Airport Concession Policy in Japan

 by Sarah Fraser

 Earlier this year, in February, JITI USA held a workshop regarding airport redevelopment using public-private partnerships or P3s.  I would like to take a moment to check in with this issue and see what developments or changes have been happening since this time.  As you may remember from our workshop, we had speakers from a variety of organizations such as the Eno Center for Transportation, as well as a speaker from the LaGuardia Airport and MLIT Japan.  In the seminar we discussed recent cases of airport redevelopment using P3 in the United States, such as the LaGuardia Airport Terminal B project, as well as the efforts in Japan, such as the Sendai Airport and the Fukuoka Airport.  In addition, we discussed many of the challenges and benefits there are in utilizing P3s in airport redevelopments.

JITI staff, former president, and the speakers of our 2018 Airport Workshop

From left: Hiroki Sakamoto (JITI), Makoto Washizu (JITI), Robert Puentes (ENO), Lysa Scully (LaGuardia), Azuma Kato (MLIT)

I would like to take a moment to review the Japanese approach to airport concession, as explained by Mr. Kato during our seminar. Regional economies and airports in Japan are and were facing a tough time which created the idea to call for airports to serve as points of regional revitalization. In this way, areas could attract tourists and there would be more flexibility to fly in and out of Japan's regional airports as opposed to hub airports. Concessions would also give the addition benefit of improve efficiency for airport governance. When the airports were governed by MLIT for aeronautical activities and private companies were in charge of non-aeronautical activities there was a disconnect between the management strategies. The idea behind using a concession system was the ability to unify this strategy and attract airlines to various airports. In addition, by using a concession strategy, there would more incentive for efficient airport management and operations across the board, as well as more incentive to promote individual airports for tourism or in connection with local business and other entities. With concessions in place, there are a variety of important benefits, such as improved accessibility to destinations, a stimulus for Japan's overall airline industry, and local revitalization, one of the main focal points. For more information, you can find Mr. Kato's presentation here (link to presentation) via the JITI website.

Attracting airlines is one benefit of implementing concessions systems.

(Airport by Jorge Díaz is licensed under CC BY-SA 2.0) 

 Recently, MLIT has announced that starting in 2020 they will outsource the operation of four national airports, as well as two specific municipal airports and one municipal airport, to the private sector.  In accordance with this, MLIT has developed an application guidelines document, which contains conditions and procedures, the selection methods for P3s, and schedules/deadlines for applications and selections.  According to the schedule, the terminal building operations will begin in January of 2020 with runway operations continuing at later dates from June of the same year to March of 2021.  Using the private-sector know-how and P3s, MLIT hopes to promote tourism and improve the regional activation of the seven airports in Hokkaido.  It will be interesting to see the process and the fruits of this extensive P3 project in Hokkaido.