expanded opportunities for
employees with abilities and motivation to be active beyond thelimits of their original company and recruitment region, putting themerit system first.
We will maintain these strategies into the future, promoting
diversity and changing workstyles, while also taking a serious
interest in the health management of the employees gathered
under the JAL Group banner to ensure their ability to exhibit theirabilities at the highest level.

LP

Executive Officer, Human Resources Management

New employee education
Education for new recruits initiated immediately after they join
the company covers the foundations of the JAL Group, including
the JAL Philosophy, safety and the corporate brand. A four-day
new employee training course held in Tokyo from April 1, 2016
was attended by more than 1,100 employees from 32 Group
companies with senior colleagues serving as instructors. Because
the course brought several Group companies together, the trainees
split into teams. This annual course lays the groundwork for
cultivating a sense of oneness of the JAL Group as a whole.

JA

Takuya Oda

Joint education course for new employees

Education and training are generally systematized as
employment grade-based training, management skills improvement
training, skills improvement training, career training, women’s careerdevelopment, active training and self-development (online course).
Each course or educational activity adopts a cross-departmental
style to encourage trainees to deepen bonds with co-workers andgain a higher level of motivation toward work. The management
skills improvement training, in particular, further cultivates theirbusiness skills to include skills supporting logical, effective problemsolving as well as knowledge and techniques for facilitation (runningmeetings). Three new types of training focusing on logical thinking
and problem-solving, facilitation and marketing fundamentals havebeen established and made accessible to any interested memberof the JAL Group in order to foster understanding of the essential
elements of marketing.
We will continue to enhance the quality of our programs
and maximize their effectiveness, centered on the JAL Education
and Training Center. We will work even harder to develop humanresources who embody the JAL Philosophy and realize the JAL
Group Corporate Policy.

In addition to conducting education and training by job category
and Group company, the JAL Group has created a common
education and training program for the entire Group that focuses
on developing leaders and safety and service professionals.

General staff

MessageNurturing overseas staff
We have formulated a Global HR Policy and are focusing on
developing staff who are hired overseas, building development
programs including assignments to work in Japan, Japanese
language training and global training.

Skill Upgrade Workshop for changing workstyles

A common education and development
program of the JAL GroupJAL Philosophy Education

Developing infrastructure that encourages action
To develop infrastructure that supports the participation ofdiverse human resources, we have constructed a common
training program and a human resources database that is sharedGroup-wide. We specify the positions recognized as importantfor our business and management as Group Management (GM)posts with integrated remuneration and compensation. We haveadopted the GM system for assigning highly motivated employeeswith strong potential to these positions, regardless of their originalGroup company.

Exchange of opinions in the JAL Nadeshiko Lab

Managerial staff

The JAL Group believes that promoting the active participationof diverse human resources is the wellspring of new corporate
value creation, and we continue to pursue the diversity promotion
initiatives listed below for this reason. Our aim is to be a company
in which anyone can play an active role, regardless of gender,
company of employment, nationality, age, sexual orientation,
gender identity or disabilities.

63

Human Resources in the JAL Group

Changing Workstyles

Health Management

We are striving to develop a workplace environment where
every employee can be active and exhibit their best abilities
and individual attributes.

The JAL Group promotes health management to ensure that its
human resources — our most important asset — can fulfill theirduties in good health (both mental and physical) and with a sense of
security, enabling us to provide customers with unparalleled services.

Concrete initiatives(1) Startup workshops
One internal division served as a pioneer for the rest of thecompany by introducing an IT tool in fiscal 2014 that transformed
its attendance management rules and sought to realize apaperless, free-address office. This resulted in a substantial
reduction in overtime work compared with the previous year.
Subsequent steps saw awareness rise companywide from July
2015. Workshops were held for about 4,000 employees in all JAL
Group back office divisions, with colleagues from the pioneering
division serving as instructors to relate their experiences, theaims of the initiatives and planning required, and the specific skills
needed to improve operational efficiency.

“Pursuing the material and intellectual growth of all our employees” requires that they be healthy.

The Procurement Division, which pioneered workstyle reform, has created an environment for working independently of location andmade working easier for non-Japanese employees and employees with work hour restrictions to care for children or elderly family
members. It also makes use of time saved through improved productivity to conduct procurement education for developing humanresources internally.
Programs are provided to educate employees in necessary business skills, thus helping them improve their skills. These efforts will
ensure that employees will continue to apply knowledge and experience gained inside and outside the company to create diverse values
free from restrictions imposed by existing frameworks, thus helping the company grow as an airline capable of providing products andservices to meet diverse customer needs.

Follow-up by medical experts
In addition to regular medical checkups,
careful follow-up procedures are conductedby medical experts such as professional
occupational physicians, public healthnurses, clinical psychiatrists, pharmacists
and fitness trainers according to the needs

Employing free-address offices and layout variations to realize workstyles
independent of location

Seeking workstyle reform
As we feel it is essential to develop an environment where every
employee can work with ease and display their abilities, the JAL
Group has been making concerted efforts to change workstyles
since fiscal 2015.
All our employees are motivated to work and are improving
labor productivity. The extra time gained is used to promote a worklife balance for fuller lives, both public and private, and encouraging
self-development and healthier lifestyles. When employees put theirexperiences and learning back into their work, new value is created
which contributes to growth of the company as a whole. The JAL
Group is pursuing the following
initiatives aimed at increasing
labor productivity through thissynergy of life and work.

J A PA N A I R L I N E S R E P O R T 2 0 1 6

64(2) Operational rules and visibility
To construct systems that permit employees to work with anawareness of operational efficiency and hourly productivity,
new rules were established companywide for holding meetings,
using phones and email, and work completion times. Reportmeetings on attendance performance were also set up to enabledivision heads to analyze their division’s issues and report on
countermeasures. A corporate climate ensuring timely completionof work will be put in place, enhancing the visibility of attendanceissues in various divisions, such as overtime work and the use of
paid leave, and sharing information such as original innovations or
initiatives by the divisions.
(3) IT tools and office facilities
We have revamped our infrastructure to enable employees towork independently of location. We have already invested in IT
equipment, introducing tablets in the Flight Operations and Cabin
Attendant divisions and mobile phones and other mobile devices
in administrative divisions, and installing VDI (virtual desktops). We
are improving operational efficiency by such means as converting
documents into digital data, sharing internal information andrevising approval authorization standards. We are also revising ourteleworking systems and upgrading their operation regularly tomake them easier for employees to use.
Our intention is to continue laying foundations for further workstylereforms, to create an environment where everyone is equally active
and promote true diversity.

of the various occupational categories.
To assure flight safety and provide
unparalleled service across different timezones and in a cabin environment with low
air pressure and dry air, in particular, our fulltime in-house psychiatrists and physicians
provide all our flight operation crews(approximately 2,000 persons) with boththe legally required health examinations for
air travel and early health advice throughinterviews. Specialized trainers lead our(approximately 5,000) cabin attendants
in stretching exercises before and after
boarding. Videos of the stretching exercises
are installed in tablets issued to all cabin
attendants to help them practice them athome or in their travel accommodations,assuring that they will be in excellent
condition for their next flight.
	Workplace health promotion activities
conducted by Wellness leadersMore than 130 Wellness leaders have been
appointed in our offices throughout Japanto promote better health in the workplace.
They conduct wellness activities to raiseawareness of health and encourage
behavioral changes.
Their main activities are holding healthseminars and walking events at individual
workplaces, planning and organizing sports
festivals and conducting visits nationwide to
examine personnel using body composition
monitors. The activities are designed to beenjoyable and easy to continue in order tohelp prevent lifestyle-related diseases. The
Company and the Japan Airlines Health
Insurance Association also encourage theuse of stairs, napping and the closure ofsmoking areas at headquarters to support

employee health.
(1,700 employees participated in these
activities in fiscal 2015.)
Results of the activities
Through these activities, medical costs
paid per JAL employee or family member
is on average 20% lower in each age
group as compared with the national
average (for people under 60).

JAL has been honored with the
Health & Productivity Stock
Selection for two consecutive
years, and the Japan Airlines
Health Insurance Association also
received a commendation from
the Ministry of Education, Culture,
Sports, Science and Technology.
JAL was selected as Health & Productivity
Stock 2016 for the second consecutive
year by the Ministry of Economy,
Trade and Industry and Tokyo Stock
Exchange. (14 of the 25 companies
selected are repeat selections). The JAL
Group’s concerted efforts toward healthmanagement were also recognized in
the selection of the Japan Airlines Health
Insurance Association for commendation
as a Health and Fitness Promoting
Organization by the Ministry of Education,
Culture, Sports, Science and Technology
in fiscal 2015.

J A PA N A I R L I N E S R E P O R T 2 0 1 6

Aiming to create new value

The physical and mental health of all JAL
Group employees is indispensable in orderto “pursue the material and intellectual
growth of all its employees” and to“become the world’s most preferred andvalued airline group.” The health of ouremployees and their family members is,
as pointed out in the President’s message,
an irreplaceable corporate asset. In thisbelief, we established the JAL Wellness
2016 health promotion project to support
efforts by our employees, companies
and the Japan Airlines Health Insurance
Association to work together to improve
employee health.
The aim of this project is to tackle thekey issues of (1) lifestyle-related diseases,(2) cancer and (3) mental health based on
medical cost analyses and other tools,
raise awareness among all employees
and their family members concerning
self-health care, which involves adopting
proper lifestyle habits, acquiring the ability
to monitor their own health status throughregular health and cancer checkups, andassessing their own stress levels andfinding ways to deal with them.
To enhance health awareness, aninteractive booklet titled “JAL Wellness
2016 My Book” containing resolutions
based on health issues and the results ofpersonal and family health checkups is
distributed to all current and former JAL
Group employees.
The project centers on a five-year
plan, under which the Policy Review
Council and Evaluation Council, formed
under the auspices of the main Group
companies and the Japan Airlines Health
Insurance Association, will deliberate
the nature of its policies and theirimplementation each year. The results arereflected in activities of the following fiscal
year, and a report on the status of progressis presented to the Board of Directors.

Stretching lesson conducted before boarding.

Chapter TOP

Contents65

Human Resources in the JAL Group

Promoting Diversity Including Promotion of Women’s Careers

A JAL that shines with the diversity of its human resources
The JAL Group is promoting diversity with the aim of establishing itself as a company which promotes the participation ofdiverse human resources including women. As efforts aimed at changing workstyles and raising awareness among all our
employees, we have set a target of raising the ratio of women in management in the JAL Group from 15.6% (as of March
31, 2016) to 20% by fiscal 2023 year-end.

JAL efforts
Infrastructure provision(1)	Employees are permitted up to
three years of childcare leave. In
fiscal 2015, 782 employees (780
women and two men) took childcare
leave. The reemployment rate afterchildcare leave was 71.3% (100% foroperational planning positions and
70% for cabin attendant positions).
The timing of the return to work can be
adjusted according to the individual’s
circumstances.
(2)	JAL programs responding to employee
childcare responsibilities include
exemption from late night duty andshortened working hours, from which
many employees are benefiting.
(3)	Employees can use subsidies andservices for temporary childcare,monthly childcare, rented childcare
items and housekeeping services.
(4)	New leave systems introduced in fiscal
2016 include leaves for spouse transfersand leaves for fertility treatment. Thesesystems permit employees to continue
working in step with their life stages. In
April 2016, we eliminated the contractsystem for cabin attendants, giving ourcurrent contract employees regular
employee status and hiring all new cabin
attendants as regular employees from
April 2016.
(5)	The nursing care leave system has been
expanded to support employees who
provide nursing care by, for example,
enabling them to make free use of thespecial purpose cumulative leave system(for accumulating untaken paid holidays)
for nursing care.

Committed to placing the right talent in theright job and employing the merit system,
we are placing increasing numbers of
women in divisions that have had few
female employees in the past. This is
the third year in which cabin attendants
have been assigned overseas as part ofa program to give motivated employees
overseas and other assignments in which
they can gain experience and build theircareers. Training for women employees

Efforts by the JAL Group	Establishment of the JAL
Nadeshiko Lab

The JAL Nadeshiko Lab was establishedin November 2015 as a cross-functionalteam under the direct control of the
President. The Nadeshiko Lab engages inchanging workstyles, as well as in raisingawareness among employees, throughtwo mainstay Group projects concernedwith leveraging efforts toward women’s
career promotion throughout the JAL
Group. The Nadeshiko Lab is laying plans
for further research aimed at realizing awork environment where diverse humanresources can participate actively. Others

activities of the JAL Nadeshiko Lab
include organizing lunches that are open
to any JAL Group employee to create
communities as will as forums and otherfunctions offering a chance to hear theideas and opinions of top management or
invited lecturers. In these ways, it promotes
deeper understanding of diversity andincreases motivation among employees tocontinue working.
*All 43 JAL Group companies have formulated
action plans following the enforcement of the
Act Concerning Promotion of Women’s Career
Activities, including companies with fewer than
300 employees to which the act does not apply.

Training for female employees

Mama Cafe: training designed tocontribute to networking among
employees who have come back to thecompany after childcare leave.

Expanding opportunities for active
participation by employees with disabilities
A new concept calling for “increasing diversity in an environment
where disabilities are not hindrances and continuing to create
new value” was added to the corporate policy of JAL Sunlightin the current fiscal year. SKY CAFÉ Kilatto newly opened for
JAL Group employees on the third floor of the Haneda Aircraft
Maintenance Center on February 15, 2016.
Kilatto is operated primarily by employees with minor
mental disabilities. The name incorporates the hope that thecafé will be a place where the individuality and character of
employees will shine like stars. The staff prepare every cupof coffee or tea among the sixteen varieties on the menu withmeticulous care and operate the cash registers, receiving
payments and returning change with smiles and cheerful voicesreflecting an “always positive and happy” attitude.
Employees with mental disabilities are also employed
serving tea to visitors in the reception space on the fourteenth
floor of our Tennozu Headquarters.

MessageJunko Okawa
Director, Senior Managing Executive Officer,
Director, Communication Division

Customer Value Creation Project: training
deploying the unique perspectives
and experience of women to generatevalue in products and services that willencourage customers to choose them.
The project is helping to develop theabilities of JAL’s female employees.
Japan Airlines has beencertified with the “Kurumin”
mark as a company
that supports the next
generation of children.

Successive selection for the Nadeshiko Brand list
JAL was selected in both fiscal 2014 and fiscal 2015 for inclusion in the Nadeshiko Brand
list of enterprises pursuing diversity management by the Ministry of Economy, Trade andIndustry and the Tokyo Stock Exchange. The list recognizes companies for positioning the
career development of diverse human resources including women as a key management
strategy for surviving intensifying competition andengaging in various activities. The JAL Group willcontinue its concerted efforts to become a company thatoffers career opportunities for diverse human resources.

Efforts for the LGBT community
The JAL Group seeks to promote career opportunities fordiverse human resources, including women, persons withdisabilities, and employees who wish to continue employment
beyond the mandatory retirement age. A message fromPresident Ueki to employees titled “What We Must Do to Further
Promote the Career Success of Diverse Human Resources” inMarch this year also touched upon promotion of understandingof the LGBT community.
Efforts will continue to further a proper awareness andunderstanding of LGBT people among our management
executives and all JAL Group employees through e-learning andother approaches.
*LGBT, which stands for lesbian, gay, bisexual and transgender, serves as a
general term for all sexual minorities.

Since fiscal 2014, the JAL Group has positioned promotion ofcareer success by members of our diverse workforce as one ofour business strategies, and has reinforced its development andsupport systems to enable a variety of human resources including
women to exhibit their capabilities actively.
One major step toward making our company one in which
women truly play a leading role is the JAL Nadeshiko Lab, which
opened in November 2015. This lab is central to our efforts toimprove our corporate value by promoting women’s careers.
Raising awareness and changing workstyles are two keyphrases in psychological and functional terms for promoting
women’s careers. I can understand this from my own experience.
I spent many years in the Cabin Attendants Division, building mycareer while deciding when to take leave and when to work as I
encountered various events in my personal life. To facilitate creationof workplaces that give others the opportunity to have the samekind of experience, we must first develop an environment whichraises awareness to enable the sensitivity, abilities and experiencesof each individual, whether male or female, to be fully optimized.
This will open up many possibilities that women had to forego in
the past, spur the growth and development of women, and create
new values for the JAL Group. Promoting women’s careers does
not entail giving women preferential treatment, but rather enablingthem to work longer and truly to build their own careers.
The JAL Group is founded on the JAL Philosophy imbued in
all our employees. It is precisely for this reason that our employees
can consistently enjoy progressive careers. We will continue topromote resolute efforts, based on this foundation, to ensure that
not only women but all members of our diverse workforce candisplay their individuality to strengthen the JAL Group by serving asa source of competitive power and raising our corporate value.
Chapter TOP

Contents

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

66

	Reinforcing human resources
cultivation and corporate
culture development

also continues as part of efforts to further
their careers.
Striving to cultivate a corporate
culture that encourages further growthof human resources, we have included
human resources development for womenand other employees in performance
evaluations for management posts, andinterviews with management personnel
and the Human Resources Division forlower-ranking female employees aged 35
or younger.

67

Human Resources in the JAL Group

Practicing Diversity

A wide variety of human resources are active in the JAL
Group, irrespective of nationality or gender.
We take the utmost care to make it easy for anyone to workand to show their talents in our workplaces.

Multiple opportunities to take our careers up to the next level
precisely because we have workplaces with a majority of women
JAL NAVIA is the primary contact center for the JAL Group. Our employees are 97.5%
women, and our management is 90.0% women as well. As head of the Osaka Center,
I am simultaneously responsible for managing the business and educating our staff,
while also participating in the overall company operations. I started my career as acabin attendant. My first experience in a different type of job was in the Labor Services
Department. I was appointed to my current position in 2013 after serving as head of the
Kansai Airport branch of Japan Asia Airways, the JAL Osaka Airport Cabin Attendants
Office and the Narita Cabin Attendants Department. The many opportunities I havebeen given along the way have brought me to this point. It is not unusual these daysfor employees to build careers beyond their original positions in much the same way. In
addition to childcare leave and child nursing leave, we established a system at JAL NAVIA
that enables employees to choose four-hour shifts until their children enter elementary
school, and that allows both male and female employees who leave the company toreturn to their original position within a seven-year period.
We also established Nadeshiko Navia in fiscal 2016 as part of our activities aimed
at assuring a work-life balance. We will continue our efforts to create a workplaceenvironment which enables women to play vital roles and shine. We have a target of
doubling the number of women in management positions, such as director, generalmanager or above, by fiscal 2018. I certainly hope that working women will never let theiropportunities slip away, but will continue to aspire to step up to the next level.

Editing the English edition of the in-house magazine to share
information with non-Japanese JAL Group employees

Rosang Zual
Inner Branding Group, Corporate Brand
Promotion Department, Communications
Division, Japan Airlines

When I was a student, I desperately wanted to work in the airline business. I found a job
in JAL’s Yangon branch in my native Myanmar and later worked in ticketing and sales
support in the Singapore branch. I came to Japan two years ago. A senior colleague
at the time told me about job possibilities in Japan and assured me, “You can do it,”convincing me to take the chance. For the past year, I have been editing the English
version of our in-house magazine, Route, along with two Japanese colleagues. Wishing toshare business information and news from branches around the world with our colleagues
worldwide, we changed it from a bimonthly to a monthly publication. This makes usbusier, but I’m happy that my suggestion to make this change was accepted. I also write
unique articles for the English edition about Japanese culture and about our staff outside
Japan. Japanese is still difficult for me, but people listen to my opinions during meetings.
There are many other staff from outside Japan in the company, and gathering together
people from different cultures is helping to change all our ways of thinking. I believe this is
the real meaning of diversity.

An environment that permits both men and to women takechildcare and other types of leave, and to do our best as
individuals while mutually supporting each otherOsaka Center Head and Executive Officer,
JAL NAVIA Co., Ltd.

I took childcare leave when both my children were born.
This is a work environment that gives me the time I need for bothmy family and my job.

Kenta Oyagi
JAL Engineering Co., Ltd.
Foreman, Team No. 6, Cabin Maintenance
Section, Cabin Electronics Maintenance Office,Flight Inspections and Maintenance Department,
Narita Aircraft Maintenance Center

I work in aircraft cabin maintenance. We handle all the equipment customers can see andtouch, including the seats, lights, air conditioning, entertainment systems and restrooms.
Our work involves both short but intensive bursts between landing and takeoff, and fullmaintenance and overhauls conducted over several days. We work in shifts includingnight shifts, which means I can be home during the daytime. Right from the start of mymarriage with my working wife, we shared the housework, and I took a month of childcare
leave for the births of both my son and daughter. It puts stress on the family when I’m
studying to pass exams for the qualifications required for maintenance work, so I have
tried to make up for those times by doing housework and looking after the children during
my childcare leaves. It is not only wonderful that we have these systems, but also thatpeople are encouraged to actually use them. Many other male employees have followed
me in taking childcare leave, and we all work together to cover for each other as a matterof course. We can work all the harder precisely because we have spent a good deal oftime with our families. This JAL corporate climate that permits us to make active use of
these systems to balance our work and family responsibilities is something that will always
remain close to our hearts.

I achieved my dream of a career outside Japan.
After I married, I came alone to work in Helsinki.

Kenichiro Naito
Group Head, International Network
Planning Group, Network Planning
Department, Network Marketing Division,
Japan Airlines

I wanted to work in a JAL branch overseas as part of my personal career development.
Currently I work at Helsinki Airport managing arrangements between our locallycontracted ground handling company and JAL Headquarters. Our customers comefrom various parts of Europe as well as from Japan. They have different cultures andvaried preferences. I always try to provide sincere service that blends the way the
Finnish people want to be treated with JAL’s own concept of hospitality. Actually, theoffer to come to Helsinki coincided with my marriage. I was unsure what to do, but
my husband was extremely supportive, so I decided to take the offer. Every day I feel
fulfilled to be doing the work I wanted to do. I enjoy a good balance of work and timeoff, and a positive working environment for both men and women. I’m also grateful forthe understanding I receive when I return to Japan on leave. At JAL, it’s not at all difficult
for women to work in other countries. I hope that what I accomplish here will pave theway for my junior colleagues to follow.

Aiko Hirano
Assistant Manager, Passenger Section,
Helsinki Vantaa Airport, Japan Airlines
Chapter TOP

Contents

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

68

Our job is to negotiate with international airports and airlines in different countries to plan
flight routes and arrival and departure times. We hold telephone conferences with the U.S.
from 8:00 in the morning and with the UK from 8:00 in the evening, and we also travel
abroad frequently for face-to-face meetings. In recent years, there have been more female
employees posted to each group. Women in our group take charge of developing flightschedules and managing arrival and departure slots, and serve as top JAL representatives
at conferences bringing together international airlines several times a year. We have many
employees with small children, so we support them by making it as easy as possible touse our internal systems to arrange childcare leave, paid holidays, changes in working
hours by applying by the previous day and other schedule adjustments. Our work
environment allows fathers with sick children to take time off as necessary, and one male
employee whose wife is from another country was permitted to take a month’s leave
recently to be present at the birth of their child overseas. The people on my staff havedifferent family situations and varying personalities. I believe it is my responsibility as grouphead to bring the organization together so that each individual’s personality can shine
based on a foundation of mutual consideration.

Kyoko Furuta

69

Shareholders and investors

Suppliers

Customers

Employees

Local communities

Recognizing the General Meetingof Shareholders as a forum forconstructive dialog with shareholders,
JAL always provides shareholders withtimely notifications of the meetings
together with accurate information andsufficient time to allow them to study
all relevant notifications. In addition,
we establish an environment in whicheasily understandable information isprovided at the meetings to enable all
the shareholders to exercise their voting
rights properly. The representative
directors, the executive responsible forfinance and accounting, and executives
from other JAL departments address
issues arising from the dialog anddevelop investor relations (IR) related
to management strategies, businessstrategies, financial information andother relevant information with anemphasis on fairness, correctness andcontinuity, while promoting good mutualcommunication.

In order to realize a sustainable society,
JAL promotes procurement activities
in consideration of corporate social
responsibility (CSR) with our suppliers.
We have established a Supplier
Code of Conduct based on the JAL
Group’s CSR Policy, to which weseek the suppliers’ consent prior toenacting any transactions with them.
In addition, JAL provides and shares
CSR information with suppliers who
handle specific goods, such as inflight meals or in-flight giveaways, using
the Sedex*1 platform. As a forum forcommunication, we host meetingscentering on suppliers of indirectmaterials. In fiscal 2015, a total of
115 companies participated in thesecommunication meetings.

Our Medium Term Management
Plan targets acquisition of the No.1
Customer Satisfaction rating by
fiscal 2016. All JAL employees are
responding with united efforts tosatisfy customers based on the
JAL Philosophy. While providing thefinest service to deliver a refreshingand inspiring travel experience, we
address challenges in order to “provide
unparalleled service to customers”
in accordance with the JAL Group
Corporate Policy.

Based on the JAL Group Corporate
Policy and the JAL Philosophy, we
promote creation of workplaces which
are a pleasure to work in. To enable
every employee to grow and develop
as a more admirable person, we willcontinue to tackle diversity and arange of other workstyle reforms withleaders who are endowed with genuine
competence and empathy playing acentral role.

As a responsible corporate citizen,
we build relationships of trust withlocal communities through businessactivities that contribute to creating
better communities and a better
society. Leveraging our human assets,know-how, information and otherresources, we conduct a diverse
range of social contribution activities,
including educational support for the
next generation.

*1	Sedex Information Exchange Limited. A
British non-profit organization that enables
sharing of CSR procurement information.

CSR Activities

CSR Policy.............................................................. 72
Safety and Sense of Security. ................................. 74
The Environment..................................................... 76
Environment: Action Plan........................................ 78
Bridging Japan and the World................................. 80
Nurturing the Next Generation. ............................... 84

Contents

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

70

JAL Group CSR

71

JAL Group CSR

CSR Policy

Preserving the JAL Philosophy as our base,we promote social contribution activities only
the JAL Group can conduct in four fields.

Action policy
and fourareas ofactionThe JAL Group promotes CSR activities by putting our action policy
and the JAL Philosophy into practice for the realization of the JAL
Group Corporate Policy. As a participating company in the United
Nations Global Compact, we uphold and implement its Ten Principles
with respect to Human Rights, Labor, Environment and Anti-Corruption.

Safety and Sense of Security
Maintaining safe operations strictly, providing
every passenger with a safe, comfortableflight, and contributing to building a safer, moresecure society

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 the betterment of society.
Safety and Sense of Security

We take advantageof the air transportbusiness as ourcore business.
We strive to solve social
issues through the airtransport business.

Bridging Japanand the World

We promote all our
initiatives fully as a
unified JAL Group.
Designating four key action
areas as pillars, andpursuing cooperation withbusinesses when necessary,
we promote our initiatives asa unified JAL Group.

Solvingsocial issues

CSR
Businesses

Environment

Aside frombusinesses

Nurturing the
Next Generation

We contribute widely tosociety in our capacity
a member of society.
As a member of society,we maintain a comprehensive
awareness of social issues andstrive constantly to solve them.

JAL Philosophy

We seek to do what only the JAL Group can achieve.

Positioning the JAL Philosophy as the basis for awareness,values and ways of thinking shared by all JAL Group employees supporting all our efforts,
we link the JAL Philosophy to initiatives and values that are unique to JAL.

JAL Group’s Basic CSR Policy
The JAL Group will engage in corporate social responsibility activities through its core
air transport business as the “Wings of Japan” to meet society’s expectations andsolve social issues to create a better society for the next generation.

Program for actual pre-flight experience(Photo: Japanese Society of Service Dog Research)

Bridging Japanand the World

Acknowledging our environmental burden,
alleviating climate change and conserving
biodiversity
Aircraft consume large quantities of fuel, placing a substantial
burden on the global environment. In recognition of this, the JAL
Group applies a wide range of approaches to minimizing theenvironmental burden in all its business activities. In an activity
only an airline can conduct, we have been developing andconducting atmospheric observations using passenger aircraft
since 1979. This includes a forest fire reporting project. The
JAL Group promotes “Sky Eco” (ecological-friendliness fromthe sky), a project unique to the Group. We strive to link these
activities with Japan’srich natural environment
for the benefit of future
generations to help
ensure that Earth as
seen from the sky canremain beautiful forever.

Four keyareas of the JAL
Group’s CSR
activities

Atmospheric observation equipment
mounted on an aircraft

Nurturing Future
Generations

Revitalizing Japan’s industries andregional economies, and improving mutual
understanding with international society

Providing support to help children advance into
the future in good health and with hearts filledwith hopes and dreams

Air transport is a vital part of the social infrastructure, and thebusiness itself has the characteristics of a public service. Society
expects airlines to provide a diverse range of “bridging” functions.
Besides fulfilling the basic roles of maintaining route networks
and providing convenient air transport services, we maintain andimprove lifeline routes and local community networks, promotecultural exchange by such means as assisting with transport
for art exhibitions, and revitalize local economies by promoting
tourism and supporting natural disaster reconstruction projects.
By bridging communities and their people in these and otherways, we canmake a significant
contribution
to the overall
progress anddevelopment ofsociety.

Flying through the sky and building bridges with people aroundthe world. . . . Our business makes dreams like this come true,
giving children in our contemporary world hope of advancing
into the future while holding onto their dreams. We contributeto the future of children who will carry their hopes and dreams
with them as leaders of the next generation through programs
supporting a wide range of age groups, and through theparticipation of JAL employees in programs such as JAL Paper
Plane classes, in whichchildren enjoy playing together;
JAL Sky Eco classes, inwhich children think about
the global environment withJAL employees; JAL Career
Talk for Students classes, inwhich the role of airlines are
discussed; and JAL Factory
Tours.

Cooperating intransportation for art
exhibitions

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

72

Maintaining safe operation of each and every flight is among ourmost important CSR activities, and indeed our reason for being.
From this perspective, we have revealed our full commitment
to contributing to society by communicating our thoughts andactions, responding as only an airline can and establishing a
BCP (Business Continuity Plan). We are also pursuing actions
to enable more passengers to enjoy travel with assured safety
by such means as promoting barrier-free facilities with Universal
Design, supporting medicaltransport using stretchers forpatients and planning package
tours for customers with foodallergies.

The Environment

A JAL Paper Plane class

Chapter TOP

Contents

73

JAL Group CSR

Safety and Sense of Security

The JAL Group seeks to be a friendly corporation thatwelcomes every customer with a genuine spirit of attentive
hospitality to assure that anyone can fly JAL Group airlines
with a true feeling of safety every time.
Perspectives and basic principles with respect to barrier free design
JAL seeks to achieveattention to qualitythat gives customers emotional satisfaction

Attention to quality through Universal Design“Becoming a JAL that isfriendly to everyone”

Psychological value
Functionalvalue

Value provided by JAL

We believe that providing customers
with safe, secure functional value is thefoundation for our services. But thisalone does not constitute the “attention
to quality” we seek to maintain. It is also
important to offer customers “emotional
satisfaction.”
In our efforts to assure attention
to quality, we added three principles
to the 7 Principles of Universal Design
and formulated the 10 Principles of JAL
Universal Design.
To realize a “JAL that is friendly
to everyone,” we will continue to offer
customers beauty, quality, security andcomfort reflecting the JAL character.

Friendliness
Security
Confidence
Fulfillment
On-time performance
ComfortConvenience(Basis forexistence)

Realizing psychological value

Creating feelings ofcomfort and fulfillment

Making airports easier to use

Enhancing cabin comfort

At Haneda Airport, the signs at terminal entrances as well asother signs and displays throughout the terminal have been
repaired and updated based on comments and feedback from
customers and airport staff. Universal Design has been applied
to make terminal use easier for customers by employing “easily
understandable letters and characters,” “symbols (pictograms) thatcan be understood at a glance” and “color guides.” Many monitors
have been installed to enable the JAL Group to provide accurate
information promptly in the event of a flight delay or cancellation
due to weather or some other reason.
A smooth flow of passengers through airport security
checkpoints has been facilitated by installing tables for temporary
placement of personal items as well as explanatory panels clarifying
the flow of inspections just in front of entrances to inspection areas.
This has made it easier for passengers to prepare in advance andreduced waiting times.

We always aspire to provide products and services that ensure
every passenger, from small children to elderly passengers andpassengers requiring special assistance of any kind, a safe,
comfortable trip on a JAL Group flight.
We make extensive use of Universal Design for our products
and services to meet the needs of our passengers. Examples
include JAL SKY SUITE and JAL SKY NEXT and other special
aircraft seating configurations and a wide range of special inflight meal options for passengers with allergies or other healthconditions. In addition to developing new products and services,
we naturally recognize the importance of ease of use of onboard
facilities. The lights turn on automatically in the cabin lavatories
when the door is locked, for example, to remind passengers
to lock the door. We will continue to seek out and adopt facility
enhancements to improve usability
for passengers.
In addition to our superior
facilities and services, we provide
hands-on education to ensurethat each cabin attendant offers
customers timely service in a true
spirit of hospitality.

Distinction
by numbers

3 Principles of
JAL Universal Design

56
Realizing functional value

Easy, enjoyable use
by anyone
The 7 Principles of
Universal Design

Color guides

Baggage
Symbols (pictograms) viewers
can understand at a glance

Easy-to-hold eco-friendly
UD mugs

SafetyTravel assistance

Program for actual pre-flight experience

Priority guest support
The JAL Group refers to passengers with reduced mobility andsick or injured passengers as “priority guests,” who are to be given
precedence in provision of services.
The Priority Guest Center we launched in 1994, the first
facility of its kind in the airline business in Japan, has handled awide range of situations. Its experienced staff members are always
standing by to respond with care to customer needs.

The JAL Group maintains
a special focus on activities
in support of customers
who hesitate to fly due todisabilities. One of these
activities is flight training forchildren with autism or otherdevelopmental disorders.
While the ability to use public transport freely is essential tofacilitating the social engagement of children with these disorders,
the special atmosphere of airports and the high levels of noiseproduced by aircraft raise additional hurdles between them andair travel, and may even cause some children to give up on flying
completely. We host a program to enable both these children
and their guardians to develop a positive attitude toward aircraft
through a series of airline classes and hangar tours with flight andcabin crews in cooperation with local rehabilitation centers. Many
participants have commented to the effect, “I may now actually be
prepared to take my first-ever flight!”
We held an event at Haneda Airport to which we invited
physically challenged customers who had no experience of air
travel and felt uncertain about airport procedures to bring theirservice dogs and gain a hands-on experience and understandingof the flow of events up to a departure gate and beyond, until they
were actually seated in the cabin.

The 3 Principles of JAL Universal Design
Principle

1

Principle

2

Principle

3

Exceptional Quality Is the best use made of materials to achieve
functionality accompanied by ample quality
and Beautyand beauty?
Feeling of Comfort

Has a pleasant environment been provided forboth customers and staff?

Sense of Security

Do the structure and services assure longterm peace of mind?

The 7 Principles of Universal Design

Assigning Service Care-fitters at all
domestic Japanese airports

Flexibility in Use

Does the design accommodate a wide range
of individual preferences and abilities? Can it
be used under differing conditions, including
dark or noisy environments?

In January 2006, JAL initiated education to
enable airport staff across Japan to obtain“Service Care-fitter*1 certification.” JAL has
placed staff with this qualification at all the
42 domestic airports at which it operates
to provide reliable service for customers
requiring help. (As of April 1, 2016)

Principle

Simple andIntuitive Use

Is the design straightforward, making the
purpose and method of use immediately
apparent?

*1	Service Care-fitter: Certification awarded by The Nippon Care-Fit
Education Institute, a Public Interest Incorporated Foundation. This
personal qualification incorporates a spirit of hospitality and various
support techniques for the elderly and/or disabled persons.

Principle

Perceptible
Information

Is there more than one means ofcommunication? Is the necessary information
communicated effectively to the user?

Tolerance for Error

Does the design minimize hazards and theadverse consequences of accidental orunintended actions?

1

Principle

2

3
4

J A PA N A I R L I N E S R E P O R T 2 0 1 6

Principle

5

Principle

6

Principle

7

Can the design be used efficiently and

Low Physical Effort comfortably by users with different physicalconstitutions?

Size and Space forApproach and Use

Are appropriate size and space provided
for comfortable use by people with different
physical constitutions?

Support by CRO*2 for North America routes
JAL offers a wide range of services based on the Air Carrier
Access Act on its North America routes to enable disabledcustomers to fly as comfortably as possible. Persons withquestions or issues regarding their use should convey
them to our airport staff, at which time a CRO (complaint
resolution official) will provide them with full support.
We have 60 certified staff stationed at all inbound andoutbound airports on North America routes operated by
the JAL Group. (As of April 1, 2016)•	Transport support for para-sports organizations participating in
events such as the Paralympic Games•	Medical transportation using stretchers for patients, including those
traveling overseas for heart transplant surgery•	Joint Priority Guest operations with American Airlines and British
Airways•	Events to raise public awareness concerning people withdisabilities

JAL Smile Support
We have established Smile Support Counters at several airports*1
for customers taking advantage of our JAL Priority Guest Support
or JAL Family Service, in addition to expectant mothers and those
traveling with small children. Our Service Care-fitters and trained
support staff can assist customers with all their boarding procedures
using lower counters and chairs, which are part of our Universal
Design. We also have strollers and wheelchairs available for use
inside the airports in which the counters have been installed.
*1	Counters are installed at eight Japanese airports (Haneda, Narita, Itami,
Kansai, New Chitose, Chubu, Fukuoka and Naha). Support is also available
at our information counters at other airports.

*2	CRO: An airport staff member with special education on regulations
applicable to disabled persons in the United States.
Photo courtesy ofJapanese Society of Service Dog Research

Chapter TOP

Contents

J A PA N A I R L I N E S R E P O R T 2 0 1 6

Equitable Use

Has consideration been given to the differing
physical and mental conditions of the people
that may use the design?

Principle

74

Qualified personnel extending full
support and assistance75

JAL Group CSR

The Environment

Considering the significant environmental burden associated with
air transport, we have taken up the challenges involved in promoting
our Sky Eco program into the future in every aspect of our business,from maintenance and the flight itself to handling after landing.
Our Eco-First Commitment andSky EcoEnvironmental Guidelines

We are currently promoting a Sky Eco programby steadily implementing our Action Plan (pages 78-79) throughcorporate activities in several different departments. As a CO2
reduction target for aircraft by fiscal 2020, we are working on“reducing CO2 emissions per revenue-ton-kilometer from JAL Groupaircraft by 23% below the fiscal 2005 level.” As of fiscal 2015, we
had achieved a 14.9% reduction. In fiscal 2016, we stepped up
efforts by joining the Eco-First Promotion Council.

As an airline company responsible for an extremely important
aspect of social infrastructure, the JAL Group is fully awareof its responsibility with respect to the global environment.
We have therefore placed management of our environmental
impact and protection of the environment as core themes inall of our business operations. We will continue to implement
the Sky Eco program with the aim of passing on a bounteous
Earth to future generations to ensure their enduring ability toview and enjoy our beautiful planet from the skies.

Engine water washing
Maintenance

While parked

In flight

On descent

Minute atmospheric dust particles accumulate in aircraft engines during flight. Since engines intake andcompress air in the combustion process, this accumulated dust reduces their mileage performance andadds to their CO2 emissions. We give the engine interior a regular washing with water, removing any
adhering dust and dirt and recovering engine performance while also achieving a 1% improvement in fuelefficiency. This washing is conducted at intervals of 200 to 300 days for the Boeing 777 (PW4000 engine),
767 (CF6 engine) and 737-800 (CFM56 engine).

Closing the window shades blocks out sunlight, lowers cabin temperatures and reduces air-conditioner
use. This shortens the time the APU at the rear of the aircraft is in operation, lessening CO2 emissions.

CONTRAIL project using passenger aircraft for atmospheric observations/Reporting on forest fires
We participate in the CONTRAIL project, a social contribution activity that takes advantage of the special
characteristics of aircraft. In this context, we cooperate fully with external research institutes in conducting
atmospheric observations and reporting on forest fires.

Use of CDO (continuous descent operations)
Upon securing safety and other specified conditions, we make positive use of CDO as if descending aslope as a means of reducing CO2 emissions.

To prevent air resistance from increasing, while securing safety at the same time, we employ approaches
such as reduced use of flaps (devices at the back of the main wings designed to increase lift) and delayed
gears and flaps. If runway conditions and other factors meet set standards, reverse thrust is employedwhen the engine is idling, a procedure that lowers CO2 emissions.

Engine Out Taxi using only one of the twin engines
While taxiing

85.1%

If certain conditions are met, the flight crew use only one of the aircraft’s twin engines while taxiing to its
parking slot to reduce CO2 emissions.

Water use*1

430
1,000m3

Electricity use*1

120
Million kWhHeat use (crude
oil equivalent) *1

46,770Kiloliters

CONTRAIL project

http://www.jal.com/en/csr/environment/social/detail01.html

Aviation biofuels
Many countries are developing aviation biofuel with the aim ofsignificantly reducing CO2 emissions. In January 2009, a JAL
Boeing 747-300 became the first airliner in Asia to conduct a test
flight using non-food biofuel. We participated in the founding of
Initiatives for Next Generation Aviation Fuels (INAF), a group of 50
major companies and organizations that explores the potential forbiofuel production in Japan.
We have seen promising results for several manufacturing
processes using municipal waste, which offers a significant costadvantage in terms of raw material procurement. Going forward,
we will actively promote studies targeting future commercialization.

Industrial waste*1

3,475
Tons

Recycle*1

2,600
Tons

Cabin waste recycling
Since 2007, JAL has been pursuing efforts to recycle all the waste
generated onboard aircraft. We have been recycling beverage cans,newspapers, in-flight magazines and plastic bottles, for example,
using standardized procedures at numerous airports. We incinerate
all our food waste, such as leftover meals from international flights,
to comply with quarantine and other restrictions. Besides pursuingself-help efforts, such as reducing food waste, and cooperatingwith the International Air Transport Association (IATA) in efforts
to formulate common international rules, we will continue to
implement initiatives to achieve a steady increase in the ratio ofrecycled waste.

Actions toward biodiversity
Izumi City’s migrating cranes
As part of its biodiversity conservation activities, the JAL Grouphas resumed its support of conservation activities concernedwith the winter migration of cranes to the area around Izumi City,
Kagoshima Prefecture. In February 2015, we announced our cosponsorship of the
Kagoshima-ken Tsuru
Hogokai (Kagoshima
Prefecture Crane
Protection Association).
In fiscal 2016, we areproceeding with plans toextend support to otherenvironmental protection
activities.
OISCA Children’s Forest Program in Thailand
The OISCA Children’s Forest Program was organized in 1991 as aprogram for developing children’s ability to contribute to creating asustainable affluent society and to promote global greening throughsuch activities as planting and nurturing seedlings at their schools.
(As of end fiscal 2015, some 4,700 schools in 36 countries andregions had participated.) The JAL Group supports this laudable
program by providing airtransport and collecting
contributions throughcharity mile donations.
Charity miles donated bycustomers in fiscal 2015
totaled 1,701,000 miles,or the equivalent of some
8,500 seedlings.

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6CO2 emissions/revenue-ton-kilometerIn 1979, the JAL Group participated in a Tohoku University greenhousegas research project by conducting observations of CO2 concentrationsin the atmosphere using aircraft on scheduled domestic flights (operatedby Toa Domestic Airlines, since renamed Japan Air System (JAS). This
led to the current program of observations between Sendai and Sapporo.
In 1984, we began a two-year program of measuring concentrations of
CO2 in international airspace — between Narita and Sydney, for example— again in cooperation with Tohoku University. This was the first-everattempt at atmospheric observation by aircraft on scheduled international
flights. Currently, the JAL Group takes advantage of these and otherresults by participating in the CONTRAIL Project. This is a joint research
project conducted by the National Institute for Environmental Studies,
the Meteorological Research Institute, JAMCO CORPORATION and the
JAL Foundation for the purpose of elucidating the mechanisms of global
warming. It is an environmental activity taking advantage of the wide
range of coverage and high frequency of flights by aircraft on regularpassenger flight routes. Most notably, aircraft on flights from Australia toJapan have continued observations since 1993, achieving the longest
observation record of greenhouse gases using international scheduled
flights. Observation is carried out by automatic observation equipment
installed in aircraft cargo bays and by manual pumps operated byresearchers or JAL Group employees who board with special permission.
By analyzing air samples and measurement data collected at aparticipating research institute, we have assisted in clarifying many facts,
thus contributing to global research activities in this field.

Reduced auxiliary power unit (APU) usage time/Shades Closed Exercise

Reduced flap, delayed flap & delayed gear, and idle reverse
At landing

CONTRAIL Atmospheric Greenhouse Gases
Observation Project by Passenger Aircraft

Final disposal
ratio*1

1.2%(Comparison with FY2005)*1 Airports, offices, maintenance centers (Japan)

76

Chapter TOP

Contents

77

JAL Group CSR

Environment: Action Plan

We are formulating targeted plans to protect theenvironment in different areas of our business operations
and to achieve results through continuous action.
We have positioned control of our environmental impact and protection of the environment as core themes in our operations, and we are
creating plans for action in these areas. Our philosophy and commitment to these efforts are specified in our Action Plans.

Action Plan 1 We actively pursue initiatives to prevent global warming.
Commitment
We are working to reduce CO2 emissions per revenue-tonkilometer from JAL Group aircraft by 23% below the fiscal
2005 level by fiscal 2020.

• We increased the number of 787-8/-9 aircraft with lower fuel consumption in our fleet.
With these aircraft logging a significantly higher proportion of our total flight time, CO2
emissions per revenue-ton-kilometer for fiscal 2015 improved by 1.5% year-on-year,
contributing to a decline of 14.9% from the fiscal 2005 level.
• We achieved our target of 1.5% average annual improvement (average figure for fiscal
2005 to fiscal 2015).

We are upgrading our fleet with aircraft featuring lower fuelconsumption and noise levels (e.g., Boeing 787, 737-800 and
Embraer 170)

• We introduced six fuel-efficient 787-8/-9, one 737-800 and two Embraer 170 aircraft
and retired eight older aircraft (777-200/300 and 767-300 models).

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

We are working on weight reduction.

• We introduced 2,900 of the world’s most advanced cargo containers and 1,500
lightweight pallets, which are about 40% lighter than conventional models. This led to a
reduction in annual CO2 emissions of approximately 6,900 tons.

We are cutting CO2 emissions by washing aircraft engines
and pursuing other CO2 reduction activities.

• We wash engines with water once every 200 to 300 days for 777, 767 and 737-800
aircraft. We have installed new Eco Power equipment to enhance washing efficiency.
Result: Reduction of annual CO2 emissions by approximately 25,000 tons.

We work together with the relevant ministries and air traffic
control and other aviation authorities in various countries tointroduce the latest approaches to fuel-efficient aviation, andwe will continue this collaboration proactively into 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 routes) on flights to Hawaii, Australia, theWest Coast of North America (Los Angeles, San Francisco and Vancouver) and Palau.
• We extended our efficient selection of alternative airports (alternatives for Ho Chi Minh
City).
• The estimated annual reduction in CO2 emissions resulting from the above efforts wasapproximately 6,000 tons.

We are collaborating in the research and development ofaviation biofuel made from inedible plants.

• We are participating with an all-Japan team of industry, government and academia ina project organized to produce aviation biofuel from municipal waste, with realization
planned for about 2020 (the year of the Tokyo 2020 Olympic and Paralympic Games).
The project will contribute further to realization of a recycling-based society.

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

• We continue to adopt LED lighting in our maintenance facilities (hangars and docks),
replace desktop PCs with laptop PCs, and other energy-saving activities, while
upgrading to electricity-saving lighting in our offices.
• We have been awarded certification as an Excellent Operator for Energy Conservation(S-Class) from the Ministry of Economy, Trade and Industry.

environment.
Commitment

StatusWe are targeting a final disposal rate of less than 2% forindustrial waste from domestic worksites.

• The total volume of waste increased by 1.8% in fiscal 2015 from fiscal 2014. The final
disposal rate was 1.2%, easily meeting our target of less than 2%.

We work to reduce water usage.

• We reduced water usage by 3.0% year-on-year by reusing wastewater and implementing
water-saving measures.

We work to reduce chemical emissions (in accordance with
the PRTR Act).

• The total volume of PRTR substances handled in fiscal 2015 (462 chemicals) decreased by
4.0% year-on-year to 64 tons (as compared with a total volume in fiscal 2014 of 66.5 tons).

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 continue to recycle beverage cans, newspapers, in-flight magazines and plastic
bottles in accordance with our regulations. We are promoting comprehensive efforts todispose of in-flight waste in collaboration with the IATA and airport companies.
• The total volume of recycled waste in fiscal 2015 was 2,600 tons.

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

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

We pursue efforts to reduce NOx emissions from aircraft,
automobiles and other vehicles.
(NOx, HC, CO and other aircraft engine emissions are strictly regulated by
the ICAO. Similar restrictions have been established under Japan’s Civil
Aeronautics Act. The restrictions on NOx emission are particularly stringent.)

Status• We actively practice “noise reduction at source” and “noise abatement procedures” asresponsibilities of airlines under the Balanced Approach to Aircraft Noise Management
recommended by the ICAO. All JAL aircraft are compliant with ICAO Chapter 4, the moststringent standard for noise.
• We practice noise abatement procedures during takeoff and operate under even stricter
rules when taking off from Haneda and Itami airports.
• As for noise abatement procedures upon landing, we practice reduced flap, delayed
flap and idle reverse. At San Francisco International Airport, Kansai International Airport,
Kagoshima Airport, and Naha Airport, we conduct CDO (continuous descent operations)that achieve significant reductions in both noise and CO2 emissions.

• All JAL aircraft engines are compliant with the regulation values and the ICAO’s CAEP6
and CAEP8 NOx standards. (The applicable standards differ depending on the date ofissue of an aircraft’s Certificate of Airworthiness.)

Action Plan 2	We actively promote programs aimed at solving social and environmental issues andraising environmental awareness.
Commitment

Action Plan 5	We give due consideration to biodiversity.
StatusCommitment

StatusWe are contributing to long-term conservation of theenvironment through ongoing environmental and social
activities, while also striving to raise environmental awarenessamong the children who will lead the next generation, as wellas among our employees and society at large.

• We implemented the Sky Eco Project, in which our pilots have taken the initiative.
• In fiscal 2014, we held 16 Sky Eco classes in which JAL flight crew captains offeredenvironmental awareness education for children.
• We contributed to reducing CO2 emissions in cooperation with passengers byimplementing the Shades Closed Exercise and improving on-time performance.

We convey the importance of biodiversity to our customers
and society at large and adhere to the JAL Group Policy on
Biodiversity in our business operations.

• We formulated and adhere to the JAL Group Biodiversity Policy in recognition of thepossible indirect impact of the JAL Group’s air transport business on biodiversity.

We will continue to participate with our aircraft in atmosphericobservation and forest fire reporting projects.

• We are participating in the Siberian Forest Fire Reporting Project. Since 2003, our pilots
have been reporting any fires they spot during summer flights over Siberia to a researchteam led by Hokkaido University and JAXA that is conducting a cooperative research
project studying early fire detection by satellite.

We are participating in the United Nations Decade of
Biodiversity initiative. We also promote activities that convey
the importance of protecting the natural beauty of Japan,
including its cranes and other wildlife.

• We have painted the United Nations Decade of Biodiversity logo on our aircraft,contributed to the JAL Endemic Rabbit’s Forest and served Rainforest Alliance
Certified™ coffee on our flights in consideration of biodiversity.

Chapter TOP

Contents

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

78

StatusAction Plan 3	We work toward realization of a recycling-based society and preservation of the79

JAL Group CSR

Bridging Japan and the World

Initiatives unique to the JAL Group, which serves
as wings connecting Japan with the rest of theworld, contribute to the revitalization of regional
economies, development of Japanese industry andevolution of international communication.

2020

2016

Tokyo 2020 Olympic andParalympic GamesRio de Janeiro Olympic andParalympic Games
Specially painted aircraft put into service.

Activities for the Tokyo 2020
Olympic and Paralympic Games2014

Sochi (Winter) Olympic andParalympic Games
Specially painted 777-200 put into service
on domestic routes.

In 1964, JAL transported the Olympic torchfrom Athens to Tokyo. In the years since, wehave supported athletes in many other Olympic
and Paralympic Games. Going forward, theJAL Group will continue to transmit values
unique to JAL with the “Tradition,” “Innovation”
and “the Spirit of Japan”: to help overseas
visitors enjoy their stay in Japan; to ensurethat passengers with disabilities can travel
comfortably without stress; and, finally, toenable more travelers to experience the many
tourist attractions to be found in every cornerof Japan. In 2020, the Olympic torch will returnto Tokyo. The JAL Group will take advantage
of our decades of experience and the unitedefforts of all our employees to assure thesuccess of the Tokyo 2020 Olympic andParalympic Games.

2012

London Olympic GamesTokyo’s Olympics host city bid
Specially painted aircraft put into service.

2010

Vancouver (Winter) Olympic Games
Specially painted aircraft put into service.

2009Tokyo’s Olympics host city bid
Specially painted 767-300 put into service.

2008

Beijing Olympic Games
Specially painted 777-300 put into service.

2006

Turin (Winter) Olympic Games
Specially painted aircraft put into service.

2004

Athens Olympic Games
Special 777-300 aircraft with “Let’s Go Japan” painted on chassis
put into service on domestic routes.
A JAL cabin attendant selected as a basketball team member representing
Japan at the Athens Olympic Games.

2002

Salt Lake City (Winter) Olympic Games
Specially painted aircraft put into service.

2000

Sydney Olympic GamesJAL designated official airline of Team Japan.
Specially painted 747-400 put into service.

1998

Nagano (Winter) Olympic Games
Transport of Olympic torch
JAL designated official airline partner of JOC, supporting activities by providing transport.

1992

Barcelona Olympic GamesJAL designated official airline of the Japanese Olympic Committee (JOC).

1976

Montreal Olympic Games
Charter flights arranged to transport Japanese athletes.
J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

80

1972

Munich Olympic Games
Temporary JALPACK center established in Munich.

1971

Sapporo (Winter) Olympic Games
Transportation

1964
The Olympic torch transported from Athens in the summer of 1964 andCity of Tokyo crew members

Tokyo Olympic Games
Transport of Olympic torch

Chapter TOP

Contents

81

JAL Group CSR

Bridging Japan and the WorldJAL Guide to Japan
In 2004, JAL launched an information and guidance website
designed to stimulate interest in Japan and extend a welcome
to overseas visitors. We wanted to create a website portraying
the charms of different parts of Japan to people overseas
while contributing to local community revitalization and regional
development. Today, the website is presented in seven different
languages*1 and targets 26 regions around the world, and weplan to expand its accessibility by adding more languages in thenear future. In 2014, the site’s design and content were revamped,
leading to receipt of a Grand Prix award in the Promotional Site
category at the 2014 Japan Web Grand Prix.

In Aomori Prefecture, we offered Aomori Ai Financier (“Aomori
indigo petit fours”) on our domestic flights. Widely known as a dye,indigo also has health benefits. We collaborate with the region toreactivate the indigo industry by promoting planting of indigo andindigo product development.

*1	English, French, German, Russian, Simplified Chinese, Traditional Hong
Kong Chinese and Traditional Taiwan Chinese.
Planting indigo

Aomori indigo petit fours, a
confectionary treat served on flightsfrom Itami Airport to Aomori Airport

JAL NEW-JAPAN PROJECT
We continued development of the JAPAN PROJECT forcollaboration with regional communities we introduced in May 2011,and established a new JAL NEW-JAPAN PROJECT in September
2015. Founded on promotion of tourism and development of the
6th industry of agricultural and aquatic products, and conductedin cooperation with local governments in Japan, the project is
intended to expand our range of activities from exploration andcreation of tourism resources and local specialties to promotion,
sales and purchasing of these commodities to support sustainable
development of regional economies.
Sustainable development of regional economies
Increase thenon-resident population

Regions
Tourism
resources

Expandemployment opportunities

Increase theresident population

Markets

Attracting people
Reinforcementof tourism
infrastructure

Local foodDevelopment ofand specialties the 6th industry

Promotion of
inbound andwide-area tourism

Creating appeal
Increasing appeal

Promotion of

local foodCommunicating appeal and specialty
sales
Increasing sales

Continued collaboration with regions
Regions

JAL

World
Japan

JAL’s VISIT TOHOKU! regional support project is a means ofexpressing the JAL Group’s gratitude to society through support for
Tohoku from a wide range of perspectives. We make use of our airtransport business to tackle the challenges involved in promoting
industry, creating tourism demand and supporting disaster victims
in the Tohoku region.
Tohoku Cotton Project
Initiated in 2011, the Tohoku Cotton Project is an earthquake
disaster reconstruction effort, in which JAL cooperates with
agricultural corporations and clothing manufacturers in cultivation,
spinning, commercialization and sales of cotton grown on
agricultural land impacted by the tsunami and no longer suitable forgrowing rice. The project regenerates agriculture, and creates new
industrial and employment opportunities. JAL Group employee
volunteers participate in such fieldwork as sowing seeds, weedingand harvesting. Over 300 employee volunteers have traveled to
Tohoku to work in the fields so far.
JAL employees even design and develop original products
using the cotton they harvested for use as complimentary gifts oritems to be exchanged for mileage points.
In fiscal 2015, we commercialized 12,000 original
handkerchiefs.

Development of human resources with aspirit of warm hospitality
Following deregulation and as a special service supporting thedevelopment of limited-area licensed guide interpreters (areaguides), JAL dispatches cabin attendants and airport staff toconduct development and follow-up training for qualified persons
in an area of Kyushu designated as the Kyushu Asia Tourism Island
Special District. We upgrade trainees’ practical skills by sharing
know-how accumulated by our employees through extensive
experience in serving customers. The training includes role-playing
to communicate such skills as manners, personal grooming andoptimal complaint management.

Charter flights between Taipei and Aomori/Akita
Between November 5 and 14, 2015, we operated two almost fully
occupied round-trip international charter flights carrying a total of
365 passengers between Taipei and Aomori and Akita airports incooperation with the municipal governments of the two prefectures.
When the aircraft landed at Aomori Airport, the welcoming
ceremony for passengers included a performance of traditional Nebuta
Bayashi music and a gathering of local citizens, including the governorof Aomori prefecture. This was the first time a Boeing 787 had landed
at Aomori Airport. After the arrival of the charter flight, JAL held anairline class for kindergarten children from the local community.
As it was also the first JAL international charter flight to Akita
Prefecture, passengers were welcomed by an exciting show featuring
Namahage folklore demons, enchanting Akita Maiko dancers andlocal residents. The visitors enjoyed the special attractions of Tohoku
during their four-night stay in the region.
In hopes of encouraging our visitors to pass on theirimpressions of the beauty and charm of Tohoku to people backhome in Taiwan and to visit again in the future, we presented themwith gifts at the two airports. These included apples embellished with“natural product of Aomori” logos, famous confectionaries from an
Akita bakery and other local specialties. They also received specialty
products from other prefectures on the return flight.

Unveiling the Boeing 787 to kindergarten children
in the city of Aomori

Welcoming passengers from
Taiwan at the Akita Airport
arrival gate

JAL Gifts of Smiles ProjectThis project was conceived by JAL Group employees as a way ofhelping children impacted by the Great East Japan Earthquake of2011 make a fresh start by taking them on a family trip. The costs
are met by donations from JAL Group employees, which are thenmatched by the JAL Group. Employee volunteers accompany
the families to provide assistance. Since introducing the projectin the summer of 2013, we have invited 60 families (145 people)
from Miyagi and Iwate prefectures to join us on four-day trips to
Okinawa. We feel
fortunate to have theopportunity to sharethese wonderful times
reflected in the brightsmiles of families as
they enjoy the brilliant
sunshine and blue
seas of Okinawa.
Creating a bright future with Tohoku children through Ashita
no Tsubasa (“Wings of Tomorrow”)
In March 2015, we cooperated with Benesse Holdings in a twoday event in which we invited elementary school children from
Aomori, Miyagi and Iwate prefectures to participate in airline
classes and flight experiences at Aomori, Sendai and Hanamaki
airports, respectively.
Both our companies wanted to provide children who will
be tomorrow’s leaders with an opportunity to learn about theirhometowns and work related to aviation as one of their future
career opportunities. The event was held on March 12-13, thefirst weekend of the sixth year since the earthquake disaster.
A variety of JAL Group staff, including flight and cabin crew,
participated as volunteers.

Chapter TOP

Contents

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

82

Invigorate
local industries

Tohoku regional support activities

83JAL Group CSR

Nurturing the Next Generation

We conduct many programs to help ensure that thechildren who will take the lead in the next generation canfoster their dreams and create a bright future.
A JAL Paper Plane class

JAL Factory Tours – SKY MUSEUM

Paper Plane (folded paper airplanes) is a craft whose practitioners foldsingle sheets of paper into aerodynamic shapes with no cutting, pastingor power source to create paper airplanes that can fly gracefully.
The JAL Group has hosted JAL Paper Plane classes since2007 with technical guidance by the Paper Plane Association.
Approximately 450 employees from many departments andin jobs ranging from sales, reservations and back offices to flightand cabin crew, aircraft mechanics and airport staff have taken theassociation’s instructor development course and qualified as certified
instructors. They have visited many different regions of Japan andvarious overseas countries to hold the classes.
In fiscal 2015, we held 130 classes on Airplane Day at locations
such as elementary schools and public halls from Hokkaido to
Okinawa and Haneda and other airports. Classes were also held in
various locations in North America, Europe and Asia.
We have taught the craft of folding and flying Paper Plane andshared the pleasures of this activity with some 10,500 parents andchildren over the years.

The JAL Group also hosts free tours in which visitors can view aircraft resting theirwings in a hangar following a flight.
We began these tours in the mid-1950s, soon after the Company’s founding,and renewed them in July 2013 under the name “JAL Factory Tours – SKY
MUSEUM.” Besides giving visitors from children to adults a closer look at airplanesin the hangar tour, the museum invites them to improve their knowledge of airlines
and learn about the history of JAL and its pioneering undertakings in the world’s
skies since its foundation in 1951. They can also learn about the work of staff who
support flights, try on uniforms and enjoy an opportunity for hands-on experience inthe actual work. Experienced and knowledgeable flight crew, cabin crew, mechanics
and airport staff serve as guides for the museum guests. The facility welcomed over
120,000 visitors in fiscal 2015.

Mastering the knack of folding, andadding a little flight theory, is all ittakes to transform a sheet of paper
into a gracefully flying Paper Plane.
Class members experience thewonder of flight, new surprises andunexpected pleasure together.

SKY BATON: Passing the baton to younger
generations to create the future of the Tohoku region

Chapter TOP

Contents

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

84

The JAL Group launched SKY BATON to help the young people
who will be entrusted with the future of Tohoku, and to contributeto development of the next generation, by offering opportunities forlearning support in disaster-stricken areas and assisting children whose
lives have been impacted by the disaster. Chance for Children (CFC),a public interest incorporated association, issues education vouchers
to pay for tutoring or private lessons for children who face financial
difficulties due to the earthquake. Aiming to create an environment inwhich children can envision their futures and pursue their hopes anddreams through study, the JAL Group has cooperated with CFC inpresenting JAL/CFC education vouchers to many children through thisongoing program.
JAL supports the activity by matching the miles contributed
through JAL Charity Miles, and by working together with its customers
to implement initiatives for redevelopment of disaster-stricken areas.

85

JAL Group CSR

Nurturing the Next Generation

Programs for nurturing
the next generation

JAL Scholarship Program
The JAL Scholarship Program invites college
students from across Asia and Oceania toJapan to promote mutual understanding
and prepare young men and women to
assume leadership roles in shaping theregion’s future. It offers opportunities toexperience Japanese culture, such as thetea ceremony and Zen meditation, and toparticipate in workshops with Japanese
students. Established in 1975, the programis currently operated by JAL and the JAL
Foundation. To date, a total of 1,538
students have been invited to participate.
In 2015, the program wasconducted in the Tokyo area and in
Ishikawa Prefecture for about three weeks
beginning July 1 with 24 participants from

13 countries and regions.
We have recently organized alumniorganizations in other countries to develop
a vertical network connecting previous
participants who are now playing activeroles around the world. In another new
initiative, moreover, we launched an
exchange program in 2015 between
Japanese and Korean junior high school
students.

JAL Factory Tours– SKY MUSEUM –A free tour that gives visitors an
opportunity to view aircraft close up while
they are in the hangar for maintenance.

JAL SORAIKUThis is the inclusive name for the various
next-generation programs conductedby the JAL Group. There are five classes
available.
JAL Paper Plane class
JAL Sky Eco Classes
JAL Career Talk for Students	JAL Safety Demonstrations by Cabin
Attendants	JAL Job Interview Simulation forStudents

World Children’s Haiku
This poetry project
spreads the joy of
haiku, the world’s
shortest form of
poetry, worldwide
and develops
sensitivity by creating
and improving an
understanding andinterest in Japanese culture and Japan
itself among the world’s children. The
beginning of the project dates back to ahaiku contest JAL hosted on an Americanradio program in 1964. Since the creationof the JAL Foundation in 1990, we havehosted the biennale World Children’s
Haiku Contest. to which children 15

years old or younger from Japan andaround the world submit their picturesand haiku they have written. The Grandprize-winning haiku from each country
are collected and published the following
year in an anthology titled “Haiku by WorldChildren,” which is donated to domestic
and overseas educational institutions andlibraries. We have received more than
680,000 works from 52 countries andregions so far.

Support for UNICEF

https://www.jal.com/en/csr/
society/activity.html

Corporate Governance

JAL Group Corporate Governancedifferent countries free of charge.
JAL cabin crew participate in an
activity hosted by the Japan Committee
for UNICEF at each year-end by collecting
donations for UNICEF on the street.

Corporate Governance. .......................................... 88
Risk Management System. ..................................... 92
Lead Independent Outside Director Discusses
JAL Corporate Governance. ................................. 94
Members of the Board of Directors......................... 95
Corporate Auditors and Executive Officers.............. 96Contents

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

86

JAL has established a scholarship toprovide financial support for students
enrolled in pilot training courses at private
universities.

We have contributed to UNICEF’s
activities over the years as a memberof the Steering Committee of UNICEF’s
Change for Good Program.

Support for UNICEF
In 1991, JAL launched the Change forGood® fundraising campaign for UNICEF
on its flights between Tokyo (Narita) and
New York to collect spare change in
foreign coins from passengers.
This campaign was expanded in2006 to include all international flights
operated by JAL. Passengers are simply
asked to make voluntary donations offoreign coins that are left unused after
they travel. We also provide support bytransporting coins collected in airport
customs areas and lounges in Japan toWings of Japan Scholarship

87JAL Group Corporate GovernanceCorporate Governance

The JAL Group has voluntarily established five committees,a majority of whose members are Outside Directors, in orderto enhance management transparency and managementmonitoring for the purpose of strengthening enterprise value.
Status of Corporate GovernanceCorporate Governance System

We maintain an awareness that our corporate group is a memberof society at large with the duty of fulfilling our corporate social
responsibility and contributing to society as we develop ourbusiness, in addition to fulfilling our financial responsibility of earning
adequate profits by providing high-quality products through faircompetition while maintaining flight safety as the leading company
in safety in the transport sector 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,“The JAL 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 betterment ofsociety.” We will strive to enhance corporate value and achieve
accountability by establishing a corporate governance system that
results in a high level of management transparency and strong
management monitoring, while at the same time engaging inspeedy and appropriate management decision-making.
The Board of Directors has established corporate governancethat adheres to the Fundamental Policies of Corporate Governanceas a key set of rules pursuant to the Companies Act, relevant laws
and regulations and the Articles of Incorporation, and reviews it atleast once a year.

Board of Directors

Directors

The Board of Directors ensures a high level of managementtransparency and strong management monitoring through theelection of candidates for the positions of Director, Corporate
Auditor and Executive Officer, decides their remuneration andmakes important decisions.
In order to separate the management-monitoring function
and business execution function, the Board appoints a Director
who is not a business executive director as Chairperson, and an
appropriate number of three or more Outside Directors who qualify
as highly independent to provide appropriate advice.
In order to carry out efficient decision-making, the Board may
delegate decision-making concerning matters set forth in the
Administrative Authority Criteria Table to the President pursuant toRegulations for Kessai (written approval) and Administrate Authority
approved by the Board. The Management Committee has been
established for the purpose of contributing to appropriate andflexible decision-making concerning management issues by the
Board of Directors and the President.
The Board of Directors has established the Corporate
Governance Committee, which comprises the Chairperson of
the Board and Outside Directors, to evaluate the effectiveness of
the Board of Directors with reference to self-evaluations by each
Director once a year, review the operation, etc., of the Board
appropriately, and disclose a summary of its findings. The Lead
Independent Outside Director serves as Chairman of the Corporate
Governance Committee.

Corporate Governance System
General Meeting of Shareholders
Appointment/
Dismissal

Appointment/
Dismissal
Auditing

Board of Directors
Appointment/Dismissal,
Instruction/Command

Instruction/
Delegation of Authority

ReportRecommendation
Advisory

Management
Committee

President

Instruction/
Delegation of Authority

Group Council for
Safety Enhancement
General MeetingGroup Operational
Safety Promotion
Committee

Executive Officers Board
Departments and Subsidiaries

Management
Liaison Committee

Audit

Risk Management Committee
Financial Risk Committee
JAL Philosophy Committee
CSR Committee

Accounting Auditor

Collaboration

Guidance/Advice

Collaboration

Legal Advisors

Board of Corporate Auditors
The Board of Corporate Auditors makes appropriate judgmentsfrom an independent, objective perspective, based on their fiduciary
responsibilities to the shareholders, when fulfilling their roles andresponsibilities, such as auditing the execution of Directors’ duties,
appointing or removing accounting auditors and executing rights
concerning auditors’ remuneration.

Corporate Auditors
The Corporate Auditors monitor important matters concerning
corporate management, business operations and the execution ofduties by reviewing important Kessai (written approval) documents,
as well as participating in Board meetings and other important
meetings. Furthermore, the Corporate Auditors, together with staff
members of the Corporate Auditors Office, conduct an annual
audit of each business site, subsidiary and affiliated company andreport the results to the Representative Directors. The Corporate
Auditors also share information with the internal audit departments
and accounting auditors and hold regular meetings with corporate
auditors of subsidiaries to improve and strengthen auditing of the
JAL Group.
The Corporate Auditors are provided with the means toacquire a sufficient understanding of their required roles andresponsibilities through provision of corporate information andopportunities for regular participation in external training andexternal associations, etc., for which the Company bears thenecessary expenses.
Outside Corporate Auditors are appointed from among
persons with vast knowledge and experience in various fields, andthose who do not qualify as highly independent as defined by the“Standards for Independence of Outside Directors” (described
below) established by the Company are not appointed. Outside
Corporate Auditors ensure sound management by conducting
audits from a neutral and objective standpoint, with the cooperationof internal audit departments and accounting auditors.
To deepen the Outside Auditors’ understanding of theCompany, we arrange tours of airports and sales, maintenance andother workplaces and provide training on safety.

Establishment of Various Committees
We have established the following committees under the
Board of Directors to build a corporate governance systemthat results in a high level of management transparency andstrong management monitoring. The majority of each committee
comprises Outside Directors.

Corporate Governance Committee(Chairperson: Kimie Iwata, Director, Outside, Independent)

The Corporate Governance Committee inspects initiatives under
the JAL Group Fundamental Policies at least once a year, conducts
analyses and evaluations to verify whether they contribute tosustainable growth and enhancement of corporate value in themedium to long term, and provides necessary recommendations
and reports to the Board of Directors. The committee comprises
three Outside Directors (Iwata, Kobayashi and Ito) in addition to
Director and Chairperson Onishi.

Nominating Committee(Chairperson: Masatoshi Ito, Director, Outside, Independent)

When submitting a proposal to the General Meeting of Shareholders
concerning the appointment of candidates to the positions of
Director and Corporate Auditor, the Nominating Committee makesa comprehensive judgment of the personality, knowledge, ability,
experience and performance, of the candidate in response toinquiries from the Board of Directors and reports back to the Board.
The Nominating Committee considers a succession plan for top
management members such as the President, moreover, in orderto realize our Corporate Policy, medium- to long-term management
strategies and management plan. The committee comprises three
Outside Directors (Iwata, Kobayashi and Ito), President Ueki and
Executive Vice President Fujita.

Compensation Committee(Chairperson: Eizo Kobayashi, Director, Outside, Independent)

The Compensation Committee discusses matters concerning theamounts of compensation paid to Directors, Executive Officers andCorporate Auditors based on an inquiry from the Board of Directors
and reports back to the Board. The Compensation Committee
determines a compensation scheme that provides sufficient incentives
for attaining sustainable growth. The Compensation Committee
members are the same as the Nominating Committee members.

Personnel Committee(Chairperson: Yoshiharu Ueki, President)

When appointing or removing an Executive Officer, the Board of
Directors consults the Personnel Committee and takes the Personnel
Committee’s response into account before making a decision. The
Personnel Committee members are the same as the Nominating
Committee members.

Officers Disciplinary Committee(Chairperson: Kimie Iwata, Director, Outside, Independent)

Any disciplinary action imposed on Directors or Executive Officers
is determined by the Officers Disciplinary Committee. The Officers
Disciplinary Committee members are the same as the Nominating
Committee members.
Chapter TOP

Contents

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

ReportSignificant
IssuesCorporate Brand
Promotion Council

Collaboration Report

Personnel Committee
Officers Disciplinary
Committee
Financial Audit

Group Earnings
Announcement
SessionBoard ofCorporate Auditors

Nominating Committee
Compensation Committee

Recommendation

88

Corporate GovernanceCommittee

Appointment/
Dismissal

Legal considerations are explained to the Directors to ensure thatthey are aware of their responsibilities, including the “fiduciary
duty of loyalty” and the “duty of ensuring prudent management.”
The term of office is set at one year in order to confirm theiraccountability in each fiscal year.
Outside Directors are appointed from among persons withvast knowledge and experience in various fields in order to ensure
diversity. Those who do not qualify as highly independent as
defined by the “Standards for Independence of Outside Directors”(described below) established by the Company are not appointed.
Furthermore, one Outside Director among the Outside Directors
is appointed Lead Independent Outside Director to improvecoordination with the Corporate Auditors and internal divisions.
To deepen the Outside Directors’ understanding of theCompany, we arrange tours of airports and sales, maintenance andother workplaces and provide training on safety.

89

JAL Group Corporate GovernanceCorporate Governance

In-house governance bodies, including one
under the direct control of the PresidentManagement Committee (Newly Established)Group Earnings Announcement Session (Convened 12
times in fiscal 2015)

Corporate Brand Promotion Council (Convened 12
times in fiscal 2015)
The Corporate Brand Promotion Council establishes important
policies on the corporate brand (corporate value) based on the
JAL Group Corporate Policy and strategies, clarifies the status ofcorporate activities, manages the progress of various corporate
brand enhancement measures and shares information.

Group Council for Safety Enhancement General
Meeting (Convened 13 times in fiscal 2015)
The Corporate Safety and Security Department has been
established directly under the President for the purpose of
rigorously promoting safety. The Group Council for Safety
Enhancement General Meeting, which serves as secretariat for the
Corporate Safety and Security Department, shares information on
safety in daily operations, decides countermeasures, considers
important measures related to safety and checks policies.

Management Liaison Committee (Convened 24 times infiscal 2015)

Internal Auditing
The Internal Auditing Department, an independent body under
the direct control of the President, carries out operations with theChief Auditor as Head of Internal Auditing and Auditing Department
personnel as internal auditors. These auditors pass on information
on important issues and conditions related to internal control,
discovered through their internal auditing activities to auditing
corporations, the corporate auditors and other relevant parties.
They seek guidance, advice and other forms of mutual assistanceand cooperation when necessary.

Board ofCorporate
Auditors

During the selection process for Outside Directors, the Company consistently strives to ensure comprehensive diversity while nominating
candidates with a wealth of experience in various fields who are also equipped with insight, specialized knowledge and other strengths.
Selection of nominees is also based, moreover, on the “Standards for Independence of Outside Directors” presented above. The JAL
Group’s current Outside Directors were chosen for the reasons summarized below.

Directors

Corporate
Auditors

19

93%

89%

Name

12

—

100%

Kimie
Iwata

Throughout her many years serving in government and corporate positions, Ms. Iwata has accumulated a diverse range of experience and accomplishments inactivities promoting more active roles for women, corporate social responsibility (CSR) and many other fields, while also cultivating deep insight, attributes that
we believe make her a promising member who can make a significant contribution to JAL’s management as an Outside Director. She also serves as chairperson
for the Japan Institute for Women’s Empowerment & Diversity Management and as a Tokyo municipal corporate auditor, among other positions.

Eizo
Kobayashi

Mr. Kobayashi has accumulated wide-ranging experience and a fund of knowledge concerning management during his time serving as head of management
for a general trading company, where he takes responsibility for global corporate management and a diverse range of other tasks for the corporate group as awhole. We therefore believe he is equipped to make significant contributions to JAL’s management. He currently serves as Chairman of ITOCHU Corporation,as an outside auditor for OMRON Corporation and as an outside auditor for Asahi Mutual Life Insurance Co., among other capacities.

Masatoshi
Ito

Mr. Ito is a top executive in a global corporation who excels in marketing that incorporates the customer’s perspective. He possesses a diverse range ofexperience and insight into management, attributes that equip him to make a significant contribution to JAL’s management as an Outside Director. He serves
as Representative Director and Chairman of the Board of Ajinomoto Co., Inc. and as Head Director of the Japan Advertisers Association Inc.

Hiroyuki
Kumasaka

Mr. Kumasaka has accumulated extensive experience and accomplishments as a certified public accountant. His rich fund of wide-ranging insights into theaccounting field make him a perfect fit for the position of Outside Auditor, in which has served JAL since March 2011. He is also an outside director (auditing
committee member) of Matsuda Sangyo Co., Ltd.

ShinjiHatta

A professor of Aoyama Gakuin University, Prof. Hatta is an authority on financial auditing and corporate internal control. He brings wide-ranging experienceand deep insight in these areas to the position of Outside Auditor for JAL, which he has occupied since July 2012. Professor Hatta also serves as an outside
auditor for the Development Bank of Japan Inc., as a council member on the Japanese government’s Financial Services Agency Business Accounting Council
and in various other positions.

Osamu
Kamo

Since earning certification as an attorney in April 1973, Mr. Kamo has accumulated a broad range of experience and cultivated deep knowledge in the fields
of compliance and corporate governance. He serves as an attorney at Ginza Sogo Law Firm, as a committee member at CHANS (Office for Government
Procurement Challenge System, under the jurisdiction of the Japanese Cabinet Office) and in various other capacities.

Standards for Independence of Outside
Directors
We have established the following standards to determine whether
an Outside Director qualifies as independent in order to establish
a Corporate Governance System that results in high managementtransparency and strong management monitoring and to enhance
corporate value. (Basically, persons who are not described in thefollowing items qualify as independent.)
1.	A person who executes or has executed business in the
Company or a consolidated subsidiary during the past 10 years.
2.	A person who could be described by any of items a~f during thepast three years.
a.	A business counterpart or a person executing business for abusiness counterpart whose transactions with the Company
for one business year exceeded 1% of the consolidated
revenue of the Company or the business counterpart.
b.	A major shareholder of the Company or a person executing
business for a shareholder holding an equity ratio of 5% ormore in the Company.
c.	A major lender to the Company or a person executing
business for such a lender.
d.	A person who receives over 10 million yen in donations
annually from the Company, or a person belonging to an entity
receiving such donations.
e.	A person 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 the consolidated revenue of the Company.
f.	A person executing business for the Company who also
executes business for another company as Outside Director.
3.	The spouse or a relative within the second degree of kinship of
an individual described in 1 or 2.
(Note)	“A person executing business” refers to an executive director or
executive officer.

Independent
Officers

Issues for Corporate GovernanceFundamental Policies on the Internal Control System

We have established a corporate governance framework based on
the stipulations of the Corporate Governance Code implemented
by the Tokyo Stock Exchange as part of ongoing efforts to increase
our corporate value. Because the JAL Group considers thefollowing two issues to be of particular importance, we have clearly
expressed them in the Group’s Fundamental Policies of Corporate
Governance. The committees established by the Board of Directors
also focus on these issues in their discussions and deliberations.

The JAL Group has established the following Fundamental Policies
on the Internal Control System in order to increase the effectivenessof the Fundamental Policies on Corporate Governance. These
policies will help to ensure compliance with the Companies Act
and the Ordinance for Enforcement of the Companies Act in ourbusiness activities. We make adjustments in our system of internal
control, moreover, evaluate and verify its operation and instituteimprovements as necessary.

Succession planning for Chief Executive Officers andother top management
The Nominating Committee considers the succession plan formembers of top management such as the President in order torealize our Corporate Policy, medium- to long-term management
strategies and management plan.

Directors’ roles/responsibilities and compensation for
management personnel
With the objectives of ensuring sustained, steady growth andstrengthening corporate value over the medium to long term,
the Compensation Committee is considering the introduction in
fiscal 2017—the first year of the next Medium Term Management
Plan—of performance-linked compensation and compensation for
management personnel in the form of JAL shares. This is expected
to give managers strong motivation to pursue efforts in close sync
with JAL’s Corporate Policy and strategies.

1.	We have developed a system to ensure compliance with the Articles of Incorporationand laws and regulations governing the execution of the duties of directors.
2.	We have developed a system concerning the preservation and management of
information concerning the execution of the duties of directors
3.	We have developed regulations and other systems concerning risk management withrespect to losses.
4.	We have developed a system to ensure that the duties of the Directors are executed
efficiently.
5.	We have developed a system to ensure that the duties of all JAL Group personnel are
executed appropriately.
6.	We have developed an employee system that assures the ability to respond should
Corporate Auditors require that employees by assigned to support their duties, tomaintain the independence of such employees from Directors and to ensure that the
instructions given these employees by the Corporate Auditors are effective.
7.	We have developed a system governing reports, etc., to Corporate Auditors.
8.	We have developed a system for advance payment or repayment of costs arising fromthe execution of duties by the Corporate Auditors and a policy for processing of costs
or liabilities arising from 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.
Please visit the following page for details on adjustments and operation ofJAL’s internal control system:

http://www.jal.com/en/outline/corporate/
governance/internal_control.html
Chapter TOP

Contents

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

90

The Management Liaison Committee checks the progress ofmatters related to management and shares information among the
Directors.

Board ofDirectors

Average rate of attendanceOutside Auditors

The Group Earnings Announcement Session is attended by the
Directors, Executive Officers and presidents of major subsidiaries toshare the status of Group earnings and consider ways to improvebusiness performance.

Meetings

Number ofmeetings held

Selection of Outside Directors

Outside Directors

The Management Committee is a body established by theCompany for the purpose of contributing to appropriate and flexible
decision-making by the Board of Directors and the President. The
Committee deliberates important issues requiring a resolution of theBoard of Directors and matters requiring approval by the President
that must be confirmed by the Management Committee before they
are presented to the Board or to the President. The Management
Committee was established in February 2016 to replace theManaging Executive Officers Committee for the purpose of moreclearly differentiating the auditing and executive functions.

Board of Directors and Board of Corporate Auditors
Meetings and attendance91

JAL Group Corporate GovernanceRisk Management System

Solving governance-related problems and fostering amore robust management framework through information
disclosure and the establishment and operation of asounder risk management system.
Promoting Compliance
To promote compliance with all laws, regulations and rules
governing our corporate activities, we have designated the General
Affairs Department of Japan Airlines Co., Ltd. to oversee allcompliance matters, and are implementing various measures in a
focused effort to elevate employee awareness.
We have created the JAL Group Compliance Network
comprising directors from each JAL Group company, which seeks
to cultivate a climate of compliance throughout the JAL Groupby sharing relevant information promptly, publishing in-housenewsletters and mail magazines about compliance regularly andproviding information over the Intranet.
In addition to these efforts, we offer compliance training andvarious seminars on laws and regulations organized by the Legal
Affairs Department in both one-on-one and e-learning formats as partof proactive efforts to disseminate relevant knowledge throughout
the Group. In these ways, we promote activities rooted in widely
accepted social standards as well as legal-risk prevention measures.

Risk Management System
The JAL Group manages risks by dividing them into three
categories: (1) corporate risks associated with managementin general and excluding risks related to air transportation; (2)operational risks associated with aviation safety, aviation security
and other issues related to air transportation; and (3) strategic risks
associated with business management that may have a material
impact on corporate revenues and expenditures.
We have established the following five committees in order
to identify existing risks, analyze and assess them, and implement
appropriate measures in response.

1. Risk Management Committee
The Risk Management Committee is headed by the Executive
Officer of General Affairs, and its membership primarily comprises
general managers responsible for supervising operations
departments. The Committee takes responsibility for overall risk
management—encompassing corporate risk, operational risk
and strategic risk—for the purpose of stabilizing Group-wide
management activities. It has also established the JAL Group
Basic Policies on Risk Management. When existing risks are
identified, it reports on the progress of responses to them andshares information with Group management via the Management
Liaison Committee.

4. Group Operational Safety Promotion Committee
Organized as a subdivision of the Group Council for Safety
Enhancement General Meeting, the Group Operational Safety
Promotion Committee maintains and strengthens collaborative,
safety-related pursuits among departments/divisions as well as
among Group airline companies with the aim of enhancing thesafety of Group air transport operations as a whole. The Committee
comprises the Executive Officer (who serves as Chairperson)of the JAL Operational Safety Promotion Committee, heads ofdepartments responsible for JAL safety management appointed by
the Chairperson, and Executive Officers responsible for safety atGroup airline companies.

2. Information Security Committee
The Information Security Committee is headed by the Executive
Officer of General Affairs and the Executive Officer for IT Planning,
and its membership comprises the heads of relevant departments.
The Committee carries out activities specific to information
management, upgrades information security measures and strives
to reduce corporate risk.

5. Financial Risk Committee
The Financial Risk Committee is chaired by the Executive
Officer of Finance and Accounting and includes the President,
Executive Vice President and heads of the relevant departments/
divisions. The Committee identifies financial risk as appropriate
and strives to facilitate improvements in corporate management.
More specifically, it conducts regular financial condition-based
simulations and reviews the results. In the event of a major financial
crisis, large-scale disaster or other major risk-generating event that
the Committee expects to exert a large, quantifiable impact on theGroup, moreover, it calculates the estimated financial impact of therisk in question and, if necessary, pursues collaborative responses
with the Risk Management Committee.

3. Group Council for Safety Enhancement General Meeting
The Corporate Safety and Security Department promotes safety
rigorously under the direct control of the President. The GroupCouncil for Safety Enhancement General Meeting, which serves
as secretariat for the Corporate Safety and Security Department,
shares information on safety in daily operations, determines
countermeasures, considers important measures related to safety
and checks policies.

Risk Management System

Board of Directors

Promotion of Safety
and Security

Promotion of
Aviation Safety

Safety Management
Security Management

Management Liaison Committee

When responding to specific risks that threaten our ability tofulfill our responsibilities as a provider of public transportation,such as the emergence of pandemic influenza or unidentified
viral infectious diseases or occurrence of earthquakes, we haveestablished a business continuity plan (BCP) that enables us tocontinue business effectively in emergency situations based on
guidelines established in collaboration with regulatory bodies andother relevant institutions. The BCP covers the basic points ofpolicies and procedures that are necessary for ensuring the safetyof our employees and their families and for maintaining air transport
operations essential to the JAL Group, including reservations andguidance, as well as payment and settlement operations. We
conduct regular reviews and implement revisions as required forenhancing practical application of the BCP.
We responded according to our BCP during the Ebola
outbreak in West Africa in 2014. We coordinated our operations
with the relevant governmental bodies, developed the necessary
systems and added the “Policy for Handling the Ebola Virus
Disease (International Flights)” to our BCP.
We introduced a safety confirmation system in 2007 to
facilitate speedy confirmation of the safety of all JAL Group staff
and their families in the event of a large-scale disaster. The Groupwide system was upgraded in 2014 to make safety-related
information available more quickly. Communication and otherpractice exercises are conducted regularly throughout the JAL
Group to foster staff awareness of risk management and reinforce
preparedness for unexpected situations.

An incident involving leakage of personal information from JAL
Group data occurred in September 2014 when hackers attacked
the JAL Mileage Bank’s systems and gained illegal access to thecustomer information management system. We deeply regret theinconvenience and concern this has caused to many customers
and persons involved. We have responded by strengthening
information security as a top priority and taking steps to prevent areoccurrence.
Specifically, we pushed forward with previously planned
measures for reinforcing information security to establish a robust
system for detecting and monitoring increasingly advanced andcomplex 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 that thesemeasures are making steady progress.

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

92

Council for
Safety Enhancement
General Meeting

Management Committee

Information Security Measures

Business Continuity Plan (BCP)

Risk Management Committee Administration: General Affairs Department(Overall Supervision of Risk Management)
Information Security Committee

Corporate Risk, Operational Risk, Strategic Risk

Responses by Responsible Departments

Chapter TOP

Contents

93JAL Group Corporate Governance

Lead Independent Outside Director Discusses JAL Corporate GovernanceMembers of the Board of Directors

JAL provides its Outside Directors with full, highly detailed
information disclosure reflecting its sincere efforts to achieve greater
management transparency. Working to support the JAL Group’s
growth, I try to motivate executives and other Group employees.

Masaru Onishi

Yoshiharu Ueki

Director, Chairman

Representative Director,
President

Chairman, Management
Meeting Executive Officers,
Chairman, Council for Group
Safety Enhancement, Chairman,
Corporate Brand Promotion
Council, Chairman, JAL Philosophy
Committee, Chairman, CSR
Committee

Reappointed

Reappointed

Kimie Iwata

Outside Director

Tadashi Fujita

Junko Okawa

Norikazu Saito

Representative Director,
Executive Vice President

Representative Director,
Senior Managing Executive Officer

Director, Senior Managing
Executive Officer

Aide to the President

Thorough Disclosure of Information to
Outside Directors and Establishment of
Effective Committees by JAL

Finance & Accounting

Reappointed

Reappointed

Reappointed

Toshiaki Norita

Hideki Kikuyama

Toshinori Shin

Director, Senior Managing
Executive Officer

Director, Senior Managing
Executive Officer

Director, Senior Managing
Executive Officer

Efforts to Strengthen the GovernanceFunctions of the Board of Directors
As concerns the JAL Board of Directors, I felt its members needed moretime for discussion to reach a true understanding of the management
environment, management-related issues and other such conditions, andto then engage in thorough deliberations of business plans, strategies andother matters based on that understanding. In order to secure sufficient
discussion time to these ends, we assigned a portion of the items inpending Board resolutions to the executive staff in February 2016. We
abolished the Managing Executive Officers Committee, formerly thesecond-highest decision-making body after the Board of Directors, atthe same time, thus clarifying the President’s role as chief executive, andcreated the Management Committee to serve in an advisory capacity.
We also increased the number of Outside Directors serving the General
Meeting of Shareholders from two to three. I believe that Outside Directors
can make use of their wide-ranging experience and expertise, cultivatedthrough endeavors outside of the JAL Group, to encourage even freer andmore open discussions by the Board of Directors.

Corporate Planning
Business Creation Strategy

Managing Division Route Marketing

Flight Operations
Safety General Manager

Reappointed

Newly appointed

Newly appointed

Kimie Iwata

Eizo Kobayashi

Masatoshi Ito

Outside Director

Outside Director

Outside Director

My Role as a JAL Outside Director and My
Expectations for the JAL GroupAs an independent Outside Director, I seek to employ my uniqueperspectives, decision-making skills and other capabilities cultivatedthrough experience working outside the JAL Group, and to express my
opinions in a frank, unreserved manner. I hope to continue doing so in
the future. Fully aware of my responsibility for serving the shareholders,moreover, I work to motivate JAL management and other employees withthe goal of raising shareholder value over the medium-to-long term.
The most notable characteristic of the JAL Group’s corporate
governance is the sincere dedication, rooted in the JAL Philosophy, ofthe management personnel and the employees who serve them. It is myhope that the Group can retain the spirit of humility, earnest devotion andpassion promoted by the JAL Philosophy as its members endeavor torevitalize the Group and accomplish even greater things in the future.

Reappointed
Independent

OutsideReappointed
Independent

Outside

Newly appointed

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

94

JAL’s Outside Directors can participate in meetings of the Board of
Directors and the Management Committee and communicate information
to these bodies. We are also invited to participate in important meetingsof the Group Earnings Announcement Session. I think very highly of JAL’s
detailed and thorough disclosure of information to Outside Directors aswell as of the Group’s impressive management transparency.
As a company with a Board of Corporate Auditors, JAL has
voluntarily established various committees. The Group added a fifth
committee to oversee corporate governance in October 2015 in responseto the establishment of the Corporate Governance Code. This marked
a new addition to the four existing committees organized to oversee
nominations, personnel, compensation and disciplinary measures forcorporate officers.
Outside Directors serve as heads of four of the five committees,
excluding only the Personnel Committee, and a majority of eachcommittee’s membership comprises Outside Directors to ensure sufficient
independence from JAL’s executive management. The decisions resulting
from committee deliberations are reflected in concrete measures, leading
to what I consider highly effective operations.
Issues such as succession planning for chief executive officers
and other top management personnel, a new compensation framework
including performance-linked compensation and compensation in theform of JAL shares, and other issues raised in the Corporate Governance
Report are being appropriately deliberated, for example, by the Nominating
Committee, Compensation Committee and/or other committees. The
Corporate Governance Committee evaluated the effectiveness of theBoard of Directors and, following a resolution by the Board, disclosed
the results of its evaluation in May 2016. The Personnel Committee iscontinually striving to secure successors to central management positions
at the earliest possible date from among executive officer nominees andother personnel.

Communication Division

OutsideIndependent

Chapter TOP

Contents

95

JAL Group Corporate GovernanceCorporate Auditors and Executive Officers

Corporate Auditors

Hisao Taguchi

Yasushi Suzuka

Hiroyuki Kumasaka

Shinji Hatta

Osamu Kamo

Corporate Auditor

Corporate Auditor

Outside Auditor

Outside Auditor

Outside Auditor

Mr. Taguchi has served in various
departments since joining JAL, including
Sales, Personnel Affairs and Flight
Operations. He was appointed Executive
Officer and CEO for the Americas Office inApril 2007 and Executive Vice President
in February 2010. He has been a memberof the Audit & Supervisory Board since
February 2012.

During his career at JAL, Mr. Suzuka
has engaged primarily in maintenance
operations such as maintenance projects
and engineering. He has, moreover, madea substantial contribution to JAL Groupmanagement. A member of JAL’s Audit
and Supervisory Board since July 2012,
he is also chairperson of the Japan SAP
Users’ Group.

Mr. Kumasaka has acquired a wealth ofexperience and advanced knowledge inaccounting in the course of a career as acertified public accountant. He became a
JAL Outside Auditor in March 2011. Healso serves as an outside director (auditing
committee member) for Matsuda Sangyo
Co., Ltd.

Since his certification as an attorney inApril 1973, Mr. Kamo has accumulated
extensive experience and expertisethe fields of compliance and corporate
governance. An attorney for the Ginza Sogo
Law Firm, he also serves as a committee
member for CHANS (Office for Government
Procurement Challenge System, under thejurisdiction of the Japanese Cabinet Office),among other capacities.

Reappointed

Reappointed

Reappointed

Professor Hatta is an authority on financial
auditing and corporate internal control andhas served as an Outside Auditor for JAL
since July 2012. A professor of Aoyama
Gakuin University, he also serves as an
outside auditor for the Development Bankof Japan Inc. and as a council member
on the Japanese government’s Financial
Services Agency Business Accounting
Council, among other positions.

Reappointed

Newly appointed

OutsideOutsideOutsideIndependent
Independent

Managing Executive Officer

Executive Officer

Nobuyoshi Gondo

Tsuyoshi Yamamura

Cargo & Mail

Tetsuya Onuki

President, J-AIR Co., Ltd.

Munemitsu Erikawa

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

Kiyoshi Marukawa

President, Japan Transocean Air Co., Ltd.

Akira Yonezawa

Managing Division Route Marketing(International Route Marketing)Toshiki Oka

Purchasing

Jun Kato

Managing Division Route Marketing(Products and Services Planning)

Hiroyuki Hioka

General Affairs

Hidetsugu Ueda

Human Resources, Officer Responsible for Education, Vice
President, Human Resources Management

Tadao Nishio

Managing Division Route Marketing (Domestic Route Marketing)

Hoshiko Nakano

Senior Vice President for Western Japan Area

Hiroki Kato

President, Japan Air Commuter Co., Ltd.

Tomohiro Nishihata

Managing Division Route Marketing (Passenger System
Planning)

Takahiro Abe

Airport Operations

Hideki Oshima

Managing Division Route Marketing(International Relations and Alliances)

Eri AbeCabin Attendants

Kazuko Yashiki

Vice President, Haneda Airport, President, JAL Sky Co., Ltd.

Consolidated Statements of Income
and Comprehensive Income

Takuya Oda

Human Resources

Consolidated Statements of Changes in Net Assets

Yoriyuki Kashiwagi

Deputy General Manager, Managing Division Passenger Sales
International Passenger Sales, Web Sales, Senior Vice President
for Eastern Japan Area

Consolidated Statements of Cash Flows

Corporate Safety & Security

Kiyoshi Ishizeki
IT Planning

Ryuzo Toyoshima
Corporate Control

Shinichiro Shimizu
Secretariat

Yuji Akasaka
Engineering & Maintenance,
President, JAL Engineering

Hideo Ninomiya
Managing Division Passenger Sales,
Domestic Passenger Sales,
President, JAL Sales

Financial Data

Financial Data
Evaluation and Analysis of Financial Conditions by
Management........................................................... 98
Consolidated Financial Statements. ...................... 102
Consolidated Balance Sheets

Notes to Consolidated Financial Statements(As of July 1, 2016)

Contents

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

96

Independent

97

Financial Data

Evaluation and Analysis of Financial Conditions by Management

Analysis of Financial Conditions and Operating Results–3.2%

1,014.3

–2.0%

179.6

209.1

+16.4%+18.1%

161.5

190.8

Operating margin (%)

13.4

15.7

+2.3ptOrdinary income

175.2

209.2

+19.4%Net income *1

149.0

174.4

+17.1%ASK (million seat kilometers) *2

84,00384,196+0.2%

RPK (million passenger kilometers) *3+3.8%

Air transportation segment60,10362,411

EBITDA margin (%) *4

19.8

22.3

+2.5ptEBITDAR margin (%) *5

21.8

24.0

+2.3pt

8.9

9.3

+0.5

12.3

12.0

–0.3

Unit cost (yen) *6
Including fuel*1 Net income attributable to owners of the parent company*2	ASK (available seat-kilometers). A unit of passenger transport capacity: Total number ofseats x distance flown (km)*3	RPK (revenue passenger-kilometers). Total flight distance covered by revenue
passengers: Number of revenue passengers x distance flown (km).
*4	EBITDA margin = EBITDA/operating revenue
EBITDA = operating income + depreciation expense*5	EBITDAR margin = EBITDAR/operating revenue
EBITDAR = operating income + depreciation expense + aircraft lease*6	Unit cost = consolidated air transport cost (excluding fuel cost and transactions withaffiliates where revenues and expenses are internally settled) / ASKInternational passenger operations (operating results)
Fiscal 2014 Fiscal 2015 Year-on-year

ASK (million seat kilometers)

454.8
47,696448.7
48,327

–1.3%
+1.3%

RPK (million passenger kilometers)

36,10938,069+5.4%

Revenue passengers carried(unit: 1,000)

7,793

8,080

+3.7%

Load factor (%)

75.7

78.8

+3.1pt

12.6

11.8

–6.4%

9.5

9.3

–2.6%

58,36255,537–4.8%

Passenger revenues (billion yen)

1

Yield (yen) *2

Unit revenue (yen) *3

Unit passenger revenue (yen) *In domestic passenger operations, ASK decreased by 1.2% fromthe year before, while RPK increased by 1.5%, resulting in yearon-year growth of the load factor of 1.8 points to 67.9%. Efficientrevenue management and the introduction of demand stimulation
measures contributed to year-on-year increases in yield of 1.3%
and in unit passenger revenue of 1.3%. As a result, domestic
passenger revenues increased 2.8% from the previous year to501.2 billion yen.

+1.5%

31,644

32,114

+1.5%

66.1

67.9

+1.8pt

20.3

20.6

+1.3%

Load factor (%)
1

Yield (yen) *2
3

Unit passenger revenue (yen) *

14.0

+4.1%

15,609+1.3%*1 Yield = Passenger revenues / RPK*2 Unit revenue = Passenger revenues / ASK*3 Unit passenger revenue = Passenger revenues / Passengers

Unit passenger revenue caused to increase revenue by 6.4 billion
yen from the previous year with support from changes in thecustomer mix achieved through revenue management. Revenues
in relation to passenger numbers increased by 7.3 billion yen yearon-year, boosted by the new “Ultra Sakitoku” discount fare and anincrease in the number of international visitors to Japan, despite
the decrease in ASK of 1.2% year-on-year.

Analysis of Changes in Operating Expenses
Fuel costs decreased by 54.3 billion yen year-on-year to 228.1
billion yen due to a significant decline in fuel prices. Maintenancecosts increased by 7.3 billion yen year-on-year mainly due to theimpact of the weaker yen. Personnel costs increased by 9.7 billion
yen year-on-year due to a raise of the base salary and bonus andthe impact of foreign exchange rates.
Expenses of travel agency/incidental business, etc. wereabout level with revenue. However, the year-on-year expenditure
decrease of 23.5 billion yen stems partly from a substantial reductionof incidental distribution business in aircraft parts, conducted byengineering and maintenance subsidiaries. The decrease also reflects
an accounting change from the previous fiscal year, whereby resaleof fuel to related companies is recorded as a net amount. From fiscal
year 2016 onwards, this year-on-year difference by the accountingchange will not occur since the revised accounting will be used infuture years. “Other expenses” increased by 22.2 billion yen year-onyear mainly due to increased expenses for service enhancement andthe impact of the weaker yen.

Changes in operating income(Billions of yen)

29.5 billion yen(+16.4%)179.6–6.0 +13.7–6.8 +13.9–7.3 –1.0
+54.3

–9.7

209.1
–22.2

–22.8 +23.5*Includes resale of fuel torelated companies
Operating revenues –8 billion yen

98

13.4
15,407

Unit revenue (yen) *J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6*1 Yield = Passenger revenues / RPK*2 Unit revenue = Passenger revenues / ASK*3 Unit passenger revenue = Passenger revenues / Passengers

24,341Other costs

1,127.4

1,034.6

23,993

Revenue passengers carried(unit: 1,000)

Labor costs

1,165.0

RPK (million passenger kilometers)

MaintenanceOperating profit

–0.6%
+0.7%

+2.8%
–1.2%

Aircraft depreciationand leases

Air transportation segment

1,336.6
1,205.2

501.2
35,869Fuel

Air transportation segment
Operating expense

1,344.7
1,196.2

487.5
36,306

Travel agency, incidental
business expenses (*)

Operating revenues

ASK (million seat kilometers)

Passenger revenues (billion yen)

Travel agency, incidental
business revenues (*)(Billions of yen)

Fiscal 2014 Fiscal 2015 Year-on-year

Fiscal 2014 Fiscal 2015 Year-on-year

Operating revenues decreased by 8 billion yen from the previous
year, although domestic passenger operations were strong.
International passenger operations also experienced a year-onyear decline in operating revenues of 6 billion yen due to lower fuelsurcharge revenues, despite a significant rise in passenger numbers
due to robust inbound demand. Domestic passenger operations
saw operating revenues rise by 13.7 billion yen from the year
before, as the number of passengers increased due to changes incustomer mix because of improved revenue management and theintroduction of various measures to stimulate demand.
Operating expenses fell by 37.5 billion yen from the previous
year due to the dramatic drop in fuel prices.
In international passenger operations, ASK increased 1.3%
from the year before and RPK increased 5.4%, raising the loadfactor by 3.1 percentage points to 78.8%. Unit passenger revenue
decreased 4.8%. When the approximately 11% decrease in unit
passenger revenue resulting from lower fuel surcharge revenues
is taken into consideration, unit passenger revenue excluding fuelsurcharge rose approximately 6%.
Although unit passenger revenue caused to decrease
revenue by 21.5 billion yen due to lower fuel surcharge revenues
and other factors, net unit passenger revenue increased due toimprovement in revenue management. Revenues in relation torevenue passengers carried increased 15.4 billion yen, bolstered bystrong inbound demand, primarily on the North America, Southeast
Asia, and China routes. As a result, international passenger
revenues ended at 448.7 billion yen, down 6 billion yen from theprevious year.

Other revenues

The JAL Group comprises Japan Airlines Co., Ltd. (“JAL”
hereinafter), 87 subsidiaries, and 59 affiliated companies.
Operating under these economic conditions, the JAL Group
worked to increase profit consciousness of its staff based on
the JAL Philosophy and the amoeba management system andimprove management efficiencies to provide the finest service
founded on a firm commitment to flight safety, and thus achieve
the targets of Rolling Plan 2015, introduced on February 18, 2015as an adjunct to the JAL Group Medium Term Management Plan.
As a result, consolidated operating revenues decreased
0.6% from the previous year to 1,336.6 billion yen, operating
expenses decreased 3.2% to 1,127.4 billion yen, operating
income increased 16.4% to 209.1 billion yen, ordinary income
increased 19.4% to 209.2 billion yen, and net income attributableto owners of the parent company increased 17.1% to 174.4
billion yen.

Consolidated Operating Results

Domestic passenger operations (operating results)

Cargo & mailJAL Group

Consolidated operating revenues decreased 0.6% from theprevious year to 1,336.6 billion yen in fiscal 2015.
Operating expenses decreased 3.2% to 1,127.4 billion yen
due to the sharp drop in fuel prices. The JAL Group will continue to
do its best to maximize revenues and minimize expenses.
As a result, consolidated operating income was 209.1 billion
yen, the operating margin was 15.7% and the EBITDAR margin
was 24.0%. The operating margin exceeded our target of 10% orabove, as in the previous year.

Analysis of Changes in Operating Revenues

Domestic passengers

The Japanese economy continued its moderate recovery in thefiscal year ended March 31, 2016 (fiscal 2015), with consumer
spending remaining strong overall. Overseas economies including
the U.S. economy also trended toward recovery, although
weakness was observed in countries such as China and theemerging countries of Asia. The number of international visitors
to Japan, which affects our passenger revenues, rose to 21,359
thousand in 2015, a significant increase of 45.6% from theprevious year. Fuel prices, which impact our fuel purchasing costs
and international passenger and international cargo revenues,
declined from the year before, but the yen remained weak against
the U.S. dollar.

Analysis of Consolidated Operating Results(Overview)

International passengers

Economic conditions

Operating expenses +37.5 billion yen
Fiscal 2015

Fiscal 2014

Chapter TOP

Contents

99

Financial Data

Evaluation and Analysis of Financial Conditions by Management

Analysis of Financial Conditions and Operating Results

Cash flows

Financial Condition

Credit ratings

JAL conducts appropriate capital investments based on strict
investment principles. It also strives to secure an appropriate returnon investment and maximize free cash flows.
Fiscal 2015 cash flows
Cash flow from operating activities
After adjusting non-cash items such as depreciation, etc. with net
income before income taxes and non-controlling interests of 207.3
billion yen, cash flow from operations (inflow) was 312.3 billion yen(an increase of 51.2 billion from the previous year).
Cash flow from investing activities
Due largely to expenditures for the acquisition of fixed assets,
cash flow from investing activities (outflow) was 288.9 billion yen(an increase of 58.3 billion yen from the previous year). (Includes
deposits and withdrawals from deposit accounts.)
Cash flow from financing activities
As a result of payments of dividends and repayment of interestbearing debt, cash flow from financing activities (outflow) was 49.6
billion yen (a decrease of 17.6 billion yen from the previous year).

Total assets for the 2015 consolidated fiscal year increased by 105.5
billion yen from the previous year to 1,578.9 billion yen, primarily due
to aircraft purchases and advance payments for aircraft.
Liabilities totaled 708.3 billion yen, an increase of 35.7 billion
yen from the previous year, primarily due to an increase in retirement
benefit obligations.
Net assets were 870.5 billion yen, up 69.8 billion yen from theprevious year, primarily due to recording of net income attributable toowners of the parent company and despite a change in the methodof calculating retirement benefit obligations and to payments ofdividends. Shareholders’ equity was 843.0 billion yen at year-end as
a result, and the shareholders’ equity ratio rose by 0.7 points fromthe previous year to 53.4%.

JAL’s current credit ratings are as indicated below:

Cash flow(Billions of yen)
Fiscal 2014 Fiscal 2015

169.9

207.3

Depreciation and amortization

85.8

88.5

+2.6

Other

5.3

16.4

+11.1

Cash flow from operating activities

261.1

312.3

+51.2

Capital expenditures *1–198.6–210.6

–12.0

–0.6

3.4

+4.0

–199.2–207.2–7.9

Free cash flow *3

61.8

105.1

+43.2

Repayment of interest-bearing debt *4

–51.1

–33.3

+17.7

Cash dividends, other

–16.2

–16.2

–0

Cash flow from financing activities

–67.3

–49.6

+17.6

Other
Cash flow from investing activities *2+37.4

Total cash flow *5

–5.4

55.5

+60.9

EBITDA

265.5

297.7

+32.1

EBITDAR

292.7

321.1

Issuer ratingA– (stable)

Japan Credit Rating Agency, Ltd. (JCR) Long-term issuer ratingA– (positive)

Hedging against Risk
<Policy>

Capital investment and depreciation and amortization[Fuel prices] The JAL Group’s business performance is strongly
impacted by changes in fuel prices. The Group’s fuel costs infiscal 2015 were approximately 228 billion yen, which accounted
for approximately 20% of consolidated operating expenses forthe year. In an airline industry environment with extremely severe
competition, it is difficult to raise prices by increasing fares orasking customers to pay a fuel surcharge for increased portionsof fuel costs. We seek to reduce risks posed by fluctuation infuel prices by conducting hedging transactions using crude oil
commodity derivatives.
[Exchange rates] The JAL Group conducts business extensively
in domestic and international markets, and it receives revenues
and pays expenses partially in foreign currencies. Since jet fuelprices, especially, which account for the largest percentage of total
costs, are impacted by the value of the U.S. dollar, fluctuations in
the dollar’s exchange rate have a greater impact on expenses thanon revenues. To reduce risks to profitability caused by currency
fluctuations, foreign currencies received as revenues are used, asa rule, for paying expenses incurred in foreign currencies. We also
conduct derivative transactions. Because aircraft purchase prices
are generally set in amounts linked to the U.S. dollar, the capitalized
amount and depreciation cost involve risk of increasing or decreasing
due to exchange rate fluctuations. To reduce the resulting foreign
currency exchange rate risk, we conduct derivative transactions to
spread out opportunities for acquiring foreign currencies.

(Billions of yen)250

<Hedge ratio>

Capital investment
Total capital expenditures during the consolidated fiscal year were
212,435 million yen (including expenditures for intangible fixed
assets). Capital expenditures by segment were as detailed below:
The air transportation segment invested in purchases of
new aircraft to improve operating efficiency and intangible fixed
assets such as measures for increasing competitiveness by
responding to diverse customer needs and systems to improvecustomers’ convenience and efficiency. Capital investment activities
included new purchases of 11 aircraft (three Boeing 787-8, three
Boeing 787-9, one Boeing 737-800, two Embraer E170 and two
Bombardier DHC-8-400CC), purchases of leased aircraft, andadvance payments for aircraft. Capital expenditures were 208,925
million yen.
Other capital expenditures during the consolidated fiscal year
totaled 3,510 million yen, mainly for software.

Capital expenditures

Depreciation and amortization
196.4

200

212.4

The hedge ratio for fuel costs is shown in the graph below:(As of March 31, 2016)

50%
Fuel

40%

163.3

150

+28.4

*1 Expenditure due to purchases of fixed assets*2 Excluding deposits and withdrawals from deposit accounts*3 Cash flow from operating activities + Cash flow from investing activities*4 Repayment of long-term debt + Repayment of lease debt
*5	Cash flow from operating activities + Cash flow from investing activities + Cash flowfrom financing activities

Rating & Investment Information, Inc.

Foreign exchange

124.6
100

81.0

82.7

85.8

88.5

10% 10%

5%

5%

50

Fiscal 2016

Fiscal 2017

Fiscal 20180

Fiscal 2012

Fiscal 2013

Fiscal 2014

Fiscal 2015

*Capital expenditures include investments in intangible fixed assets.

<Sensitivity>
The impact of fuel costs (without hedging) is as indicated below:

We regard the return of profits to our shareholders as amanagement issue of the highest priority. We will return profits
to our shareholders actively through regular dividend payments,
while securing ample internal reserves for investments to respondto opportunities for future corporate growth and changes in thebusiness environment, and to build a strong financial foundation.
Our policy is to allocate approximately 25% of net income
attributable to owners of the parent company after deducting
deferred income taxes as the total amount of dividends for ourshareholders.
In fiscal 2015, we paid a dividend of 120 yen per share in lightof our financial results, financial conditions, and the future businessenvironment.
The dividend to be paid in fiscal 2016 will be disclosed when
our earnings forecast becomes clearer.

Future Business Environment and Issues
We recognize that the environment surrounding the JAL aviation
business contains a mixture of negative and positive factors. We
will respond proactively to business opportunities and resolve
issues one after another, turning them into opportunities forcorporate growth.
We will make no significant change in the fiscal year to March2018 or beyond in our current policy of emphasizing ensuring
profitability over the pursuit of merit of scale. We will strive toestablish business management structures that give customers
a stronger impression of growth, building on the foundation for
profitability and stability we have constructed over the past five years.
To achieve these objectives, we will focus on the following
targets in fiscal year 2016:• Completion of our current Medium Term Management Plan.
• Development of a new management plan as a basis for growth,and preparations for implementing the new management plan in
fiscal 2017 and beyond.
Environmental awareness from fiscal 2017 forward and issues for the next Medium Term Management Plan

We will seize business opportunities proactively to achieve corporate growth.
Environmental changes surrounding JAL
Changes in
the macroenvironment
Changes incustomers
Changes in
the competitiveenvironment

2.7 billion yen/year

FX (change in 1 yen/US$)

1.0 billion yen/year

Expansion of LLC use and increased entry by overseas carriers into the Japanese market
Increase in inbound/outbound flights
to/from the Tokyo metropolitan area

Introduction to operation of thelinear Shinkansen (“bullet train”)

Awareness of issues

Influence on fuel costs (fiscal 2016)
Crude oil (change in 1 US$/bbl)

2016
2020
2030
Contraction of the working-age population and progress of aging in Japan
Growth of the global economy (especially in the Asia-Pacific region)
Progress of technologies contributing to improved customer satisfaction
and business productivity
Diversification of customer values
Increase in inbound demand/regular use by passengers

International •Ensure that we capture demand in countries and regions with signiﬁcant growth potential andmake this a driver for growth.
routesDomestic
routesBusiness
operations•Establish a structure for increased selection of JAL by customers in the mature market andexpand inbound passenger demand.
•Contribute to regional revitalization•Cultivate new businesses (in ﬁelds other than air transportation) from a long-term perspective.
•Cater to the world leveraging Japan’s values (market, human resources/organization,customer base, etc.).

Chapter TOP

Contents

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

100

Difference

Net income before income taxes
and non-controlling interests

Distribution of Profits to Shareholders

101

Financial Data

Consolidated Financial Statements

CONSOLIDATED BALANCE SHEETSJapan Airlines Co., Ltd. and Consolidated Subsidiaries
Thousands of U.S.
dollars (Note 4)

Millions of yen

As of March 31

2015

2016

2016

As of March 31

2015

2016

2016

LIABILITIESASSETS

Current liabilities:

Current assets:
Cash and deposits (Notes 5, 7 and 10)

Thousands of U.S.
dollars (Note 4)

Millions of yen

Operating accounts payable (Note 7)¥

420,333¥

364,988

$3,730,324

Notes and operating accounts receivable (Note 7)

128,148

142,150

1,137,273

Flight equipment spare parts and supplies

20,31419,754

180,280

Deferred tax assets (Note 12)

16,725

12,448148,429

Other

44,42976,931

394,293

Allowance for doubtful accounts
Total current assets

(709)

(817)

(6,292)629,242

615,455

5,584,327¥

145,413¥

144,846$

1,290,495

Short-term loans payable (Notes 7 and 10)

5,792

106

Current portion of long-term loans payable (Notes 7 and 10)

10,851

7,807

96,299Lease obligations (Notes 7 and 10)

13,25425,123

117,625

178

174

1,579

Accounts payable—installment purchase (Notes 7 and 10)

51,402

Income taxes payable

19,333

7,443

171,574

Advances received

83,36578,770739,838

Deferred tax liabilities (Note 12)

0

181

0

Provision for loss on business of subsidiaries and associates

—

3,889

—

Asset retirement obligations (Note 20)

234

—

2,076

90,128104,730

799,858

368,552

373,074

3,270,784

Long-term loans payable (Notes 7 and 10)

51,33143,809455,546

Lease obligations (Notes 7 and 10)

10,37322,54892,057

847

1,025

7,516

Other
Total current liabilities
Non-current liabilities:

Non-current assets:Long-term accounts payable—installment purchase (Notes 7 and 10)

Investment securities (Notes 6, 7, 8 and 10)

93,18584,931

753,736

Deferred tax liabilities (Note 12)

358

2,317

3,177

Reserve for loss on antitrust litigation

6,294

5,858

55,857

Net defined benefit liability (Note 11)236,310

191,635

2,097,177

Asset retirement obligations (Note 20)

3,723

3,419

33,040

Other

Tangible fixed assets, net:
Flight equipment (Note 10)560,601

491,295

4,975,159

Ground property and equipment (Notes 10 and 17)

51,14250,210453,869

Advances on flight equipment and other purchases

116,92997,752

1,037,708

728,673

639,258

6,466,746

Total tangible fixed assets

30,57828,914

271,370

Total non-current liabilities

339,818

299,528

3,015,779

Total liabilities

708,371672,6036,286,572

Contingent liabilities (Note 18)
NET ASSETS (Note 13)
Shareholders’ equity:
Common stock:
Authorized: 700,000,000 shares in 2016 and 2015

Software61,66879,866

708,785

8,169

9,343

72,497

Deferred tax assets (Note 12)

6,172

3,860

54,774

Net defined benefit asset (Note 11)

1,090

1,974

9,673

Other (Note 10)

41,027

48,868364,101

Allowance for doubtful accounts
Total non-current assets
Total assets

¥

(245)

(258)

(2,174)

949,686

857,899

8,428,168

1,578,928¥

1,473,354$ 14,012,495

181,352

181,352

1,609,442

183,042

183,042

1,624,440

Retained earnings

557,905

421,137

4,951,233

Treasury shares, at cost:
203,395 shares in 2016 and 2015

(538)

(538)

(4,774)

921,761

784,992

8,180,342

Valuation difference on available-for-sale securities (Note 8)

14,767

24,334

131,052

Deferred losses on hedges (Note 9)(24,777)(15,612)(219,888)

427(4,101)

3,789(69,079)(13,136)(613,054)(698,100)

Total shareholders’ equity
Accumulated other comprehensive income

Foreign currency translation adjustment
Remeasurements of defined benefit plans (Note 11)
Total accumulated other comprehensive income(78,662)(8,516)

Non-controlling interests

27,457

24,275

243,672

Total net assets

870,557

800,751

7,725,922

1,473,354$ 14,012,495

Chapter TOP

Contents

Total liabilities and net assets¥

1,578,928¥

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

Long-term loans receivable (Note 10)

Issued: 362,704,000 shares in 2016 and 2015
Capital surplus

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

102

103

Financial Data

Consolidated Financial Statements

CONSOLIDATED STATEMENTS OF INCOME ANDCOMPREHENSIVE INCOME
Japan Airlines Co., Ltd. and Consolidated Subsidiaries

Operating revenue:
Passenger:
Domestic
International
Incidental and other revenue
Total operating revenue

2015

2016

¥

501,274
448,780
386,606
1,336,661

Japan Airlines Co., Ltd. and Consolidated Subsidiaries¥

487,555454,857
402,299
1,344,711

Shareholders’ equity

2016

$

4,448,651
3,982,783
3,431,008
11,862,451

Balance at April 1, 2014

Common stock

Capital surplus¥¥

181,352

Retained earnings

183,043¥

Cumulative effects of changes
in accounting policies

Total shareholders’equityTreasury shares

332,067

¥

(130)

¥

(30,965)

Restated balance

181,352

183,043696,332(30,965)

301,102(130)665,367

Changes of items during period

Operating expenses:
Wages, salaries and benefits
Aircraft fuelLanding fees and other rent
Aircraft maintenanceAircraft rent
Depreciation and amortization
Other
Total operating expenses
Operating income

240,208
282,561
81,65040,603
27,20285,897
406,897
1,165,021
179,689

249,999
228,162
82,25047,90623,471
88,528407,151
1,127,469
209,192

2,218,663
2,024,866
729,943
425,150
208,297785,658
3,613,338
10,005,937
1,856,514

Dividends of surplus(29,010)(29,010)

Profit attributable to owners of parent

149,045

149,045

Purchase of treasury shares(408)

equity charge balance

887
1,556
(1,172)
5,798(3,978)651(3,837)
265
1,198
7,063
2,201
(6,972)(1,020)(2,714)—(1,738)(1,810)207,381808
1,097(1,665)
3,154(6,954)(2,609)
1,889
121
846
—
—
—
(1,454)(881)(3,889)(250)(9,788)
169,901

7,871
13,809(10,401)
51,455(35,303)
5,777(34,052)
2,351
10,631
62,681
19,533(61,874)(9,052)(24,085)—(15,424)(16,063)
1,840,441

Income taxes—current (Note 12)
Income taxes—deferred (Note 12)
Total income taxes
Profit26,834(436)
26,398
180,983

14,656
1,319
15,976
153,925

238,143(3,869)234,274
1,606,167(0)

Total changes of items during period—

149,045
4,880

1,548,349
57,809Other comprehensive income (Note 14)
Valuation difference on available-for-sale securities
Deferred losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities accounted for using equity method
Total other comprehensive income
Comprehensive income(9,461)(9,005)
4,588(55,877)(453)(70,209)110,773

17,610(22,515)
1,333
1,058
355
(2,157)
151,768(83,963)(79,916)
40,717(495,891)(4,020)(623,083)
983,075¥

104,323
6,449¥

146,572
5,196

$

¥

181,352(0)¥

183,042

120,034¥(408)

421,137¥(538)

119,625¥

784,992

Valuationdifference
on availablefor-salesecurities

Balance at April 1, 2014¥

Deferred
gains(losses) onhedges6,450 ¥

Foreigncurrencytranslation
adjustment

6,887 ¥

Remeasurements ofdefinedbenefit plans

Total accumulated
othercomprehensive
incomeNoncontrollinginterests

Total net
assets(5,187) ¥ (14,193) ¥(6,044) ¥ 20,775 ¥ 711,064

Cumulative effects of changes
in accounting policies
Restated balance(30,965)
6,450

6,887

(5,187)(14,193)(6,044)

20,775680,099

Changes of items during period
Dividends of surplus(29,010)

Profit attributable to owners of parent

149,045

Purchase of treasury shares(408)

equity charge balance
Net changes of items other thanshareholders’ equity
Total changes of items during period(0)17,883(22,499)

17,883(22,499)¥ 24,334 ¥ (15,612) ¥

1,085

1,056

1,085

1,056

(4,101) ¥ (13,136) ¥(2,472)

3,499

1,026

(2,472)

3,499

120,651(8,516) ¥ 24,275 ¥ 800,751

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

174,468
6,514(0)

Accumulated other comprehensive income

Balance at March 31, 2015

Profit attributable to
Owners of parent
Non-controlling interests(408)

Net changes of items other thanshareholders’ equity
Balance at March 31, 2015

Non-operating income (expenses):
Interest income
Dividend income
Interest expenses
Gain on sales of flight equipment
Loss on sales and disposal of flight equipment
Share of profit (loss) of entities accounted for using equity method
Foreign exchange gains (losses)
Gain on sales of investment securities
Compensation income
Subsidy income for aircraft purchase
Settlement of facility restitution
Loss on reduction of aircraft
Loss on cancellation of leases
Impairment loss (Note 15)
Provision for loss on business of subsidiaries and associates
Other
Total non-operating income (expenses)
Profit before income taxes

Comprehensive income attributable to
Owners of parent
Non-controlling interests

Millions of yen

Thousands of U.S.
dollars (Note 4)

Millions of yen

Years ended March 31

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

925,834
57,232

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

104

Chapter TOP

Contents

105

Financial Data

Consolidated Financial Statements

CONSOLIDATED STATEMENTS OF CASH FLOWSJapan Airlines Co., Ltd. and Consolidated Subsidiaries
Millions of yen
Shareholders’ equity

Balance at April 1, 2015

Common stock

Capital surplus¥¥

181,352

Retained earnings

183,042¥

Total shareholders’equityTreasury shares

421,137

¥

(538)

¥

784,992

Changes of items during period
Dividends of surplus(37,700)(37,700)

Profit attributable to owners of parent

174,468

174,468

Net changes of items other than shareholders’ equity
Total changes of items during period
Balance at March 31, 2016—¥

181,352—¥

136,768

183,042¥—557,905¥

136,768(538)¥

921,761

Noncontrollinginterests

Total net
assets

Accumulated other comprehensive income
Valuationdifference
on availablefor-salesecurities

Balance at April 1, 2015

Deferred
losses onhedgesForeigncurrencytranslation
adjustment¥ 24,334 ¥ (15,612) ¥Remeasurements ofdefinedbenefit plans

Total accumulated
othercomprehensive income(4,101) ¥ (13,136) ¥(8,516) ¥ 24,275 ¥ 800,751

Changes of items during period
Dividends of surplus(37,700)

Profit attributable to owners of parent
Net changes of items other than shareholders’ equity
Total changes of items during period
Balance at March 31, 2016

174,468(9,566)(9,165)

4,529(55,942)(70,145)

3,182(66,962)(9,566)(9,165)

4,529(55,942)(70,145)

3,182

69,805¥ 14,767 ¥ (24,777) ¥427 ¥ (69,079) ¥ (78,662) ¥ 27,457 ¥ 870,557
Thousands of U.S. dollars (Note 4)
Shareholders’ equity

Balance at April 1, 2015

Common stock

Capital surplus

Retained earnings$ 1,609,442$ 1,624,440$ 3,737,460

Treasury shares$(4,774)

Total shareholders’equity$ 6,966,560

Changes of items during period
Dividends of surplus(334,575)(334,575)

Profit attributable to owners of parent

1,548,349

1,548,349

Net changes of items other than shareholders’ equity
Total changes of items during period
Balance at March 31, 2016——

1,213,773$ 1,609,442$ 1,624,440$ 4,951,233$—

1,213,773(4,774)$ 8,180,342

Accumulated other comprehensive income

Balance at April 1, 2015

Deferred
losses onhedgesForeigncurrencytranslation
adjustment

Remeasurements ofdefinedbenefit plans

Total accumulated
othercomprehensive income

Noncontrollinginterests

Total net
assets$ 215,956 $ (138,551) $ (36,395) $ (116,577) $ (75,576) $ 215,433 $ 7,106,416

Changes of items during period
Dividends of surplus(334,575)

Profit attributable to owners of parent

1,548,349

Net changes of items other than shareholders’ equity
Total changes of items during period
Balance at March 31, 2016

(84,895)(81,336)

40,193(496,467)(622,515)

28,239(594,266)(84,895)(81,336)

40,193(496,467)(622,515)

28,239619,497$ 131,052 $ (219,888) $The accompanying notes are an integral part of these consolidated financial statements.

3,789 $ (613,054) $ (698,100) $ 243,672 $ 7,725,922

Years ended March 31

Cash flows from operating activities
Profit before income taxes
Adjustments to reconcile profit before income taxes to net
cash provided by operating activities:
Depreciation and amortization
Loss on sales and disposal of noncurrent assets and impairment loss
Decrease in net defined benefit liability
Interest and dividend income
Interest expenses
Foreign exchange losses (gains)Share of (profit) loss of entities accounted for using equity method
Decrease in notes and operating accounts receivable
Decrease (increase) in flight equipment spare parts and supplies
Increase (decrease) in operating accounts payable
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Proceeds from settlement of facility reconstitution
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of non-current assets
Proceeds from sales of non-current assets
Purchase of investment securities
Proceeds from sales and redemption of investment securities
Proceeds from purchase of shares of subsidiaries resulting
in change in scope of consolidation (Note 16)
Proceeds from sales of shares of subsidiaries resulting
in change in scope of consolidation (Note 16)
Payments of loans receivableCollection of loans receivable
Other, net
Net cash used in investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Cash dividends paid
Dividends paid to non-controlling interests
Repayments for lease obligations
Other, net
Net cash used in financing activities
Effect of exchange rate change on cash and cash equivalents
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents resulting from merger
Decrease in cash and cash equivalents resulting from exclusionof subsidiaries from consolidation
Cash and cash equivalents at end of period (Note 5)

2015

2016

¥

¥

207,381¥2016

169,901$

1,840,441

88,528
3,526(10,741)(2,444)
1,172
(421)
(651)
14,193(449)
731
21,152321,977
2,975(1,259)2,190(13,489)
312,394

85,897
6,108(5,686)(1,905)
1,665
943
2,609
1,975
851
(4,392)
15,730273,700
2,360(1,768)—(13,152)
261,139785,658
31,292(95,323)(21,689)
10,401(3,736)(5,777)125,958(3,984)
6,487
187,7172,857,445
26,402(11,173)
19,435(119,710)
2,772,399(400,309)
318,607(210,660)
7,642(6,345)273(427,960)
396,645(198,635)
3,538(5,287)243(3,552,618)
2,827,538(1,869,542)
67,820(56,309)
2,422

39

76

346

—

169

—

(319)
1,669
486
(288,915)

(287)
1,859
(920)
(230,559)(2,831)
14,811
4,313(2,564,030)

5,686
19,002(7,952)(37,695)(3,264)(25,411)—(49,636)(141)(26,299)
119,287—(84)
15,342(18,465)(28,989)(2,046)(32,638)(441)(67,323)
1,037(35,705)
155,252
4

50,461
168,636(70,571)(334,531)(28,966)(225,514)—(440,504)(1,251)(233,395)
1,058,635
—

(36)

(264)

(319)

92,951¥

119,287$

824,911J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

Valuationdifference
on availablefor-salesecurities

Thousands of U.S.
dollars (Note 4)

Millions of yen

Contents

107

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

106

Chapter TOP

Financial Data

Consolidated Financial Statements

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 andprepare their financial statements in accordance with accounting
principles generally accepted in Japan, which are different incertain respects as to the application and disclosure requirementsof International Financial Reporting Standards. The accompanying
consolidated financial statements have been compiled from theconsolidated financial statements filed with the appropriate Local
Finance Bureau of the Ministry of Finance as required by the
Financial Instruments and Exchange Act of Japan and include
certain additional financial information for the convenience ofreaders outside Japan. Some supplementary information includedin the statutory Japanese language consolidated financial
statements, but not required for fair presentation, is not presented
in the accompanying consolidated financial statements.
As permitted by the Financial Instruments and Exchange Act
of Japan, amounts of less than one million yen have been omitted.
As a result, the totals shown in the accompanying consolidated
financial statements (both in yen and U.S. dollars) do notnecessarily agree with the sum of the individual amounts.
Certain amounts previously reported have been reclassified
to conform to the current year’s classification.

 . InventoriescInventories are valued at the lower of cost and net realizable value
with cost determined principally 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 on March
31, 2016 and 2015 amounted to ¥364,355 million ($3,233,537
thousand) and ¥336,569 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 theestimated useful lives of the respective assets
The estimated useful lives are principally as follows:
Flight equipment: from 12 to 20 years
Other: from 2 to 65 years

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa.	Principles of Consolidation and Accounting for Investments
in Unconsolidated Subsidiaries and Affiliates
The accompanying consolidated financial statements include theaccounts of the Company and all significant subsidiaries controllede. Software (excluding leased assets)
Computer software intended for internal use is amortized by the

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 the equity basis.
The balance sheet date of 6 of the consolidated subsidiaries
is December 31. Any significant differences in intercompany

f. Leased Assets
Depreciation of leased assets is computed as follows:
Leased assets arising from finance lease transactions
that transfer the ownership of leased assets to the lessee areaccounts and transactions arising from intervening intercompany
transactions during the period between the balance sheet dateof each subsidiary and the consolidated balance sheet datehave been adjusted, if necessary. The differences between theacquisition and the fair value of the net assets at the respective
dates of 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 3 to 5 years.
All significant intercompany accounts and transactions andunrealized gain or loss on intercompany accounts and transactions

straight-line method based on its estimated useful life which ranges
principally from 5 to 7 years.

depreciated by the same method applied to assets arising frompurchase transactions.
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 leasetransactions that do not transfer the ownership of the leased assets
to the lessee contracted prior to April 1, 2008, continue to beaccounted for by a method corresponding to that used for ordinary
operating lease transactions.

are eliminated in consolidation.

g. Allowance for Doubtful Accounts
General provision for doubtful accounts is provided by applying a

 . Securitiesb
Securities, except for investment securities of non-consolidated
subsidiaries and affiliates, are classified as trading securities, held-

reserve percentage to receivables based on experience from pasttransactions. When considered necessary, specific reserves are
made based on the assessment of individual accounts.

to-maturity securities, or other securities. Trading securities arecarried at fair value. Held-to-maturity securities are carried atamortized cost. Marketable securities classified as other securities
are carried at fair value with any unrealized gain or loss reported asa separate component of net assets, net of taxes. Non-marketableh. Accounting Method for Retirement Benefits
In calculating the retirement benefit obligation, the method of
attributing expected benefits to the accounting period is principally
based on the benefit formula.

Actuarial gain and loss are amortized by the straightline method over a period ranging from 5 to 15 years, which isless than the average remaining years of service of the active
participants in the plans. Amortization is computed from the fiscal
year subsequent 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 amortized by
the straight-line method over a period which is less than the averageremaining years of service of the active participants in the plans.

more likely than not that some portion or all of the deferred tax
assets will not be realized.
The Company and certain domestic consolidated
subsidiaries file tax returns under the Japanese consolidated
corporate tax system.

i. Reserve for Loss on Antitrust Litigation
Estimated future loss is accrued in order to provide for penalties andcompensation potentially arising from price cartels.

3.	CHANGES IN ACCOUNTING POLICY/CHANGES INPRESENTATION
For the fiscal year ended March 31, 2015
(Application of Accounting Standard for Retirement Benefits, etc.)
Effective from the year ended March 31, 2015, the Company
and its consolidated domestic subsidiaries have adopted Article
35 of Statement No. 26 and Article 67 of Guidance No. 25 andhave changed the determination of retirement benefit obligations
and current service costs. In addition, the Company and its
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 effectj.	Provision for Loss on Business of Subsidiaries andAssociates
Provision for loss on business of subsidiaries and associates isprovided for estimated future loss generated from the business of
subsidiaries.
k.	Foreign Currency Translation
Revenues 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 applicable year-end
foreign exchange rates and any gain or loss on translation is
included in current earnings.
Differences arising from the translation of assets, liabilities,
revenues, and expenses of foreign consolidated subsidiaries andentities accounted for using the equity method into yen at theapplicable exchange rates at the year-end are presented as foreign
currency translation adjustments and non-controlling interests in acomponent of net assets.
l.	Derivatives and Hedge Accounting
Derivatives positions are stated at fair value.
Gains or losses on derivatives designated as hedging
instruments are deferred until the gains or losses on theunderlying hedged items are recognized with any unrealized gains
or losses reported as a separate component of net assets, net oftaxes. Foreign currency receivables and payables are translated at
the applicable forward foreign exchange rates if certain conditions
are met.
m. Revenue Recognition
Passenger and cargo revenues are recognized when thetransportation 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. Valuation allowance is recorded
to reduce deferred tax assets to their net realizable value if it iso.	Cash Equivalents
Cash equivalents are defined as highly liquid, short-term
investments with an original maturity of 3 months or less.

of changing the determination of retirement benefit obligations andcurrent service costs has been recognized in retained earnings at
the beginning of the period.
As a result of the application, retained earnings havedecreased by ¥30,965 million at the beginning of period. In
addition, operating income has increased by ¥2,301 million andprofit before income taxes has increased by ¥2,302 million in thefiscal year ended March 31, 2015.
Due to these changes, net assets per share of common stock
have decreased by ¥79.17 and earnings 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,
application of the “Revised Accounting Standard for Business
Combination” (ASBJ Statement No. 21, September 13, 2013;
hereinafter, “Statement No. 21”), the “Revised Accounting Standard
for Consolidated Financial Statements” (ASBJ Statement No. 22,
September 13, 2013; hereinafter, “Statement No. 22”), and the“Revised Accounting Standard for Business Divestitures” (ASBJ
Statement No. 7, September 13, 2013; hereinafter, “Statement No.
7”) (together, the “Business Combination Accounting Standards”),
is permitted. The Company and its domestic subsidiaries haveadopted these accounting standards from the fiscal year ended
March 31, 2015, except for Article 39 of Statement No. 22 and, as
Chapter TOP

Contents

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

108

securities classified as other securities are carried at cost. Costof securities sold is determined principally by the moving-averagemethod.

109

Financial Data

Consolidated Financial Statementsa result, changed the accounting policies: to recognize differences
as capital surplus arising from changes in the Company’s ownershipinterest of subsidiaries, over which the Company continues control;
and to record 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 to reflect
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, withapplication from the beginning of the period and into the future.
As a result, the effects of these changes on profit before
income taxes for the fiscal year ended March 31, 2015 and capitalsurplus at the beginning of the period were immaterial.
In the consolidated statements of cash flows of the fiscal year
ended March 31, 2015, cash flows from acquisition of the sharesof subsidiaries with no changes in the scope of consolidation are
included in “Cash flows from financing activities,” and cash flows
from acquisition related costs of the shares of subsidiaries withchanges in the scope of consolidation are included in “Cash flows
from operating activities.”
The effects of these changes on capital surplus at the end of
the period in the consolidated statements of changes in net assets,
earnings per share of common stock, and net assets per share ofcommon stock were immaterial, respectively.
For the effects on segment information, please refer to “Note
21. SEGMENT INFORMATION.”
For the fiscal year ended March 31, 2016
(Changes in accordance with the application of “Revised
Accounting Standard for Business Combinations” and otherstandards)
The presentation of profit was amended and the reference to“minority interests” was changed to “non-controlling interests”
in accordance with Article 39 of “Revised Accounting Standard
for Consolidated Financial Statements” (ABSJ Statement No.
22, September 13, 2013) and others. To reflect these changes inpresentation, consolidated statements of the prior year presented
herein were reclassified.

Thousands of
U.S. dollars

Millions of yen
2016

2015

2016

¥ 420,333¥ 364,988$ 3,730,324(327,382)(245,700)(2,905,413)

92,951¥ 119,287

As of March 31

Cash and deposits
Time deposits with a maturity of more than
three months
Cash and cash equivalents¥$

824,911

6.	INVESTMENT SECURITIES OF NON-CONSOLIDATEDSUBSIDIARIES AND AFFILIATES
Investment securities of non-consolidated subsidiaries and affiliates
which were included in “Investment securities” in the consolidatedbalance sheets on March 31, 2016 and 2015 amounted to ¥39,431
million ($349,937 thousand) and ¥34,302 million, respectively, andbonds of affiliates which were included in “Investment securities”
in the consolidated balance sheets on March 31, 2016 and 2015
amounted to ¥3,330 million ($29,552 thousand) and ¥3,330 million,
respectively.
7.	FAIR VALUES OF FINANCIAL INSTRUMENTS
The Company and its consolidated subsidiaries (the “JAL Group”)
manage its financial instruments to raise funds, principally forthe purpose of flight equipment and facilities in accordance withmanagement plans for air transportation, utilizing loans fromfinancial institutions, finance lease transactions, and derivatives.
Funds from short-term loans payable 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 offluctuations of interest rates and foreign currency exchange rates,
not for the purpose of speculation.
With respect to operating accounts receivable, the JAL
Group exercises due date management and outstanding balance
management in accordance with internal policies. The JAL Groupmakes its best efforts to identify and mitigate risks of bad debt frommajor customers with financial difficulties by periodically monitoring
their creditworthiness. Securities and investment securities arecomposed mainly of shares of companies with which the JAL
Group has business relationships. The JAL Group reviews thefair values of such financial instruments and the financial positionof the issuers periodically in order to identify and mitigate risks of
impairment. Most operating accounts payable are due within one
year. As for derivatives, the JAL Group believes that the credit risks
are extremely low, as it enters into derivative transactions only with
reputable financial institutions with a sound credit profile.
The Company utilizes derivatives in order to mitigate the risksof fluctuations in interest rates and foreign currency exchange rates
on receivables and payables. 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 fuel purchase payables.
The JAL Group also utilizes commodity derivatives in order110

to mitigate 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 transactionsin accordance with such policies. Moreover, monthly meetings
are held with the attendance of board members responsible forderivatives to determine methods and ratios for minimizing risks aswell as to report and confirm results of derivative transactions.
The fair value of financial instruments is based on thequoted market price, when it is available. When there is no market
price available, fair value is reasonably estimated. Since various
assumptions and factors are reflected in estimating the fair value,
different assumptions and factors could result in a different fairvalue.
The book value of financial instruments in the consolidatedbalance sheets, their fair value, and the differences as of March 31,

Millions of yen
As of March 31, 2015

Book value

Fair value

Difference

Assets(1) Cash and deposits¥ 364,988 ¥ 364,988 ¥(2) Notes and operating accounts receivable
142,150
142,150(3) Securities and investment securities(i)	Investment securities of non-consolidated
14,648
14,462subsidiaries and affiliates
50,10550,105(ii)	Other investment securities
Total
571,893571,706
Liabilities(1) Operating accounts payable
144,846
144,846(2) Short-term loans payable106106(3) Long-term loans payable
51,61751,617(4) Lease obligations
47,67147,671(5)	Long-term accounts payable—installment
1,200
1,200
purchase
Total
245,442
245,442
Derivatives*¥ (14,086) ¥ (13,876) ¥

—
—
(186)
—
(186)
—
—
—
—
—
—
209

*	Derivatives assets and liabilities are stated on a net basis, and net liabilities are enclosed inparentheses.

2016 and 2015 were as follows:
Millions of yen
As of March 31, 2016

Book value

Fair value

Assets(1) Cash and deposits¥ 420,333 ¥ 420,333 ¥(2) Notes and operating accounts receivable
128,148
128,148(3) Securities and investment securities(i)	Investment securities of non-consolidated
14,87813,090subsidiaries and affiliates(ii) Other investment securities
36,12936,129
Total
599,490597,702
Liabilities(1) Operating accounts payable
145,413
145,413(2) Short-term loans payable
5,792
5,792
(3) Long-term loans payable
62,18362,183(4) Lease obligations
23,627
23,627(5)	Long-term accounts payable—installment
1,025
1,025
purchase
Total
238,043
238,043
Derivatives*¥ (29,571) ¥ (29,672) ¥Difference——(1,787)—(1,787)
—
—
—
—
—
—
(100)

*	Derivatives assets and liabilities are stated on a net basis, and net liabilities are enclosed inparentheses.
Thousands of U.S. dollars
As of March 31, 2016

Book value

Fair value

Assets(1) Cash and deposits$ 3,730,324 $ 3,730,324 $(2) Notes and operating accounts receivable
1,137,273 1,137,273(3) Securities and investment securities(i)	Investment securities of non-consolidated
132,037
116,169
subsidiaries and affiliates(ii) Other investment securities
320,633
320,633
Total
5,320,287 5,304,419
Liabilities(1) Operating accounts payable
1,290,495 1,290,495(2) Short-term loans payable
51,40251,402(3) Long-term loans payable
551,854551,854(4) Lease obligations
209,682
209,682(5)	Long-term accounts payable—installment
9,096
9,096
purchase
Total
2,112,557 2,112,557
Derivatives*$ (262,433) $ (263,329) $Difference——(i)	Methods of calculating the fair value of financial instruments,
including securities and derivatives transactions
Assets(1)	Cash and deposits and (2) Notes and operating accounts
receivable
The fair value equates to the book value due to the short-term
nature of these instruments.
(3)	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)	Operating accounts payable and (2) Short-term loans payable
The fair value equates to the book value due to the short-term
nature of these instruments.
(3)	Long-term loans payable, (4) Lease obligations, and (5) Longterm accounts payable—installment purchase
The fair value of long-term loans payable, lease obligations, andlong-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.

(15,859)—(15,859)
—
—
—
—
—
—
(887)

*	Derivatives assets and liabilities are stated on a net basis, and net liabilities are enclosed inparentheses.

Derivatives
Derivatives are described further in “Note 9. DERIVATIVES ANDHEDGING ACTIVITIES.”(ii)	Financial instruments for which the fair value is extremely
difficult to measure
2016

2015

Thousands of
U.S. dollars
2016¥ 24,552¥ 19,653$ 217,891

3,330
6,040

3,330
5,447

29,55253,603

Millions of yen
As of March 31

Investment securities of non-consolidated
subsidiaries and affiliates
Held-to-maturity securities
Other securities

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

4. U.S. DOLLAR AMOUNTS
Amounts in U.S. dollars are included solely for the convenienceof the reader. A rate of JPY 112.68 = USD 1.00, the approximate
exchange rate prevailing on March 31, 2016, has been used intranslation. The convenience translations should not be construed
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 theaccompanying consolidated statements of cash flows at March 31,
2016 and 2015 were as follows:

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.

Chapter TOP

Contents

111

Financial Data

Consolidated Financial Statements(iii)	Redemption schedule for monetary claims and securities
with maturity date subsequent to the consolidated balance
sheet dateMillions of yen
As of March 31, 2016

Cash and deposits
Notes and operating accounts
receivable
Investment securities
Held-to-maturity securities

Within one
year

More than one
year, within
five years

More than five
years, within
ten years

More thanten years¥ 420,333 ¥

— ¥

— ¥

—

128,148

—

—

—

—

—

—

3,330

Thousands of U.S. dollars
As of March 31, 2016

Cash and deposits
Notes and operating accounts
receivable
Investment securities
Held-to-maturity securities

Within one
year

More than one
year, within
five years

More than five
years, within
ten years

More thanten years$ 3,730,324 $

— $

— $

—

1,137,273

—

—

—

—

—

—

29,552Millions of yen

As of March 31, 2015

Cash and deposits
Notes and operating accounts
receivable
Investment securities
Held-to-maturity securities

Within one
year

More than one
year, within
five years

More than five
years, within
ten years

More thanten years¥ 364,988 ¥

— ¥

— ¥

—

142,150

—

—

—

—

—

—

3,330

The redemption schedule for short-term and long-term debt
subsequent to the consolidated balance sheet date is described in“Note 10. SHORT-TERM LOANS PAYABLE AND LONG-TERM DEBT.”
8. INVESTMENT SECURITIESNo trading securities were held on March 31, 2016 and 2015.
Securities classified as other securities are included in “Investment
securities” in the accompanying consolidated balance sheets.
The components of unrealized gain or loss on marketablesecurities classified as other securities on March 31, 2016 and2015 were summarized as follows:
Millions of yen
Acquisition
cost

As of March 31, 2016

Carrying
value

Unrealized
gain (loss)

Unrealized gain:
StocksTotal¥

15,870 ¥15,87036,095 ¥36,095

20,225
20,22540
40
15,910 ¥33
33
36,129 ¥(6)(6)
20,218

Thousands of U.S. dollars
As of March 31, 2016

Acquisition
cost

Carrying
value

Unrealized
gain (loss)

Unrealized gain:
Stocks
Unrealized loss:
Stocks$ 140,841 $ 320,331 $ 179,490
140,841
320,331
179,490
354
292
(53)
354
292
(53)
$ 141,196 $ 320,633 $ 179,428

Carrying
value

Unrealized
gain (loss)

Unrealized gain:
Stocks¥

Unrealized loss:
StocksTotal¥

15,913 ¥15,91350,105 ¥50,10534,191
34,191——
15,913 ¥——50,105 ¥——34,191

Proceeds from sales of securities classified as other securities forthe years ended March 31, 2016 and 2015 amounted to ¥273
million ($2,422 thousand) and ¥54 million, respectively. For theyears ended March 31, 2016 and 2015 the aggregate gain realizedon those sales totaled ¥265 million ($2,351 thousand) and ¥0
million, respectively.

Millions of yen
As of March 31, 2016

Thousands of U.S. dollars

Contract amount
Maturing
Total
after 1 year

Type of derivative

Major hedged items

Forward foreign currency exchange contracts:
Buy:
USD
EUR
OthersOperating accounts payable
Operating accounts payable
Operating accounts payable¥ 53,335
3,176
1,182

Operating accounts payable

85,238Operating accounts payable
Aircraft fuel

¥

1,801
—
—

Contract amount
Maturing
Total
after 1 year

Estimated
fair value¥

Estimated
fair value(3,146)(149)(62)$ 473,331
28,186
10,489$ 15,983——$ (27,919)(1,322)(550)

23,6501,890

756,460

209,886

16,77378,87521,322(3,089)699,991

189,226(27,413)77,531

21,620(25,013)

688,063

191,870(221,982)

1,166
217
157

—
—
—

(75)
(11)
(13)
¥ (29,672)

10,347
1,925
1,393

—
—
—

(665)
(97)
(115)
$ (263,329)

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

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

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 purchasecommitments, principally for flight equipment and foreign accounts
payable, and other items. The Company also enters into a varietyof options in its management of risk exposure related to thecommodity 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. Gains andlosses on hedging instruments and the assessment of hedge
effectiveness, which are performed both at inception and on an
ongoing basis, 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 on March 31, 2016 and 2015, which met
the criteria required for the application of hedge accounting, aresummarized as follows:

Forward foreign currency exchange contracts:
Buy:
USD
EUR
Others
Total

Operating accounts payable
Operating accounts payable
Operating accounts payable

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, 2015
Type of derivative

Major hedged items

Contract amount
Maturing
Total
after 1 year

Estimated
fair value

Forward foreign currency exchange contracts:
Buy:
USD
Operating accounts payable ¥ 37,248 ¥ 1,690 ¥ 3,624
EUR
Operating accounts payable
3,284
—
(211)
OthersOperating accounts payable
1,303
—
(32)
Currencies options:
Buy:
Call option
Operating accounts payable 183,843
28,723
19,433Sell:
Put option
Operating accounts payable
97,15826,186(869)
Commodity swap:
Received variable/
Aircraft fuel113,996
30,971(36,044)
pay fixed
Commodity options:
Buy:
Call option
Aircraft fuel158,887—
13
Method of hedge accounting: Special treatment (Note 2. l.)
Forward foreign currency exchange contracts:
Buy:
USD
Operating accounts payable
1,102
EUR
Operating accounts payable
282
OthersOperating accounts payable
80
Total

—
—
—

226
(19)
2
¥ (13,876)

All derivative transactions were conducted as over-the-countertransactions. Fair value is estimated based on prices quoted byfinancial institutions and others.

10. SHORT-TERM LOANS PAYABLE AND LONG-TERM DEBT
The weighted-average interest rate for short-term loans payable
outstanding on March 31, 2016 was 1.0%. Long-term debt on
March 31, 2016 and 2015 consisted of the following:Thousands of
U.S. dollars

Millions of yen
As of March 31

2016

2016

2015

Long-term loans:
Current portion of long-term¥ 10,851 ¥ 7,807
loans payable
Long-term loans payable(excluding current portion)
51,33143,809due 2017 to 2029
Lease obligations:
Current portion of lease obligations 13,254
25,123
Lease obligations (excluding
current portion) due 2017
10,37322,548
to 2026
Long-term accounts
payable—installment purchase:
Current portion of Long-term
accounts payable—installment
178
174
purchase
Long-term accounts
payable—installment purchase
847
1,025
(excluding current portion) due
2021
Total
¥ 86,837 ¥ 100,488

Weightedaverageinterest rate2016

$ 96,299

1.1%

455,546

0.8%

117,625

0.7%

92,057

1.4%

1,579

2.0%

7,516

2.0%

$ 770,651

The aggregate annual maturities of long-term debt within 5 years
subsequent to March 31, 2016 are summarized as follows:Year ending March 31,

Millions of yen

Thousands of
U.S. dollars

2017
2018
2019
2020
2021
2022 and thereafter
Total¥ 24,283
16,107
8,161
8,036
6,209
24,039¥ 86,837$ 215,504
142,944
72,426
71,317
55,102
213,338$ 770,651

Chapter TOP

Contents

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

Unrealized loss:
Stocks

Total

112

¥

Millions of yen
Acquisition
cost

As of March 31, 2015113

Financial Data

Consolidated Financial Statements

Assets pledged as collateral as of March 31, 2016 for long-termand short-term debt of ¥58,333 million ($517,687 thousand) areflight equipment and others totaling ¥145,192 million ($1,288,533
thousand). Assets pledged as collateral as of March 31, 2015
for long-term and short-term debt of ¥49,448 million are flightequipment and others totaling ¥171,605 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
derivative transactions.
The Company entered into loan commitment agreements
amounting to ¥50,000 million ($443,734 thousand) with threebanks. There were no loan payables outstanding on March 31,
2016 under these 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 rateof pay, length of service, and the conditions under which thetermination 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, 2016, the Company and 42 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.

Millions of yen
Year ended March 31

2016

2015

Balance at beginning of period¥ 424,673 ¥ 396,449
Cumulative effect of changes in accounting policies—
30,229
Restated balance
424,673426,678
Service cost
12,851
12,813
Interest cost
3,200
3,221
Actuarial loss
58,5244,176
Benefit paid
(25,858)(22,353)
Past service costs
—
(6)
Other
(45)
143
Balance at end of period¥ 473,346 ¥ 424,673

Thousands of
U.S. dollars
2016$ 3,768,840—
3,768,840
114,048
28,399519,382(229,481)—(399)$ 4,200,798

Thousands of
U.S. dollars
2016

Millions of yen
2016Year ended March 31

Balance at beginning of period
Expected return on plan assets
Actuarial gainContributions paid by the employer
Benefit paid
Balance at end of period

2015¥ 238,110 ¥ 233,331
3,646
3,613
653
3,102
18,012
16,586(19,547)(18,522)¥ 240,874 ¥ 238,110$ 2,113,152
32,357
5,795
159,850(173,473)$ 2,137,681(3)	Reconciliation from retirement benefit obligations and plan assets to
net defined benefit liability (asset), applying the simplified method
Thousands of
U.S. dollars
2016

Millions of yen
Year ended March 31

Balance at beginning of period
Retirement benefit cost
Contributions paid by the employer
Benefit paid
Increase on partial termination of defined
benefit plan
Increase by merger
Other
Balance at end of period

¥

¥

2016

2015

3,098 ¥
183
(163)
(235)

3,249
192
(190)
(254)

—

17

—

—
(132)
2,748 ¥

43
39
3,098

—
(1,171)
24,387$$27,493
1,624(1,446)(2,085)(4)	Reconciliation from retirement benefit obligations and plan
assets to net defined benefit liability (asset)
Millions of yen
Years ended March 31

Funded retirement benefit obligations
Plan assets
Unfunded retirement benefit obligations
Total net defined benefit liability (asset)
Net defined benefit liability
Net defined benefit asset
Total net defined benefit liability (asset)

2016

2015

¥ 390,109 ¥ 339,880(244,800)(241,887)
145,308
97,99389,911
91,667235,220
189,661
236,310
191,635(1,090)(1,974)¥ 235,220 ¥ 189,661

Thousands of
U.S. dollars
2016$ 3,462,096(2,172,523)
1,289,563
797,932
2,087,504
2,097,177(9,673)$ 2,087,504(5) Retirement benefit costs
Millions of yen
Year ended March 31

2016

2015

Service cost
¥ 12,851 ¥ 12,813
Interest cost
3,200
3,221
Expected return on plan assets(3,646)(3,613)
Past service costs amortization
(18)
(24)
Net actuarial loss amortization
1,366
1,475
Amortization of unrecognized severance—
680
benefit obligation at transition
Retirement benefit cost based on the
183
192
simplified method
Other
(692)
(685)
Subtotal
13,244
14,059Loss on partial termination of defined benefit—
20
plan, net
Total
¥ 13,244 ¥ 14,079

Thousands of
U.S. dollars
2016$

114,048
28,399(32,357)(159)
12,122—
1,624(6,141)
117,536—$

117,536(6)	Remeasurements of defined benefit plans in othercomprehensive income
Thousands of
U.S. dollars
2016

Millions of yen
2016Year ended March 31

Past service costs
Actuarial losses (gains)
Benefit obligation at transition
Total

2015

¥

(18) ¥(56,504)—¥ (56,522) ¥(159)(501,455)—$ (501,615)

$

(18)
401
680
1,063

(7)	Remeasurements of defined benefit plans in accumulated othercomprehensive income
Thousands of
U.S. dollars
2016

Millions of yen
As of March 31

2016

12. INCOME TAX
The significant components of deferred tax assets and liabilities
and the related valuation allowances on March 31, 2016 and 2015
were as follows:

2015

Past service costs that are yet to be(399) ¥
(417)¥
recognized
Actuarial losses that are yet to be recognized
70,385
13,881
Total¥ 69,986 ¥ 13,463$(3,541)$

624,645
621,1042016

As of March 31

Deferred tax assets:
Net defined benefit liability
Operating accounts payable
Deferred losses on hedges
Lease obligations
Deferred liability on flight equipment
Non-recurring depreciation
Reserve for loss on antitrust litigation
Asset retirement obligations
Tax loss carryforwards
Other

Year ended March 31

2016

2015

%
General insurance fund
Bond
Other
Total

91
3
6
100

%
89
3
8
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
Year ended March 31

2016

2015

%
Discount rateLong-term expected rate of return

0.6–1.2
1.0–2.5%
0.6–1.8
1.0–2.5

b. Defined contribution plans
The Company and its consolidated subsidiaries contributed a totalof ¥1,564 million ($13,880 thousand) and ¥1,579 million for the
fiscal years ended March 31, 2016 and 2015, respectively.

Deferred tax liabilities:
Valuation difference on available-for-salesecurities
Leased assets
Deferred gains on hedges
Other
Net deferred tax assets

2015¥ 71,370 ¥ 60,834
10,442
9,413
10,17012,845
4,323
11,284
3,347
3,018
3,148
3,634
1,885
1,837
1,188
1,075
197,977
247,720
8,660
8,060
312,513359,723(276,975)(316,836)
35,53842,887

Valuation allowance(8) Plan assets

Thousands of
U.S. dollars
2016

Millions of yen$

633,386
92,66990,25538,36529,70327,937
16,728
10,543
1,756,984
76,854
2,773,455(2,458,067)
315,388

6,167

10,86354,730

3,022
658
3,150
12,998¥ 22,539

7,181
6,373
4,659
29,077¥ 13,809

26,8195,839
27,955
115,353
200,026$

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, 2016 and 2015 were as
follows:
Year ended March 31

2016

2015

Statutory rate
Share of profit (loss) of entities accounted for using equity method
Changes in valuation allowance
Decrease in deferred tax assets due to a change in the tax rate
Other
Effective tax rate

%
32.0
(0.1)
(20.8)
0.4
1.2
12.7

%
34.3
0.5
(27.5)
1.0
1.1
9.4

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, 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 havechanged 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, netdeferred tax assets (after deducting the deferred tax liabilities)
decreased by ¥992 million as of March 31, 2015, income taxes—
deferred expense recognized for the fiscal year ended March
31, 2015 increased by ¥1,627 million, valuation difference on
available-for-sale securities increased by ¥1,020 million, deferredgains (losses) on hedges decreased by ¥370 million, andChapter TOP

Contents

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

114

For the years ended March 31, 2016 and 2015
a. Defined benefit plans(1)	Balances of retirement benefit obligations, excluding plans
adopting the simplified method(2) Balances of plan assets, excluding plans adopting the simplified method

115

Financial Data

Consolidated Financial Statements

remeasurements of defined benefit plans decreased by ¥16 million.
On March 29, 2016, amendments to the Japanese tax
regulations were promulgated. 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, 2016 to March 31, 2018 and on or after April 1, 2018 havechanged from 31.5% to 30.2% and 30.0%, respectively, as ofMarch 31, 2016.
Due to these changes in statutory income tax rates, netdeferred tax assets (after deducting the deferred tax liabilities)
decreased by ¥963 million ($8,546 thousand) as of March 31,
2016, income taxes—deferred expense recognized for the fiscal
year ended March 31, 2016 increased by ¥925 million ($8,209
thousand), valuation difference on available-for-sale securities
increased by ¥308 million ($2,733 thousand), deferred gains (losses)on hedges decreased by ¥327 million ($2,902 thousand), andremeasurements of defined benefit plans decreased by ¥20 million($177 thousand).
13. NET ASSETSThe Companies Act of Japan (the “Act”), provides that an amountequal to at least 10% of the amount to be disbursed as distributionsof capital surplus (except for distributions from additional paidin capital) and retained earnings (except for distributions from thelegal reserve) be appropriated to additional paid-in capital and thelegal reserve, respectively, until the sum of additional paid-in capitaland the legal reserve equals 25% of the capital stock account.
Such distributions can be made at any time by resolution of theshareholders, or by the Board of Directors if certain conditions aremet, but neither additional paid-in capital nor the legal reserve isavailable for distribution by resolution of the Board 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 shareholders’ meeting held on June 22, 2016,
the shareholders approved dividends of surplus amounting to

the year ended March 31, 2016 were as follows:

On April
1, 2015

Number of shares of stock authorized:
Common stock
700,000
Preferred stock
50,000Total
750,000
Number of shares of stock in issue:
Common stock
362,704
Total
362,704
Number of shares of common stock in treasury:
Common stock
203
Total
203

Increase———

Decrease

On March
31, 2016— 700,000— 50,000— 750,000——— 362,704— 362,704

—
—

—
—

203
203

The total number and changes in the total number of shares ofstock authorized and in issue and common stock in treasury for theyear ended March 31, 2015 were as follows:
Thousands of sharesYear ended March 31, 2015

On April
1, 2014

Number of shares of stock authorized:
Common stock
350,000
Preferred stock
50,000Total
400,000
Number of shares of stock in issue:
Common stock
181,352
Total
181,352
Number of shares of common stock in treasury:
Common stock
33
Total
33

Increase

Decrease

On March
31, 2015

350,000—
350,000— 700,000— 50,000— 750,000

181,352
181,352— 362,704— 362,704

169
169

—
—

203
203

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.

14. OTHER COMPREHENSIVE INCOME
Reclassification adjustments for each component of othercomprehensive income including tax effect for the years ended
March 31, 2016 and 2015 were as follows:
Millions of yen
Year ended March 31

2016

2015

Valuation difference on available-for-sale securities,
net of taxes:
Unrealized holding gains arising during the period ¥ (14,159) ¥ 25,198
Less: Reclassification adjustment included in profit——
Pre-tax amount(14,159)
25,198Tax expense
4,697(7,588)Valuation difference on available-for-sale(9,461)
17,610securities, net
Deferred gains (losses) on hedges, net of taxes:
Deferred gains (losses) arising during the period(34,237) (29,577)
Less: Reclassification adjustment included in profit 22,219(1,546)Pre-tax amount(12,017) (31,123)
Tax benefit
3,012
8,608
Deferred gains (losses) on hedges, net of taxes(9,005) (22,515)
Foreign currency translation adjustment:
Translation adjustment arising during the period
(247)
1,333
Less: Reclassification adjustment included in profit
4,836
(0)
Foreign currency translation adjustment
4,588
1,333
Remeasurements of defined benefit plans:Remeasurements of defined benefit plans arising(57,871)(1,068)during the period
Less: Reclassification adjustment included in profit
1,348
2,131
Pre-tax amount(56,522)
1,063
Tax expense645(4)
Remeasurements of defined benefit plans(55,877)
1,058
Share of other comprehensive income of entities
accounted for by the equity method:
Share of other comprehensive income of entities
accounted for by the equity method arising
(453)
355
during the period
Total other comprehensive income¥ (70,209) ¥ (2,157)

Thousands of
U.S. dollars
2016$(125,656)—(125,656)
41,684

Assets utilized in the Company’s andconsolidated subsidiaries’ operations
Assets to be soldGroups of assets

Locations

Flight equipment—

An impairment loss of ¥881 million on flight equipment wasrecognized as non-operating expenses in the accompanying
consolidated statements of income and comprehensive income forthe year ended March 31, 2015.

(83,963)(303,842)
197,186(106,647)
26,730(79,916)(2,192)
42,91740,717(513,587)
11,963(501,615)
5,724(495,891)(4,020)$(623,083)

15. IMPAIRMENT LOSS ON NON-CURRENT ASSETS
Assets are attributed or allocated to cash-generating units
which generated largely independent cash flows for calculating
impairment loss. Assets to be sold and idle assets are written down
to their 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, 2016 and 2015, respectively.
The Company and certain consolidated subsidiaries haverecognized impairment loss on the following groups of assets
in the accompanying consolidated statements of income andcomprehensive income for the year ended March 31, 2016:
Assets utilized in the Company’s andconsolidated subsidiaries’ operations
Assets to be sold

The Company and certain consolidated subsidiaries haverecognized impairment loss on the following groups of assets
in the accompanying consolidated statements of income andcomprehensive income for the year ended March 31, 2015:

Groups of assets

Locations

Flight equipment—

An impairment loss of ¥2,714 million ($24,085 thousand) was
recognized mainly on flight equipment as non-operating expenses
in the accompanying consolidated statements of income andcomprehensive income for the year ended March 31, 2016.

16. SUPPLEMENTARY CASH FLOW INFORMATION
There are no material transactions that need to be presented forthe year ended March 31, 2016.
The assets and liabilities of a subsidiary included inconsolidation following the purchase of its shares during the year
ended March 31, 2015 were as follows:Year ended March 31, 2015

Millions of yen

Current assets
Non-current assets
Current liabilities
Non-current liabilities
Non-controlling interests
Expenditure for purchase of shares of common stock
Gain on step acquisition
Cash and cash equivalents held by subsidiaries
Net proceeds

¥

¥

579
876
(503)
(422)
(243)
286
(80)
(282)
76

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

Millions of yen

Current assets
Non-current assets
Current liabilities
Non-controlling interests
Foreign currency translation adjustment
Gain on sales of shares
Proceeds from sales of shares of common stock
Cash and cash equivalents held by subsidiaries
Net proceeds

¥

¥

560
2
(217)
(9)
(7)
72
401
(231)
169

17. LEASESAs Lessee
The following amounts represent the acquisition costs,
accumulated depreciation and net book value of the leased assets
on March 31, 2016 and 2015, and the related depreciation andinterest expenses for the periods ended March 31, 2016 and 2015,
which would have been reflected in the accompanying consolidatedbalance 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:

Chapter TOP

Contents

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

116¥43,508 million ($386,119 thousand). Such appropriations havenot been accrued in the Consolidated Financial Statement as ofMarch 31, 2016.
The total number and changes in the total number of sharesof stock authorized and in issue and common stock in treasury for

Thousands of sharesYear ended March 31, 2016117

Financial Data

Consolidated Financial Statements

As of March 31, 2016

Less
Acquisition accumulated
cost
depreciation

Net book
value

Ground property and equipment
Total

¥
¥

¥
¥

—
—

¥
¥

—
—

—
—

Thousands of U.S. dollars
As of March 31, 2016
Ground property and equipment
Total

Less
Acquisition accumulated
Net book
cost
value
depreciation
$
—
$
—
$
—
$
—
$
—
$
—
Millions of yen

As of March 31, 2015

Less
Acquisition accumulated
cost
depreciation

Net book
value

Ground property and equipment
Total

¥
¥

¥
¥

58
58

¥
¥

55
55

Millions of yen
Year ended March 31
Lease expenses
Depreciation equivalentInterest expenses equivalents

2016
¥
		
		

2
¥
2 		
0

2015
93
85
1

2
2

Thousands of
U.S. dollars
2016
$
17
		
17
		
0

The present value of future rental expenses under finance leases
accounted for as operating leases outstanding on March 31, 2016
and 2015 were as follows:
Millions of yen
As of March 31
Within 1 year
Over 1 year
Total

2016
2015
—
¥
2
— 		
—
—
¥
2

Depreciation equivalent is calculated by the straight-line methodon the assumption that the useful lives of the related assets are thesame as the lease term and the residual value is zero.
Interest expenses equivalent is calculated on theassumption that the difference between aggregate lease rentals
and the acquisition cost of leased assets is deemed to be theinterest portion and is apportioned 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, 2016 and 2015.
Future rental expenses under noncancelable operating leases
outstanding on March 31, 2016 and 2015 were as follows:

As of March 31
Within 1 year
Over 1 year
Total

2016
2015
¥ 19,015 ¥ 24,024
		 77,900 		 101,071¥ 96,915 ¥ 125,096

Net assets per share are computed based on the net assets
available for distribution to the shareholders of common stockand the number of shares of common stock outstanding on eachbalance sheet date.
Yen

18. CONTINGENT LIABILITIESOn March 31, 2016 and 2015, contingent liabilities for guarantees,
principally for employees, amounted to ¥186 million ($1,650
thousand) and ¥227 million, respectively.
19. AMOUNTS PER SHARE
Basic earnings per share is computed based on the earnings
available for distribution to or allocable to the shareholders ofcommon stock and the weighted-average number of shares ofcommon stock outstanding during each year. Diluted earnings per
share are computed based on earnings available for distribution to
the shareholders and the weighted-average number of shares ofcommon stock outstanding during each year after giving effect tothe potentially dilutive securities to be issued upon the conversionof convertible bonds. However, diluted earnings per share havenot been presented for the years ended March 31, 2016 and 2015
since the Company had no equity instruments issued that had adilutive effect on earnings per share.
Yen
Year ended March 31
Earnings per share of common stock:
Basic

U.S. dollars
2016

2016

2015

¥ 481.29¥ 411.06$

4.27

The following table sets forth the computation of basic earnings per
share of common stock for the years ended March 31, 2016 and2015:
Thousands of
U.S. dollars
2016

Millions of yen
Years ended March 31
2016
2015
Earnings (allocable to) available forshareholders of common stock:
Profit attributable to owners of parent¥ 174,468 ¥ 149,045
Appropriations for payment of preferred
			
— 			
—
dividend¥ 174,468

Year ended March 31
Weighted-average number of shares of common stock
outstanding¥ 149,045

As of March 31
Net assets per share of common stock2016¥ 2,325.79

2015¥ 2,142.00

U.S. dollars
2016$ 20.64

The Company undertook a two-for-one stock split on October
1, 2014. The previous year’s figures for earnings per share ofcommon stock and net assets per share of common stock havebeen adjusted accordingly.
20. ASSET RETIREMENT OBLIGATIONS
a.	Asset retirement obligations recognized in the consolidatedbalance sheets on March 31, 2016 and 2015
The Company and its consolidated subsidiaries, in connection
with some buildings and land, have entered into real estate lease
contracts with terms ranging from 1 to 46 years for the years
ended March 31, 2016 and 2015. Asset retirement obligations
have been recognized in light of the obligation of the Company andits consolidated subsidiaries to the owners of the buildings andland to remove the facilities from leased real estate at the end of
those contracts. The liabilities on March 31, 2016 and 2015 havebeen calculated with expected useful lives ranging from 1 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, 2016 and 2015:
Millions of yen
Year ended March 31
Balance at beginning of period
Increase due to purchases of tangible
fixed assets
Accretion due to the passage of time
Decrease due to settlement
Balance at end of period

¥
		
		
		
¥

2016
3,419

¥

2015
4,405

484 		—54 		62(0) 		 (1,049)
3,957 ¥ 3,419b.	Asset retirement obligations not recognized in the consolidatedbalance sheets as of March 31, 2016 and 2015
The Company and its consolidated subsidiaries have rented lots
and buildings from domestic service airports based on permission
for national property use and a real estate rental contract fornational property, and have an 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
the trends of the aviation administration of each country. For thisreason, the time of building removal and withdrawal cannot be
determined at the discretion of the Company and its consolidated
subsidiaries alone in regard to rented airport related facilities.
Moreover, since there is also no schedule for building removal
and withdrawal at present, asset retirement obligations cannot bereasonably estimated. Therefore, the asset retirement obligations
corresponding to the debt concerned have not been calculated.
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 allocationand to assess performance. Air transportation includes internationaland domestic passenger operations, cargo operations and othertransportation services.
The accounting policies of the segments are substantially thesame as those described in the significant accounting policies inNote 2. Inter-group sales are recorded under the same conditions
used in transactions with third parties.

Thousands of
U.S. dollars
2016$ 30,342
		

4,295

		
479
		
(0)
$ 35,117$ 1,548,349
		—$ 1,548,349

Thousands of shares
2016
2015
		

362,500 		

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

118

¥
		
¥

Thousands of
U.S. dollars
2016
$
—
		
—
$
—

Thousands of
U.S. dollars
2016$ 168,752
		 691,338$ 860,090

Millions of yen

Millions of yen

362,584

Chapter TOP

Contents

119Financial Data

Consolidated Financial Statements

Millions of yen
Year ended March 31, 2016

Air transportation

Other

Total

Eliminations

Consolidated

Net sales
External¥

Intersegment

		114,415 		

28,734 				

1,205,202 		

274,609 		

Total

1,090,787¥

245,874¥

1,336,661¥—¥

1,336,661

143,149 		

(143,149) 		

—1,479,811 		

(143,149) 		

1,336,661

Operating income		

190,811 		

18,466 		

209,277 		(84) 		

209,192

Assets		

1,517,665 		

167,193 		

1,684,858 		

(105,929) 		

1,578,928

Depreciation and amortization

		86,416 		

2,112 		88,528 		(0) 		

88,528

Impairment loss		2,504 		209 		

2,714 		

— 		

2,714

Investments in entities accounted for using equity method		7,229 		24,871 		

32,100 		— 		

32,100Capital expenditure

¥

3,510

212,435—

212,435

208,925

¥

¥

¥

¥

Thousands of U.S. dollars
Year ended March 31, 2016

Air transportation

Other

Total

Eliminations

Consolidated

Net sales
External$

9,680,395$

2,182,055$

11,862,451

$

—

$

11,862,451

		

1,015,397 		

255,005 		

1,270,402 		

(1,270,402) 		

—

Total

		

10,695,793 		

2,437,069 		

13,132,862 		

(1,270,402) 		

11,862,451

Operating income		

1,693,388 		

163,880 		

1,857,268 		(745) 		1,856,514

Intersegment

Assets		

13,468,805 		

1,483,785 		

14,952,591 		(940,086) 		

14,012,495

Depreciation and amortization

		766,915 		

18,743 		

785,658 		(0) 		

785,658

Impairment loss		22,222 		

1,854 		24,085 		— 		

24,085Investments in entities accounted for using equity method		64,155 		

220,722 		

Capital expenditure$

1,854,144$

31,150$284,877 		
1,885,294

$

— 		
—

$

Air transportation

Other

Total

Eliminations

Consolidated

Net sales
External
Intersegment
Total

¥

1,079,073¥

265,638¥

1,344,711¥—¥

1,344,711

		117,169 		

32,818 		

149,988 		

(149,988) 		

—		

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 loss		881 		

— 		

881 		

— 		881

Investments in entities accounted for using equity method		

2,818 		24,011 		

26,830 		— 		

26,830Capital expenditure

¥

2,250

196,477(13) 		

196,464

194,227¥¥¥(Application of Accounting Standard for Business Combination,etc.)
As mentioned in “CHANGES IN ACCOUNTING POLICY/CHANGESIN PRESENTATION,” the Company has recognized differences ascapital surplus arising from changes in the Company’s ownershipinterest of subsidiaries, over which 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 for the fiscal year ended March 31, 2015 wereimmaterial.

2016

2015

Thousands of
U.S. dollars
2016¥

243,785 ¥

247,832$ 2,163,516

Millions of yen
Year ended March 31
Asia and Oceania
North America

		

197,552 		

193,505		 1,753,212

Europe		

79,997 		

90,944

		

Total

¥

521,334 ¥532,282$ 4,626,677

709,948

Information about amortization and unamortized balances of
goodwill by segment for the years ended March 31, 2016 and2015 were as follows:
Millions of yen
Year ended March 31,
Airtransportation
2016
Amortization during
the year¥

Unamortized balance 		

—

Other
¥

— 		

849

Total
¥

849

455 		

Eliminations

Consolidated

¥

¥

849

— 		

455

455 		—

Thousands of U.S. dollars
Year ended March 31,
Airtransportation
2016
Amortization during
the year$

Unamortized balance 		

—

Other
$

— 		

7,534

$

4,037 		TotalEliminations

Consolidated

7,534

$

$

7,534

— 		

4,037

4,037 		

—284,877
1,885,294
Millions of yen

Year ended March 31, 2015

(Application of Accounting Standard for Retirement Benefits, etc.)
As mentioned in “CHANGES IN ACCOUNTING POLICY/CHANGESIN PRESENTATION,” the Company and its consolidated domestic
subsidiaries have changed the method of attributing expected
benefits to periods from a straight-line basis using a discount rate
based on estimated average remaining years of service of theeligible employees to a benefit formula basis using a discount ratethat is a single weighted average reflecting the projected benefit
payment period and the projected payment per period.
As a result of the application, the operating income of the
air transportation segment has increased by ¥2,303 million andoperating income of other has decreased by ¥1 million for the fiscal
year ended March 31, 2015.

Information by Geographical Area
Operating revenue from overseas operations, which include
international passenger and cargo services of domestic
consolidated airline subsidiaries rendered during the years ended
March 31, 2016 and 2015, export sales of domestic consolidated
subsidiaries, and sales of consolidated subsidiaries outside Japan,
for the years ended March 31, 2016 and 2015 were as follows:

Millions of yen
Year ended March 31,
Airtransportation
2015
Amortization during
the year¥

Unamortized balance 		

22

Other
¥

— 		

849

Total
¥

1,305 		871Eliminations

Consolidated

¥

¥

871

— 		

1,305

1,305 		

—22. RELATED PARTY INFORMATION
There are no material transactions that need to be presented forthe years ended March 31, 2016 and 2015.

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

120

Chapter TOP

Contents

121

Financial Data

Consolidated Financial Statements

Independent Auditor’s Report

Corporate Data

Contents

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

122

Corporate Data
Group Companies. ............................................... 124
ESG Data.............................................................. 126
Domestic Route Map............................................ 127
International Route Map........................................ 128
Stock Information / Corporate Information. ........... 130

123

Corporate Data

Group Companies

Consolidated Subsidiaries (As of March 31, 2016)(As of March 31, 2016)

Group Total

Air Transport BusinessCorporate Name

OthersNumber of Subsidiaries 87

Number of Subsidiaries 32

Number of Subsidiaries 55

Air Transport Business Segment

Affiliated Companies 59

Affiliated Companies 3

Affiliated Companies 56•Air Transport Business(Consolidated Subsidiaries 55)(Consolidated Subsidiaries 30)(Equity Method Affiliates 14)(Equity Method Affiliates 3)(Consolidated Subsidiaries 25)(Equity Method Affiliates 11)

Customers and Business Associates

Paid-in Capital Ratio of Voting Rights(Millions of yen) Direct (%) Indirect (%) Total (%)

Other segments•MaintenanceJAPAN TRANSOCEAN AIR CO., LTD.

4,537

JAPAN AIR COMMUTER CO., LTD.
J-AIR CO., LTD.

315

66.6

3.4

70.0

HKD 1,000 1,960

46.4

4.6

51.0

JALPAK CO., LTD. *4

80

96.4

1.2

97.7

JAL SALES CO., LTD.

460

100.0

—

100.0

JAL JTA SALES CO., LTD.

30

16.7

83.3

100.0

USD 1,000 1,000

—

100.0

100.0

JALPAK INTERNATIONAL (CHINA) CO., LTD.

USD 1,000 600

—

100.0

100.0

JALPAK INTERNATIONAL (EUROPE) B.V.

EUR 1,000 1,600

—

100.0

100.0

100.0

JALPAK INTERNATIONAL (FRANCE) S.A.S.

EUR 1,000 160

—

100.0

100.0

100.0

100.0

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

GBP 1,000 100

—

100.0

100.0

—

100.0

JALPAK INTERNATIONAL ASIA PTE. LTD.

SGD 1,000 146

—

100.0

100.0

100.0

—

100.0

JAL SATELLITE TRAVEL CO., LTD.

HKD 1,000 750

—

100.0

100.0

100.0

—

100.0

PT. TAURINA TRAVEL DJAYA *5

IDR 1,000 500,000

—

49.0

49.0

72.8

Air Transport Business(JAL, thirty consolidated subsidiaries, two non-consolidated subsidiaries and three equity method affiliates)

Air Transport BusinessJAPAN AIRLINES CO., LTD.

JAPAN TRANSOCEAN AIR CO., LTD. JAPAN AIR COMMUTER CO., LTD. J-AIR CO., LTD.
HOKKAIDO AIR SYSTEM CO., LTD. RYUKYU AIR COMMUTER CO., LTD.

Others

—

300

60.0

—

60.0

200

100.0

—

100.0

HOKKAIDO AIR SYSTEM CO., LTD.

490

57.3

—

57.3

•Passenger SalesRYUKYU AIR COMMUTER CO., LTD.

396

—

74.5

74.5

JAL SKY CO., LTD.

100

100.0

—

100.0

JALSKY OSAKA CO., LTD.

30

100.0

—

100.0

JALPAK INTERNATIONAL HAWAII, INC.

JALSKY KYUSHU CO., LTD.

30

100.0

—

100.0

JALSKY SAPPORO CO., LTD.

30

100.0

—

100.0

JALSKY NAHA CO., LTD. *1

30

51.0

49.0

JTA SOUTHERN SKY SERVICE CO., LTD. *1

20—

JALSKY KANAZAWA CO., LTD.

10

100.0

JALSKY SENDAI CO., LTD.

10
USD 1,000 100

JAL HAWAII, INCORPORATED•Ground Handling

Provision of service and goods•CargoJUPITER GLOBAL, LTD.

•Airport-Related Business

JAL GROUND SERVICE CO., LTD. *2

100

99.8

0.2

100.0

OKINAWA FUELING FACILITIES CO., LTD.

100

40.0

20.0

60.0

JAL GROUND SERVICE TOKYO CO., LTD. *2

20

—

100.0

100.0

JAL ABC, INC.

100

51.0

—

51.0

10

—

100.0

100.0

Airport Passenger Handling

Ground Handling

JAL GROUND SERVICE OSAKA CO., LTD.

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

JAL GROUND SERVICE CO., LTD.
OKINAWA AIRPORT SERVICE CO., LTD.

JAL GROUND SERVICE KYUSHU CO., LTD.

10

—

100.0

100.0

JAL INFORMATION TECHNOLOGY CO., LTD.

702

100.0

—

100.0

JAL GROUND SERVICE SAPPORO CO., LTD.

10

—

97.7

97.7

AXESS INTERNATIONAL NETWORK, INC.

700

100.0

—

100.0

OKINAWA AIRPORT SERVICE CO., LTD. *1, 3

33

70.6

29.4

100.0

JAL CARD, INC.

360

50.6

—

50.6

JAL FACILITIES CO., LTD.

180

85.0

—

85.0

100.0

—

100.0

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

Cargo

•Maintenance

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

Passenger Sales

Airport-Related Business

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

JAL ROYAL CATERING CO., LTD.

Provision of service and goods(25 Consolidated Subsidiaries, 30 Non-Consolidated Subsidiaries, 11 Equity Method Affiliates, 45 Non-Equity Method Affiliates)

Airport-Related Business

AL AIRTECH CO., LTD.

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

Passenger Sales

OthersJALPAK CO., LTD. JAL SALES CO., LTD.

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

Cargo
JUPITER GLOBAL, LTD.

100.0

—

100.0

JAL BRAND COMMUNICATIONS CO., LTD.

100

JAL MAINTENANCE SERVICE CO., LTD.

10

100.0

—

100.0

JTA INFORMATION & COMMUNICATION CO., LTD.

50

—

100.0

100.0

JAL SUNLIGHT CO., LTD.

20

100.0

—

100.0

JAL KANSAI AIRCARGO SYSTEM CO., LTD.

100

69.2

—

69.2

OFFICIAL FILING CO., LTD.

10

50.0

4.0

54.0

JAL CARGO SERVICE CO., LTD.

50

100.0

—

100.0

JPRO CO., LTD

10

—

100.0

100.0

JAL CARGO HANDLING CO., LTD.

50

—

100.0

100.0

JLC INSURANCE COMPANY LIMITEDUSD 1,000 2,000

100.0

—

100.0

JAL CARGO SERVICE KYUSHU CO., LTD.

20

40.0

40.0

80.0

JAL NAVIA CO., LTD.

50

100.0

—

100.0

JAL MILEAGE BANK CO., LTD.

40

100.0

—

100.0

USD 1,000 205

100.0

—

100.0

2,700

51.0

—

51.0

	JAL PASSENGER SERVICES AMERICA
INCORPORATED•Airport-Related Business
JAL ROYAL CATERING CO., LTD.

*1	On July 1, 2016, JAL Sky Naha Co., Ltd., JTA Southern Sky Service Co., Ltd.,and Okinawa Airport Service Co., Ltd. merged, with Okinawa Airport Service
Co., Ltd. as the surviving company.
*2	On April 1, 2016, JAL Ground Service Co., Ltd. and JAL Ground Service Tokyo
Co., Ltd. merged, with JAL Ground Service Co., Ltd. as the surviving company.
*3	JAL Sky Airport Okinawa Co., Ltd. changed its corporate name to Okinawa
Airport Service Co., Ltd. on July 1, 2016.
*4	Operating revenue (excluding operating revenue between consolidated
subsidiaries) of JALPAK CO., LTD accounts for over 10% of consolidated
operating revenue.
*5	Although JAL’s ownership is 50% or less, the company is considered a
subsidiary because JAL has substantial control.

Others

Chapter TOP

Contents

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

Maintenance

80•Passenger Sales

Others•Others

JAL ENGINEERING CO., LTD.

•CargoOthers124

JAL AIRTECH CO., LTD.

72.8

•Airport Passenger Handling

JAL Group

Paid-in Capital Ratio of Voting Rights(Millions of yen) Direct (%) Indirect (%) Total (%)

Corporate Name

125

Corporate Data

ESG Data(As of June 14, 2016)

Domestic Route Map

Environmental Data (E)FY2013

FY2014FY2015

Unit

Environment
CO2 Emissions
CO2 Emissions/RTK (Comparison with FY 2005)
NOx (LTO cycle)
CO (LTO cycle)
HC (LTO cycle)
Electricity Use *1
Heat Use (crude oil equivalent) *1
Water Use *1
Industrial Waste *1
Ratio of Final Disposal *1

820
89.6
6.26
4.39
0.72

840
86.6
6.12
4.38
0.70

854
85.1
5.78
4.43
0.72

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

129
49,633452

125
48,494445

120
46,770430

Million kWh
1,000 liters
1,000 m3

3,720
1.2

3,415
1.2

3,475
1.2

Tons
%

*1 Airports, Offices, Maintenance Centers (Japan)

Social Data (S)FY2013

Human Resources
Consolidated Staff Headcount *2
Ground Staff
Flight Crew
Cabin Attendant

FY2014FY2015

Unit

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

31,53423,093
2,446
5,995

31,98623,3672,519
6,100

Persons
Persons
Persons
Persons

Average age *2
Ground Staff
Flight Crew
Cabin Attendant

37.4
37.5
42.1
35.0

38.3
38.7
42.7
35.1

37.4
37.7
41.1
35.0

Years
Years
Years
Years

Ratio of Men *2
Ratio of Women *2

53.3
46.7

53.2
46.8

52.3
47.7

%
%

Managerial Staff *2
General Staff *2
Ratio of Disabled Staff *3
Ratio of Female Managers *2

15.6
84.4
2.00
14.1

15.9
84.1
2.04
15.1

16.0
84.0
2.28
15.6

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

62.5
311,70460.2
318,24962.8
380,997

702
62

779
51

782
42

Childcare Leave ApplicantsNursing Care Leave Applicants he routes below are operated as code-shareTflights with Fuji Dream Airlines Co., Ltd. (FDA) using
FDA aircraft and crew: 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, andNiigata-Fukuoka.

Rishiri

Asahikawa
Sapporo (Okadama)
Sapporo (New Chitose)

Ratio of Locally Hired Managerial Staff at Overseas Offices *2
Community Contribution
Participation in Voluntary Activities
Total Hours of Voluntary Activities

92.0
62.1

90.8
62.8

90.4
60.8

Kushiro (Tancho Kushiro)
Obihiro(Tokachi Obihiro)

Hakodate

Okushiri he routes below are operated as code-shareTflights with Hokkaido Air System Co., Ltd.
(HAC) using HAC aircraft and crew : Sapporo(Okadama)-Rishiri, Sapporo (Okadama)-Kushiro,
Sapporo (Okadama)-Hakodate, Sapporo(Okadama)-Misawa, Hakodate-Okushiri, andHakodate-Misawa.

Aomori
MisawaAkita

 he routes below are operated as code-shareTflights with Amakusa Airlines Co., Ltd. (AMX) using
AMX aircraft and crew: Fukuoka-Amakusa andKumamoto-Amakusa:

Hanamaki (Iwate Hanamaki)

Yamagata(Oishii Yamagata)

Niigata

Sendai*Some flights on the Osaka (Itami)-Kumamoto route are alsocode-share flights with AMX.
*Some routes are not operated in certain seasons.
Oki(Oki Island Global Geopark)
Izumo(IzumoEnmusubi)

%
%
%
%

Komatsu

Nagoya(Komaki)Okayama
Hiroshima

Hours/Person
Yen/Person

Nagasaki

Nagoya(Chubu)Tokyo(Narita)Tokyo(Haneda)Shizuoka(Mt. Fuji Shizuoka)

Osaka (Kansai)

Tokushima
Takamatsu
Yamaguchi Ube(Tokushima Awaodori)
Kitakyushu
Matsuyama
Kochi
Oita
(Kochi Ryoma) Nanki Shirahama

Fukuoka

Persons
Persons

Matsumoto(Shinshu(Shinsyu
Matsumoto)Tajima(Konotori Tajima)

Osaka (Itami)

Kumamoto(Aso Kumamoto)AmakusaMiyazaki(Miyazaki Bougainvillea)

Kagoshima

Ratio of Local Hires at Overseas Offices *2

Memanbetsu%%
Tanegashima

915
3,144

1,044
4,436

909
3,182

Yakushima

Persons
Hours*2 As of the fiscal year-end *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.

Amami-Oshima
Kikaijima

Governance Date (Japan Airlines Co., LTD.) (G)(As of the end of each fiscal year)

FY2013

FY2014FY2015Tokunoshima (Tokunoshima Kodakara)

Unit

Governance
7
2
2

9
2
2

9
2
2

Persons
Persons
Persons

Auditors
Outside Auditors

5
3

5
3

5
3

Persons
Persons

Director Remuneration
Directors Total (Including external directors)
Auditors Total (Including external auditors)

294
228
66

386
320
66

414
339
75

Millions of yen
Millions of yen
Millions of yen

Yoron

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

126

Okinoerabu (Erabuyurinoshima)

Executives
Female Directors
External Directors

Kita-Daito
Kumejima
Okinawa(Naha)

Minami-Daito

TaramaYonaguni

MiyakoIshigaki(Painushima Ishigaki)

Note: Total 11 directors (including three outside directors) and five auditors (including three outside auditors)
after the 67th Ordinary General Meeting of Shareholders on June 22, 2016)

Chapter TOP

Contents

127Corporate Data
(As of June 28, 2016)

International Route Map

Newcastle
Copenhagen
Hamburg
KittilaDublinStockholm
BillundGothenburg
Manchester
Ivalo
Dusseldorf
BelfastOslo
Amsterdam
Rovaniemi
Glasgow
Oulu
Brussels
Edinburgh
Aberdeen
Helsinki
Riga
Vilnius

Tallinn
St. Petersburg

Yellowknife

Moscow

Khabarovsk

ToledoWhitehorse

Anchorage

Nizhny Novgorod
Warsaw
BerlinHannoverPragueBudapest

LondonParis
Stuttgart

GenevaLisbonPerm

Shenyang

Rostov

Rome
Malta

Nice
Marseille

Doha

Barcelona
Toulouse

Seoul

Victoria

Vladivostok

PortlandDalianBeijing
Chongqing

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

Terrace

PrinceGeorgeTianjin
Qingdao

Xi'an

KunmingChengduNanjing
Wuhan

Shanghai

Sacramento

Monterey
Palm Springs
Los Angeles

Hong Kong

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

Kuantan
Kuala Lumpur
Singapore

FresnoDenver
Wichita
Tulsa
Las Vegas
Albuquerque
El PasoLong BeachSan Diego

Honolulu

Phoenix
TucsonMexico City

CairnsBrisbane

PerthMemphisLouisville
Nashville

Evansville

Knoxville

Indianapolis
Cincinnati

Huntsville

Raleigh Durham
Greensboro

Jacksonville

Dallas
HoustonAustinSan Antonio
Monterrey

Tampa

AucklandCharlotte
Greenville
Columbia
AtlantaOrlandoWest Palm Beach
Fort Lauderdale
Miami

Paris

CancunFrankfurt
San Juan
Fortaleza

New Orleans

Salvador
Pensacola
Birmingham

Brasilia

ManausPapeeteGold Coast

SydneySt. Louis

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

Fort Myers

Queretaro
DarwinOklahoma City

North West
Arkansas

Aguascalientes
Guadalajara
Leon
San Luis Potosi

Jakarta
Denpasar
Kuching

PeoriaBloomington

Little RockKota Kinabalu

SurabayaKansas City

Santa Rosa

Taipei
Kaohsiung

PhuketDes Moines

Reno

San Francisco
San Jose

Bangkok

Omaha

Salt Lake City

EugeneHanoi

Chennai

Chicago

Boise

Busan
Jeju

Guangzhou

YangonSyracuse

Winnipeg

Jackson HoleJapan

Shenzhen

Burlington

MadisonCalgary
Kelowna
VancouverSeattleGrand Rapids
Milwaukee
Kalamazoo

Edmonton

Yantai

Chiang Rai

Milan
Sao Paulo

Ufa

Chelyabinsk

Krasnodar
Sochi
Bucharest
Istanbul
ZurichDubrovnik
Athens

Lyon

MalagaSamaraMinneapolis

Yekaterinburg

Volgograd

ViennaFrankfurt
MunichBasel

MadridKazan

Cleveland
DetroitBuﬀaloTorontoOttawaRochesterMontreal

LondonRecifeBelo Horizonte
Campo Grande

Londrina
IguazuSantiago

Melbourne

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

128Port Alegre
Curitiba
Sao Paulo
Rio De Janeiro

 he routes above include code-share flights.
TThe map has been altered to highlight the cities on JAL’s route network.

Chapter TOP

Contents

129

Corporate Data

Stock Information / Company Information

Glossary(As of March 31, 2016)

Stock Information

Total number of shares to be issued(Common stock) (700 million)

Stock Exchange The first section of the Tokyo Stock Exchange
The Stock Code 9201
Number of shares per unit 100 shares
Account closing date March 31
Ordinary General Meeting of Shareholders June each year
	Date of Finalizing Shareholders Eligible to Exercise Voting
March 31
Rights at the Ordinary General Meeting of Shareholders
Date of Finalizing Shareholders to Receive Year-end Dividends March 31(Class 1 Preferred stock) (12.5 million)(Class 2 Preferred stock) (12.5 million)(Class 3 Preferred stock) (12.5 million)(Class 4 Preferred stock) (12.5 million)
Outstanding Issued Shares
Common stock
362,704,000 (Number of shares per unit: 100)
Number of Shareholders 105,163* We do not apply the interim dividends system.

Shareholder Registry Administrator
Mitsubishi UFJ Trust and Banking Corporation
Contact
Stock Transfer Agency Department
Mitsubishi UFJ Trust and Banking Corporation
10-11, Higashisuna 7-Chome, Koto-ku, Tokyo 137-8081, Japan
Phone: 0120-232-711(toll free (Only with Japan))
Open: 9:00 am to 5:00 pm (Japan time)
Website: http://www.tr.mufg.jp/daikou/

Method of official announcement
Electronic public notice at:
URL http://www.jal.com/ja/corporate/publicnotices/
Provided, however, that if the electronic notice cannot be made due to an
accident or any unavoidable reason, the public notice shall be published in
the Nihon Keizai Shimbun.

	Limitation on listing or recording of Citizens of Foreign Countries and Other
Persons in Register of Shareholders and Register of Beneficial Shareholders
The Articles of Incorporation lay down the following provision concerning the Civil
Aeronautics Act, Article 120-2.
Article 12. Limitation on listing or recording of Citizens of Foreign Countries and Other
Persons in Register of Shareholders and Register of Beneficial Shareholders 12.1 If theCompany receives from a person, who falls into one of the categories listed in the items
below, a request for listing or recording his or her name and address in the register ofshareholders (including the register of beneficial shareholders; hereinafter the same), andif the acceptance of such request causes the total voting rights owned by persons, whofall into one of the categories listed in the items below, to represent one-third or more of
the Company’s total voting rights, the Company shall refuse such listing or recording.
(1) A person who does not have Japanese citizenship(2) A foreign country, foreign public body or similar entity(3)	A corporation or other organization established under foreign laws and regulations
2. When the Company intends to list or record all shares held by any of the shareholders
listed in the items of the following- paragraph, upon notification from a book-entry
institution in accordance with Article 151. Paragraph (1) or (8) of the Act on Book-Entry
Transfer of Company Bonds, Shares. etc.. and thereby the total number of voting rights
held by such persons listed in the items of the preceding paragraph will account for
more than a third of the Company’s voting rights, the Company shall list or record suchshareholders in the register of shareholders in accordance with measures provided forin the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism to list orrecord only a part of the shares so that the total number of voting rights held by suchshareholders in the items of the preceding paragraph accounts for less than a third of theCompany’s voting rights.

Share price (Left axis)

Trading volume (Right axis)

3,000

15

2,000

10

1,000

5

0

April
2013

April
2014

April
2015

April
2016

Irregular operation................................
An occurrence in which the aircraft diverts
due to aircraft system malfunction, etc.,
but with no immediate effect on flightsafety.

Fleet management................................
A management approach to manage
aircraft flexibly according to demand
trends in order to maximize revenues andminimize expenses.

LCC. ......................................................
Abbreviation for Low Cost Carrier. An
airline operating at reduced fares by
cutting costs through simplified services
and limited baggage allowance. LCCs
have emerged in many countries since
airline deregulation.

Incident.................................................
An occurrence with risks of an aircraft
accident according to the Civil Aeronautics
Act, Article 76-2. Sixteen items andequivalent situations such as engine
damage and fire inside an aircraft are
defined in the Ordinance for Enforcementof the Civil Aeronautics Act.

Full-service carrier................................
An airline which has an extensive route
network and provides conventional
services. It offers several classes of seats(First, Business, Economy, etc.), andincludes services such as meals, drinks,
and entertainment in the fare. It is also
called a network carrier or legacy carrier.

Japan Trustee Services Bank, Ltd.(Trust account)

21,048,400

5.80

The Master Trust Bank of Japan, Ltd.(Trust account)

16,050,600

4.42

Kyocera Corporation

7,638,400

2.10Japan Trustee Services Bank, Ltd. (Trust account 9)5,470,700

1.50

Daiwa Securities Group Inc.

5,000,000

1.37

MSCO CUSTOMER SECURITIES

4,541,100

1.25

STATE STREET BANK AND TRUST COMPANY

4,464,400

1.23Japan Trustee Services Bank, Ltd. (Trust account 6)

3,924,500

1.08Japan Trustee Services Bank, Ltd. (Trust account 5)

3,922,100

1.08Japan Trustee Services Bank, Ltd. (Trust account 1)

3,904,400

1.07

Shareholders NameOpen Skies Agreement. .......................
An agreement signed by countries orregions allowing the free movement ofpeople and goods. Airlines are given more
freedom in selecting the number of flights,
destinations and other conditions.

Marshaller.............................................
A specialist who uses hand signals to
guide aircraft on the ground to a specified
position.

Corporate NameJapan Airlines Co., Ltd.

Headquarters

Nomura Real Estate Bldg., 2-4-11
Higashi-Shinagawa, Shinagawa-ku, Tokyo
Phone: +81 3 (5460) 3121
Website: http://www.jal.com/jp
August 1, 1951

Capital181,352 million yen

Employees

Consolidated Employees 31,986 people
Employees 11,224 people

Capital andPaid-in Capital

355,845 million yen (Amount is rounded
down to the nearest million yen)

Businesses

1.	Scheduled and non-scheduled airtransport services
2. Aerial Work Services
3. Other Related Business

ROA.......................................................
Abbreviation for Return on Assets.
Calculated by dividing operating income
by total assets (net assets + liabilities).
Indicates how much profit is earned fromassets invested in the business.
ROE.......................................................
Abbreviation for Return on Equity.
Calculated by dividing current net income
by shareholders’ equity. Indicates the rateof return on shareholders’ investment.
RPK.......................................................
Abbreviation for Revenue Passenger
Kilometers. The total distance flown by
each revenue passenger. Number ofrevenue passengers × distance flown (inkilometers).
SMS (Safety Management System).....
A system to proactively prevent accidents
by identifying and managing accident
risk factors in every sector of theairline. Activities should be conductedorganizationally based on mutual trust,in which safety policies and safety
information are shared by everyone fromtop management to frontline staff.
Alliance..................................................
Member airlines of an alliance promotebusiness partnership by such means
as operating code-share flights to theirrespective airports, simplifying proceduresat connecting airports, participating infrequent-flyer programs of all members,
and sharing airport lounge services for toptier members.
The three major airline alliances are
the oneworld alliance, Star Alliance, and
Sky Team.

Code-share...........................................
To place the flight number of an airline on aflight operated by another airline, indicatingthat flight number on reservations systems
and timetables, and operating the flight as
if it were its own flight. A flight undertaken
jointly.
Serious incident....................................
An occurrence which did not result inan aircraft accident, but had the risk of
causing an accident, as rated by the
Ministry of Land, Infrastructure, Transport
and Tourism, such as deviation from a
runway, emergency evacuation, fire, smoke
and abnormal cabin decompression,and encountering abnormal weather
conditions.
Diversity................................................
A management approach which provides
equal opportunity in employment
regardless of gender, age, race, nationality,
belief, values or disability to enable
everyone to reach his or her potential.
Normal line operation monitoring........
A proactive preventive program to identify
latent risks in daily operations and normal
operations, and implement preventive
measures.

Unit cost................................................
Consolidated air transport costs (excluding
fuel costs and transactions with affiliatedcompanies in which revenues andexpenses are settled internally) / ASK.
Unit revenue..........................................
Revenue from passenger flights / ASK.
Revenue management system. ...........
A method of forecasting changes indemand and controlling inventory to
maximize revenues, for example, setting
advance discount fares in phases tosecure the optimum number of revenue
passengers.
Load control..........................................
To control aircraft weight. Cargo andpassengers are loaded taking into
account the center of gravity, loading
weight limitations, and loading/unloading
sequences.
Load factor. ..........................................
The usage rate of revenue passenger
seats. It represents how many revenue
passengers boarded against the total
number of seats available. An indicator formeasuring sales of seats. Calculated by
RPK (Revenue Passenger Kilometers) /ASK (Available Seat Kilometers). Different
from seat occupancy rate, because nonrevenue passengers are excluded.

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

20

September
2012

Percentage ofShares Against
Total Number ofIssued Shares (%)

Representative
Yoshiharu Ueki
Director, President

4,000

0

Number ofsharesEstablished(MN shares)
25

ASK. ......................................................
Abbreviation for Available Seat Kilometer. A
unit for passenger transport capacity.
Total number of seats × distance travelled(in kilometers)

Major Shareholders

Company Profile

Transition of share price and trading volume
(JPY)
5,000

750 million*Trading volume refers to the average trading volume per day in the month.

130

Chapter TOP

Contents

131

J A PA N A I R L I N E S R E P O R T 2 0 1 6

J A PA N A I R L I N E S R E P O R T 2 0 1 6

133
Contents
Chapter TOP

132

Japan Airlines Co., Ltd.
Finance Department, Corporate Brand Promotion Department
Nomura Real Estate Building, 2-4-11 Higashi-Shinagawa,Shinagawa-ku, Tokyo 140-8637, Japan
Tel.: +81 (0)3-5460-3068 (Finance) +81 (0)3-5460-6837 (Corporate Brand Promotion Division)
Corporate website
Corporate information
CSR information
Investor Relations

www.jal.com/en/
http://www.jal.com/en/outline/corporate/
http://www.jal.com/en/csr/
http://www.jal.com/en/investor/