As a part of U.S. fiscal reform and to obtain new financial sources for its aviation services, the U.S. Federal Aviation Administration will begin charging foreign commercial aircraft that use U.S. airspace starting May 19. But the U.S. move has triggered opposition from many international airlines, including Japanese ones.
While upsetting airlines, the new regulation also seems to have encouraged Japan to introduce similar overflight fees for Japanese airspace. Some observers say Japan is looking for the best time to implement the change.
Many nations currently charge foreign carriers overflight fees. But among major countries, Japan, Singapore and the U.S. so far have not introduced such charges.
Finland, for example, charges one of the highest overflight fees — 35,000 yen for every 100 km — while Germany charges 29,000 yen, China 12,000 yen and Malaysia 700 yen for the same distance.
The recent U.S. decision is in accordance with the Federal Aviation Reauthorization Act, which was passed in 1996. With the new rule regarding overflights, the FAA is expected to earn about $90 million in revenues for fiscal 1998, according to the FAA.
Under the FAA’s charging system, commercial aircraft operators have to pay $78.90 per 100 nautical miles (about 185 km) if they fly in airspace over U.S. territory. Aircraft that fly in U.S. controlled oceanic airspace will have to pay $69.50 per 100 nautical miles. However, U.S. carriers will not pay the fees because they do not apply to flights leaving or arriving in the U.S.
The announced fees are not expensive compared with the charges of other countries for foreign carriers flying in their airspaces. But international airlines are strongly opposed to the U.S. move, saying that the U.S. decision was too sudden and that airlines were given no chance to challenge the action beforehand.
The International Air Transport Association, composed of the world’s commercial airlines, asked the FAA to postpone the introduction of the overflight fees for at least 90 days. IATA has told the FAA that the association does not question the right of the U.S. to introduce fair and reasonable charges for the use of air navigation facilities in U.S. airspace but that the U.S. should consult those affected in advance.
“Consultations should provide complete transparency of information about the costs of providing overflight services and the method used to allocate these costs to the various categories of users,” the IATA director general, Pierre Jeanniot, wrote in a letter sent to U.S. Transport Secretary Rodney Slater last week.
Japanese airlines also decided to take concerted action with IATA because they feel that the U.S. new regulations will only benefit U.S. carriers, and they fear that additional costs for Japanese carriers will sharply reduce their competitiveness.
Despite the opposition, the U.S. position so far remains unchanged. The U.S. plans to bill airlines via monthly invoice.
The overflight charge will cost 530 million yen a year for Japan Airlines and about 100 million yen for All Nippon Airways, according to the two Japanese carriers.
Flights to be mainly affected are those to Canada and Australia that must pass through U.S. airspace or U.S. controlled oceanic airspace, they said. For example, a flight bound for Vancouver, Canada, from Japan is likely to be charged 242,000 yen.
Kiyoshi Marukawa, manager at JAL’s airport operations section, said that JAL will have to make up for the loss, and an increase in fares on cost-affected flights will be inevitable in the future.
“The new U.S. rule will not be an advantage for Japanese carriers because Japan is one of the few countries that do not charge overflight fees,” he said.
Although Transport Ministry officials admitted that they are studying ways to charge overflight fees, they added that the introduction will not be easy. This is because costs for navigation control must be calculated thoroughly and fees should be of an acceptable range for foreign carriers.
The ministry spent about 560 billion yen in fiscal 1996 for improving the nation’s airport facilities and air navigation services.
Currently, such costs are covered by various airport-facility taxes, which are well-known to be expensive, and revenues from the central government’s general account.
“It is true that the U.S. move gives Japan a good reason to start taking overflight charges from foreign carriers, but there is no specific time-schedule for introducing the new fees,” said a senior ministry official.
One reason why the ministry is hesitating to introduce overflight fees in the near future is believed to be related to the ministry’s new satellite due to be launched in 1999.
The satellite will be used for a new air-traffic control system, using global-positioning to locate civil aircraft. The system is more accurate and compatible with the U.S. system, and the ministry is currently trying to promote it among nations in the Asia-Pacific region.
“If Japan starts charging overflight fees in the near future, many countries, especially in the Asia-Pacific region, may think that the country needs money for the new satellite, and they may even refuse to use Japan’s new navigation system,” said a Transport Ministry official.