Introduction

Immediately after the JNR reforms a little more than 20 years ago, there was a sense of crisis in the air at JR East over whether the new company would be profitable and could really recapture the glory days of rail. Nevertheless, all JR East employees were determined to show unrelenting resolve and determination from the outset with the intent of creating a new railway era.
Since those first days, we have striven to enhance the competitiveness of our railway operations despite the effects of the collapse of the Japanese economic ‘bubble’ in 1991, the Lost Decade period of low growth, and intensifying competition with other transport modes. Specifically, we have expanded our shinkansen network, increased carrying capacity in the Tokyo metropolitan area, and in recent years, enhanced seamless transportation services. We have also worked to grow life-style services into another business pillar alongside operations to maximize revenues. In addition to incorporating IT and other technological innovations, such as the Suica card system, we have taken measures to cut costs and increase productivity across the board.
JR East has worked to reduce long-term debt inherited from JNR—one of the company’s most important tasks— and although total long-term debt increased temporarily at purchase of the Tohoku and Joetsu shinkansen infrastructure in 1991, we have repaid about ¥2.7 trillion in 20 years. The resultant drop in interest payments has helped stabilize the company’s operations.
Thanks to such efforts, JR East has continually posted favourable operating results and became fully privatized following listing on the Tokyo Stock Exchange, three sales of government-held shares, and amendment of the JR Law. It is no exaggeration to say that we have achieved the objectives of the JNR reforms with independent management of a profitable company and have helped restored railways in Japan to their former glory (Figs. 1 and 2). However, we must not forget that our business environment is changing rapidly with increasingly exacting and diversified customer expectations. Greater importance is also placed on group-based management and corporate social responsibility (CSR). In its 20-year history, the JR East Group has grown to include over 80 companies and we are working to attain three basic management goals in line with the policy of becoming a trusted life-style services group, providing services taking the customer’s viewpoint into account, creating a strong and robust group, and fulfilling our social responsibility and achieving sustainable growth. The group policy is based on the New Frontier 2008 4-year medium-term business plan, which started in FY2005.

Main Initiatives and Results in Railway, Life-style Service and Suica Operations

Safety measures and accident reduction
As a railway operator, we shall never forget the collision at Higashi-Nakano Station on the Chuo Line in 1988, which prompted us to further bolster safety measures and reminded us that passenger safety is always the primary concern.  Based on this commitment, about 40% of our capital investment each year—over ¥1.7 trillion since the company was founded—is devoted to enhancing safety.  We are keen to further refine our safety systems by formulating new measures based on new technologies and through free discussion in the workplace to create a climate of safety.  The company has also established its own Safety Research Laboratory, which researches safety issues from a wide range of viewpoints, drawing fully on scientific findings.  Thanks to these endeavours, the numbers of railway and level-crossing accidents have both fallen considerably since 1987 (Fig. 3).

Key Issues to Address and Proposed Solutions

After 20 years of operation, there are two key management issues we need to consider for the future.
The first is laying the foundations to create a rock-solid corporation for the new age and to facilitate long-term growth. In addition to taking continued initiatives to enhance our finances, by aggressively reducing costs and repaying long-term debt, we will press full ahead with further development of life-style services and Suica operations.
The second point is instilling a passion for reform based on the JNR reform spirit in future generations. We have to tell our younger employees—who did not go through the JNR reforms—about our experiences and the prevailing spirit at that time. We see the 20th anniversary of our founding as a new starting point for passing on the passion for reform from 20 years ago with the aim of creating a bright, new future.
Specifically, JR East will further enhance railway operations making full use of technical innovations to offer our customers full peace of mind. We will propose new ideas for a more fulfilling life through our Station Renaissance concept focused on stations and rail and develop Suica into a new social infrastructure. Next, we would like to go into more detail about some of the challenges we face and the ways in which we will set about addressing them.


Safety based customer peace of mind
As explained above, JR East places the highest priority on safety and has worked strenuously to attain this objective. Despite our efforts, a train was derailed on the Uetsu Line in December 2005. Although there can never be perfection in railway safety, we must continue to do everything we can in pursuit of this ultimate goal. The quality of railway operations is largely determined by transportation reliability. We are fully aware that our customers would like to see further improvements in service reliability, of course without compromising safety, and we will continue to do our utmost to reach this goal.
Safety is a prerequisite for railway operations and service reliability is another key factor. However, these elements alone do not give passengers peace of mind, which comes from passengers who use train services; it is not something railway operators can create. The JR East Group would like to focus on offering peace of mind and all companies in the group, covering operations such as hotels, restaurants, shopping centres, work on the same principle of establishing ourselves as a group that customers firmly associate with this concept.

Conclusion

JR East Chronology