ANA Responds to Declines after September 11 Attacks

Responding to steep declines in demand for air transport following the September 11 Attacks, All Nippon Airways (ANA), filed an application with the Ministry of Land Infrastructure and Transport for additional modifications on its international network effective January.

Additionally, as part of an expanded effort to reduce costs, the ANA Group plans to pare its workforce by 1,000 employees and implement a “Voluntary Leave of Absence” program for one month.

International Operations

In keeping with its policy of flexibly responding to demand patterns, three routes will be suspended in January for the remainder of the winter schedule, until March 30, 2002. As a result, available seat kilometers (ASK) on the ANA Group’s international operations will decline 15% compared to the same period a year ago.

Bangkok – Mumbai (Bombay)*

Two flights/week (Th. Su.) from January 17, 2002

Bangkok – Kuala Lumpur*

Three flights/week (Mo. We. Fr.) from January 16, 2002

Kansai – Bangkok

Daily service from January 15, 2002

*Flights connect Tokyo/Narita on same flight between Tokyo/Narita and Bangkok

Personnel

Personnel Reductions

By the end of fiscal year 2002**, ANA will reduce its workforce by 1,000 to 12,700 employees from the current level of 13,780.

In the company’s Medium Term Corporate Plan, ANA outlined aims to reduce its workforce by 680 from the current level to 13,100 employees by the end of fiscal year 2002**. However, this number will be reduced by another 400 due to the discontinuation of plans to recruit 300 cabin attendants and through the early retirement of 100 employees.

In addition, ANA will postpone the hiring date of 200 cabin attendants recruited for February 2002 to April.

**Ending March 31, 2003

Voluntary Leave of Absence

ANA employees will be given the option of a one month “Voluntary Leave of Absence” whereby they will receive pay 40% less their normal monthly salary for the term. Subject to an agreement between labor and management this program will be offered to 12,000 (management approx. 3000, general employees approx. 9,000) employees early next year beginning with cabin crew.

Other

In addition to the above measures, the following cost reductions will be executed by the end of the current fiscal year, ending March 31, 2002.

Cost Reductions

International Operations - \15 billion***

Personnel - \ 1 billion***

Advertising - \ 2 billion***

Leases, etc. - \ 3 billion***

Fuel, other - \ 9 billion***

Total: \30 billion***



***All figures approximate