"Japan Drops Plans To Raise Airport Landing Fees In FY04"

Sunday, August 3, 2003

Ministry Drops Plans To Raise Airport Landing Fees In FY04
Japan - Nihon Keizai Shimbun


TOKYO (Nikkei)--The Ministry of Land, Infrastructure and Transport decided
Monday to abandon plans to increase landing fees at domestic airports in
fiscal 2004, The Nihon Keizai Shimbun has learned. 

The ministry initially planned to abolish current landing fee discounts and
thus raise the fees by a total of 23 billion yen. But it will keep the
discount system in place for next fiscal year, hoping to prevent an increase
in airfares resulting from the fee hike. 

Airlines are required to pay the Transport Ministry fees for flying planes
into the nation's airports, with regular fees for Boeing 767-300s on
domestic routes set at 217,000 yen per landing. This is much higher than
comparable fees collected by major airports in other countries. 

The landing fees are currently discounted to 50-90% of the regular levels at
Tokyo International Airport at Haneda, while 70% of the regular fees are
actually collected at 25 regional airports under the jurisdiction of the
Transport Ministry. These discounts amount to 23 billion yen a year. 

The ministry's budget request for fiscal 2004 will reflect the decision to
maintain the discounts. 

Under its initial plan, the ministry was supposed to start phasing out the
discounts in fiscal 2003 and start collecting regular fees in fiscal 2004.
It is expected to collect 5 billion yen more in fees in fiscal 2003 than the
year before. 

But the planned fee hike angered domestic airlines, prompting them to
announce plans to pass the fee increase on to passengers in the form of
higher airfares.

Although the ministry told airlines to absorb the higher costs by
streamlining their operations, they raised regular airfares for domestic
flights by 11% from July, saying the increase was needed to compensate for
their deteriorating finances following the outbreak of severe acute
respiratory syndrome (SARS). 

With these airlines threatening to raise airfares again if landing fees go
up further next fiscal year, the ministry has decided against the fee hike,
concluding that such action would hurt consumers. 

The ministry introduced the landing fee discounts as a temporary measure in
fiscal 1999 to encourage domestic airlines to maintain less-lucrative
regional routes.


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