c. Realizing concessions related to Kansai International Airport and Osaka International Airport

On July, 2012, Kansai International Airport and Osaka International Airport merged into a New Kansai International Airport Co., Ltd. with a view to rejuvenating and reinforcing Kansai International Airport as an international core airport and expanding the demand for air transportation in the Kansai district through appropriate and effective utilization of the two airports. The New Kansai International Airport Co., Ltd. is now operating in an integrated manner.

The newborn company has moved ahead with positive measures, such as expanding passenger networks, including LCCs, and turning into a cargo hub airport, in its bid to augment the corporate value of these two airports. It developed and announced the Implementation Policy based on the “PFI Act” on July 25, 2014 and developed and started distributing the Application Guidelines on November 12 of the same year. On December 26, 2014, the company proceeded with procedures for bidding and selecting the Operating Right Holder, such as disclosing the Participation Requirements Screening Results, expecting to commission port administration as a concession by the end of FY2015.

### d. Present status of airport development

For the development of general airports (other than metropolitan airports), MLIT has shifted its emphasis from quantitative to qualitative enhancement, mainly implementing appropriate mix of measures on facilities, equipment, laws and regulations and promoting effective use of existing airports. New projects including the construction of new runways and extension of existing runways will be conducted only when absolutely necessary.

The construction of the new runway at Naha Airport, which started in January 2014, were carried forward into FY2014. On the other hand, the environmental assessment procedures on the construction of the new runway at Fukuoka Airport have been implemented to mitigate the chronic airport congestion at peak times. Also, MLIT has been renewing or renovating aging airport facilities to ensure airport operation safety, while pushing forward with quake-resistant technologies and structures so that airports can maintain their operations at the time of natural disasters, including earthquakes. Furthermore, it has been promoting relocate or change the internal layout of airport terminal area in order to enhance Japan’s international competitiveness and regional competitiveness in the hinterlands of the airports.

### e. Fostering and securing aircraft pilots, etc

Rapidly expanding LCCs and those regional airlines that have structural difficulties seucring pilots in Japan’s aviation industry are faced with a short-term undersupply of pilots. In 2014, Peach Aviation and Vanilla Air had to trim their flights due to pilot shortages.

While drastic leaps in the demand for aviation focusing on international lines and massive retirement of pilots in their 40s, who form a primar workforce at present, are predicted in the future, it would be difficult to fully fill the future demand for pilots with the present yearly supply of new pilots. Hence, a solution to middle-and long-term shortages of pilots is sought.

In the circumstances, the Joint Subcommittee for Studying Crew Policies, etc. was formed under the Basic Policy Taskforce and Technology and Safety Taskforce, Aviation Group, Transport Policy Council in December 2013 to explore directions in the specific measures to address shortages of pilots, etc. The

Figure II-6-1-9 Age Compositions of Japan's LCCs

Source) MLIT