Significant Flight Reductions, Route Suspensions and Redeployment at JAL

With the high prices of jet fuel, the JAL Group has decided to carry out a bold review of its original FY2008 route, flight frequency and fleet plan further concentrating its resources on improving profitability and increasing competitiveness.

The airline group aims to improve profitability by increasing flight frequency on four high growth, high profit routes in Asia where demand is strong, whilst suspending services on three under-performing international routes. JAL will also expand aircraft downsizing by introducing smaller, more fuel-efficient aircraft on an additional five international routes.

In Japan, JAL will conduct the biggest review of its domestic passenger operations since 2002 by cutting unprofitable routes, adjusting supply to demand through flight frequency reductions on other routes and by adding more flights on popular routes. The airline will increase flight frequency on five routes, decrease flight frequency on four other routes, and will suspend a total of 12 routes.

JAL aims to increase overall competitiveness by improving the products and services offered on selected international routes. The JAL Shell Flat Seat, the airline's business class seat in JAL Executive Class will be introduced onto routes serving between Tokyo and Sydney, and Tokyo and Jakarta. JAL Premium Economy featuring the JAL Sky Shell Seat with 20% more legroom than available in economy class will be introduced onto four more routes. The airline will also start operating on all China routes aircraft fitted with personal TV monitor in all classes of travel. Currently, this is offered on approximately 95% of China routes.

The airline will also revise the schedules of five international passenger routes improving departures times and connectivity to increase their customer appeal and ultimately the income they generate.

Regarding international cargo operations, flight frequency will be reduced in the second half of FY2008 when compared to the fist half of the fiscal year with the objective of increasing profitability. One aircraft freighter routing will be suspended and two new ones will be introduced.

INTERNATIONAL PASSENGERS

INTERNATIONAL CARGO

Recently many airlines including, among others, Cathay Pacific, Northwest Airlines, United Airlines, Air New Zealand, Qantas, Continental Airlines, American Airlines, Virgin Blue and Air Canada have announced significant reductions or redeployments to their international operations.

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