VZCZCXRO4915
PP RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #0917/01 1110912
ZNR UUUUU ZZH
P 210912Z APR 09
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 2472
INFO RUEHBJ/AMEMBASSY BEIJING 8921
RUEHBY/AMEMBASSY CANBERRA 3139
RUEHUL/AMEMBASSY SEOUL 4943
RUEHGP/AMEMBASSY SINGAPORE 7372
RUEHNH/AMCONSUL NAHA 5973
RUEHNAG/AMCONSUL NAGOYA 1310
RUEHOK/AMCONSUL OSAKA KOBE 7436
RUEHKSO/AMCONSUL SAPPORO 4172
RUEHFK/AMCONSUL FUKUOKA 3635
RUEHHK/AMCONSUL HONG KONG 6758
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHIN/AIT TAIPEI 7318
RULSDMK/DEPT OF TRANSPORTATION WASHINGTON DC
RUEHBS/USEU BRUSSELS

UNCLAS SECTION 01 OF 02 TOKYO 000917 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/J, EEB/TRA FOR BYERLY 
PASS TO DOT FOR K. GLATZ AND J. THIBODEAU 
PASS TO DOC FOR E. ALFORD AND D. LEE 
 
E.O. 12958: N/A 
TAGS: EAIR ELTN PGOV ETRD JA
SUBJECT: JAPANESE AIRLINES DISCUSS CIVIL AVIATION AIR 
MARKETS AND NEGOTIATIONS 
 
REF: A. TOKYO 175 
     ¶B. 08 TOKYO 2982 
 
SENSITIVE BUT UNCLASSIFIED.  CONTAINS BUSINESS SENSITIVE 
INFORMATION. 
 
¶1.  (SBU) Summary:  Japanese airlines report slight 
improvements in the international civil aviation market, 
particularly for leisure travel, but that the business, 
domestic, and freight sectors show no sign of recovery. 
Japan's position as a regional hub, according to Japan 
Airlines (JAL) and All Nippon Airways (ANA) executives, has 
changed and will continue doing so with the advent of smaller 
long-distance aircraft, e.g., the B-787.  Neither airline 
seemed content with Japan losing its hub status, however. 
Overcrowding remains the most significant issue for the Tokyo 
airports and limits the possibilities for upcoming U.S.-Japan 
civil aviation negotiations, they said.  Both sets of airline 
executives noted shortcomings in Japan's Asian Gateway 
Initiative and the government's overall policy on civil 
aviation.  Neither airline identified specific requests for 
talks in Washington scheduled for May 13-15, but ANA hopes 
the USG will show "flexibility" to move the discussions 
beyond the focus on Haneda flights.  End summary. 
 
Business Outlook 
---------------- 
 
¶2.  (SBU) The international passenger market for Japanese air 
carriers seems to have bottomed out in January and February 
with the last two months showing gradual improvements due to 
the yen's appreciation and the drop in fuel prices.  Korea, 
Guam, and Hawaii are the strongest routes, a top level Japan 
Airlines (JAL) executive told EMIN April 16.  (Note:  The 
Ministry of Land, Infrastructure, Transport and Tourism 
(MLIT) reports year-on-year numbers of international 
passengers fell 20 percent, domestic passengers by 10 
percent, and freight traffic dropped 60 percent in recent 
months.  End note.)  Business travel is still suffering 
severely, because of cost-cutting steps that many companies 
took.  Japan Airlines hopes companies will abolish these 
measures in the new fiscal year, which began April 1.  Demand 
for domestic air travel shows no sign of recovery.  The 
economic downturn is severely damaging Japan's air freight 
market, domestically but especially for trans-Pacific 
transactions.  Japan Airlines has cut frequencies and lowered 
fares to meet the current challenges, according to the senior 
JAL executive. 
 
¶3.  (SBU) Despite severe declines in the aviation market, ANA 
does not plan to seek financial assistance from the GOJ, an 
ANA executive told EMIN April 17.  The company does, however, 
have a long-standing credit facility with the Development 
Bank of Japan.  All Nippon Airways, the executive said, 
generally considers support by the world's governments as 
unfair, but recognizes such support in these dire times is 
both temporary and necessary. 
 
Japan's Position as Regional Hub 
-------------------------------- 
 
¶4.  (SBU) Japan's status as a regional hub has changed as 
aircraft have become more available that can fly directly 
from U.S. cities to anywhere in Asia, noted the JAL 
executive.  He said many Japanese travelers from cities 
outside Tokyo now fly to Seoul or Taipei to connect to 
international flights rather than transfer in Tokyo, where 
the 45 miles between Haneda and Narita mean long and 
difficult transits.  Since passengers prefer to fly direct, 
the delivery of the B-787 aircraft next year will change the 
whole market, claimed the executive. 
 
 
TOKYO 00000917  002 OF 002 
 
 
Tokyo Airports 
-------------- 
 
¶5.  (SBU) Both JAL and ANA reiterated concerns with lack of 
slots at Haneda.  The airport's chronic congestion means that 
many aircraft sit idle, said the JAL executive; thus having 
even one extra flight a day at Haneda will help.  (Note:  In 
the GOJ's recent stimulus proposal for aviation, MLIT offers 
two additional flights per day at Haneda Airport for domestic 
flights.  End note.)  Japan Airlines is hindered by 
inefficient domestic operations in which it flies wide-body 
aircraft at low load factors.  The average load factor in or 
out of Haneda, he said, is 70 percent; operating smaller 
aircraft would boost JAL's competitiveness.  The JAL 
executives did not directly speak out against Haneda's 
internationalization and gave a sense they could benefit from 
it, but at the same time they stated the airline "cannot 
agree to open it at the expense of domestic operations."  The 
executive too noted the MLIT plans for Haneda seem flawed 
since current rules precluding late night flights at most 
other Japanese airports would limit airlines' ability to 
pursue the Haneda option.  Echoing what some North American 
air carriers have said, it would be ideal if JAL could move 
its entire operation to Haneda rather than having split 
operations as is the case currently. 
 
¶6.  (SBU) Haneda should not be restricted to only short-haul 
services, said the ANA executive, and expansion of the 
airport should continue beyond the 30,000 extra nighttime 
slots available beginning 2010.  All Nippon Airways also 
suffers from a lack of capacity at Narita and would like to 
increase capacity there as well to expand its network.  The 
main problem at Narita is the limited domestic network, said 
the JAL executive. 
 
Civ Air Talks 
------------- 
 
¶7.  (SBU) The JAL executive reiterated JAL has no specific or 
major requests for the upcoming civ air talks in Washington, 
and explained JAL and ANA are incumbent airlines and can 
operate with maximum flexibility.  ANA executives repeated 
continued interest in anti-trust immunity (ATI), and 
recognized it would most likely be linked to an Open Skies 
agreement with the U.S.  Neither airline seems concerned with 
current requirements to request fare approval from MLIT nor 
seems to seek greater flexibility in fare-filing. 
 
¶8.  (SBU) ANA executives believe MLIT would like to 
demonstrate Japan is liberalizing, as per the GOJ's Asia 
Gateway Initiative.  However, MLIT, Japan's negotiator, lacks 
the necessary Cabinet authorization to agree to Open Skies. 
Given that the Asia Gateway Initiative (which liberalizes all 
points outside Tokyo) is as far as MLIT can go, European 
carriers struck agreements with Japan simply to obtain rights 
at Haneda, despite having scheduling problems using the 
nighttime slots.  The Japanese executives also thought the 
Canadians would not actually use the new access they 
negotiated at Haneda.  The ANA executives argued the U.S. 
should also consider having flexibility on Haneda, so that 
the negotiations can proceed to a new phase. 
ZUMWALT