Narita International Airport Corp. said Friday it has agreed with the International Air Transport Association to cut its notoriously high landing fees for the first time by an average of 21 percent.
The new fees will be in effect from Oct. 1 through the end of March 2009, when they will be reassessed.
Narita airport, whose landing charges are the highest in the world, has been under constant pressure to cut its fees. It had pledged to consider cutting the charges when it received its first full-year financial results after its privatization in April 2004.
But at the same time that it is lowering the landing fees, the airport will raise its fees for stationary time and introduce charges for using boarding bridges and baggage-handling facilities in the arrivals terminal, effectively making the overall reduction of fees only 10 percent.
Airport officials said the new fees and charges will cause a 6 billion yen to 6.5 billion yen decline in annual revenue.
The airport operator and the IATA, which groups 265 airlines worldwide, have been discussing details of the new fee framework since June.
According to Friday’s agreement, landing charges will range from 1,650 yen per ton to 2,100 yen per ton, depending on the noise the plane causes on a six-level scale set by Airports Council International.
On average, the landing charges will be lowered to 1,891 yen per ton, down 21 percent from the current 2,400 yen per ton.
For example, landing a Boeing 747-400 will cost 730,750, yen a 23 percent drop from the current charge of 948,000 yen. The charge at Kansai International Airport is 825,600 yen.
However, Narita’s new fee compares with roughly 322,000 yen charged at South Korea’s Inchon airport and about 374,000 yen at Hong Kong.
Airport officials said they decided to base the new landing fees on noise levels to counter noise pollution, which affects nearly residential areas.
Cutting the charges will result in a decline in profits for the airport because it is at capacity and cannot increase the number of flights.
Narita hopes to be listed on the Tokyo Stock Exchange in fiscal 2007.
One analyst said that taking the listing into account, the airport has to limit losses from the cheaper landing fees to between 20 percent and 30 percent of its ordinary profit and that the 10 percent decrease in overall airport charges is well within this range.
The cheaper landing fees will not affect ordinary passengers unless airlines reduce their fares to reflect the new charges, an unlikely move given the current harsh business environment, observers said.
The airline industry has been hit hard by soaring fuel prices and heavy competition, making reducing costs essential to survival.
“We welcome the move,” said Tatsuo Yoshimura, a spokesman at Japan Airlines Corp., which paid the airport 17 billion yen in landing and stationary fees in fiscal 2004. “But (the fees) are still high compared with other airports in the world and we hope for a further reduction.”
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