Ministry of Land, Infrastructure, Transport and Tourism
Japanese airport investment opportunities
Hiroki Yasui
Director for Policy Planning and Coordination
Airport Governance Reform Unit
Japan Civil Aviation Bureau (JCAB)
The Ministry of Land, Infrastructure,
Transport and Tourism (MLIT)
1
1. Circumstance, Trend and Target
2. Airport concessions in Japan
3. Upcoming transactions
Circumstance around airports in Japan
Shifted focus of airport policy
“development to management”
Deregulation and the proliferation of LCCs
Vastly expanded Open Skies Agreements
Positive support by Japanese government
2
● Decreasing of population + Centralization in urban areas
● Capturing a rapidly growing demand in Asia
3
52%,1,314
50%,2,016
55%,2,427
58%,3,809
55%,4,302
60%,5,477
62%,5,701
62%,5,949
62%,5,941
64%,5,905
63%,5,947
64%,6,216
65%,6,136
66%,5,959 66%,
5,546 66%,5,456
67%,5,258
64%,5,490
63%,5,792
62%,5,879
61%,5,908
28%,711
25%,1,013
22%,960
20%,1,312
21%,1,652
18%,1,674
18%,1,679
17%, 1,620
16%, 1,532
16%1,461
15%,1,434
14%,1,335
14%,1,287 13%,
1,205 13%,1,072
13%,1,033 12%,
945
13%,1,124
13%,1,243
14%,1,340
14%,1,377
14%,1,376
5%, 118
6%, 259
5%, 239
6%, 378
7%, 532
7%, 650 7%, 637
7%, 645 7%, 648 7%, 632 8%, 712
7%, 674 7%, 644
7%, 597
6%, 513 6%, 484
6%, 460
6%, 498
6%, 571 6%, 563 6%, 577 6%, 610
16%, 402
19%, 754
17%, 751
16%, 1,026
17%, 1,324
15%, 1,398 15%, 1,441
15%, 1,452 15%, 1,428
14%, 1,281 14%, 1,356
15%, 1,472 15%, 1,418
14%, 1,305
15%, 1,256 15%, 1,248
16%, 1,243
17%, 1,488
18%, 1,643 18%, 1,738 18%, 1,738
19%, 1,918
2 545
4 042
4 378
6 525
7 810
9 198 9 458
9 666 9 549 9 279
9 449 9 697
9 485
9 066
8 387 8 221
7 905
8 600
9 249 9 520 9 606
9 812
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
10 000
50 55 60 2 7 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
(万人)
(年度)
国内航空旅客数の推移
羽田便利用者
関空または伊丹便利用者
中部または名古屋便利用者
その他
Other
Chubu or
Nagoya
Airport flight
passengers
Kansai or Itami
Airport flight
passengers
Haneda
Airport flight
passengers
61%,5,824
Trends in domestic air passenger transport
Numbers of Domestic Air Transport Passengers
The demand for domestic air passenger transport in Japan started to decline in FY2007 due to increased fuel prices. As a result of the global economic recession after
the Lehman crisis in 2008 and the Great East Japan Earthquake in 2011, the demand continued to decline. However, the demand started to increase again in FY2012
due to LCCs starting to compete with major airlines.
Approximately 60% of domestic airline users start from Haneda Airport.Total number of passengers in
FY2016: 98.12 million
Haneda Airport flight
passengers
Kansai or Itami Airports
flight passengers
Chubu or Nagoya Airports
flight passengers
Other
(10,000 persons)
1975 1980 1985 1990 1995 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (FY)2014 2015 201620162016
473%,607
67%,901
72%,1380
69%,2279
60%2663
57%,3046 58%,
2777
62%, 319765%, 2903
62%, 3457 61%, 3472 61%, 3569 62%, 361163%, 3385 64%, 3417 63%, 3540 63%, 3414
62%, 3774 61%, 388560%, 4091
56%, 445656%, 4814
8%, 145
22%, 294
20%, 382
16%, 533
21%, 937
24%, 1,285
23%, 1,098
20%, 1,044
19%, 854
20%, 1,116 20%, 1,114 19%, 1,123 19%, 1,101
19%, 1,011 18%, 957 19%, 1,041
19%, 1,011
19%, 1,143 19%, 1,205
20%, 1,352
22%, 1,728
22%, 1,915
1%, 9
2%, 26
3%, 50
6%, 194
8%, 348
8%, 437
9%, 414
8%, 420
7%, 332
8%, 449 9%, 533 9%, 547 10%, 556
9%, 498 8%, 430
8%, 451 8%, 438
7%, 449 7%, 447
7%, 450
6%, 490
6%, 524
8%, 66
9%, 118
6%, 118
9%, 284
11%, 467
10%, 534
10%, 488
10%, 505
8%, 364
9%, 518 9%, 532
10%, 567 10%, 563
10%, 514 10%, 532
10%, 581 11%, 577
12%, 703
13%, 792
14%, 956
16%, 1,230
16%, 1,401
827
1 339
1 930
3 290
4 415
5 302
4 777
5 166
4 453
5 540 5 651 5 806 5 831
5 408 5 336 5 613
5 440
6 069 6 329
6 849
7 904
8 654
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
50 55 60 2 7 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
(万人)
(年度)
国際線航空旅客数の推移首都圏空港(成田空港・羽田空港)
関西空港
中部空港
地方空港
Demand for international air passenger transport in Japan registered a record high in FY2016, despite a temporary decline since 2001 at the time of the 9/11 terrorist
attacks, the Lehman crisis and the Great East Japan Earthquake.
Passengers using airports in the capital area (Haneda and Narita Airport) account for 60% of the total number.
(昭和) (平成)
Trends in international air passenger transport
Airports in
the capital
area
(Haneda
and Narita)
Kansai
Airport
Chubu
Airport
Local
airports
Airports in the capital area
(Narita and Haneda)
Kansai Airport
Chubu Airport
Local airports
Numbers of International Air Transport Passengers(10,000
persons)
Total number of passengers
in FY2016: 86.54 million
1975 1980 1985 1990 1995 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (FY)2014 2015 2016
5
Foreign visitors to Japan
○ The number of foreign visitors to Japan rose to a record high of over 28 million in 2017 with a national ambition
to increase further.
million
5,2 6,1 6,7 7,3 8,3 8,4 6,88,6
6,2 8,410,4
13,4
19,724,0
28,7
40,0
60,0
0
4
8
12
16
20
24
28
32
36
40
44
48
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2020 2030
Target
Total
2,869Asia: 2,434(84.8%)
East Asia: 2,129(74.2%)
South-east Asia: 292(10.2%)
② Republic
Of Korea
714
(24.9%)
③
Taiwan
456
(15.9%)
① China
736
(25.6%)
Other
110
(3.8%)
5 major
European
countries
100 (3.5%)North
America
168
(5.9%)
Indonesia
35 (1.2%)
Australia
49 (1.7%)
Spain
10 (0.3%)
U.K.
31 (1.1%)
Canada
31 (1.1%)
Vietnam
31 (1.1%)
Philippines
42 (1.5%)
Singapore
40 (1.4%)
Malaysia
44 (1.5%)
India
13 (0.5%)
France
27 (0.9%)
Germany
20 (0.7%)
Italy
13 (0.4%)
Russia
8 (0.3%)
④ Hong
Kong
223
(7.8%)
⑤U.S.A.
138
(4.8%)
⑥Thailand99 (3.4%)
6
Note 1: Figures in parentheses are shares of overall visitors.
Note 2: “Other” includes other countries in Asia and Europe.
Note 3: Totals may not be the same as the sum of individual values, due to rounding.
Note 4: Adapted by the JTA based on material prepared by the JNTO
(Unit: 10,000 people)
Breakdown of int’l visitors by country/region of
origin
2017
Growth in numbers of international visitors after the
substantial relaxation of visa requirements
2016.01~12 2017.01~12
Number of visitors to Japan from Russia
After the substantial relaxation of visa
requirements (January 1, 2017)
41% year-on-year increase
Approx. 55,000 people
Approx. 77,000 people
0万
5万
10万
15万
20万
25万
2013.10~2014.09 2014.10~2015.09
Number of visitors to Japan from the Philippines
After the substantial relaxation of visa
requirements (September 30, 2014)
54% year-on-year increase
Approx.158,000
people
Approx.243,000 people
Date Country
2013 July 1
Thailand
Malaysia
Philippines
Vietnam
Indonesia
2014
July 3 India
September 30Indonesia
Philippines
November 20 Vietnam
December 1 Indonesia
2015 January 19 China
2016
January 11 India
February 15Vietnam
India
October 17 China
2017
January 1 Russia
February 1 India
May 8 China
2018January 1 India
August 1 Philippines
250,000
200,000
150,000
100,000
50,000
0
80,000
60,000
40,000
20,000
07
Strategic relaxation of visa requirements
6.5 6.4 6.3 6.3
12.7
10.1 10.0 9.7 9.8 9.9
20.021.0
24.8
0.05
1.90.9
2.6 2.61.5
4.25.5
20.0
9.1
0
50
100
150
200
250
300
H18(2006) H19(2007) H20(2008) H21(2009) H22(2010) H23(2011) H24(2012) H25(2013) H26(2014) H27(2015) H28(2016) H29(2017) H30(2018)
当初予算 補正予算
Japan Tourism Agency
was inaugurated
(Oct 2008)
(Units: billions of yen)
Initial
budget
Supplementary
budget
30
25
20
15
10
5
0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 8
Change in JTA budget
9
1. Circumstance, Trend and Target
2. Airport concessions in Japan
3. Upcoming transactions
Shin-ChitoseHakodate
Wakkanai
Sapporo
ChitoseKushiro
Misawa
Sendai
Niigata
Hyakuri
Haneda
Yao
Komatsu
Naha
Miho
Takamatsu
TokushimaKochi
Matsuyama
Hiroshima
Kitakyushu
Fukuoka
Oita
)Kumamoto
Nagasaki
MiyazakiKagoshima
Iwakuni
Narita
ChubuItami
Kansai
Asahikawa
Obihiro
Kobe
Shizuoka
Memanbetsu
Airports in Japan
National airports (19)
Defense / Civil airports (9)
10
Corporate airports (4)
Local airports (65)
97 airports
127 million people
Four types of airport management system in Japan
11
① National airports (ex. Haneda(Tokyo), Hiroshima)Ownership: MLIT
Operation: a) Aerodrome (development and maintenance of runways, navigation aids, etc.)
⇒ MLIT
b) Non-aerodrome (construction and maintenance of terminal buildings, services
to air passengers, etc.) ⇒ Private sectors
③ Local airports (ex. Kobe, Shizuoka)Ownership: Local governments (Prefectures, Cities)
Operation: a) Aerodrome ⇒ Local governments
b) Non-aerodrome ⇒ Private sectors
※ Air traffic control is conducted by MLIT in every airport
② Corporate airports (ex. Narita, Kansai)Ownership: Private sectors
Operation: a) Aerodrome ⇒ Private sectors
b) Non-aerodrome ⇒ Private sectors
④ Defense / Civil airports (ex. Tokushima, Ibaraki)Ownership: Ministry of Defense (MOD)
Operation: a) Aerodrome ⇒ MOD
b) Non-aerodrome ⇒ Private sectors
19 airports
4 airports
65 airports
9 airports
Aim of airport concession
i) Separated management
➢MLIT
: Aeronautical activities
(Runways, Apron…etc)
➢Private companies
: Non-aeronautical activities
(Terminal Buildings…etc)
ii) Profit pooling of multiple airports
The revenue and expenditure of 28 national
airports are managed together in a single
accounting system.
Current system
・Integrated management of the whole airport.
・Incentivized individual airports working closer
in tandem with the local community to promote
growth.
After concession
12
⇒ developed network
⇒ stimulated air transportation industry
⇒ Improved accessibility
Revitalization of
local communities
Framework of airport concession
13
SPC
Integrated operations under
private management Provision of
operating right
- Ownership and
operations of the
runways and related
facilities (aprons,
taxiways, lights, etc.)
MLIT
InvestorsAcquisition of
shares
Terminal building
company
Financial Institutions
MLIT
- Air traffic control
bidding
Pre-determined
MLIT monitoring
Before After
Transaction timeline
14
• Market soundingT-21m
• Publication of the implementation policyT-14m
• Publication of the application guidelineT-12m
• Screening process by the government
• First screening committee
• Competitive dialogue
• Second screening committee
T-9m
• Selection of preferred negotiation right holderT-0m
• Grant of the operating rightsT+3m
• Commencement of the terminal building operationsT+6m
• Commencement of the airside operationsT + 9m
Upon the commencement of the airside operations, government staff will be reduced but
may be utilized for a period of 3 – 5 years.
Handover period
Training provided
by the government
* Example; timeline for actual transactions will be tailored accordingly
Main characteristics of Japanese
concession
Not simply a privatization
• integration of airsideoperations with landside operations
• Need to replace MLIT employees
Structure
• Concession rights designated on runway (and parking).
• No holding periods
• Investment incentive throughout the concession
Local initiative
• Many of the larger airports are owned by a central government
• Decision to utilize the concession scheme is deeply influenced by the local governments
Bidding process
• Bids based on 1) price and 2) proposal
• Proposals on Air service development, Service quality, Operations, Safety etc.
• Items unique to each airport added based on the situation
• Third party selection committees
• Takeaway from prior transactions have been incorporated to ensure
a smoother process and better incentives.
• Understanding of historical and cultural aspects are key to success.
15
(2)Shin-Chitose(5)Hakodate
(3)Wakkanai
(20)Sapporo
(21)Chitose (4)Kushiro
(26)Misawa
(6)Sendai
(7)Niigata
(22)Hyakuri
(1)Haneda
(27)Yao
(23)Komatsu
(19)Naha
(24)Miho
(9)Takamatsu
(25)Tokushima(11)Kochi
(10)Matsuyama(8)Hiroshima
(13)Kitakyushu
(12)Fukuoka
(16)Oita
(15)Kumamoto
(14)Nagasaki
(17)Miyazaki(18)Kagoshima
(28)Iwakuni
Overview of transactions
“National Airports” (19)
administered by the National Government
“Military Airports” (9)※※It’s open for private aviation within an extent
that doesn’t hinder the defense activities
16
Sendai Airport (private operation started)
Number of passengers : 3.4mil in 2017
Location: Miyagi Pref. (population 2.3mil)
Takamatsu Airport (private operation started)
Number of passengers : 2.0mil in 2017
Location: Kagawa Pref. (population 1.0mil)
Fukuoka Airport (Agreement signed)
Number of passengers : 24.0mil in 2017
Location: Fukuoka Pref. (population 5.1mil)
Kansai Airport (private operation started)
Number of passengers : 28.7mil in 2017
Location: Osaka Pref. (population 8.8mil)
17
(2)Shin-Chitose(5)Hakodate
(3)Wakkanai
(20)Sapporo
(21)Chitose (4)Kushiro
(26)Misawa
(6)Sendai
(7)Niigata
(22)Hyakuri
(1)Haneda
(27)Yao
(23)Komatsu
(19)Naha
(24)Miho
(9)Takamatsu
(25)Tokushima(11)Kochi
(10)Matsuyama(8)Hiroshima
(13)Kitakyushu
(12)Fukuoka
(16)Oita
(15)Kumamoto
(14)Nagasaki
(17)Miyazaki(18)Kagoshima
(28)Iwakuni
“National Airports” (19)
administered by the National Government
“Military Airports” (9)※※It’s open for private aviation within an extent
that doesn’t hinder the defense activities
Sendai Airport (private operation started)
Number of passengers : 3.4mil in 2017
Location: Miyagi Pref. (population 2.3mil)
Takamatsu Airport (private operation started)
Number of passengers : 2.0mil in 2017
Location: Kagawa Pref. (population 1.0mil)
Fukuoka Airport (Agreement signed)
Number of passengers : 24.0mil in 2017
Location: Fukuoka Pref. (population 5.1mil)
Kansai Airport (private operation started)
Number of passengers : 28.7mil in 2017
Location: Osaka Pref. (population 8.8mil)
Overview of transactions
Airports in Hokkaido (2020 commencement)
Number of passengers : around 28mil* in 2017
Location: Hokkaido Pref. (population 5.4mil)* Total of 7 major airports
Hiroshima Airport (2021 commencement)
Number of passengers : 3.0mil in 2017
Location: Hiroshima Pref. (population 2.8mil)
Kumamoto Airport (2020 commencement)
Number of passengers : 3.3mil in 2017
Location: Kumamoto Pref. (population 1.8mil)
Airport Ranking by passenger numbers
18
airport2016 pax
(Million)
% of
intn'lStauts Note
1 Haneda 85.7 20% Terminal building listed
2 Narita 39.0 81% Corporate airport
3 Kansai 28.7 76%Concession started Bundled with Osaka
4 Fukuoka 24.0 26%Concession to start in 2019
5 Shin Chitose 23.1 15% In 2nd phase of bids 7 airports bundle
6 Naha 21.2 17%
7 Osaka 15.7 0%Concession started Bundled with Kansai
8 Chubu 11.5 48%
9 Kagoshima 5.4 6%
10 Sendai 3.4 8%Concession started
11 Kumamoto 3.3 5% In 2nd phase of bids
12 Miyazaki 3.2 4%
13 Nagasaki 3.2 2%
14 Kobe 3.1 0%Concession started in 2018 Follows Kansa - Osaka
15 Matsuyama 3.1 1%
16 Hiroshima 3.0 17% Implementation Policy in FY2018
17 Shin Ishigaki 2.5 3%
18 Takamatsu 2.0 15%Concession started in 2018
19 Ohita 1.9 7%
20 Hakodate 1.8 11% In 2nd phase of bids 7 airports bundle
* Transaction completed
* Pipeline
19
1. Circumstance, Trend and Target
2. Airport concession projects in Japan
3. Upcoming transactions
Hiroshima airport (Overview)
20
(‘000)
Route Network
• The Hiroshima metropolitan area houses c.2.1 Million inhabitants making it the 8th biggest metropolitan
area in Japan.
• While Tokyo routes make up c.60% of the traffic, competition is fierce with the bullet train (taking less than
4hours between Tokyo and Shin-Hiroshima station). LCC flights to Narita have reinvigorated the Tokyo
routes.
Traffic Trends
0
500
1000
1500
2000
2500
3000
3500
2013 2014 2015 2016 2017
Haneda Narita Other Dom Intn'l
北京Beijing
大連Dalian
ソウルSeoul
上海Shanghai
台北Taipei
香港Hongkong
シンガポールSingapore
札幌(新千歳)Sapporo New- Chitose
仙台Sendai
成田 Narita
東京(羽田)Tokyo(Haneda)
沖縄(那覇)Okinawa(Naha)
Route Network
Hiroshima airport (Financials, Schedule)
Financials Schedule
• FY 2018
– Implementation policy
– Application guideline (RFP)
• FY2019
– Bidding and Screening
– Selection of Preferred negotiation
rights holder
21
469
304375
-196
320
961
871
1027
1040
1119
-400
-200
0
200
400
600
800
1000
1200
1400
1600
2012 2013 2014 2015 2016
EBITDA
Aero Non Aero
Million JPY
Hiroshima airport (Growth potential)
Tourist demographic Inbound tourism trends
22
AmericasAmericas
Oceania
Oceania
Europe
Europe
China
China
Hong Kong
Hong Kong
Taiwan
Taiwan
KoreaKorea
OthersOthers
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Hiroshima Japan
Country share of Inbound Touists
• Hiroshima is an unique tourism destination with high recognition in the Western countries as well as in Asia.
This demand is currently served predominantly by high speed rail.
< Source : Hiroshima Prefecture>
0
500
1000
1500
2000
2500
3000
2011 2012 2013 2014 2015 2016 2017
Hiroshima Prefecture Inbound Tourists (‘000)
Hiroshima airport (Growth potential)
23
Catchment area
population'000
drive
time
Hiroshima prefecture 2,844
Okayama City 719 1:30
Matsuyama City 515 2:20
Kurashiki City 477 1:10
Takamatsu City 421 2:10
Matsue City 206 2:10
Izumo City 172 2:00
Shunan City 145 1:45
Tsuyama City 104 2:30
Tatsuno City 77 2:10
Soujya City 67 1:20
Tamano City 60 1:45
Hamada City 58 1:50
Total 5,865
・Hiroshima airport(HIJ) is located 50km east of the city of Hiroshima sitting in between the larger international airports of
Fukuoka(FUK) to the west and Kansai(KIX) to the east.
・Due to this location, the airport has the potential to grow its catchment area serving cities in the wider Chugoku region.
・Bus connectivity already spanning 7 cities in the region.
* Cities with over 50,000 people / sub 2.5h drive time
2時間圏域
2時間30分圏域
2時間圏域(福岡空港,関西国際空港)
2.5時間圏域(福岡空港,関西国際空港)2時間圏域
2時間半圏域
福岡
北九州
山口宇部
松山
高松
関西
米子
岡山
2h line from HIJ
2.5h line from HIJ
(reference)
Bullet train 1.5h line(from FUK,KIX)
KIX2.5h line
KIX2h line
FUK 2h line
FUK 2.5h line
Hiroshimaairport(HIJ)
< Source : Hiroshima Prefecture>
24
Commercialize the food of SetouchiSanctuary for cyclists
Commercialize the Setouchi local products recognized all over the
world
Long-stay typed cruising and resort(reference:Cruise guntû HP http://guntu.jp/cabins/type2)
Paradise of nature and art
【Onomichi City Museum of Art】 Yayoi Kusama
2004 photography by Mie MORIMOTO ©YAYOI KUSAMA
Collaboration with Setouchi DMO
Attempt to attract tourists for Hiroshima by providing foreign tourists with tours in the
Setouchi region.
Offer satisfying stay uniqueto Setouchi
Hiroshima airport (Tourism Potential)
JALB737-800(165seats)
B787-8(335seats)
B767-300(270seats)
A321(194seats)
ANAB777-200(405seats)
Spring Japan〔SJO〕B737-800(189seats)
IBEX Airlines〔IBX〕CRJ-700(70seats)
CRJ-200(50seats)
China Eastern〔CES〕A319(120seats)
China Airlines〔CAL〕B737-800(158seats)
Air China〔CCA〕B737-800(157seats)
Air Seoul〔ASV〕A321(195seats)
Hong Kong Express〔HKE〕A320(180seats)
Silk Air〔SLK〕B737-MAX8(156seats)
《Domestic》
《International》
Hiroshima airport (Aircrafts operated)
25
Airports in the Kyushu region
26
・DOMESTIC
Distance from the 3 metropolitan areas (Tokyo, Osaka, Nagoya) bring stable domestic traffic.
・East Asia
Closer in proximity to East Asia with historically deep ties.
・ASEAN
Easily reached by narrow bodies from many ASEAN cities.
1h20m
1h40m
3h20m
2h30m
50m
Flight time
Rail time
1h40m
5h~7h
1h40m
3h30m~5h30m
●Nagoya
Airports in the Kyushu region
Airports in Kyushu Current status
Airport 2017Traffic
(Million)
Status
① Fukuoka 23.8 Concession
Agreement
signed
② Kitakyushu 1.6 Study in
progress
③ Oita 1.9
④ Miyazaki 3.2
⑤ Kagoshima 5.6 Study in
Progress
⑥ Kumamoto 3.3 In bidding
⑦ Nagasaki 3.2 Study in
progress
27
①②
③
④⑤
⑦ ⑥
・The Fukuoka and Kumamoto airport concession projects stimulating the other local municipalities to study
concessions for their local airports.
Disclaimer
This publication has been prepared for general guidance on matters of interest only, and
does not constitute professional advice. You should not act upon the information contained
in this publication without obtaining specific professional advice. No representation or
warranty (express or implied) is given as to the accuracy or completeness of the
information contained in this publication, and, to the extent permitted by law, Civil Aviation
Bureau, Ministry of Land, Infrastructure, Transport and Tourism, its members, employees
and agents do not accept or assume any liability, responsibility or duty of care for any
consequences of you or anyone else acting, or refraining to act, in reliance on the
information contained in this publication or for any decision based on it.
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