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Japan Airlines System Corp. is expecting a group net profit of 35 billion yen for the business year through March 2006, up from 8 billion yen estimated for 2002.

Under a three-year plan unveiled Tuesday, the holding company of Japan Airlines Co. and Japan Air System Co. said it will implement a series of cost-cutting measures to streamline operations. Thanks to these efforts, it expects to see net merger effects worth 56 billion yen in saved costs in 2005, the final year of the plan. It expects to generate 2.25 trillion yen in revenues that year.

The company said it will reduce its ground crew by 3,600, or 6 percent of the total group workforce during the three-year period starting April.

It will reduce its number of aircraft from the current 281 to 276 by the end of the 2005 business year. Aircraft types will be narrowed from 16 to 11 by retiring old jets around fiscal 2006.

On the earnings outlook for the current business year, which ends this month, the firm said it expects to post 8 billion yen in group net profit, down from 24 billion yen it forecast in November, due to growing geopolitical uncertainty and the prolonged deflationary trend.

It also revised its revenue forecast down to 2.07 trillion yen from 2.09 trillion yen for this fiscal year.

Officials noted a sharp drop in international flights, with reservations seeing a steep fall since February.

On a planned airfare hike in June, Japan Airlines System President Isao Kaneko said the company will file an application with authorities later this month, adding that such a hike has already been factored into its earnings forecast in the three-year plan.

Meanwhile, the firm announced that it has named Katsuo Haneda, 60, vice president of Japan Airlines, as the international carrier’s new president, effective April 1.

Minoru Morikawa, vice president of Japan Air System, has been named president of JAS. He will be officially appointed at a general shareholders’ meeting slated for June.

Under the three-year plan, JAL and JAS, which currently fly under their old names, will complete their integration in April 2004.

Domestic passenger airline operations will subsequently be merged into Japan Airlines Domestic and overseas business into Japan Airlines International.

JAL International will also assume cargo operations, which, in the original merger plan, were to become a third unit under the holding company.

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