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The opening of the second runway has lifted hopes for a prominent role that Kansai airport can play in Asian air transportation. With the first, 3,500-meter runway and now the second, 4,000-meter runway, the airport can pitch itself as a 24-hour operation. But it is saddled with high costs and faces tough competition.

Kansai International Airport Co. has debts of ¥1.2 trillion due to construction and other costs. The airport’s landing fee is among the world’s highest. For a jumbo jet, it’s ¥820,000 compared with ¥460,000 at Incheon airport in South Korea and ¥270,000 at Changi airport in Singapore.

Competition from Japanese airports also is expected to intensify. Toward the end of fiscal 2009, Narita airport’s second runway will come into service. In fiscal 2010, the fourth runway at Haneda airport will be completed and the airport will begin serving regular international flights part-time.

In fiscal 2006, there were 116,000 takeoffs and landings at Kansai airport — below both the peak of 124,000 in fiscal 2000 and the goal of 130,000. There are many flights between Kansai and China ahead of the Olympics Games to be held in Beijing in 2008. But the number of flights to and from North America has dwindled. This summer there are a record 776 international flights a week at the airport. Of some 580 Asian flights, 307 are flights to and from China.

The airport’s strong point is international cargo flights, which number more than 190 a week. Half of such cargo flights are to and from 14 Chinese cities, including Harbin and Nanjing, which do not have air connections with Narita. Air transportation of high value-added products of Japanese firms is increasing.

For the business year ended March 2007, the airport company paid ¥22.1 billion in interest against operating profits of nearly ¥110 billion. Since the opening of the second runway costs an annual ¥10 billion in maintenance and taxes, the company probably will not be able to lower landing fees. The central and local governments and local business organizations should consider ways to help the company reduce or get rid of large debts.

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