Struggling airports in Japan
810,000 passengers were expected to pass through its gates every year; since opening on March 11, that figure has tumbled to 167,000. Ibaraki Airport, Japan’s newest commercial airport, and according to the Daily Yomiuri, probably it’s last, has joined Japan's list of underperforming airports.
Located 83km from Tokyo, Ibaraki Airport has been labeled the capital's 'third travel hub'. But so far it has done nothing to relieve the pressure at Haneda and Narita airports, hosting only two flights per day: one to Kobe, and the other to Seoul, Korea. With airlines competing for slots at these airports, as highlighted in our EURObiZ January Feature, it would seem logical to head to Ibaraki. The chance of that happening any time soon, however, is almost non-existent; carriers are wary of the lack of passengers, and access to Tokyo is difficult.
Japan's major airlines have already announced they will fly clear of its runways.
Ibaraki Airport is part a trend of underperforming airports in Japan. A recent survey by the transport ministry has revealed that nearly half of Japan's airports are attaining 50% of initially predicted passengers. The Japan Times blames the previous LDP government, who used unreliable GDP and population data to forecast passenger activity.
Intense competition also means that Japan's regional airports are now 'eating' each other; Ibaraki Airport already threatens Fukushima Airport's existence. The few customers there are from Ibaraki and Tochigi prefectures may prefer the new option.
But it's not all bad, and the New York Times notes that Ibaraki Airport might lift itself from this slump. It is Japan's first airport to fully cater to budget airlines. Operational costs are lower: landing fees at Ibaraki Airport for a Boeing 737 (89,000 yen) are two-thirds that of Narita (139,600 yen), and less than half that of Haneda (189,600 yen). For medium-sized airlines, including those from Europe, this could be a lucrative alternative.
Quoted in the New York Times, Dongshil Hyun, executive vice president and head of Japan operations at Asiana, said: “We finally have a much-needed new route to Tokyo.”
Ibaraki Airport's construction comes at a time when budget airlines are redoubling their efforts in the Asia-Pacific region. Asia is home to an increasing number of middle-income families looking to travel, while in Japan a more frugal younger generation will be looking to take advantage of cheaper tickets.
But as costs and service expectations remain high in Japan, it could take longer for budget airlines to establish themselves.
Whether or not airports like Ibaraki's can break the mould may depend on prefectural authorities. The government is unlikely to provide any more help, having cut public costs in order to built a social welfare net. Prefectures will need to develop tourist resources, and market themselves abroad. They similarly need to follow Ibaraki's example and cater to budget airlines; this means slashing costs.
While such steps are no doubt difficult, they are needed to tap into Asia's new rich.