Japan Airlines : Consolidated Financial Results for the Nine Months Ended December 31, 2021

(Percentage compared to prior year)

[REFERENCE TRANSLATION]

Please note that this translation is to be used solely as reference and the financial statements in this material are unaudited. In case of any discrepancy between this translation and the Japanese original, the latter shall prevail.

Consolidated Financial Results for the Nine Months Ended December 31, 2021[IFRS]

Company name	Japan Airlines Co., Ltd	February 2, 2022
Stock Listing	Tokyo Stock Exchange
Code No.		9201		URL: https://www.jal.com
Representative	Yuji Akasaka, President
Contact	Yuichiro Kito, General Manager, Finance Phone: [phone]
Scheduled date for filing of Quarterly Report: February 3, 2022
Scheduled date for dividend payment:	Not Applicable

Supplementary explanations of the quarterly financial results: Yes

Presentation for the quarterly financial results:

Yes (for institutional investors and analysts)

(Amounts are rounded down to the nearest million yen unless otherwise indicated)

1. Consolidated Financial Results for the Nine Months Ended December 31, 2021 (April 1, 2021 to December 31, 2021)

(1) Consolidated Operating Results (Cumulative)

						Profit before financing		Profit before tax	Profit attributable to	Comprehensive income
		Revenue			and income tax		owners of parent
					(Loss in brackets)	(Loss in brackets)
						(Loss in brackets)		(Loss in brackets)
		Millions of		%		Millions of	%		Millions of	%	Millions of	%	Millions of	%
	Nine months ended	Yen				Yen			Yen		Yen		Yen
	December 31, 2021	498,480		39.8		(183,328)	-	(188,692)	-	(128,322)	-	(129,665)	-
	Nine months ended	356,548		(68.0)		(294,179)	-	(299,539)	-	(212,722)	-	(181,328)	-
	December 31, 2020
					Basic earnings per share		Diluted earnings per share
						(Loss in brackets)
						Yen				Yen
	Nine months ended December 31, 2021	(293.64)				－
	Nine months ended December 31, 2020	(597.38)				－

(Note)Profit before financing and income tax represents as index to monitor, compare and evaluate the JAL Group's performance conti nuously. Profit before financing and income tax is Profit from which Income tax expense, Interest, and Finance income and expense are deducted.

(2) Consolidated Financial Position

				Ratio of equity	Equity per share
			Equity attributable to	attributable to owners
	Total Assets	Total Equity	attributable to owners
	owners of the parent	of the parent to
			of the parent
				total assets (%)
	Millions of Yen	Millions of Yen	Millions of Yen	%	Yen
As of December 31, 2021	2,312,693	845,931	817,740	35.4	1,871.23
As of March 31, 2021	2,107,279	981,535	947,459	45.0	2,168.06

2. Dividends

			Dividends per Share
	1st Quarter End	2nd Quarter End		3rd Quarter End	Fiscal Year End	Total
	Yen	Yen		Yen	Yen	Yen
Year Ended March 31, 2021	－	0.00		－	0.00	0.00
Year Ending March 31, 2022	－	0.00		－
Year Ending March 31, 2022 (Forecast)					0.00	0.00

(Note)Revisions to the most recently disclosed dividends forecast: Yes

We forecast no year-end dividends for this fiscal year. Please refer to "1. Qualitative Information concerning Financial Results for the Third Quarter of FY 2021 (4) Dividends" in the Attachment.

3. Consolidated Financial Forecast for the Fiscal Year Ending March 31, 2022		(Percentage compared to prior year)
				Profit before financing and income tax		Profit attributable to owners of parent
	Revenue
		(Loss in brackets)			(Loss in brackets)
Entire Fiscal	Millions of Yen		%	Millions of Yen		%		Millions of Yen		%
Year	766,000		59.2	(198,000)		－		(146,000)		－

(Note)Revisions to the most recently disclosed earnings forecast: None

Please refer to "1. Qualitative Information concerning Financial Results for the Third Quarter of FY 2021 (3) Explanations of Forecast of Consolidated Financial Results" in the Attachment.

Notes

1. Changes in significant consolidated subsidiaries during the nine months ended December 31, 2021: None
2. Changes in accounting policies/changes in accounting estimates

1. Changes in accounting policies due to revisions in accounting standards under IFRS: None
2. Changes in accounting policies other than 1): None
3. Changes in accounting estimates: None

1. Number of shares issued (common stock)

(a) Total number of shares issued at the end of the period (including treasury shares)

As of December 31, 2021 :		437,143,500
As of March 31, 2021		: 437,143,500
(b) Number of treasury shares at the end of the period
As of December 31, 2021	:	136,291
As of March 31, 2021	:	136,217
(c) Average number of shares outstanding
During the nine months ended December 31, 2021 :	437,007,232
During the nine months ended December 31, 2020 :	356,094,303

Indication of quarterly review procedure implementation status

This document is unaudited by certificated public accountants or audit firms.

Explanation for appropriate use of forecasts and other notes(Remarks on the description on future forecast)

The forward-looking statements such as operational forecasts contained in this statement summary are based on information

currently available to the Company and certain assumptions which are regarded as legitimate. However, it does not mean that we guarantee its achievement. Actual results may differ from such forward-looking statements for a variety of reasons. Please refer to "1. Qualitative Information concerning Financial Results for the Third Quarter of FY2021 (3) Explanations of Forecast of Consolidated Financial Results" in the Attachment for the assumptions used and other notes.

• The Company holds a presentation for institutional investors and analysts on February 2, 2022. Documents distributed at the presentation are scheduled to be posted on our website on the same day.

Attachment

CONTENTS
1. Qualitative Information Concerning Financial Results for the Third Quarter of FY2021	2
(1)	Explanation of Operating Results	2
(2)	Explanation on Financial Position	6
(3)	Explanations of Forecast of Consolidated Financial Results	6
(4)	Dividends	6
2. Condensed Quarterly Consolidated Financial Statement and Primary Notes	7
(1)	Condensed Quarterly Consolidated Statement of Financial Position	7
(2)	Condensed Quarterly Consolidated Statement of Profit or Loss and Comprehensive Income	9
(3)	Condensed Quarterly Consolidated Statement of Changes in Equity	11
(4)	Condensed Quarterly Consolidated Statement of Cash flows	13
(5)	Notes for Condensed Quarterly Consolidated Financial Statements	14
	(Reporting company)	14
	(Basis of preparation)	14
	(Going Concern Assumption)	14
	(Additional Information)	14
	(Revenue)	15
	(Segment Information)	17
	(Subsequent Event)	18

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1. Qualitative Information Concerning Financial Results for the Third Quarter of FY 2021

(1) Explanation of Operating Results

The revenue increased by 39.8% year on year to 498.4 billion yen, the operating expense increased by 5.0 % year on year to 687.9 billion yen, the profit or loss before financing and income tax (hereinafter referred as "EBIT") was the loss of 183.3 billion yen (EBIT loss of 294.1 billion yen in the same period in the previous year).The loss attributable to owners of the parent for the nine months ended December 31, 2021 (from April 1, 2021 to December 31, 2021 hereinafter referred as the "Third Quarter Period") was 128.3 billion yen (the loss attributable to owners of the parent of 212.7 billion yen in the same period in the previous year).

Consolidated financial results are as follows.

(JPY Bn)	Nine months ended	Nine months ended	% or points compared to
December 31, 2020	December 31, 2021	prior period
Revenue	356.5	498.4	139.8%
International Passenger	18.8	48.4	256.8%
Domestic Passenger	136.9	174.4	127.4%
Cargo/Mail	90.9	161.0	177.1%
Others	109.8	114.5	104.3%
Operating Expense	655.4	687.9	105.0%
Fuel	73.5	101.8	138.4%
Excluding Fuel	581.8	586.1	100.7%
Profit or loss before financing and income	(294.1)	(183.3)	－
tax (EBIT) (Loss in brackets)
EBIT Margin (%)	－	－	－
Profit or loss attributable to	(212.7)	(128.3)	－
owners of the parent (Loss in brackets)

Note: Figures have been truncated and percentages are rounded off to the first decimal place.

※: Profit or loss before financing and income tax is defined as EBIT for the JAL Group. EBIT is calculated as Profit or Loss excluding Income tax expense, Interest, and Finance income and expense.

※: EBIT Margin=EBIT/Revenue.

The international passenger demand recovered steadily with a base demand of returnees or expatriates and a transit demand between Asia and North America. The domestic passenger demand recovered robustly after October, compared with the first half of this fiscal year when the demand was sluggish due to a surge of new infections and repeated declarations of a state of emergency. Amid the prolonged COVID effects and world-wide resurge of the new variant, we will strive to maintain our international and domestic network while keeping an eye on the changing environments. On the other hand, the international air cargo demand remained very high due to mainly auto-related shipments or semiconductors bound for North America in the prolonged disruption of ocean transport. While the overall air cargo capacity was limited due to significant reductions of passenger flight operation, we actively operated cargo flights with own passenger aircraft and chartered cargo freighters to increase revenue by capturing the strong demand.

In the business environments, securing safety for our passengers and employees, which is our Group's basic foundation, as the first priority, the JAL group has been seeking to fulfill its responsibilities by sustaining both international and domestic air transport network for passengers who need to travel.

For the full service carrier business domain, in order to provide our passengers with safety and comfort as well as

easier access to air transport, we have extended to Haneda, New-Chitose (Sapporo), Itami (Osaka) and Naha Okinawa Airports "JAL SMART AIRPORT" that provides "contact-less"touch-screencheck-in kiosks. Moreover, in order to enhance security check with a shorter time and better hygiene using ultraviolet sterilizer, we will introduce "JAL SMART SECURITY" at Haneda Airport from April 2022. Also, the digital certificate app "VeriFLY" for easier travel from Japan to U.S. Mainland has been in full use. In addition, the JAL Group has been cooperating with Kao Corporation who provides infectious disease prevention solutions to healthcare centers to improve JAL's hygiene measures through improving cleaning procedures based on hygiene tests at airports or within cabin. Those initiatives

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called "JAL FlySafe", together with JAL's excellent services and sustainability initiatives toward its management goal of net zero CO2 emissions by 2050, were rated as the world's highest standards, and APEX (Airlines Passenger Experience Association) awarded JAL "WORLD CLASS" for the first time to Japanese airlines. We also conducted operation of scenic tours of Japan from Narita Airport with various themes to increase revenue with wisdom and thoughts of each employee.

In LCC operations, our mid- and long-haul international low-cost carrier, ZIPAIR Tokyo (ZIPAIR), started the first LCC's non-stop flights from Asia to Los Angels from December 25, which made the total ZIPAIR routes to five. Spring Japan became our subsidiary in June. Together with Jetstar Japan, the three low cost carriers will establish useful network based at Narita Airport for a coming recovery of international passenger demand.

For the non-aviation business domain, we disclosed on November 2 a joint tender offer plan with Sojitz Corporation to make JALUX a consolidated subsidiary by the end of this fiscal year toward leaping business expansion and profit growth in that domain. Also, for regional revitalization, we have established an e-commerce program within China's largest social media, "WeChat" app, to promote international e-commerce of Japanese regional products. This initiative is also aimed for inbound tourism in the post-COVID era. Moreover, we will start cargo freighter operations together with YAMATO HOLDINGS co., ltd from April 2024 by sharing the business resources of each company together toward D to B/C markets, creation of new businesses and revitalization of regional industries.

We responded to the decrease of demand by making continuous efforts of reducing our capacity to minimize our operating cost, together with fixed cost restructuring by in-sourcing operations instead of outsourcing, reducing IT expenditure and reducing personnel cost including executives' salaries and employees' bonus cut. As workloads for operation decreased, the JAL Group accepted quarantine-support or vaccination-support business and sent about 1,700 employees per day to various industries or municipalities. Through those measures, the JAL Group uses this occasion to train and develop our employees for capturing growth beyond COVID-19, while maintaining its flexibility to put back its human resources to our operation in a timely manner when demand comes back. The Japanese government is providing governmental supports including exemption of landing fees and jet fuel tax, or subsidies for employment to assist the airline industry. We would like to show our sincere gratitude for the support.

To achieve ESG goals, we are steadily taking various initiatives to achieve one of our industry's most important goals, net zero CO2 emission, while satisfying our social mission to provide sustainable air transportation network as public transportation infrastructure. Members of oneworld alliance, to which we belong, announced that they will jointly purchase Sustainable Aviation Fuel (SAF) from Aemetis. Inc at San Francisco Airport. Moreover, regarding another pillar of CO2 emission reduction, renewal to fuel-efficient aircraft, we have conducted steady introduction of Boeing 787s and Airbus 350s amid the difficult financial situations, and JAL has almost completed its Airbus 350 renewal for its domestic large-scale fleets. In addition, toward smooth transition to fuel-efficient aircraft, JAL has determined to issue the world's first transition bonds in the aviation industry on February 2, 2022. This transition bonds is one of SDGs bonds with a second party opinion from Sustainalytics, an external review provider operating worldwide Also, this bond issuance is selected as the very first airline model example of "the 2021 Climate Transition Finance Model Projects" (*1) by the Ministry of Economy, Trade and Industry in Japan. We will strive to challenge toward realization of a sustainable society through net zero emission initiatives including renewal to more fuel- efficient aircraft during a transition period or an increase of use of SAF.

It is expected to take for a while until a complete recovery of air travel demands. In the meantime, we will strive altogether for strict cost management, efficiency improvement, implementation of sales promotion in a timely manner and cargo revenue maximization. Also, we will strive for maintaining international and domestic network with safe operation and solid infection prevention measures to prepare for reopening of international interaction of people without any barriers.

*1 A project whereby METI provides information on and reduces the assessment costs for model examples in order to promote the spread of transition finance. METI selects model examples that conform to the Basic Guidelines on Climate Transition Finance formulated jointly by METI, the Ministry of the Environment (MOE), and the Financial Services Agency (FSA), and are deemed to have model qualities.

As a result of the above, in Full Service Carrier operations, the passenger traffic for International Passenger Business in the third quarter increased by 140.9% year over year, its revenue passenger kilometers (RPK) increased by

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