Annual Report Profile JAL Group Overview Consolidated Financial Highlights Consolidated Operating Highlights Message from the Group CEO Interview with the Group CEO Spreading New Wings of Trust Review of Operations Fundamental Policies and Actions Regarding Corporate Governance Management's Review and Analysis of Financial Position Consolidated Balance Sheets Consolidated Statements of Operations Consolidated Statements of Stockholder' Equity (Note8) Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements Report of Independent Auditors Consolidated Subsidiaries JAL and Its Subsidiaries and Affiliates Directory JAL Group Route Network Board of Directors Investor Information

Management’s Review and Analysis of Financial Position

Japan Airlines Corporation and Consolidated Subsidiaries Years Ended March 31, 2004 and 2005

Outlook

The operating environment faced by the JAL Group is expected to remain harsh as fuel prices continue to post historic highs, and the international situation remains unsettled. In such circumstances, the Group will pare costs to the maximum through cost restructuring measures and emergency measures in line with the Fiscal 2005-2007 Medium-Term Business Plan, and work to raise revenue through a variety of measures in international, domestic and cargo operations, aiming at fundamental improvement of the revenue/expense position. Fuel prices have risen even higher than the level expected at the time of drafting of the Fiscal 2005-2007 Medium-Term Business Plan. However, we are making no change to our earnings forecast for fiscal 2005 because we expect to take further measures to boost revenues.

In our forecast for the full year we have assumed an exchange rate of ¥110 to the dollar, and a per-barrel oil price of $54 on the Singapore Kerosene market. Based on these assumptions, we forecast

(1) Consolidated operating revenue of ¥2,209.0 billion

(2) Consolidated operating income of ¥60.0 billion

(3) Consolidated net income of ¥17.0 billion