After U.S. and Japanese officials agreed in mid-February to add new landing and take-off slots at Tokyo Haneda Airport that will allow daytime flights to the United States for the first time, passenger carriers were practically licking their lips. Because of this agreement, Japanese and U.S. airlines will soon get five new slots each at the chronically congested airport. Being much closer to downtown Tokyo than Narita Airport, Haneda is favored by travelers but has only limited international routes, so the extra trans-Pacific capacity will be much appreciated.
Meanwhile, Tim Strauss, vice president of cargo for Hawaiian Airlines, which already serves Haneda (as well as Osaka and Sapporo), is much more interested in starting flights to Narita in July. The new slots at Haneda will offer more flexibility, he said, but they are of less relevance for cargo. “From the airline side it’s good news, for cargo it’s indifferent,” Strauss added. He likens the situation to New York. “If you’re in JFK, you’re in the industry; if you’re in LaGuardia, you’re not.”
Despite the opening of Haneda to international (mostly intra-Asian) flights a few years back, Narita has remained Tokyo’s gateway for international cargo, as forwarders have retained their warehouses there. With the exception of Nippon Express, no forwarder has facilities at Haneda, noted Steve Sato, regional manager, cargo sales, North Pacific at United Airlines.
The daytime departure slots at Haneda may be popular, Sato said, but operating at two airports is a costly proposition for airlines. Moreover, handling charges at Haneda are exorbitant, he added, suggesting that the airport authority is not too anxious to boost cargo throughput.
If Haneda is the wrong place for airfrieght in Japan, cargo executives may be forgiven if they are beginning to feel that Japan is the wrong country for them as well. Sato said he is spending more and more time outside the country. “The Japan market is shrinking,” he said. “A company that focuses on Japan is in trouble. That’s why Japanese forwarders look to other markets.”
Tough times
To understand the need for Japanese carriers and forwarders to look beyond their home islands, it’s important to note the current sluggish state of Japan’s cross-border trade. According to Nittsu Research Institute and Consulting, a subsidiary of logistics giant Nippon Express, Japan’s international air cargo volume slipped 4.5 percent in fiscal 2015 (ended March 31). For fiscal 2016 it predicts just 1.3 percent growth.
This lackluster performance is reflected on the balance sheets of carriers. All Nippon Airways (ANA) Cargo registered a 3.1 percent decline in revenue to US$207 million in the quarter that ended Dec. 31, 2015, with international revenue falling 5.8 percent. Japan Airlines (JAL) Cargo reported just 0.7 percent growth in freight tonnage in the April-December 2015 period, while mail dropped 2.9 percentage points. JAL’s revenue from international freight traffic was $372.7 million during that time, down 4.1 percent.
Sato said that the average yield out of Japan is the lowest in the Asia-Pacific region. Because of this, airlines are going after higher-yielding traffic from different stations to feed their international departures. In some cases, this has led to creative thinking about reinventing the traditional hub-and-spoke air network – including moving the hub to a place that better suits global trade than the local population.
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