### d. Present status of airport development

Emphasis has been shifted to achieving qualitative enhancement to the construction of general airports, etc. mainly by implementing mixes of hardware and software measures and leveraging existing airports. New projects relating to the construction of new runway and extension of existing runways will be conducted only if they are truly needed.

In FY2013, an extension to the runway at Naha Airport then nearing its handling capacity limit was started. At Fukuoka Airport, an environmental assessment relevant to an extension to its runway for the sake of a dramatically enhanced airport capacity was conducted. Facilities in an advance stage of aging have also been renewed or renovated to ensure aircraft flight safety. The airport facilities have been progressively made quake-resistant at a steady pace to keep the Airport functions unaffected in times of earthquakes or other disasters simultaneously. Further, functional upgrades, such as restructuring of the terminal areas, have been promoted by leveraging existing stocks to boost Japan’s international competitiveness and the regional competitiveness of the airport hinterlands.

## (2) Enhancement and optimization of airport operations

### a. Driving airport management reforms

Specific studies are presently underway towards outsourcing of the management of Sendai Airport and others to private sectors, subject to coordination with the stakeholders, in accordance with the Act on Operation of National Airports Utilizing Skills of the Private Sector that came into effect in June 2013.

Future efforts will be directed at driving airport management reforms through integrated management of aviation business and non-aviation business, utilization of private knowledge and funds, etc. regarding actual circumstances of its neighboring region under the Act on Operation of National Airports Utilizing Skills of the Private Sector. Regional revitalization will be conducted through expanding numbers of population engaging in domestic and foreign interaction by way of airports in close association and collaboration with locals.

### b. Encouraging LCC entry

Since Japan’s first LCC came into service in March 2012, Peach Aviation now covers a network of 10 domestic and six international flights at the end of FY2013, when compared with a network of 14 domestic flights by Jetstar Japan and two domestic and two international flights by Vanilla Air.

On December 17, 2013, Spring Airlines Japan Co., Ltd. was granted a license to provide air services. The Narita-based airline expects to start operating at the end of May 2014.

The accelerating entry of LCCs could create new demand for aviation by attracting more tourists visiting Japan, expanding domestic tourism and so on.

The government is geared at stimulating new demand to for aviation to allow “LCCs to command a U.S. or European equivalent share (20 to 30%) of the total volume of domestic and international passenger traffic” by 2020. The nation and its airports have staged various measures to this end.

Two principal governmental measures being implemented or explored are summarized below.

The first measure is the lowering of the landing fees during FY2013 with regard to mainly used equipment (up to 100 tons) aimed at revitalizing local communities by maintaining local routes and supporting LCCs.