My Account Menu

CAPA Login

Register to trial CAPA Membership!

IATA chief warns Japan on airport privatization


Tokyo (Thomson Financial) - The head of the International Air Transport Association urged Japan Thursday to avoid repeating the same mistakes as in past airport privatizations such as the "disaster" at London's Heathrow.

"We have seen too many privatizations fail because governments sold the crown jewels without appropriate guidance to the new owners," IATA director general Giovanni Bisignani said during a speech in Tokyo.

"Look around Heathrow. Failed regulation allowed for a 42 percent profit margin. The new Spanish owner is happy, but Londoners suffer with terminal facilities politely described as a national embarrassment," he said.

"There is no need to repeat the mistakes in other places," he said.

Heathrow airport operator BAA, which was bought by Spanish group Ferrovial in 2006, has been harshly criticized by travelers, airlines and politicians for overcrowding and delays.

There is a trend around the world toward privatizing airports which are "a very, very, very profitable business," said Bisignani.

But efficient regulation is vital, he said.

"In the case of Heathrow, (the) authority is a disaster. The UK authority can be called a phantom. It's difficult to try to say what is a good example of an effective authority system, because I do not see," he said.

The operator of Narita International Airport, Japan's main airport close to Tokyo, is currently fully owned by the government but there are plans for a stock market flotation some time from 2009.

A row has erupted recently about whether to limit foreign ownership of the operators of Japanese airports.

But Bisignani said that ownership in itself is not the most important issue.

"I don't care who owns the airport. An airport is important for what it delivers, not who owns it," said.

Japan's transport ministry drew up the bill to limit foreign ownership of airports after it emerged that Australia's Macquarie Airports Management Ltd now owns nearly 20 percent of the operator of buildings at Tokyo's Haneda Airport.'

Opponents of the bill, who include Financial Services Minister Yoshimi Watanabe and Economic and Fiscal Policy Minister Hiroko Ota, fear that ownership restrictions would set back Japan's efforts to attract foreign investment.

Want more analysis like this? CAPA Membership gives you access to all news and analysis on the site, along with access to many areas of our comprehensive databases and toolsets.
Find out more and take a free trial.