Tokyo, August 1^st: Today the JAL Group announced consolidated financial results for the first quarter (April through June 2003) of the current financial year. This is the first time that the JAL Group has announced quarterly results. Until now it had been the usual practice to announce half-year results.

Total operating revenues for the three-month period were 398.8 billion yen. Operating costs were 475.8 billion yen, resulting in an operating loss of 76.9 billion yen. Ordinary income was a loss of 76.7 billion yen and the first quarter net result was a 77.2 billion yen loss.

International passenger and cargo business were seriously affected by the negative impact on demand resulting from the Iraq conflict and the outbreak of SARS. On domestic routes there was an increase in individual passenger traffic resulting from the group’s improved schedule, following the integration of the Japan Airlines and Japan Air System domestic networks.

Over the past 10 years, the first quarter result generally shows a loss, with the loss being made up and profits earned in the second quarter. The first quarter results are in line with the JAL Group forecast announced May 16, 2003.

JAL Group consolidated result (billions of yen)

The lingering effects of the 2001/9/11 terror attacks, the combined effects of the Iraq conflict and the SARS outbreaks hit international passenger traffic hard and the number of passengers was 46% down on the same period last year. Revenue passenger traffic volume in terms of revenue passenger ton kilometers performed was 39% down.

Domestic passenger traffic was unaffected by external factors and increased in volume by 2% on last year, with an 1% improvement in volume in terms of revenue passenger ton kilometers.

International cargo traffic was 5% down in volume, partly due to the reduction in the number of passenger flights following the SARS outbreaks and the subsequent loss of cargo carrying capacity. Demand was low on transpacific routes.

Although the price of fuel rose to US$ 30.5 per barrel of Singapore kerosene in the first quarter, compared to US$ 27.00 per barrel in the same period last year, the Group fuel bill was only 300 million yen up on last year, same period, because of reduced consumption resulting from passenger flight suspensions and favorable exchange rates.

Non-operating revenue included 8.4 billion yen in credits relating to aircraft purchase.

Generally favorable foreign currency exchange rates, notably the US$-Yen rate, had a positive effect on operating income of 4 billion yen.(First quarter 2002, US$:Yen rate 129.3 yen per dollar: first quarter FY2003, US$:Yen rate 119.0 yen per dollar).

１．International results include data from JAL, JAS Japan Asia Airways and JALways

２．Domestic results include data from JAL, JAS, Japan TransoceanAir, JAL Express, Japan Air Commuter, Hokkaido Air System and J-Air

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