Japan and the United States reached an agreement on a framework that enables Japanese and US airlines to operate five flights during the daytime and one flight during the nighttime per day both ways, aiming to start the flight operation on the end of October 2016.

## (iii) Realizing concessions related to Kansai International Airport and Osaka International Airport

On July 2012, Kansai International Airport and Osaka International Airport merged into 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.

This 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 increase business values of both airports. Also, since the formulation and publication of The Implementation Policy based on the “PFI Act” on July 25, 2014, the company proceeded with concession procedures targeting transfer of business in FY 2015, selected the ORIX-VINCI Airports Consortium as the Preferred Negotiation Right Holder on November 10, 2015, and executed the Project Agreement with an SPC established by the Consortium (Kansai Airports) on December 15, 2015.

## (iv) Present status of airport development

For further revitalization of Okinawa at Naha Airport, which plays critical roles as a travel and logistics base connecting Okinawa and mainland Japan/overseas, the project to increase runways was carried out in FY 2015. At Fukuoka Airport, the implementation of environmental assessment procedures on the construction of the new runway continued with the aim of fundamentally resolving the issue of chronic airport congestion at peak times, and a new runway construction project started. Also, the MLIT has been implementing countermeasures against aging airport facilities based on strategic maintenance to ensure safe flights of airplanes, while pushing forward with quake-resistant technologies and structures at airports so that airports can maintain their operations in the event of an earthquake. Furthermore, it has been promoting relocations or changes to the internal layout of the airport terminal area in order to enhance Japan’s international competitiveness and regional competitiveness in the hinterlands of the airports.

## (v) Fostering and securing aircraft pilots, etc

In the Japanese aviation industry, while drastic leaps in the demand for aviation focusing on international lines and massive retirement of pilots in their 40s, who form a primary 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.

To this end, the Joint Subcommittee for Studying Crew Policies 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, and a report was put together in July 2014. Subsequently, the following initiatives have been taken in accordance with the report. The Aircraft Pilot Training Liaison Conference consisting of relevant stakeholders including airlines and training organizations was launched in August 2014, and various challenges in training and securing pilots are being examined utilizing such a conference.

In order to secure pilots ready for work, we are promoting such efforts as using Self-Defense Force pilots or foreign pilots by relaxing residency status requirements or hiring active pilots under enhanced health management by raising the