NICHOLAS IONIDES ATI/TOKYO Japan's "big three" carriers could be in for a further wave of competition, as the Japanese Ministry of Transport (MoT) studies a controversial plan that would see slots stripped from them at congested airports and handed over to new operators.

A senior member of the MoT's strategic policy committee, Prof Hirotaka Yamauchi, says the plan is part of a wide-ranging change in the way slots are allocated at congested domestic airports including Tokyo's Haneda or Osaka's Itami. The changes "will probably be the most drastic in the world", he adds.

The choice came down either to a bidding system, favoured by economists including Yamauchi himself who is an economics professor at Hitotsubashi University, or a method of "revoke and re-allocation". The latter was chosen late in 1999 as the best way to boost competition amid the country's ongoing deregulation of the domestic industry which for years has been dominated by All Nippon Airways, Japan Airlines and Japan Air System.

Yamauchi concedes that it will probably be five years before the system is implemented, acknowledging there is much that could intervene before then.

In the meantime, the ministry has to deal with the less sensitive issue of distributing newly available slots that become available at Haneda when a third runway is opened in the middle of next year. A "rating system" for carriers will be implemented under which airlines will win new slots based on a scorecard system under which they receive points on a range of criteria including the quality of services offered.

"We are engaged in discussion with regard to how to operate this rating system," Yamauchi says, adding that details of the scorecard will be finalised by the end of February.

The ministry recently began meeting carriers to gather opinions on how the new slots should be allocated at Haneda. The three incumbents have all requested slots, as well as Skymark Airlines and Air Do - the two new low-fare carriers which launched in 1998 .

"The objective of this exercise is to add to competition by giving preference to new entrants and competitive carriers," says Yamauchi.

The system is not expected to be applied at Tokyo's Narita international airport, however, where the MoT has had a "use it or lose it policy" in place for the past two years.

Narita's operator, the New Tokyo International Airport Authority, won ministry approval to start construction on a long-delayed second runway early in December, and work has begun. The 2,180m (7,150ft)-long strip is due to be opened on 20 May, 2002 under a compromise which will see it largely used for medium-haul aircraft.

That progress could also reopen the question of international flights from Haneda, says Yamauchi. Although the option had been mooted before, it was downplayed due to political fears that Haneda's growth could be used as an excuse not to press ahead with the more controversial expansion at Narita.

Source: Airline Business