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IATA notes need to reduce cost of infrastructure to strengthen Japan’s aviation competitiveness

20-Sep-2012 9:20 AM

IATA called (19-Sep-2012) on Japan to capitalise on the economic benefits of air transport by improving the sector’s competitiveness. IATA director general and CEO Tony Tyler commented, “I am a Japan optimist. And in the case of aviation, these last few years have seen some of the most promising changes in Japanese air transport", but noted there are still some notable areas for improvements. Details include:

  • Japan air travel market: Japanese aviation comprises the world’s third largest domestic market, about 5.5% of global traffic and 11% of global industry revenues;
  • Economics of air travel: Mr Tyler noted an Oxford Economics study revealed aviation has a significant footprint in the Japanese economy, supporting 0.7% of GDP and 0.7% of the Japanese workforce (429,000 jobs). Including aviation’s contribution to tourism, the figures rise to 1.0% of GDP and 1.0% of the workforce (620,000 jobs);
  • Tourism: Mr Tyler said when analysing the number of countries granted visa-free entry, Japan ranked in 76th place while Korea ranked in sixth place alongside Malaysia, Singapore and Hong Kong. “This is a big handicap if Japan is to make its ambitious target to increase inbound tourism to some nine million visitors this year with an emphasis on attracting international meetings,” he said;
  • Cost competitiveness: Of the 139 countries in the WEF rankings, Japan ranked at 106 on airport charges and ticket taxes while South Korea was 33rd. According to a Leigh and Fisher benchmarking survey of airport charges, Osaka Kansai International Airport is the second most expensive airport in the world and Tokyo Narita International Airport is the sixth most expensive;
  • Transfer traffic: Mr Tyler said the leakage of domestic transit traffic to hubs outside of Japan illustrates the impact of Japan’s high cost environment. While approximately 1.4 million travellers make domestic/international connections at Narita annually, about 500,000 use Seoul Incheon International Airport as their transit point;
  • Opportunities for change: Mr Tyler commented, “There are opportunities for positive change. The New Kansai International Airport Company – the merged entity managing Itami and Kansai – is also focused on improving its competitiveness by reducing costs. Narita is clearly feeling the competition from Haneda. And cost-efficient infrastructure will be an even more important driver of the success of the many point-to-point airlines that it is trying to attract, than it is for the network carriers";
  • Tokyo Narita: Mr Tyler urged Tokyo Narita to permanently reduce landing charges to the 2009 discounted level while retaining rental reductions.  [more - original PR]

IATA: “It would be great news for aviation – and the Japanese economy – if none of Japan’s airports were on the top 10 most expensive airports list by my next visit. Everyone who lives, works or does business in Japan should have an interest in this. Japan’s main airports are its gateway to the world. Cost-efficiently facilitating that basic connectivity will help to make all of Japan more competitive,” Tony Tyler, CEO and director general. Source: Company statement, 19-Sep-2012.