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(1) Problems In International Air Transportation Policy
Japan's international air policies aim to maintain an air service that is
fast, comfortable and available when necessary. However, due to major increases
in demand, implementation is confronted with the following problems.
①A need to strengthen the international air network in order to cope with
the increase in demand in Japan for international services.
② Demand for international travel is focused on metropolitan centers, however,
the number of aircraft arrivals and departures is limited by restricted airport
handling capacity. To counteract this, it is important to complete the construction
of airports in the vicinity of metropolitan areas as soon as possible, to raise
the functional level of airport facilities and to increase the number of international
routes operating from regional airports.
③ Fair competition needs to be promoted in the international air transportation
market.
④ An adequate response is required to user demands related to airfares. Services
should be supplied that can answer the higher level and more diversified range
of user needs.
⑤ Competition with overseas airlines can be expected to intensify in the future.
This demands that Japanese national airlines raise their productivity level.
Furthermore, training of crew personnel is also limited and effective supply
of crews needs to be considered.
⑥ Competitiveness needs to be kept in mind as part of business development
- cost competitiveness is required along with the supply of high-quality services,
for Japanese airline companies in the Asian market.
(2) Resolving Problems In International Air Transportation Policy
(A) Strengthening the International Air Services Network It is necessary to
foster customer trust through long-term stable supply of services in an international
market. In reality, however, demand for international travel in Japan is concentrated
in metropolitan centers, where the limitations on airports are worsening and
where there is also demand for market entry from overseas airlines. In regional
airports, on the other hand, the operation of overseas routes could not be considered
to be adequate.
There is anticipation of further increases in demand from airports even
after completion of construction presently underway. Thus, in the medium to
long-term, the present degree of limitations on airports can be expected to
be continue.
It is necessary to make an effective distribution of airport functions related
to the international air network, between Japan's various airports.
(a) Metropolitan and Regional Block Key Airports
At the New Tokyo International Airport a high frequency of flights should
be established along with a network operating in all directions around the world.
This will enable the airport to satisfy the majority of demand from the metropolitan
area in the future.
However, demand for the eastern part of Japan should be distributed between
airports. The New Tokyo International Airport should operate as an international
hub airports and it should also handle connections from international flights.
The Kansai International Airport should place an emphasis on medium distance
flights to Asia, while satisfying demand for the Kansai region. It should also
operate as an international "hub" airport (a point of connection between long
flights, and medium and short distance flights), and it should also handle connections
from international flights.
Large regional airports such as Nagoya and Fukuoka should develop medium
distance routes to destinations such as Hawaii and Asia.
Airports which operate as centers for regional blocks, such as Hiroshima
and Sendai, should develop short to medium distance routes.
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(b) Structure of International Air Routes and Participation of New Airlines
Under Restricted Airport Conditions
Order of priority in structure of international air routes and participation
of new airlines at the airports under restricted airport conditions such as
metropolitan airports needs to be considered in order to make the most effective
use of the limited framework .
However, in airports in which such limitations do not apply, there is no
need to be restricted by practical questions of equal national rights and interests
between airlines. It is desirable that regular flights be established in these
airports, even if they are limited to foreign airlines.
(c) Development of Routes to Regional Airports
In business travel there is a firm pattern of direct flights being taken
to the destination point.
Likewise, there is a tendency amongst tourists visiting Asia and other areas
within a short distance to prefer direct flight (simple and easy) travel. An
increase in the number of direct flights from regional airports is desirable
to satisfy the needs of these business and tourist travelers. (Fig.34)
There is expectation for airports like Shin-Chitose to function as by-direction
gateways. ( *1) In order to fulfill this expectation, domestic connections should
be strengthened and promotional policies established for the introduction of
measures such as special connecting international fares.
(d) Structure of Excursion Flight Routes
There is a keen demand for excursion flights (flights on which a number
of places are visited by aircraft) for Japanese tourists to medium and long
distance destinations. Efficient excursion network is being established for
promoting the use of code sharing ( *2), cooperation between companies and "wet
lease" ( *3) in order to satisfy this demand.
(B) Airport Construction and Raising the Quality of Airport Facilities
The increase in demand for travel has focused on Japan's two major metropolitan
areas and restricted airport conditions have worsened. Early completion of the
airports servicing these metropolitan areas is extremely important (Fig.35),
and construction is underway in line with the "Sixth 5-Year Airport Development
Plan" (1991 - 1995).
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*1
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By-direction gateways refers to an airport which
is the Japanese point of arrival and departure for flights to different
directions such as North America and Asia. For example, there is an expectation
that the Shin-Chitose airport should operate as the gateway for flights
which tie Japan to North America. |
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*2
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With "code sharing", where routes connect with Company A's
own flights, but these flights are operated by B, A's name is also added
to the flight name in addition to Company B's name. A then makes reservations
and sells tickets on this flight, thereby strengthening its capacity to
draw customers. This has the merit of increasing sales. |
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*3
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"Wet lease" refers to the additional loan of crews in cases where aircraft owned by Company A are leased to Company B. |
It is necessary to further strengthen the customs, immigration and quarantine
systems (C-I-Q) in these airports - to ensure they adequately fulfill their
role as by-direction gateways to the nation - and to promote increases in international
routes from these airports.
(C) Promotion of Fair Competition in the International Air Transportation
Market
(a) Basic Thinking Regarding the Promotion of Competition
The basis of government aviation policy is the long-term, stable supply
of good quality air services to customers through market competition between
airline companies. The government needs to ensure effective and continuous fair
competition in the market and equitable air services to customers. The competitive
attitude of airline company's also need to permeate the whole company and companies
need to work on strengthening the quality of their constitution.
(b) Policy for Increasing Competition
Pluralizing Japanese airline Companies (services provided by two or three
Japanese airline companies on one route) is being promoted mainly on busy routes
in order to increase competition.
This policy is being promoted further in the future mainly on high-demand
routes, after making a comprehensive assessment of matters including conditions
in Japanese airline companies, policies of the countries concerned and special
features of the routes.
The system for fare authorization (which allows autonomous flexible price
such as a special zoning system ( *4) setting by individual airline companies)
needs to be revised.
(c) Responding to Trends in the United States and the EC
Trends in competitive policy in the United States and the EC call for intent
watching and careful response.
This is necessary to ensure that there is no loss of advantage in the broader
sense, to users in Japan's international air transportation market.
(D) Response to Customers Demands in Relation to Fares
(a) Improvement of the Fare Setting System
Air service users' awareness of fares has increased in recent years. It
is important to respond appropriately to user demands concerning the level and
content of fares.
The existence of discount fares has produced strong feelings of ambiguity
and distrust towards airfares, and the airfare setting system requires urgent
review.
(b) Thinking Regarding Airfare Authorization
International airfares should essentially be set autonomously according
to the judgment and ingenuity of individual airline companies. However, regulations
are necessary to control situations such as the rising airfare on the oilgoplistic
routes, or there is major undercutting on established market prices.
There is always the possibility that other countries may have fare setting
policies which protect their national airlines. In light of this it is appropriate
to have a dual fare authorization system. ( *5)
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*4
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A "zoning system" involves the automatic authorization of fares by the aeronautical authorities when they are set by airline companies within an upper and lower limit range. | |
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*5
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A "dual authorization system" involves international airfares becoming effective g after authorization by the countries concerned. For example, authorization of both the Japanese and British governments would be necessary before fares for flights between the two countries officially came into effect. |
(c) Flexible Implementation of Fare Authorization
Fares should be set as flexible as possible with fare authorization. In
order to maintain customers and to ensure the development of sound business
operations, it is necessary to employ fare policies which are balanced and display
the effective operation of market principles.
(d) Establishing New Economy Class Fares
New economy class airfares are being established as the present economy
class fares are hardly utilized, and needs to become the standard fare that
will be used for business trips and used broadly by individual travelers. New
economy class fares were set in October 1991 between Japan and Europe.
(e) Introduction of a Zoning System for Special Fares
A zone system should be introduced for special seasonal fares (eg. group
package trips and special excursion fares) and price setting should be left
flexible for the airline company.
(f) Consideration of Special Connecting Fare For Use of Regional Airports
Special international connecting fares should be considered which to encourage
departure from regional cities via by-direction gateways such as the Shin-Chitose
Airport. These fares should be cheaper to customers than those for departure
via the New Tokyo International Airport.
(g) Flexibility in Charter Prices
A comprehensive system should be structured for charter fares so that fares
can be set flexibly according to nature of the charter.
(E) Providing Services That Respond to the High Level and Diverse Nature of
User Needs
The following types of measures are necessary in responding to the high
level and diverse nature of user needs and increasing the level of user convenience.
(a) Pioneering Cost Reduction
The majority of Japanese travelers on international flights departing and
arriving in Japan are tourists.
Consequently, they tend to be concentrated into holiday periods like Japan's
Golden Week. (Fig.36) Moderately
priced trips need to be offered for off-peak times in order to even out demand.
(b) Increasing Comfort on Trips
The period spent inside aircraft has lengthened, and consideration needs
to be given to detail to make aircraft more homely and the time spent on board
more comfortable.
(c) Responding to Diversified Travel Needs
The purpose, manner and destination of people traveling overseas have diversified.
(Fig.37) Airlines need to put further
efforts into grasping these newly diversified needs. They should respond by
providing better air services such as establishing new routes and raising the
attractiveness of the total "travel product".
(F) Increasing the Supply Capacity And Raising Efficiency of Japanese Airlines
(a) Need For Increasing Supply Capacity and Raising Efficiency
In the near future, once limitations presently existing in metropolitan
airports are alleviated, demand will increase. A rapid increase in supply will
be needed to keep up with it. However, the capacity of Japanese airlines to
supply crews is limited, so it is anticipated they will face strong competition.
In light of this, it is necessary to actively work to increase crew supply capacity
and raise efficiency.
(b) Measures for Increasing Supply Capacity
Japanese airlines should foster the development of their own crews and use
foreign crews, as the need arises. Japanese airlines need also to secure diversified
their supply capacity by using a method of flight entrustment to foreign airlines.
(c) Measures for Raising Efficiency
Raising efficiency in the supply of services of a company is made the basis.
Further more, it is necessary to raise efficiency by specializing the services
supplied systems coped with the demand of the specific air transportation market
such as charter flights.
It is also necessary to apply measures such as changes of aircraft parts
at the use of wet leasing, code sharing and gateways.
(G) Measures For Project Development to Raise the Competitiveness of Japanese
Airlines on Short-Distance International Routes, eg. Asian Market
(a) Necessity to Raise Competitiveness
In the Asian market other Asian airlines can be considered more competitive
due to superiority in terms of cost competitiveness and service, including fares.
Japanese airlines need to be equally competitive as their Asian counterparts,
functioning as suppliers of regular, reduced-cost services to Asian market.
(b) Promotion of Departures and Arrivals from Regional Airports and Increases
in International Charter Flights
The number of direct international flights on short-distance routes, eg.
to Asian destinations departing and arriving from regional airports should be
further increased to raise customer convenience.
International charter flights commencing from regional airports should also
be increased. (Fig.38) In order
to do this, the system for charter flight fares needs to become more flexible,
specialist international charter companies need to be used, and the customs,
immigration, and quarantine (C-I-Q) systems need to be strengthened.
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