Japan Airlines Corporation and Consolidated Subsidiaries Results for the Fiscal Year Ended March...

Tokyo, Japan, May 9, 2008 - (JCN Newswire) - Japan Airlines Corporation announced today the consolidated financial results of the JAL Group for FY2007, the fiscal year ended March 31, 2008. The announcement includes the Group's consolidated financial targets for FY2008, the year ending March 31,

1. JAL Group Consolidated Results for FY07, Year Ending March 31, 2008

                                             (Japanese yen - billions)
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                                FY07      FY07       FY06      Diff.
                             Results  Forecast*   Results   FY07/FY06
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Total operating revenues     2,230.4   2,238.0    2,301.9      -71.4
International Passenger        754.3     748.5      724.8       29.4
Domestic passenger             677.4     685.0      675.6        1.7
International cargo            188.2     188.5      190.5       -2.2
Other                          610.4     616.0      710.8     -100.4
Total operating expenses     2,140.4   2,190.0    2,278.9     -138.5
Operating income (loss)         90.0      48.0       22.9       67.0
Ordinary income (loss)          69.8      44.0       20.5       49.2
Net income (loss)               16.9       7.0      -16.2       33.1
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Figures rounded down to the nearest tenth of a billion yen.
* Announced on Feb 8, 2008

Although the air transport business segment was strong, as a number of consolidated subsidiaries were removed from the consolidated financial statement due to the sales of shares, total operating revenue for FY2007 was 2,230.4 billion yen, down 3.1% or 71.4 billion yen on the same period last year. In terms of air transportation, the JAL Group's core business, revenue increased by 25.1 billion yen to a total of 1,826.7 billion yen.

International passenger demand was strong, bolstered by 'premium strategies' initiated by JAL aimed at attracting business and top-tier travelers through product and service enhancement and development. International passenger revenue increased by 29.4 billion yen to 754.3 billion yen: a 4.0% year-on-year improvement.

Domestic passenger demand was stagnant primarily due to a reduction in supply after the JAL Group carried out in FY2007 its biggest review of domestic passenger operations since 2002. Compared to FY2006, domestic passenger revenue went up by 1.7 billion yen to a total of 677.4 billion yen.

International cargo revenue was 188.2 billion yen, down 2.2 billion yen on the previous fiscal year.

The effectiveness of group-wide cost reduction measures implemented throughout FY2007 aimed at increasing profitability and tackling, for example, increases in the cost of jet fuel, combined with the aforementioned withdrawal of a number of subsidiaries from the consolidated statement enabled the JAL Group to significantly decrease total operating expenses. During FY2007, total operating costs went down by 138.5 billion yen to 2,140.4 billion yen compared to the previous year.

As a result, operating income was 90 billion yen and ordinary income was 69.8 billion yen, the highest since the integration of JAL and JAS in 2002. Operating income increased by 67 billion yen, and ordinary income increased by 49.2 billion yen from the previous year.

Compared to FY2006, JAL Group net income increased by 33.1 billion yen to a total of 16.9 billion yen, after extraordinary loss deductions resulting from implementation of special early retirement programs, reserve funds set aside for anti-trust law investigations by the U.S. and the E.U. authorities, and temporary depreciation costs.

2. Summary of Air Transportation Segment Results

Operating Revenue

a) International Passenger

During FY2007, the JAL Group continued network restructuring by focusing resources on high profit, high growth routes and increasing the role of its low overheads international subsidiary, JALways. JAL increased flight frequency on China, India, Russia and Vietnam routes, as well as on the Tokyo - New York and Tokyo - Paris routes. In September 2007, JAL inaugurated a service between Haneda, Tokyo - Hongqiao, Shanghai, and in October 2007 increased flight frequency to establish a daily service between Tokyo and New Delhi.

JAL increased its competitiveness by becoming a fully-fledged member of oneworld, the leading quality global airline alliance; completely revamping lounges and check-in areas at Narita Terminal 2, its main international hub; and by introducing JAL Premium Economy onboard its aircraft, starting with the Narita-London route in December 2007, followed by the Narita- Frankfurt route in February 2008.

To increase customer comfort and increase profitability against the backdrop of increases in the price of fuel, JAL continued implementing its strategy of fleet downsizing and renewal by shifting to state-of the-art, more fuel efficient primarily medium and small-size aircraft whilst retiring older types of aircraft.

Through continued network restructuring and fleet downsizing, supply measured in available seat kilometers (ASK) decreased by 4.4% from the previous year.

International passenger demand was strong, particularly in terms of business travelers. Passenger demand was especially strong on short and medium-haul routes, such as China, South Korea and Southeast Asia routes. Tourist demand on Europe routes was stagnant due to the strong Euro, and demand decreased on US mainland, Hawaii and Oceania routes due reductions in seat supply.

As a result, international passenger demand measured in revenue seat kilometers (RPK), decreased by only 3.5%. International seat load factor (L/F) increased by 0.7 points to 71.8%.

Unit price increased by 7.8% from the previous year due to a steady increase in high yield business demand resulting from product and service improvements, network restructuring by concentrating resources on high profit, high growth routes, a review of fares, and utilization of the international passenger fuel surcharge to offset the high cost of fuel.

As a result, passenger revenue increased 4.1% from the previous year to 754.3 billion yen.

The number of international passengers carried by JAL Group airlines decreased by just 0.7% to 13,367,904. (FY2006 total: 13,467,241).

b) Domestic Passenger

In FY2007, JAL carried out its biggest review of domestic passenger operations since 2002 by suspending 9 under-performing routes, adjusting supply to demand through flight frequency reductions on other routes, adding more flights on popular routes, and by increasing the role of its low overheads subsidiary airline, JAL Express (JEX).

To increase customer comfort and increase profitability against the backdrop of increases in the cost of fuel, JAL continued implementing its strategy of fleet downsizing and renewal by shifting to state-of the-art, more fuel efficient primarily medium and small-size aircraft whilst retiring older types of aircraft.

Targeting the high yield passenger, JAL greatly enhanced its product offering by introducing a first class service for the first-ever time on Japan domestic flights, starting with the Haneda, Tokyo - Itami, Osaka route in December 2007.

As a result of route restructuring and fleet downsizing, supply measured in available seat kilometers (ASK) decreased by 3.4% from the previous year. Passenger demand measured in revenue passenger kilometers (RPK) decreased by 4.3% largely a consequence of this. The domestic seat load factor (L/F) was 63.4%, slightly down on last year.

Unit price increased by 4.8% from the previous year due to fare increases.

Domestic passenger revenue increased by 0.3% from the previous year to 677.4 billion yen.

The number of domestic passengers carried by JAL Group airlines decreased by 4.7% to 41,904,924. (FY2006 total: 43,984,840).

c) International Cargo

Although exports to North America decreased from the previous year due to a reduction in supply, exports to China, Europe and East Europe ensured the results for the whole financial year were favorable.

In terms of imports, due to a rapid drop in demand to Japan, JAL attempted to increase profitability through a range of measures such as introducing early morning arrival cargo flights, and actively attracting demand both to and from Asia.

As for fleet and route operations, amid unprecedented rises in the price of fuel, we retired five classic-type Boeing 747 freighters, and introduced new fuel efficient 767 freighters, which were put into service on China, Indonesia and Vietnam routes.

As a result, international cargo volume (revenue cargo ton km) decreased by 3.1% from the previous year. Although the fuel surcharge was revised a number of times, due to intensifying competition and the rapid appreciation of the yen towards the end of 2007, unit price increased by only 1.9%, and revenue was 188.2 billion yen, a reduction of 1.2% compared to the previous financial year.

The volume of international cargo carried was 762,910 tons, down 1.0% on the year before.

Operating Costs & Foreign Exchange

a) Fuel costs

The average market price for aircraft fuel was high, increasing from US$79.7 per barrel (Singapore Kerosene) for the previous fiscal year to US$93.2 per barrel for FY2007. As a result of a wide range of measures including fuel hedging and fuel consumption reductions, the JAL Group's FY2007 fuel bill decreased by 2.0% or 8.1 billion yen to a total of 412.7 billion yen.

b) Personnel costs

JAL managed to exceed its FY2007 personnel cost reduction measure target of 50 billion yen. Improvements in the workforce's productivity levels enabled the company to also exceed its original headcount reduction target of 697 staff for FY2007. The JAL Group's consolidated business workforce was reduced by 2,297 people through a combination of natural attrition, restraining new hiring, not replacing retiring staff and special early retirement programs

c) Foreign exchange

The average yen-to-dollar exchange rate for the fiscal year ended March 31, 2008 was 115 yen to US$1.00 compared to the previous fiscal year's average rate of 117 yento US$1.00. The average yen-to-Euro foreign exchange rate was EURO1 = 161.0 yencompared with EURO1 = 149 yen the previous year. As a result, the affect of foreign exchange on operating income was an improvement of 9.6 billion yen (increased revenue of 7.0 billion yen/cost reduction of 2.6 billion yen). However, due to the decreased effectiveness of hedging, non-operating income in terms of foreign exchange declined by 13.9 billion yen compared to the previous year.

3. Financial Indicators

                                            (Japanese yen - billions)
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                                   FY07          FY06          Diff.
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Total Assets                    2,122.7       2,091.2          31.5
Stockholders' Equity*             453.9         311.0         142.8
Capital to Asset Ratio (%)*       21.4%         14.9%   +6.5 points
Interest-bearing debt
on balance sheet                  919.6        1026.1        -106.5
Debt/ Equity Ratio
(on balance sheet) *                2.0           3.3          -1.3

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Figures rounded down to the nearest tenth of a billion yen.
Debt /Equity Ratio(on balance sheet)=interest bearing debts
(on balance sheet) divided by stockholders equity.
* Stockholders' Equity does not include minority stockholders' equity
due to new accounting procedures.

Due to an increase in cash and bills receivable, etc. from capital increase through third party allocation of priority shares, etc., total assets increased by 31.5 billion yen. Capital to Asset Ratio improved significantly, increasing 21.4%. Debt /Equity ratio dropped to 2.0.

Interest bearing debt significantly declined by 106.5 billion yen from the previous year, due to the sale of non-core assets and cash flow improvement.

4. JAL Group Consolidated FY2007 Fourth Quarter Result (Jan 1- March 31, 2008)

                                            (Japanese yen - billions)
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                            Q4 FY07     Q4 FY06     Diff.   % Change
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Operating revenue           529.218     567.758   -38.540      93.2%
International passenger     181.333     175.590     5.743     103.3%
Domestic passenger          157.326     160.782    -3.456      97.9%
International cargo          44,599      44.963    -0.364      99.2%
Other                       145.961     186.423   -40.463      78.3%
Operating expenses          521.783     538.979   -17.196      96.8%
Operating income (loss)       7.436      28.780   -21.344      25.8%
Ordinary income (loss)       -9.440      28.300   -37.740         -
Q4 Net income (loss)         -3.527     -6.892      3.365         -

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5. JAL Group Consolidated Financial Targets for FY2008

                                           (Japanese yen - billions)
-----------------------------------------------------------------------
(Year ending March 31, 2009)                 FY08        Diff vs.FY07
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Total operating revenues                   2184.0            -46.4
International passenger                     807.0             52.7
Domestic passenger                          704.0             26.6
International cargo                         193.0              4.8
Other                                       480.0           -130.5
Operating income                             50.0            -40.0
Ordinary income                              30.0            -39.8
Net income                                   13.0             -3.9
 -----------------------------------------------------------------------
* Figures rounded down to the nearest tenth of a billion yen.
* Key assumptions used for above figures: 110 yen = US$1.00; average
aircraft fuel price = $110 per barrel.

A reduction in operating income is expected caused mainly due to the removal of the Pacific Fuel Trading Corporation from the consolidated financial statement in FY2008.

JAL will continue to reduce supply by downsizing the fleet used on US routes. Regardless of this, international passenger unit price is expected to steadily increase due to increased flight frequency on, for example, New York, Moscow and Paris routes where business demand is strong, and continued product and service enhancements as part of its 'premium strategy'.

Despite a reduction in supply due to fleet downsizing, stagnant overall demand, and fierce competition with the Shinkansen and new entrant carriers, JAL expects domestic passenger demand to be strong and unit price to increase as a result of wider introduction of such premium passenger targeted products as the domestic first class, and the overall impact of its Corporate Customer Center etc.

Even though the JAL Group has made great strides towards achieving its overriding goal of building a robust management framework, a business structure which can produce profits even in the face of factors such as rising fuel costs or slowing demand, the business environment continues to be severe. JAL, therefore, forecasts operating income for the year ending March 31, 2009 to be 50 billion yen, 40 billion yen less than operating income in FY2007.

Based on the above targets, JAL Group does not expect to pay a dividend for the fiscal years ended March 31, 2008 for the year ending March 31, 2009.

6. JAL Corporation & Consolidated Subsidiaries Comparative Consolidated Statements of Operations for the Year Ended March 31, 2008

                                            (Japanese yen - billions)
-----------------------------------------------------------------------
                                             FY07                FY06
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Operating revenues                      2,230,416           2,301,915
Operating expenses                      2,140,403           2,278,997
Operating costs                         1,776,979           1,885,211
Selling, general & admin expenses         363,423             393,785
Operating income (loss)                    90,013              22,917
Non-operating income                       20,825              33,834
Non-operating expenses                     41,021              36,175
Ordinary income (loss)                     69,817              20,576
Extraordinary profit                       36,232              52,413
Extraordinary loss                         76,217              20,933
Income before income taxes                 29,832              52,055
Income taxes, current                       4,897               9,953
Income taxes, deferred                      6,894              54,424
Minority interests                          1,118               3,945
Net income                                 16,921             -16,267
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7. JAL Group Consolidated Traffic Statistics Full Years 2008 vs. 2007

------------------------------------------------------------------------
                                            FY ended March 31,   %Ch/
                                            2008          2007  points
------------------------------------------------------------------------
International

   Passenger number                     13,367,904  13,467,241   99.3%
   Revenue passenger Kilometers (000)   60,426,280  62,597,923   96.5%
   Avaialable seat Kilometers (000)     84,128,194  87,987,011   95.6%
   Revenue seat Kilometers (000)             71.8%       71.1%   +0.7
   Revenue cargo ton Kilometers (000)    4,377,147   4,515,812   96.9%
   Mail ton Kilometers (000)               191,489     164,336  116.5%
   Revenue ton Kilomemters (000)        10,167,354  10,481,369   97.0%
   Available ton Kilometers             15,030,186  15,769,219   95.3%
   Revenue weight load factor               67.6.%       66.5%   +1.1p

------------------------------------------------------------------------
Domestic

   Passenger number                     41,904,924  43,984,840   95.3%
   Revenue passenger Kilometers (000)   31,746,470  33,187,684   95.7%
   Avaialable seat Kilometers (000)     50,085,682  51,864,339   96.6%
   Revenue seat Kilometers (000)             63.4%       64.0%   -0.6
   Revenue cargo ton Kilometers (000)      396,053     400,507   98.9%
   Mail ton Kilometers (000)                86,632      86,985   99.6%
   Revenue ton Kilomemters (000)         2,861,730   2,968,868   96.4%
   Available ton Kilometers              5,878,950   6,073,609   96.8%
   Revenue weight load factor                48.7%       48.9%   -0.2

------------------------------------------------------------------------
Total

   Passenger number                     55,272,828  57,452,081   96.2%
   Revenue passenger Kilometers (000)   92,172,750  95,785,607   96.2%
   Avaialable seat Kilometers (000)    134,213,876 139,851,350   96.0%
   Revenue seat Kilometers (000)             68.7%       68.5%   +0.2
   Revenue cargo ton Kilometers (000)    4,773,200   4,916,319   97.1%
   Mail ton Kilometers (000)               278,121     251,321  110.7%
   Revenue ton Kilomemters (000)        13,029,084  13,450,237   96.9%
   Available ton Kilometers             20,909,136  21,842,828   95.7%
   Revenue weight load factor                62.3%       61.6%    0.7
------------------------------------------------------------------------

About JAL

Asia's largest airline group, the JAL Group (TSE: 9205) serves 213 airports in 33 countries and territories, including 61 airports in Japan. The Group network extends over 235 international passenger, 39 international cargo, and 160 domestic routes. Altogether, the 9 airlines of the JAL Group make a total of over 1,200 flights a day, and in fiscal year 2006 carried nearly 58 million passengers. JAL Group operates a fleet of 276 aircraft including 64 Boeing 747s and 39 state-of-the-art B777s and is gradually introducing more fuel efficient medium and small-size aircraft such as the new high-tech Boeing 787 and B737 New Generation. For more information, please visit www.jal.com .

Source: JAL

Contact:

Stephen Pearlman
Public Relations Manager
Japan Airlines Corporation
Tel: +81-3-5460-3109
Fax: +81-3-5769-6487
E-mail: stephen.pearlman@jal.com
Website: www.jal.com/en/corporate/

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