JAL Investor Relations - Interview with the Group CEO (Annual Report 2004)

Interview with the Group CEO

		A priority issue is to expedite the beneficial effects of the integration, so as build a solid financial condition. We will also persist with our cost-cutting and enhancement of competitiveness.

Q	Efficiency is improving as a result of the integration, but what degree of improvement in the Group’s earnings structure are you projecting?	In fiscal 2003, the impact of the integration was already measured at ¥18.0 billion in earnings, and we are predicting further improvements in earnings as a result of cost-cutting in such areas as personnel and facilities and aircraft and other equipment, as well as through enhanced competitiveness. Even after deducting declines in revenues resulting from the integration and adding the costs of installation of IT systems, we hope to see a ¥68 billion improvement on an operating income/loss account basis in fiscal 2005. From fiscal 2006, the effect of the integration is projected at ¥74.5 billion as the additional expenses are not expected to exceed ¥6 billion.

Q	You are fostering the use of e-business methods, in part to bolster competitiveness. What is the status of progress in that area, including the use of Internet reservations?	Internet reservations in fiscal 2003 accounted for 36% of personal bookings on domestic routes and for 8% of personal bookings on international routes originating in Japan. Promoting the use of e-commerce makes things more convenient for passengers traveling as individuals, and at the same time it cuts our costs, so we want to increase these ratios still further.

Q	What of your fleet plan?	Excluding aircraft on regional routes, we operate 11 types of aircraft in the three categories of wide-bodied jets and medium and small aircraft. That number will be reduced to eight types by the end of fiscal 2006. At the same time, we will also reduce the asset value of our fleet.