Japan Airlines Co., Ltd.

If a fatal accident occurs, it could not only undermine customer trust and social reputation but also require compensation for injured or deceased passengers, potentially having an extremely serious impact on business performance. Safety issues, including those involving codeshare flights, could also lead to a decline in the company's reputation. In response, the company has established the "Group Safety Promotion Committee," chaired by the President, and has taken out liability insurance at industry-standard levels.

The majority of the Group's passengers use Haneda and Narita airports, and the IOC (Integrated Operation Control Center) and information systems center, which are the core of flight operations management, are concentrated in the Tokyo area. If a large-scale earthquake, volcanic eruption, terrorist attack, or similar event were to occur in the Tokyo metropolitan area and cause a prolonged functional outage, it could have a material impact on business operations. As part of its BCP, the company has transferred some operation control functions to Osaka International Airport, but this cannot fully substitute for all functions of the Tokyo IOC.

Because the aviation industry consumes large amounts of fossil fuel, tightening of environmental regulations, such as strengthened greenhouse gas emissions trading schemes or emissions charges, could increase cost burdens and affect business performance. There is also a risk of reputational decline due to changes in consumer behavior or insufficient efforts to reduce environmental impact. In response, the company is pursuing a goal of net-zero CO₂ emissions by 2050, through fleet renewal with fuel-efficient aircraft, procurement of SAF (Sustainable Aviation Fuel), and utilization of emissions trading and negative emissions technologies.

A deterioration in global economic conditions, terrorist attacks, regional conflicts, or wars could significantly reduce aviation demand and affect business performance. The company is also highly dependent on third-party services such as maintenance contractors, airport staff, and fuel handlers, and issues with these outsourced partners could affect business operations. The company addresses these risks by establishing a system to monitor geopolitical risk and building good relationships with relevant authorities and partner organizations.

On domestic routes, competition with LCCs and the Shinkansen is intensifying, while on international routes, competition with major overseas airlines and alliances is intensifying; significant changes in the business environment could affect operations. In addition, significant changes in the business condition of alliance partners or in alliance relationships could affect the company's partnership strategy. The company addresses this by enhancing the competitiveness of its products and services, flexibly matching supply and demand, and appropriately managing outsourcing partners.

If delivery is delayed due to technical, financial, or other reasons at aircraft manufacturers such as Boeing and Airbus, or at suppliers of critical components such as engines, the company may be forced to revise its fleet plans, potentially affecting its medium- to long-term business. The company works to mitigate this risk by continuously monitoring the situation with aircraft manufacturers and revising its aircraft introduction and retirement plans as needed.

Fluctuations in fuel prices have a significant impact on business performance, and pass-through via fuel surcharges cannot immediately reflect price changes and full pass-through is difficult. Additionally, since the majority of aircraft fuel costs are linked to the US dollar, a weaker yen could cause costs to expand at a scale exceeding revenue growth. The company implements hedging transactions for both crude oil and foreign exchange, but depending on the status of hedge positions, improvements in market conditions may not be reflected in short-term performance.

Large-scale capital expenditures, such as aircraft purchases, require fundraising from financial institutions and the markets, but fundraising constraints or increased costs could arise due to financial market conditions or changes in creditworthiness. In addition, a decline in expected future taxable income or changes in the tax system could lead to the reversal of deferred tax assets, temporarily affecting the company's financial condition. The company addresses this by improving its cash flow generation capacity and maintaining a strong financial position.

If a global pandemic such as COVID-19 were to spread, aviation passenger demand could decrease significantly due to entry restrictions, movement restrictions, or voluntary travel restraint. Since the Air Transportation Business has a high proportion of fixed costs, such as aircraft costs and personnel expenses, a short-term sharp decline in demand could have a serious impact on business performance. The company addresses this through portfolio transformation by strengthening the LCC Business and the mileage, life, and infrastructure domains, as well as by enhancing its capacity to respond to demand through the operation of dedicated freighter aircraft.

If an information system failure occurs due to a computer malfunction or cyberattack, it could result in the loss of critical data or disruption to aircraft operations, potentially affecting business management. Additionally, a leakage of customer personal information could damage the company's brand reputation and affect business operations and performance. The company addresses this by pursuing ISO27001 certification and maintenance, conducting 24/7 threat monitoring, regularly conducting targeted email attack drills, and taking out insurance against personal information leakage.