Central, whose area of operations included Nagoya, and JR West, whose area of operations included Osaka, anticipated extremely profitable operations. On the other hand, JR Hokkaido, JR Shikoku and JR Kyushu, were located in less populated areas, had fewer users and anticipated operating losses.
\14,500 billion out of the total \37,100 billion in long term debt owed by JNR was assigned to JR East, JR Central, JR West and JR Freight, as these firms were expected to be able to operate at a profit. JR Hokkaido, JR Shikoku and JR Kyushu, which were expected to operate at a loss, were burdened no debt at all.
In addition, management stabilization funds of \682 billion, \208 billion and \388 billion were set up for JR Hokkaido, JR Shikoku, JR Kyushu, respectively, in order to compensate for the losses they were expected to incur from operations.
5 Effects of Restructuring JNR
(1) Transport Performance (annual average rate of growth)
(2) Fare revisions
JR East, JR Central and JR West were able to make profits without revising fares, but JR Hokkaido, JR Shikoku and JR Kyushu were forced to raise fares by about 7% in January 1996. (During the final stages of the JNR era, JNR raised fares 11 times in 13 years.)
(3) Opinions of passengers
a) Service frequencies have increased.
b) The attitude of employees towards passengers has improved considerably.
c) Stations and trains are kept cleaner.
(4) Related Businesses
Each of the JR companies has actively advanced into non-railway sectors in order to gain the maximum possible benefit from their management resources. Specifically, these moves include real estate rentals and advertising, as well as investments in hotel, advertising and real estate sector firms.
