Capacity Constraints in Japan and Implications for Liberalization

1. SESSION 5: Physical and Environmental ConstraintsCapacity Constraints in Japanand their implications for LiberalizationMORISHIGE Toshiya Director, International Air Transport DivisionCivil Aviation Bureau, Japan Seminar “Aviation in Transition: Challenge & Opportunities of Liberalization

2. Introduction • Capacity Constraints • Types, major reasons and influence. • Removal of Constraints • Mitigation of Constraint defects • Constraints and Liberalization Seminar “Aviation in Transition: Challenge & Opportunities of Liberalization

3. Constraints Airport Constraints Physical Constraints Airspace Constraints Capacity Constraints Environmental Constraints Seminar “Aviation in Transition: Challenge & Opportunities of Liberalization

4. Physical Constraints(1) • Airport • Runways • Number of Runways • Physical Conditions (Length, Taxiways, etc.) • Parking Spots • Terminal Buildings • Cargo Facilities Seminar “Aviation in Transition: Challenge & Opportunities of Liberalization

5. Narita Airport Residence of Landowner Runway B 2180m Passenger Terminal 2 Original plan 2500m Cargo facilities Runway A 4000m Passenger Terminal 1 Seminar “Aviation in Transition: Challenge & Opportunities of Liberalization 11

6. Physical Constraints(2) • Airspace • Airspace near airport • Complexity of airspace • Neighboring airports • Enroute airspace • Environmental requirements • Oceanic or remote airspace • Lack of effective C/N/S performance Seminar “Aviation in Transition: Challenge & Opportunities of Liberalization

7. Complex Airspace Narita Airport Haneda Airport Seminar “Aviation in Transition: Challenge & Opportunities of Liberalization

8. Environmental Constraints • Noise • Type of aircraft • Number of operations • Operation procedures (Noise Abatement) • Emission • TV interference • Neighboring residential perception Seminar “Aviation in Transition: Challenge & Opportunities of Liberalization

9. Example at Narita airport • Provisional second runway opened (April 2002) • TO/LD capability increased 1.4 times. • Services by 11 new entrants including services from 5 new countries • Almost fully utilized after 9 months. Expansion of Frequencies and Network has been limited. Seminar “Aviation in Transition: Challenge & Opportunities of Liberalization

10. Removal of Constraints (1) • Physical constraints - Airport • Improvements of airport facilities • Runway / Terminal Bldg / Cargo area • New airport constructions • Kansai / Central Japan (2005/03) etc. Seminar “Aviation in Transition: Challenge & Opportunities of Liberalization

11. Access Bridge Annex to the Passenger Terminal Building Passenger Terminal Building（phase 1） Railway Station Access Road Runway A（3,500m) Access Railway Airport island of the 1st Phase Passenger Terminal Building Satellite Access Taxiway Runway (3,500m） Runway B (4,000m） Airport island of the 2nd Phase Kansai International Airport Master Plan (conceptual drawing) Kansai International Airport (Phase 2) Image of Central Japan (Chubu) International Airport Seminar “Aviation in Transition: Challenge & Opportunities of Liberalization 5

12. Removal of Constraints (2) • Physical Constraint - Airspace • Restructuring of airspace • Multi-airport approach controls • Coordination between operations • Air Space Management (Civil / Military) • New Air Navigation Facilities • Satellite based technology Seminar “Aviation in Transition: Challenge & Opportunities of Liberalization

13. Removal of Constraints (3) • Environmental constraints • Source • Noise / Emission Certificate • Noise abatement procedures / Curfew • Airport facilities • Noise insulation belt / Air Navigation facilities • Surrounding area • Noise proofing of houses Seminar “Aviation in Transition: Challenge & Opportunities of Liberalization

14. Introduction of Satellite based Technology After the introduction of the satellite Current System ＭＴＳＡＴ ＧＰＳ ＨＦ communication 50～100 NM 30 NM maximum 4 minutes 30NM（initially 50 NM） 10 minutes or 15 minutes 80 NM or 120 NM Seminar “Aviation in Transition: Challenge & Opportunities of Liberalization

15. Mitigation of Constraint Defects • Objectives • accommodate traffic demand • ensure adequate market access • ensure transparency • Slots Management • Utilization of less congested airports • Air Traffic Management Seminar “Aviation in Transition: Challenge & Opportunities of Liberalization

16. Constraints and Liberalization • Characteristics of Air Transport • Scale economy • Tendency of oligopoly or monopoly • Irreversibility of Business • Less effectiveness of ex-post solutions • Services under constraints • Excessive advantage of carriers with vested rights • Fair competitive environment is crucial. Seminar “Aviation in Transition: Challenge & Opportunities of Liberalization

17. Present framework Scale economy Physical constraints Vested rights Irreversibility Toward Liberalization unfettered ordered & gradual oligopoly or monopoly loss of services & network flexibility to the market adequate participation balanced developmentof network Seminar “Aviation in Transition: Challenge & Opportunities of Liberalization

18. Conclusion • Variety of Constraints • Unfettered rapid Liberalization –Expanding wide variety of network and Consumer Interests hindered • With Constraints, Ordered and Gradual Liberalization needed Seminar “Aviation in Transition: Challenge & Opportunities of Liberalization