日本におけるビジネス機の在り方を考える

Overall Summary

1. This site since its opening year-and-half ago engaged in comprehensive review and soul searching reexamination of status of business aviation in Japan.

2. Nearly 20 years past, Japan strived to achieve two major objectives namely ; to provide hospitable accommodations for visiting foreign business aircrafts and to propagate use of business aircrafts as “Business Tools” to enhance business efficiency and productivity of Japanese corporate community.

3. During course of past year-and-half, 31 reports and 66 current topics were posted during 2013, and 12 reports and 11 current topics for this year.

4. Since they were addressed to Japanese viewers written in Japanese, 2 English summaries were provided last year. Current summary is the third such summary..

5. It summarizes status of two main objectives of providing hospitable accommodations for visiting foreign business aircrafts and to encourage use of business aircrafts by Japanese corporate community both for foreign and domestic business trips.

6. In order to avoid distracting attention of viewers on detailed statistical figures, they are furnished at the end of this summary for interested party to review.

Hospitable Accommodations for Visiting Foreign Flights

1. In May 1996, JBAA (Japan Business Aviation Association) was found to promote business aviation in Japan and to open Japanese airports to foreign visiting business aircrafts.

2. Imminent issue was to secure slot allocation at metropolitan Tokyo airports. 3 slots were allocated in Narita in 1996. Currently, it is extended to 12 slots. 3 slots allocated in 1996 have never been utilized in full until this date.

3. By mid-2000, all the regional airports excluding Narita and Haneda were freed to allow use by visiting foreign business aircrafts. Most of them are sparsely used even today.

4. Nagoya airport was transformed into business aircraft basis in January 2005 following the completion and opening of Central airport located at off-shore Nagoya. Nagoya airport received insignificant 62 incoming foreign flights during FY 2013.

5. Major thrust were achieved during 2010~2011 with long awaited expansion of capacity at Narita and Haneda as well as opening of new Ibaragi airport not too far from Narita. Haneda received 810 flights and Narita 360 flights during FY 2013, an insignificant number of flights visiting business aircraft airports in USA/Europe.

6. Improvements in providing necessary ground works to service business aircrafts, relaxation of restrictions on providing permission for use of aircrafts, parking, and available supporting facilities were realized during the course of years. Narita for instance built new terminal for visiting business aircrafts.

7. Crowning touch followed APEC meeting held at Yokohama in October, 2013 where participating countries agreed to harmonize practice common in USA, Europe to facilitate use of business aircrafts. By end October 2013, Japan allowed foreign aircraft visitors to use their own aircraft to fly to other Japanese inland airports by-passing cabotage restrictions. By December 2013, Japan finally established new rules specifically applicable for general aviation similar to US FAR Part 135.

8. There is never a perfect system, but after 18 years from 1996, Japan removed most of impediments and adopted arrangements equal to other advanced business aircraft operating nations.

9. Because of heavy air traffic at Narita and Haneda, there always will be physical constraints to accommodate business aircrafts as seen in all major airports in advanced economic nations. This has been dealt by use of secondary neighboring airports such as Teterboro (New York) and Farnborough (London). Tokyo must consider use of Ibaragi and Yokota airports. Upcoming Olympic 2020 will necessitate use of half-a-dozen airports within 200 miles radius, thence to transport executive visitors by helicopter to metropolitan Tokyo.

10. Number of visiting foreign aircrafts are static at best. 445 from USA/Europe overtaken by 1,003 flights from neighboring East Asian countries during FY 2013.

11. Use of business aircrafts by Japanese corporate community is practically nil for the past quarter~half centuries and number of available aircrafts have been diminishing. No employee of major Japanese corporation will use business aircrafts even domestically for business trip. Reason is explained in the following columns

Use of Business Aircraft by Japanese Corporate Community

1.Most astounding fact is notion of Japanese major corporate employees including top executives do not use business aircrafts to visit major foreign countries or even making business trips within Japan despite all the prospering Japanese business activities and accumulated economic wealth.

2. Current site attempts to uncover this mystery which are elaborated in depth within 42 reports presented during past 18 months.

3.The heart of problem boils down to followings.

a. There is confusion in defining what constitutes “Business Aircrafts” Most of discussions in Japan define twin-engine turbo-props plus jets as “Business Aircrafts”. Current site employ terminology “Narrowly Defined Business Aircraft” to represent this approach in contrast to “Broadly Defined Business Aircraft” that includes single engine turbo-props, piston aircrafts and rotorcrafts as well. There are only 24 business jets in Japan as of end 2013 all being light and super~light jets costing below $20 MM. There are 11 twin-engine turbo-props or total of 35 “ Narrowly Defined Business Aircrafts” which are practically nothing in comparison to global business aircraft fleets or even in comparison to neighboring Asia-Oceania fleets. China is increasing Heavy or Super~Heavy jets costing $55~100 MM at an eye-popping rate. By end of 2013, China owned 360 aircrafts costing over $20 MM v.s. Japan nil. 24 Japanese light jets cost $4~18 MM by manufacturers’ list price, many of them well depreciated aircrafts or second-handed used aircrafts. In contrast. Japan own more than 1,000 “Broadly Defined Business Aircrafts” costing between 0.3~2.5 MM majority of them well depreciated.

b. This correlates to USA/ European phenomena of super-rich or celebrities continuing to purchase aircrafts costing more than $20 MM and ordinary people opting to purchase aircrafts between $1~5 MM.

c. 1,000 or so “Broadly Defined Business Aircrafts” are being utilized in Japan for over a quarter century. However, they are used for transportation of cargoes and other miscellaneous business uses but rarely to transport business people.

4 There is no mystery for why Japanese business corporate community do not utilize business aircrafts.

1. There is not a single Japanese aircraft that can transport client to say USA/Europe because there is no Japanese corporate client.

2. There is no client because business class round trip ticket between Narita-New York is available from commercial airliners at approx. $4~5,000. Business jet will cost $350,000~400,000.

3. Annually, millions of business visitors fly-in to Japan from foreign countries, overwhelming majority utilizing commercial airlines. During 2013, 365 business aircrafts visited Japan from USA and 80 from Europe, a fraction of business visitors. These flights can be carrying governmental dignitaries, top athletes and artists as well as super-rich. Japan is not the only exception.

4. On the other hand, Japanese business firms have used, owned and operated business aircraft outside of Japan where their business sites were located or activities required to cover remote regions. Today, they will use commercial airlines to major airport overseas then charter business aircraft locally if necessary. American corporate employees visiting Europe or Asia will do the same. Japanese engaged in such practices as early as mid-60’s. It is an established corporate habits for the past quarter~half centuries.

5. Multi-national corporation view world market as “One”. It makes no sense to define use of business aircraft flying in-and-out of its own sovereign nation.

6. Domestically in Japan, business aircrafts’ airfare is 50~100 times as high as commercial airlines. 98 airports in Japan are all served by commercial airlines or regional commuters. How can any employee of big corporation justify use of business aircraft at corporate expense account.

7. Most inexpensive business aircraft in Japan is Robinson R-22 helicopter which costs $1,500/h several times more than that can be chartered in USA. Light jet will cost $5~7,000/h In comparison with commercial or commuter aircrafts, it will be 50~100 times higher defying any use by cost minded business personnel.

5. It is this outrageously high cost differences that will instantly turn away any business clients to use business aircrafts. Japanese government intentionally promoted development of mass transportation making best use of commercial airlines to provide airfare that Japanese business person can afford, well aware that Japan is positioned farthest from center of global activities. Japan’s economic prosperity also attracted global airliners to provide competitive services. Global consolidation of airliners and formation of global alliances also contributed in providing multiple attractive options to Japanese corporate clients, JAL is member of One World and ANA Star Alliance.

6. Once Japanese clients arrive to major overseas airports, business aircrafts are available locally at much affordable fare if it is needed.

7. Japan is egalitarian society where show of wealth and power is viewed as vulgar and inappropriate. Although there are few who wants to show-off their acquired muscles. They can call-in symbolic heavy jets from neighboring Asian countries, if they do not mind the cost. It is said that there are 1.200~1,500 business jets available throughout Asia that will cater just such clients. These aircrafts do not appear on country specific statistics because “Privileged Owners” often register their aircrafts in different countries to conceal their identities or take advantage of tax haven.

Then Where To ?

1.Emplyees of major Japanese corporation including executives will keep utilizing commercial airlines to major airports overseas. Much inexpensive local business aircrafts will be chartered if such needs exist. This established business practice is not going to be changed.

2.Domestically, Japan developed highly sophisticated and well defined public transportation system which provide use fare 1/50~1/100 of that of business aircraft

3. None-the-less,vulnerability do exist in horizontal move in rural area. Airlines, railroad, highways are running radial from major cities. Traffic condition of urban area can also pose problems. Japan is island nation with numerous isolated islands connected by ferry boat.

4 .None-the-less, Japan is size of State of Montana with mountainous terrain obliging people to live in size of State of Delaware. Public transportation is highly developed connecting densely populated cities assuring economy of mass transportation.

5 Under such circumstance, even use of rotorcraft is limited to transport client for short distance, say 20~60 miles within short time (to economize transportation cost). They are few remaining options left.

6. Inexpensive rotorcrafts costing around $1 MM is making in-road to market place. Three major rotorcraft manufacturers Airbus Helicopter, Bell Helicopter and Robinson Helicopter are establishing basis in Japan to assemble, market, provide repair and maintenance services complete with pilot training facilities in collaboration with local Japanese partners. Japanese operators are renewing and upgrading their rotorcrafts. Number of financial groups are offering flexible lease arrangements.

7. What is needed and what is now lacking in Japan is consolidation of efforts to realize the effect of “Three Arrows” Japanese strength is best shown when team work and group collaboration are required.

8. This site for this year targets call for coalition of efforts by various business aviation related organizations that can be seen routinely in Washington DC to achieve both targeted economic and political objectives.

9. If Japan can provide chartering fare close to what is offered in USA, rotorcrafts can be used as judicial air taxi in rural area to complement regional alternatives for business visitor as well as sight-seers to use rejuvenating and activating regional economy as well.

10. Japan needs outside assistances such as rotorcraft manufacturers, rotorcraft and business aircraft associations as well as business consultants to actualize such goal. Japan needs neutral outsiders view to achieve “Creativity by Multiplicity” to renovate their solidly grounded “Mind Set”.

General Aviation

Broadly Defined

Business Aircraft

Narrowly Defined

Business Aircraft

360,000

83,461

45,994

Share

23.2%

12.8%

N.America

Europe

L.America

Others

Total

Number

36,993

12,134

10,604

7,872

15,858

83,461

Global Share

44.3%

14.6%

12.7

9.4

19.0

100.0

Type

World

Japan

Share%

Jet

22,673

24

0.11

Turbo-Prpops

17,091

36

0.21

Narrowly Defined Aircrafts

39,764

60

0.15

Piston Planes

6,030

273

4.5

Rotorcrafts

37,667

505

1.3

Total Business Aircraft

83,461

838

1.0

Type

Total

Number

Business

Aircraft

Military

Public

Commercial

Comuter

Individual

Owner

Business Jet

Twin Engine

Multiple Engine

563

546

17

24

24

0

8

6

2

530

515

15

1

1

0

Turbo-Props

Single Engine

Twin Engine

128

28

100

36

25

11

27

１

26

64

1

63

1

1

Business Aircrafts

691

60

35

594

2

Piston Planes

Single Engine

Twin Engine

554

501

53

273

237

36

3

3

0

45

32

13

233

229

4

Rotorcraft

Piston Single

Single Turbine

TwinTurbine

805

179

179

447

505

106

156

243

218

0

15

203

12

10

2

0

70

63

6

1

Total

1,359

778

221

57

303

Business Aircrafts

2,050

838

256

651

305

Rank

Country

Business

Aircrfts

Regional Share

Narrowly Defined

Business Aircrafts

1

Australia

2,624

33.3%

577

2

Japan

1,148

14.6

233

3

China

948

12.0

437

4

New Zealand

817

10.4

54

5

India

527

6.7

266

6

Indonesia

344

4.4

132

7

Philippine

266

3.4

79

8

Malaysia

243

3.1

76

9

Thailand

238

3.0

70

10

Korea

165

2.1

40

N,America

Europe

Asia/Oceania

L. America

Others

Total

Number

18,501

5,475

4,624

1,775

1,758

32,133

57.6%

17.0%

14.4%

5.5%

5.5%

100%

Rank

Country

2013

Share％

1

Australia

1,808

39.1

2

Japan

789

17.1

3

New Zealand

723

15.6

4

China

465

10.1

5

India

265

5.7

6

Indonesia

115

2.5

7

Thailand

82

1.8

8

Philippine

81

1.8

9

Korea

80

1.7

10

Malaysia

60

1.3

Others

156

3.3

Asia. Oceania Total

4,624

100.0