JAL Investor Relations - Review of Operations (Annual Report 2004)

Review of Operations

Other Operations

Among other operations the Group reorganized subsidiaries in such fields as airport passenger services, reservations and ticketing, distribution and retailing, flight-simulator maintenance, and advertising. These changes formed part of building an efficient management structure with the aim of expediting the achievement of the full benefits of the Group’s business integration.

Airline-Related Business

The number of passengers on international routes slumped under the impact of events such as the SARS outbreaks, with the result that the revenues of subsidiaries involved in sales of in-flight meals declined. In contrast, sales-promotion activities made it possible to achieve a strong increase in revenues from foreign airlines for the operation of auxiliary power units to supply electric power to aircraft. This and other positive factors made it possible to generate revenues of ¥243.7 billion in the airline-related business segment, with operating income of ¥1.8 billion

Travel Services

In the field of sales of overseas travel products, the dramatic fall in demand for overseas travel sparked by events such as the SARS outbreaks caused revenues to decline steeply, particularly for travel to China and other parts of Asia. On the plus side, sales of domestic travel products were buoyed by the switch of demand from overseas travel, generating brisk sales for Japanese destinations such as Okinawa and the Tohoku region. In consequence, the travel planning and sales business segment achieved revenues of ¥381.9 billion, with an operating loss of ¥3.9 billion.

TOther Businesses

In the field of hotel and resort operations, hotels within Japan, particularly in Okinawa, generated relatively strong revenues. However, owing to factors such as the SARS outbreaks there were declines in the revenues of overseas hotels, especially in Asia.

In credit-card business, schemes to attract new JAL Card members proved a success, achieving a considerable increase in the number of cardholders, and JAL ONLINE was expanded as a tool for the sale of domestic air tickets to companies. Factors such as these led to strong revenue growth.

In the field of retailing and distribution business, the impact of SARS and other factors caused sales of in-flight goods and duty-free items to fall. Nevertheless, robust mail-order sales made it possible to maintain overall revenues at around their level in the previous year.

The net result of these developments was that total revenues in this segment totaled ¥258.1 billion, with operating income of ¥6.3 billion.