Saito admitted that JAL, which filed for bankruptcy protection in 2010 and was later bailed out by the government, is struggling with the impact of a weaker yen and is nowhere near a stage where the company could raise wages.
"When business improves, we will reward employees through higher bonuses. We are not at all at a stage when we can raise base salaries," he said.
"The headwinds from a weaker yen are strong and we're up against more and more competition at both Narita and Haneda," he added, referring to the Japanese airports.
JAL has been locked in a tense battle with its chief competitor All Nippon Airways (ANA) - Japan's largest airline - in recent weeks over landing slots at Tokyo's Haneda airport, the world's fourth busiest airport hub.
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Saito said fuel costs and a weaker yen were the largest risks to his company's business.
"Fuel costs are about 250 billion to 280 billion yen a year. That's a challenge because that portion of the operation is completely exposed to volatility in the exchange rate," he added.
Saito said he expected the yen to continue to weaken, as interest rates both in the U.S., and at home, are set to head higher, while further monetary easing by the Bank of Japan combined with a stubbornly high trade deficit, also heap downward pressure on the currency.
"As of the end of last year, we were 65 percent hedged on our currency exposure and we will be 80 percent hedged by the end of March," he added.
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However, Saito was optimistic about the Japanese economic recovery in 2014, although he acknowledged that the consumption tax hike scheduled for April could hurt demand.
— By CNBC's Katie Holliday: Follow her on Twitter