FOCUS: Japanese airlines, airports to be tested under open skies pacts+

TOKYO, Nov. 3 Kyodo -
Japanese aviation policy marked a turning point in October as Tokyo signed an
agreement with the United States to fully liberalize their civil aviation
markets in parallel with the resumption of full-fledged international
operations at the capital's Haneda airport.
While the ''open skies'' treaty is expected to benefit passengers with lower
fares and more flights, domestic airlines and airports are expected to face
fierce competition for survival as Japan seeks to conclude the accord with
other countries.
Starting with the latest accord, ''We would like to seek (open skies) accords
with members of the Association of Southeast Asian Nations'' and other Asian
economies, Japanese Land, Infrastructure, Transport and Tourism Minister Sumio
Mabuchi said recently.
Japan has already concluded open skies accords with 10 countries and regions
including the United States, but domestic airports subject to the treaty
excluded the nation's two major gateways to the Tokyo metropolitan area --
Haneda and Narita airport -- due primarily to their limited number of takeoff
and landing slots.
But it will become possible for Japan to open them following an increase in
slots at both airports, with Haneda opening a new international terminal and
Narita raising the annual number of slots by 20,000 to a maximum of 220,000 in
March this year.
In addition, Narita decided in October to further increase the number of slots
amid growing concern among local governments that the opening of the new
terminal at Haneda, which is convenient because of its proximity to central
Tokyo, will reduce the number of people using Narita in Chiba Prefecture, east
of Tokyo.
''The latest open skies treaty has major significance, as upcoming agreements
will include the airports in the capital region like this one,'' said a
transport ministry official.
As the transport minister mentioned, Japan places Asian countries such as South
Korea, Vietnam, Thailand, and Malaysia as a top priority with which it aims to
conclude the pact.
''Taking into account how we can maximize the effects of open skies, Asian
countries would be the first as we can expect inbound demand from neighboring
countries,'' the official said.
Some of the positive effects would include an increase in tourists and
stimulating exchanges with expected participation of overseas low-cost
carriers, as airlines will be able to freely enter the Japanese market or
increase flights under the pact, the official said.
But for Japanese air carriers, open skies mean cutthroat competition with
low-cost carriers.
In September, Malaysian budget carrier AirAsia X said it will launch a Kuala
Lumpur-Haneda service on Dec. 9, offering some one-way tickets at 5,000 yen.
All Nippon Airways Co. also plans to establish a low-cost carrier by the end of
this year.
''It can be said that the limitation of slots at Narita and Haneda had been
serving as a big breakwater for domestic air carriers,'' said Hajime Tozaki,
professor at Waseda University, adding that a reduction in the U.S. share at
Narita, meanwhile, would resolve inequality.
Japan had no choice but to follow the growing trend of opening up aviation
markets as more Asian countries are concluding open skies treaties amid
globalization of the economy, Tozaki said.
The transport ministry official said the pact is designed to enhance the
domestic airlines' global competitiveness, as they will weaken if they continue
to be protected by regulations.
''We think it is right to help ANA and Japan Airlines Corp. obtain the strength
to expand overseas in fair competition, while promoting other air carriers to
acquire the ability to start international services, rather than protecting
them with tight regulations,'' the official said.
While some Japanese airlines would be able to launch low-cost carrier
businesses to cope with overseas budget airlines, Tozaki was skeptical about
whether such carriers will be successful in Japan, where many people take
quality in-flight service for granted.
''Japanese air carriers should aim to capture those who are in the high-income
class and want value-added services by demonstrating their solid brand images
like ones they have been working on,'' he added.
Meanwhile, Japanese regional airports, many of them already mired in
unprofitable operations, are also likely to come under pressure for survival as
airliners are expected to continue withdrawing from money-losing routes amid
accelerating competition.
''Regional airports were able to pick up demand resulting from supply
limitations at the airports in the capital region. But they are going to suffer
once they become unable to pick up such shares,'' Tozaki said.
But an increase in traffic at Haneda could also raise business opportunities
for regional airports, as the Tokyo airport is the largest hub for domestic
flights serving about 50 routes in Japan.
''Whether regional airports will be able to survive or not will be clearly
determined by how they market themselves,'' Tozaki said.
==Kyodo
2010-11-03 22:11:22