Operating Results by Business Segment Transportation Operations Overview covering the Kyoto-Osaka-Kobe met- an increase in capital expenditure, JR-West’s Transportation Operations ropolitan area covers 622.0 kilometers operating income for the segment rose consist of the railway business, along (954.3 kilometers including the three 0.2% year on year to ¥97.4 billion. with small-scale bus and ferry services. branch offices in Kyoto, Osaka, and The railway business encompasses 18 Kobe), and other conventional lines prefectures in the western half of Hon- (excluding the three branch offices in Sanyo Shinkansen shu and the northern tip of Kyushu, Kyoto, Osaka, and Kobe) extend a total The Sanyo Shinkansen is a high-speed an area of approximately 104,000 of 3,425.7 kilometers. intercity passenger service between square kilometers. The region is home Operating revenues in the Trans- Shin-Osaka Station in Osaka and to approximately 43 million people, portation Operations segment rose Hakata Station in Fukuoka in northern equivalent to 34% of the population of 1.5% year on year during fiscal 2008, Kyushu. The line runs through several Japan. The Company operates 51 lines to ¥861.2 billion. The majority of this major cities in western Japan, includ- with a total of 1,221 stations. Operating revenue is derived from the passenger ing Kobe, Okayama, Hiroshima, and route length totals 5,024.0 kilometers, railway revenue of the parent company Kitakyushu. It has a total operating a little less than 20% of all passenger JR-West, which rose 2.1% from the kilometerage of 644.0 kilometers, and railway kilometerage in Japan. By line, previous fiscal year, to ¥781.3 billion. 19 stations, including Shin-Osaka Sta- the Sanyo Shinkansen, a high-speed As a result, despite a change in the tion. JR-West owns the entirety of the 26 intercity transport line, stretches system for depreciation and greater railway facilities related to the existing 644.0 kilometers, the Urban Network depreciation expenses stemming from Sanyo Shinkansen, and with the JR-West 2008 Annual Report Sendai Niigata Tohoku Shinkansen Joetsu THE JR-WEST NETWORK Shinkansen Kanazawa Toyama Nagano Sanyo Shinkansen Urban Network (954.3-km basis) Fukui Other conventional lines Tottori Nagano Yonago Shinkansen Fukuchiyama Tokyo Kyoto Hiroshima Nagoya Yamaguchi Himeji Shin-Osaka Tokaido Shinkansen Hakata Okayama (Fukuoka) Kobe Osaka Nara Wakayama Sanyo Shinkansen Route (644.0 kilometers) Shin-Yatsushiro Kyushu Shinkansen Kagoshima-Chuo exception of Shin-Osaka Station stations along the Sanyo Shinkansen— marketing efforts such as the Express (owned by JR Central), operates all of Okayama, Hiroshima, and Hakata— Reservation system, revenue from the the other 18 stations. without having to change trains. Sanyo Shinkansen rose for the fifth There are four types of trains in op- Transportation revenue from the consecutive year in fiscal 2008. eration on the Sanyo Shinkansen: the Sanyo Shinkansen began declining express trains Nozomi, Hikari Rail Star, after fiscal 1997 due to the slowdown Fiscal 2008 Measures and Hikari, and the local train Kodama. in the Japanese economy, and more In response to more intense competi- Of these the fastest is Nozomi, which intense competition from competing tion from airlines over competing operates at a maximum speed of 300 transportation services, such as airlines routes, in July 2007 JR-West introduced kilometers per hour, linking Shin-Osaka and highway buses. However, usage the new N700 Series Shinkansen, of- and Hakata in two hours and 23 min- began to rise following the switchover fering improved speed, comfort, and utes (in the case of the fastest rail ser- from Hikari to Nozomi trains in Oc- energy conservation. In March 2008, vice). The majority of the Nozomi trains tober 2003, and timetable revisions we implemented timetable revisions to are through-service trains running on centered on lower fares for Nozomi enhance the competitiveness of Shink- the Tokaido Shinkansen tracks oper- trains. As a result of further timetable ansen services, including hourly opera- ated by JR Central linking Tokyo and revisions in March 2005, March 2006, tion of an N700 series train between Shin-Osaka. This allows passengers to and July 2007 to accommodate more Tokyo and Hakata, and an increase in 27 travel across the Tokaido Shinkansen Nozomi trains, the introduction of the number of Nozomi trains running JR-West 2008 Annual Report from Tokyo or Nagoya to the major the N700 Series and the success of between Tokyo and Hiroshima. The new N700 Series Hikari Rail Star The new N700 Series features number of trains in operation, as Shinkansen timetables that maximize improved energy efficiency, further en- well as the convenience and price the benefits from the introduction hancing the environmental friendliness advantages of the Express Reservation of the N700 Series, along with other of Shinkansen travel, and contributing system. We further worked in coopera- efforts to offer a comfortable and significantly to global environmental tion with local communities, travel highly reliable transportation service conservation. The N700 Series also agents, and other JR companies to responsive to demand. We are also received the fiscal 2007 Environment stimulate demand for tourism, includ- moving forward with measures to Minister’s Prize for Global Warming ing promotion of the DISCOVER WEST increase use of the Shinkansen, includ- Prevention Activity. Campaign, and operating the Club ing advertising campaigns promoting Sales and marketing initiatives DISCOVER WEST travel association for the environmentally friendly aspects to promote use of the Shinkansen persons over 50 years of age. of Shinkansen service. We are also included proactive publication of encouraging the use of the Express information on Sanyo Shinkansen Initiatives for Fiscal 2009 Reservation system to further enhance timetable revisions, the comfort of JR-West is working amid a fiercely the convenience of sales channels, the N700 Series, and the increased competitive environment to create and expanding the Express Reserva- tion IC card service (EX-IC) service to include the Sanyo Shinkansen from 28 summer 2009. Through-Service Operations with the Kyushu Shinkansen JR-West is planning to provide through-services between the Sanyo Shin- kansen and Kyushu Shinkansen, operated by Kyushu Railway Company (JR Kyushu), following the completion of the extension of the Kyushu Shinkansen JR-West 2008 Annual Report scheduled for spring 2011, linking Shin-Osaka and Kagoshima-Chuo stations in four hours. We expect to increase revenue by introducing a new Shin- kansen model based on the N700 Series that will provide even higher-quality Shinkansen travel, as well as by working together with JR-Kyushu to develop demand for sightseeing among the wealth of tourist destinations in Kyushu, and stimulate travel from Kyushu to the urban centers of Kyoto and Osaka. Planned total investment for this project is about ¥100 billion. Tokyo Kyoto Hiroshima Okayama Shin-Kobe Nagoya Kokura Hakata Shin-Osaka Scheduled to open in spring 2011 Partnership with JR Kyushu Kumamoto Shin-Yatsushiro JR-West JR Central Sanyo Shinkansen Fastest Traveling Time on Opened in March 2004 Through-Service Operations From Shin-Osaka to Kumamoto stations: JR Kyushu About 3 hr 20 min Kagoshima- Currently: 3 hr 47 min Chuo Kyushu Shinkansen From Shin-Osaka to Kagoshima-Chuo stations: About 4 hr Currently: 4 hr 57 min Urban Network Services to prioritize safety, and regaining that also renovated to coincide with the (Kyoto-Osaka-Kobe Area Conventional Lines) trust is of the highest priority. opening of the Osaka Higashi Line, im- The Urban Network provides passen- Ridership on the Urban Network proving access to Osaka Station from ger service for the densely populated (954.3-kilometer basis) during fiscal Wakayama Prefecture and the Kansai major cities of Kyoto, Osaka, and Kobe, 2008 was up 0.8% year on year to International Airport. We also opened and their surrounding areas. It has an 1,445 million passengers, with total three new stations, and made other operating route length of 622.0 kilo- passenger-kilometers up 0.6% to efforts to further improve convenience. meters (954.3 kilometers including the 28,962 million passenger-kilometers. In terms of facilities, we undertook a three branch offices in Kyoto, Osaka, Transportation revenues increased series of measures to enhance safety, and Kobe), forming a comprehensive 0.3% (up ¥0.9 billion), to ¥303.3 billion. including expansion of the ATS-P network stretching across the entire system, improving the safety features Kyoto-Osaka-Kobe region. Fiscal 2008 Measures equipment at railway crossings, and The Urban Network area includes Timetable revisions were implemented introducing new equipment such as the portion of the Fukuchiyama Line in March 2008 for the opening a por- train proximity warning systems, and between Tsukaguchi and Amagasaki tion of the Osaka Higashi Line between early-warning seismic activity warning where JR-West caused a terrible ac- Hanaten and Kyuhoji, providing links systems. We also installed additional cident on April 25, 2005, resulting in to the Yamatoji Line, Gakkentoshi Line anemometers, and strengthened 29 a substantial loss of the trust we have and JR Tozai Line to improve access pillars supporting elevated tracks JR-West 2008 Annual Report built among customers and society. We for passengers traveling from Nara to against earthquakes. recognize that redoubling our efforts Kitashinchi Station.