●Messages from Departments and Centers of NILIM

Air transportation market and airports stepping into atime of change
SATO Seiji
Airport Department Manager
Key words: LCC, Open Sky, policy simulation, revitalization of regional economies, stock management

1. Entry of LCC and “Open Sky” Airline

facilities. The budget carriers have diversified efforts

Deregulation Policy

from company to company so as not to leave aircraft,

In 2012, three Japanese Low Cost Carriers (LCC)

personnel and facilities idle by getting rid of any waste

started operation, and they will compete fiercely withby ways such as reducing the time to stop at one

each other. Peach Aviation, in which All Nippon

airport, avoiding busy airports, concentrating on

Airways jointly invested, started Kansai International

shorter distance flights, swing use of facilities,

Airport based flights to Sapporo/Fukuoka in March,offering minimal free-of-charge services, having

and other flights are to follow from the same airport toemployees hold two and more work positions etc. The

Nagasaki, Kagoshima, and Incheon, Korea. Jetstar

LCC are very aggressively developing businesses inJapan, in which Japan Airlines jointly invested, willmarkets including Europe and America as well as

begin by basing its operation at Narita Airport and inSouth East Asia, and it is assumed that the LCC share

July, start flights to Kansai International Airport,of the whole air transportation market has alreadyFukuoka, Sapporo and Naha. Air Asia Japan, areached the 20-30% level.

consolidated subsidiary company of All Nippon

Looking at our air transportation market, the “openAirways, will be based at Narita International Airportsky” deregulation in the airline business has beenand fly to Sapporo, Fukuoka and Naha beginning insurging and developing very quickly. Airports in theAugust and fly to Incheon and Busan in Korea from

Metropolitan Area, which were excluded from airline

October. It is estimated that the competition among

deregulation, are now included, and the fifth freedom

these Japanese owned low cost carriers will become(beyond rights) has been granted. By January, 2012,

fiercer as the introduction of more aircraft expands

Japan had already concluded airline deregulation with

their flight networks in the future. On the other hand,

twelve countries and regions centered in the US andthere are already nine low cost carriers regularly flying

Asia; and Japan will continue negotiating with China

from countries including Korea, Singapore, Malaysia,and European countries. One aspect of the backgroundthe Philippines and Australia.

to such rapid development of airline deregulation is

A Low Cost Carrier (LCC) is a budget carrier which

the easing of restrictions on airports. The easing ofpursues a business model of lean and efficient

airport restrictions including expanded international

operation, permitting the carrier to cut operational

flights in airports of the Metropolitan Area has beencosts remarkably in comparison to major airlines andenabled by an agreement on the increase of annual

successfully offer basic services to customers atarrivals/departures at Narita Airport to 300,000 andextraordinary prices. The key to low cost operation isthrough an increase of international arrivals/departures

a high operation rate of aircraft, personnel andat Haneda Airport enabled through the use of runway

●Messages from Departments and Centers of NILIM
D. Concerning airports in the Metropolitan Area, theverification methods for performance design, and toallocation of airline routes and further expansion aredevelop methods for strategic maintenance andthe next tasks to tackle, and coping with busy airports

management on the premise of securing safety. It is

like Fukuoka or Naha is another task that needs to bealso essential to consider risk management methods inapproached.

preparation for future natural disasters by taking
advantage of lessons learned from Great East Japan
Earthquake. The following are specific research

2. Focus and purpose of airline policies
As mentioned above, the airline industry is in thetopics.

middle of major changes and the focus of ourgovernment policies for airlines and airports will be

3. For the improvement of customers' convenience

integrated promotion of the following: Airline

and revitalization of regional economies

Deregulation which will deregulate international flight

We promote the development of methods forroutes and the number of such flights, the promotion

policies for simulations and the improvement of theirof new business entries by new airlines including LCC

accuracy. First of all, we work on further improving

with specialized operation styles, and strategic airport

forecast accuracy for air transportation demand on theoperation such as flexible and dynamic setting ofbasis of the current air transportation demand forecast

landing fees. The effects we target to achieve thosemodel. Further, we construct policy simulation models

policies are: the revitalization of regional economies

to evaluate impacts or effects of air policies on the airby the increase of incoming tourists, which will betransportation market in the face of a growing need togenerated by creating new airline routes or increasing

create policies concerning how airports should share

flights of regular international flights and internationalroles in areas where multiple airports are constructedchartered flights, the enhancement of airport functions

and how the capacity should be managed at busy

to respond to needs of extraordinary business

airports.

operation like LCCs to achieve efficient flight andWe study the expansion of the airline network,

operation, and the improvement of customers’possibilities of establishing new airline routes toconvenience by realizing budget fare service, as well

respond to the change of the air transportation market

as the recovering and further development of theand necessary policies to satisfy them in response tonetwork of flights formerly downsized.

the trend towards high-frequency, small-scale aircraft

It is the role of the Airport Department to support
those policies from the technical side. Concerning

in domestic air transportation and the full-fledged
entry of LCC in the market.

challenges including how we can effectively use

We think that forwarders which act as a bridge

existing airports or how we can efficiently manage or

between the shippers and airlines are playing an

maintain current facilities, our study theme will be theimportant role as one important party involved in thedevelopment of methods which will be used byairport choice mechanism in the air cargo market, andairports across the board: to develop planning methods,

we study policies to improve competitiveness while

policy simulations methods from the perspective ofconsidering the airport choice mechanism in which

how the airport should be utilized in supporting

forwarders seem to play an important role.

andWe consider how airports should be utilized

revitalization of the regional economy, to establish

effectively; through methods to evaluate the role of an

improvementofcustomers’

convenience●Messages from Departments and Centers of NILIM
airport in its region’s economy correctly based on themaintenance and management of airport facilities. To

theory of economics, and how local airports should

maintain safety and punctuality of aircraft, it isplay a role in supporting regional revitalization and thenecessary to inspect and check the pavement condition

promotion of tourism.

of airport runways and to maintain/manage them

The environment surrounding airport operation hasproperly; and such inspections usually need to bebeen drastically changing, including elements such as

executed during short periods at night when thea decrease in population, downsizing of equipment,

runway is closed. We research and study thedevelopment of LCC, airport budget changes, and weestablishment of efficient methods for maintenanceconsiderand management including development of support

ways

howairports

can be operated

tools for regular patrols and inspections, and theefficiently.

construction of a system to share technical information
4. For safe, secure and efficient management ofthroughfacilities

construction, maintenance/ management. We further

We study the advancement of technical standards

conduct research regarding predictions of deterioration

related to airport base facilities. First, we expedite thefor preventive maintenance.

establishment of verification methods to respond toall

stagesofinvestigation,planning,

We perform research on how to be prepared toperformance standardization of facility design.

ensure that an airport performs its role at the time of aFor

performancedisaster. In our study, we will pay attention to the roles

verification of asphalt materials quantitatively basedof airports changing over time, as well as risk

on dynamic and chemical indices, we improve theelements, vulnerabilities, facility recoverability, andaccuracy of lifecycle costs calculations; further, wemethods to achieve earlier availability of each airport.

establish reasonable design methods adapted to people

We research the risk management of airports. Basedliving longer, realize simplified maintenance andon certain hypothetical situations, our study will pay

management and enhance strategic maintenance andattention to the assessment axes of results seriousness,management.

frequency of occurrence and vulnerabilities, and to anexample,

Further,wethroughdevelopenablingsurface

designmethods

overall evaluation of countermeasures.

concerning runway safety performance by reflecting
characteristics of paving materials and establish[Reference]

lifecycle costs calculation methods so that we can1) Futoshi Osada, “Koku Gyosei no Genjo to Tenbo ni

construct reasonable stock management methods for

Tsuite [Current status and perspectives of airline

airport base facilities.

administration],”We consider a draft for the revision of thecalculation standards for airport civil engineering
works and an improvement of the calculation system
for airport civil engineering works, and consider adraft of construction management standards includingcommon specifications for airport construction andcommon specifications for investigation.
We work on the advancement and efficiency of theAviation

Association, Jan. 19, 2012

PolicyResearch