Haneda lures international flights from local rivals
THE ASAHI SHIMBUN
2010/11/2
The revamping of Tokyo's Haneda Airport as an international facility has left local airports around the country in a bind.
When takeoff and landing slots were limited at Narita and Haneda airports, foreign airlines chose instead to fly in and out of smaller, local airports.
But with the two major Tokyo-area airports opening up more slots, foreign airlines will inevitably shift to those locations.
That will likely spur steeper competition among local airports and cause some to abandon the idea of serving international flights.
On June 4, the first anniversary of the opening of Shizuoka Airport, the head of Japan operations for Taiwan's China Airlines, Yang Chen, said that even 100 round-trip charter flights a year would not be enough to enable the airline to start regular flights at the regional airport.
After meeting Shizuoka Governor Heita Kawakatsu at the prefectural government office that day, Yang said a 40-percent increase in charter flights would be required for the airline to begin regular flights to and from Shizuoka Airport.
Because of special demand that came with the opening of the airport, China Airlines flew 106 round-trip flights to and from Shizuoka in fiscal 2009, carrying a total of 13,000 passengers.
However, with no chance of adding more charters, it seems impossible for Shizuoka Airport to gain regular China Airlines flights.
The airline operated regular flights to eight airports in Japan, and Shizuoka Airport was seen as a candidate for the ninth.
That changed when Haneda's expansion of its slots was announced.
It was decided last December that China Airlines would operate two daily round-trip flights between Haneda and Taipei, starting in October.
From April to October this year, there have been only 51 round-trip charter flights between Shizuoka and Taiwan.
"We can't cut flights at Narita, and we have new services at Haneda. We no longer can say 'Shizuoka' when asked by our head office where is the next candidate (for starting regular flights)," said a senior official at China Airlines' Japan office.
Officials at Ibaraki Airport, which opened in March, were hoping that AirAsia X, a Malaysian budget airline, would fly from Kuala Lumpur.
The airline's CEO, Azran Osman-Rani, said in 2008 that he would welcome new slots opening up in Ibaraki. At the time, Haneda and Narita were full.
But negotiations with Ibaraki officials were cut off when AirAsia X obtained slots at Haneda, starting in December.
"(AirAsia X's flights at Ibaraki) were 90 percent sure, but they were aborted because of Haneda's internationalization," said an Ibaraki official.
Many local airports have hung on to international flights only through subsidies from local governments.
According to an Asahi Shimbun survey of 22 local airports with international flights, there were at least 16 with financial support for international flights in fiscal 2009. Local governments provided 660 million yen ($8.18 million) as assistance to foreign airlines. The perks came in the form of discounts in landing fees and rents for airport facilities, among other things.
Of 52 routes whose seat occupancy rates were known, 40, or nearly 80 percent, were below 65 percent, said to be the break-even point for profitability.
That means unprofitable international routes are being subsidized by Japan's taxpayers.
At Akita Airport on Oct. 28, about 120 senior high school students on a school excursion disembarked from a Korean Air flight that originated in Incheon.
This year, 1,500 senior high school students are expected to take school trips via Korean Air's Akita-Incheon flights.
To increase the seat occupancy rates of the flights, the Akita prefectural government pays up to 30,000 yen per student for these trips, as well as 11,000 yen each for their passports.
The route was inaugurated in 2001 at the request of the prefectural government, hoping to lure more tourists from South Korea.
But the seat occupancy rates stalled at 50 to 60 percent, prompting the South Korean airline's board of executives to decide to drop the service in 2007.
Hearing that news, the then Akita governor rushed to South Korea and begged Korean Air to keep the flights, pledging more support.
Since then, it has become a twice-annual ritual for the Akita governor to visit Korean Air's head office when the airline renews its flight schedules.
The Akita prefectural government continues its generous financial support for Korean Air, discounting landing fees to one-15th of a regular rate.
This fiscal year, the prefectural government is spending more than 140 million yen on maintaining the Akita-Incheon flights, including the discount.
Nonetheless, local governments are facing financial difficulties, and there is no guarantee their financial assistance will continue.
On Oct. 21, when Haneda's new international terminal opened, a senior official of a foreign airline said, "Unlike Japanese airlines that operate domestic routes, we will withdraw right away if a particular route proves unprofitable."
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