Japan's transportation ministry distribution of the 40 long-awaited roundtrip slots at Tokyo/Haneda has disappointed the country's prospective startups and cast doubts over the government's desire to further competition.
The handful of ambitious new startups, which had hoped to win enough slots to make their discount operations viable, are particularly piqued. The ministry finally awarded 34 of the slots to existing carriers and only six to newcomers, three each to Skymark Airlines and Hokkaido Air International.
The decision brought complaints that the government was not serious about promoting domestic competition, and concerns from the two successful startup bidders that three flights a day would be uneconomic. Also, the decision has dented the plans of at least two other newcomers unless they are prepared to launch only on secondary routes and ignore Tokyo.
The slot allocation in early March came a week after another proposed new airline announced launch plans. Pan Asia Airlines is the brainchild of a Tokyo-based human resources training company, which plans to tap into funds from investors in Hong Kong and Taiwan.
The plans include an April launch date, expanding onto seven domestic routes in 1998 - which will now need adjusting following the Haneda slot allocation - followed later by flights to China from Fukuoka and Okinawa. The carrier would lease five aircraft of under 300 seat capacity.
The new Haneda slots will come on line in two stages, 20 from 1 July and the remaining 20 from April 1998. No more new slots are expected until completion of another runway at the airport after 2000.
Junichi Okawara, president of startup Skymark, is disappointed his carrier won only three slots. 'We feel rather dubious that the [slot allocation] decision was supposed to promote competition among airlines and provide better services to users,' he says.
A presence at Haneda is critical for any startup with serious pretensions of becoming a major player. More than half of Japan's domestic air travellers - 42 million a year - travel through the airport and on average one route out of Haneda generates some ´2 billion annually. There are currently 560 daily slots available at the airport, of which All Nippon Airways holds 49 per cent, Japan Air System 30 per cent and Japan Airlines 21 per cent. The new distribution, in which ANA received nine slots, JAL 12 slots and JAS 13, has hardly altered the balance with Japan's largest carrier still holding 45 per cent of all slots, JAS 30 per cent and JAL 23 per cent.
Meanwhile, JAL has announced that its new low-cost subsidiary, JAL Express, will be incorporated on 1 April. Starting with two B737-400s, it will operate regional domestic routes in Japan from the first half of 1998.
Source: Airline Business
