Taking a comprehensive view of tangible and intangible indicators such as passenger numbers, profits, and market capitalization, we aim to be the world’s No.1 airline group in terms of service quality and business volume taken together.

Q

From start to finish, fiscal 2003 was a year in which our industry was hit by a succession of adverse external factors such as the military action against Iraq, the SARS epidemic and the outbreak of avian influenza. Although revenues on domestic routes were up as a result of the effects of the integration, international routes suffered a particularly large drop in revenues. As a result, we posted our biggest-ever loss, at ¥88 billion (US$838 million) on a consolidated basis.

Q

In this latest medium-term business plan we have set numerical targets of operating income of ¥145 billion and ROE of 10% in fiscal 2006, enabling us to return profit to all our stakeholders. The indicator we are paying most attention to is market capitalization, which at present is around ¥650 billion. In the airline industry, only Southwest Airlines exceeds ¥1 trillion, followed by Singapore Airlines with ¥800 billion, and with Cathay Pacific Airways, Lufthansa and JAL vying for third place. I aim to increase corporate value, which will enable the Company to compete for position with Singapore Airlines in the reasonably near future.

Q

In the complete integration (Phase II) we did as much as possible to avoid duplication in the realms of both organization and personnel. For example, in the four core companies − Japan Airlines, JAL International, JAL Domestic, and JAL Sales − we cut the number of directors by 12. Also, in each functional segment we have been simplifying the organization by using a format in which staff hold positions concurrently in common areas. We aim to reduce total personnel by 4,500 by the end of fiscal 2006, progressively eliminating duplication and slimming the workforce, and thereby boosting personnel efficiency.

Q

First, we are reforming our pension scheme. The new retirement benefit scheme includes the existing scheme but also incorporates components such as a defined contribution pension and a pension prepayment scheme, enabling each individual employee to choose a method of participation to suit their own lifestyle. We project that, compared with the scheme as it stood in fiscal 2003, this system will enable us to reduce retirement benefit costs by ¥32 billion in fiscal 2004, ¥14 billion in fiscal 2005, and ¥11 billion in fiscal 2006: a total of ¥57 billion. That will also enable us to reduce retirement benefit obligations.