'Make Narita Airport a Symbol of Japan's Reform Agenda' IATA Director General Urges Japanese Prime Minister

On behalf of the world's airlines, IATA Director General and CEO Giovanni Bisignani urged Japanese Prime Minister Junichiro Koizumi to "make Narita a symbol of Japan's reform agenda." Bisignani was referring to demands by the airline community for lower landing charges at Narita and for transparency in the Japanese Government's privatisation plans for Japan's three main international airports.

"Transparency is essential to rebuilding investor confidence in Japan. It is a key requirement for a successful airport privatisation. It is also a pre-requisite for addressing issues associated with the high cost of doing business in Japan," said Bisignani in his letter to the Prime Minister.

The comments echo those of Bisignani to the delegates of the Airports Council International Annual General Assembly. "IATA does not object to privatisation efforts that bring greater transparency and efficiency to airport management, and at the end of the day, lower charges. We have no patience for privatisations that breed inefficiency, uncontrolled monopolistic behaviour or cross-subsidisation of troubled developments. Effective economic regulation of these monopolies is essential."

Narita airport is the world's most expensive airport. Landing charges of JPY 2,400 per tonne were set in 1984 and have not been changed despite the fact that volume through Narita has grown over the same period. Airline yield, however, has declined by 40% since that time, Narita has not passed on any cost savings to its customers. Talks between IATA and the Narita Airport Authority on reduced charges ended in April with no date set for resumption.

"It is now time for Narita and the Japanese Government, Narita's main shareholder, to wake up to the competitive realities of business. The Narita Airport Authority and the Japanese Government must:

- Return to negotiations and agree to reduced charges reflecting the true cost of services provided.

- Allocate appropriate national funding to airport infrastructure that meets the needs of consumers and the industry.

- Pursue airport privatisation in a manner that encourages efficiency and benefits for consumers and the industry" Bisignani concluded.