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IATA Voices Concerns to Minister Ogi

Privatized Narita needs a regulator

International Air Transport Association (IATA) Director General and CEO, Giovanni Bisignani urged Japan`s Minister…

International Air Transport Association (IATA) Director General and CEO, Giovanni Bisignani urged Japan`s Minister of Land Infrastructure and Transport (MLIT) Chigake Ogi to ensure that a strong and effective economic regulatory regime is put in place as part of Narita`s privatization process.

Bisignani noted that IATA is encouraged by the government`s decision to privatize Narita independently but stated that several serious concerns remain. Privatization should benefit not only the operators of Narita and the Government, but also the airlines, passengers and shippers. It is essential that a strong and independent economic regulatory regime be established, wrote Bisignani.

The UN body governing civil aviation (ICAO, the International Civil Aviation Organization) recommends the establishment of a regulatory regime in the privatization process. IATA believes that such a regime should ensure that:

  • charges are just and reasonable
  • infrastructure development is timely and cost-effective
  • service standards are acceptable
  • there is the ability to redress the users` weak bargaining position

Bisignani commented that airports are basically monopolies that provide an essential public service. When governments sell these assets to the private sector it cannot be a licence to print money. It is in everyone`s interest that ground rules are clearly established early on so that owners and users of the facilities will have a clear understanding of the value of the airport and the costs of services provided.

Bisignani concluded that a successful privatization of Narita would give the world a clear signal that things are changing for the better in Japan and a new era of economic transparency and openness is beginning.

We also have to note that IATA strongly indicated that the following items should also be dealt with prior to privatization:

  • introduction of the single-till principle;
  • definition of the appropriate rate of return;
  • valuation of the asset base;
  • treatment of commercial rentals paid by users; and,
  • benchmarking of airport capital and labour productivity against best practice, and incentives to stimulate efficiencies

Landing charges at Narita airport are the highest in the world (JPY 2400/ton). IATA demands that Narita Airport Authority reduce charges to JPY1850/ton to reflect actual costs of providing the service. The government of the United States and the European Union, among others, are urging the Japanese Government to reduce charges.

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Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales. She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.

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