With the COVID-19 pandemic having nearly annihilated air passenger demand, it’s now almost certain that an investment blueprint for Hakodate Airport, including renovating its international flight terminal building, will be derailed.
In January 2020, the operation of all runways and other facilities at seven airports in Hokkaido was handed to Hokkaido Airports Co. to be run as a single entity.
Widening the firm’s operational framework and maximizing the merits of privatization are key to turning the airports’ fortunes around.
The privatization process began in August 2019 when Hokkaido Airport Terminal Co. and other firms established Hokkaido Airports to run the seven airports — New Chitose Airport, Wakkanai Airport, Kushiro Airport, Hakodate Airport, Asahikawa Airport, Obihiro Airport and Memanbetsu Airport.
The unified operation of the seven airports began on Jan 15. after the new firm made Hakodate Airport Terminal Building Co., which had been funded by the city of Hakodate and other private firms, its subsidiary on Jan. 7.
Initially, Hokkaido Airports’ strategy was to use the revenue from the airport buildings to lower landing fees for airlines, so that they could launch new routes. The firm would then see its profits increase, and would be able to invest more.
For Hakodate Airport, the firm was planning to invest about ¥11 billion to renew the international terminal building, merging it with the domestic facility and considerably expanding its commercial space.
But the grand plan crumbled when hit by the COVID-19 pandemic. Since late February last year, the Taipei-Hakodate route — the only regular international flight at Hakodate Airport — has been halted. The hub has also seen repeated cuts to domestic flights, with the number of passengers between January to November last year plummeting 60% year on year to about 700,000.
Hokkaido Airports has already decided to halve its five-year ¥100 billion investment plan. Although a revised investment plan has yet to be disclosed for Hakodate Airport specifically, the renewal of the airport building is likely to be pushed back.
Already managing runways at New Chitose Airport and Asahikawa Airport, the firm took over such operations at the remaining five airports on March 1. As the operational framework under the privatization expands, the company will need to come up with a post-pandemic strategy.
To take advantage of unified operation of the seven airports, Hokkaido Airports aims to promote open-jaw flights — a round-trip itinerary that arrives in one city but departs from another for the same price.
“Connecting the seven airports will make it easier for people to travel around Hokkaido, which is quite huge,” said Ryoji Mizushima, president of Hakodate Airport Terminal Building, adding that it will be possible to use the open-jaw flights for school trips and tourism.
“For now, we must prioritize investment to boost safety and security, but we are eager to take steps to cultivate new demand.”
This section features topics and issues from Hokkaido covered by the Hokkaido Shimbun, the largest newspaper in the prefecture. The original article was published Jan. 24.
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