IATA: Japan must address cost issues to build competitiveness; Japan should take advantage of China

IATA made (12-Apr-2010) the following statement following a meeting with Japan's Minister for Land, Infrastructure, Transport and Tourism, Seiji Maehara:

• Airport charges: IATA Director General and CEO, Giovanni Bisignani, urged the Japanese Government to re-think the JPY2,400 per tonne charge for international operations at Haneda Airport. He urged Tokyo Narita and Haneda Airports to reduce landing fees as they add capacity (Bloomberg/Japan Today, 12-Apr-2010). Narita increased its capacity by 10% last month, adding 20,000 take-off and landing slots, bringing its total to 220,000 annually. Haneda is set to open a fourth runway in Oct-2010;
• Aviation policy: IATA called for a more coherent aviation policy, with Mr Bisignani commenting that "infrastructure must meet the demands of passengers";
• China market: IATA described Japan a mature market on the doorstep of the world's fastest growing aviation market - China - and commented that growing passenger traffic from Japan to destinations in China would give Tokyo Haneda and Narita and the nation's airlines excellent business opportunities (Associated Press, 13-Apr-2010);
• Slipping from being a leader in the Asia Pacific: Mr Bisignani stated Japan has slipped from being a leader in the Asia Pacific market, commenting that "Japan must urgently put its aviation house in order to compete in the Asia Pacific market". He added that Japan's competitiveness is "at risk", as it has lagged in cost-cutting, liberalisation and other reforms for decades. He added that the recent bankruptcy filing of Japan Airlines, the signing of the Japan-US Open Skies agreement and planned runway expansion at Tokyo's two main airports are "a wake-up call for urgent change". He urged Japan to use the opportunity to speed up industry reforms and rebound;
• JAL restructure: IATA stated it is "closely monitoring" the restructuring of Japan Airlines and "continues to work closely" with JAL in the restructuring process. However, he warned that "tough decisions will need to be made quickly to cut costs and close the gap with regional competitors". He added that Japan's "expensive airport infrastructure costs impede improved competitiveness and must also be addressed as part of building a successful future for the company";
• Government aid: Mr Bisignani, however, commented that JAL should now allow government aid to distort competition, commenting, "restructuring has to be fast and painful" (Bloomberg 12-Apr-2010). JAL is currently restructuring under a JPY900 billion (USD9.7 billion) state-backed plan, with ANA expressing concern that JAL could distort competition if it used government funds to purchase new aircraft. [more]

IATA: "Already the charges at Haneda and Narita are twice those of Singapore. This year's airport developments are the biggest in the last three decades. This is a unique opportunity to reduce unit costs," Giovanni Bisignani, Director General. Source: Bloomberg, 12-Apr-2010.

IATA: "Building airports and runways for political purpose is a luxury that the industry and Japanese taxpayers cannot anymore afford. It's bad for the industry, it's bad for the taxpayers," Giovanni Bisignani, Director General. Source: Associated Press/Japan Today, 13-Apr-2010.