Local Governments Sweeten Pot For Airlines To Aid Regional Airports

TOKYO (Nikkei)--While a Shizuoka regional airport is set to open Thursday, tough economic conditions are making airport management extremely difficult, forcing local governments to offer sweet deals to entice airlines.

The Mt. Fuji Shizuoka Airport will open Thursday, with Ibaraki Airport slated to open its doors next March, taking Japan's tally of airports to 99.

Shizuoka's airport, which has secured six domestic and two overseas flights, is already in dire straits. In a desperate attempt to secure flight services, the prefectureal government has made the highly unusual offer of guaranteeing seat-occupancy rates to Japan Airlines Corp.

Mt. Fuji Shizuoka Airport is ready to open Thursday.

If flights are less than 70% full on its Fukuoka route, JAL is compensated for the shortfall to the tune of 15,800 yen per seat. Consequently, the prefecture is likely to foot a bill of 308 million yen this fiscal year if flight occupancy is short by 10 percentage points.

"Industrial bases will be lost if airports disappear from regional areas," says Tottori Prefecture Governor Shinji Harai. "Since they support the community, their profitability is a separate matter."

In a bid to prevent the elimination of routes necessary to bring in tourists and attract business, local governments are lining up to give financial help to the airlines.

At the end of January, JAL axed all flights to Fukushima Prefecture. Landing fees at Fukushima Airport had been half the regular charge. But in April, they were dropped to one-quarter and one-15th of the full charge for domestic and international flights, respectively, making them the lowest in Japan.

Okayama Prefecture is set to spend 500 million yen by the fiscal year-end to build airplane parking areas and boarding bridges.

But local governments themselves face financial difficulties, limiting the amount of aid they can provide. Even if they win over the airlines and keep planes flying in and out of local airports, finding sufficient numbers of passengers will not be an easy task.

(The Nikkei June 4 morning edition)