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APA1 2023 NEWS

Big in Japan


Nicolas Notebaert, CEO of VINCI Concessions and president of VINCI Airports, tells Joe Bates more about Kobe Airport and plans to develop and grow traffic to the Kansai region.

Can you tell our readers a little more about your Japanese airport network?

In Osaka, we operate Kansai International Airport (KIX) and Osaka Itami Airport (ITM), and we are also responsible for managing and developing Kobe Airport (UKB) in Kobe city, the capital of Hyōgo Prefecture.

We assumed responsibility for operating KIX and ITM in April 2016 and added Kobe Airport to our global airport portfolio in April 2018. Under the terms of our concession agreement with the Japanese Ministry of Land, Infrastructure, Transport and Tourism (MLIT) and Kobe city respectively, we will operate all three airports until March 2060. All three airports serve different markets.

KIX is the only international airport of the three and the undisputed international gateway for the region. Most international passengers to the Kansai region – the area comprises six prefectures and in Osaka, Kobe and Kyoto boasts the second most populated metropolitan region in Japan after the Greater Tokyo Area – fly in and out of Kansai International Airport. Foreign nationals acount for 70% of all inbound travellers on international flights. KIX is very much an O&D gateway with less than 2% of passengers catching a connecting flight.

ITM is essentially the large domestic airport of Osaka. A total of 35 Japanese destinations are served from the airport, with business passengers accounting for the bulk of the traffic on weekdays and more tourists being handled at weekends.

UKB is a local domestic airport with 40 daily departures. It is also home to a flying school, firefighting helicopters and an industrial base for helicopters.

I am proud to note that KIX and ITM were the first airport concession deals in Japan and showed the world that VINCI Airports had the capacity to develop the PPP model in new geographies. In this regard, our alliance with ORIX – our Japanese investment partner – has proven hugely successful. VINCI Airports is a long-term partner of Japan, with strong local roots.

What was the appeal of Kobe Airport as it seems very much like the little brother of Osaka’s airports?

In size and facilities it definitely is, its single terminal and runway handle around 3.3 million passengers per annum compared to the 31.9 million and 16.5 million handled at KIX and ITM respectively pre-COVID.

However, we feel that it has potential for future growth and that its development would be best served by being part of our network where all the airports in the Kansai region are under the same management, and operate as a team for the benefit of all. Airports in a metropolitan area should always work together, and when they are operated by one company, you can ensure that their respective policies and strategies are aligned to support their mutual development.

Is Kobe a tourist destination or more of a commercial/industrial centre?

Kobe is both a tourist destination and an important economic area for heavy industries, pharmaceutical, fashion and design, confectionery and sake. The city relies on aviation for both touristic and economic mobility and VINCI Airports is committed to supporting regional growth through enhancing UKB’s facilities and services.

How have you upgraded Kobe Airport since the concession began in 2018?

We have invested money in enhancing the energy efficiency of the terminal building, improved the check-in and security screening processes, increased the airport’s safety and disaster resilience, and renovated the runway.

In terms of potential future traffic growth, we managed to get approval to raise the number of air traffic movements handled at the airport from 60 to 80 per day. That might not seem a lot, but the demand was there, and as result traffic at UKB almost immediately increased to the new limit.

We now believe that there is demand for a little bit more. Going forward, we believe that a centre of excellence for helicopters around the existing industrial operations of Airbus Helicopters and Hirata Gakuen would make a lot of sense. UKB can become a base for medical and police helicopters as well as a training centre for pilots and technicians.

When it comes to helicopters, we have no doubt that UKB can also become a base for medical and police helicopters as well as a training centre for pilots and technicians.

In parallel to these plans, ever ambitious Kobe city would like to open up the airport to international traffic and greatly increase its handling capacity. They are preparing to invest in a new temporary terminal building in time for the Osaka-Kansai Expo in 2025, and want to build a new international terminal for 2030.

How big is Kobe Airport’s route network today and how much of this is down to the work of Kansai Airports?

Kobe Airport is currently served by five airlines – Skymark, ANA, Air Do, Solaseed Air and Fuji Dream Airlines, which between them serve 13 destinations across Japan.

Our success in gaining approval to operate 40 departures a day instead of the previous 30 proved pivotal in attracting Fuji Dream Airlines to fly to UKB, and it now operates daily services to five cities (Aomori, Hanamaki, Kochi, Matsumoto and Niigati) from Kobe.

So, does Kobe Airport effectively feed international outbound passengers to Tokyo’s airports?

International passengers can currently fly to either Tokyo’s Haneda or Narita airports from UKB with ANA and transfer onto an international flight or catch an onward connection with another airline. JAL doesn’t serve Kobe, but it does fly to KIX, as do many other international airlines, so most passengers flying internationally today will travel by road or rail to Osaka and fly from Kansai International Airport.

In general, the passengers that fly to Tokyo’s airports from Kobe or indeed KIX or ITM to catch a connecting international flight tend to be those that prefer to travel on a Japanese airline or work for businesses with strong ties with those airlines.

Can you explain a little more about how operating all three gateways as one airport system works in reality?

It’s quite simple really, Kansai Airports develops its strategy over the three platforms to ensure that we provide the best possible service to travellers and most opportunities to the airlines while making sure the total system is economically efficient.

Beyond the nominal operational matters, we also give much thought to how we can increase the resilience to natural disasters and other risks through multi-airport strategies.

As already mentioned, each airport has a clear role and function. KIX is, and will remain, the region’s international gateway and cargo hub. As a result, we are developing the international capacity of the airport by actively working to attract more airlines and add more international routes.

Yes, the COVID pandemic proved a huge setback for these goals, but we are now in a good place again and are on the way to having 11 destinations in 2023 that we didn’t have in 2019. We also promote self-connection to boost our traffic, and keep pushing the development of cargo activities through initiatives such as a KIX Medica (a certification to process pharmaceutical products) and e-cargo (a digital tool shared among all cargo stakeholders).

At Osaka Itami, the main domestic airport for businessmen and leisure travellers alike, we would like to lift the 1,000 kilometre limit distance on flights, which would mean that airlines could launch non-stop flights to popular destinations in Japan such as Okinawa and Hokkaido.

These routes are currently served by ANA and JAL from KIX, but it really doesn’t have to be this way anymore as the rule was enforced at KIX’s opening in 1994 to alleviate the noise pollution around Itami by limiting the number of B747s that were commonly flown toward Sapporo and Nara at that time. You cannot compare today’s aircraft to those of nearly 30 years ago. JAL’s eco-efficient A350 aircraft, for example, is said to be the quietest in its class with a reduced noise footprint of 50% on previous generation aircraft.

So, in our opinion, it is time to revise the 1,000 kilometre limit at ITM as, in addition to creating economic inefficiences, it is inconvenient and confusing for Osaka residents who might not want to fly from KIX.

In Kobe we want to develop a niche airport that will provide a good range of domestic destinations, a few short-haul international point-to-point destinations to generate additional traffic, and ancillary functions such as the business jet terminal and helicopter centre of excellence centre I’ve already mentioned. Urban Air Mobility (UAM) is also something we want to develop at UKB, particularly in relation to business jet users and helicopter operators.

How has Kobe Airport embraced VINCI Airports’ global sustainability goals?

The airport has obtained Level 4 ‘Transformation’ status in ACI’s Airport Carbon Accreditation programme, and has significantly reduced its energy consumption since 2018. We continue to look at new ways we can operate and develop the airport in a more sustainable fashion and lessen aviation’s impact on the environment.

Passenger traffic wise, how did your Japanese airports fare in 2022 and was this better or not as good as you hoped?

Domestic traffic has evolved in line with our expectations. Traffic across all three airports has fluctuated with the different COVID waves, however, it is on an upward trajectory and we finished 2022 very close to 2019 levels. We are still missing a few business passengers at Osaka Itami, but we believe this is partly down to more passengers connecting in Tokyo while others have switched to e-meetings. We expect them to come back when international traffic fully resumes and COVID-19 is downgraded to a Category 5 disease in Japan in May.

It is a different story for international traffic, but you have to remember that Japan was effectively closed to international travel until October 2022. Currently our international traffic is at about 40% of its pre-Covid levels, not helped by the fact that travel between Japan and China effectively remained closed until March 15, and the airlines are only now preparing to restart flights.

If we exclude China from the equation, we have recovered around 60% of our international destinations at KIX. And with Japan-China services on the verge of resumption, if it happens as we expect, international passenger traffic should continue to recover.

Would you consider expanding your Japanese portfolio with the addition of other airports?

If another opportunity was to arise we would certainly consider it as our partnership with Japan is delivering positive results. Indeed, if the opportunity met our investment criteria we would be honoured to continue to support the Japanese government’s plan for tourism and business development through aviation.

What do you hope Kobe Airport will gain by hosting THE UPCOMING ACI Asia-Pacific Regional Assembly, Conference & Exhibition in May?

The chance to showcase our airports and the Kansai region to the world. We are confident that delegates will enjoy their experience as the region offers a warm Japanese welcome, beautiful scenery, great food and Kansai dynamism. Visitors will also get a hint of what they expect at the Osaka–Kansai Expo, which is coming soon. From a personal perspective, I also hope that our airport delegates can help persuade their airlines to launch new routes to the Kansai region!”

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