2015年07月12日(日)11時00分

Overview of Japanese Business Aircraft Market

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Executive Summary

1.During 90’s,business aircraft manufacturers became aware of untapped potentiality of Japanese Market

2.Japan was then world second economic power after USA measured by size of annual GDP.

3.As such, there were frequent flow of business people between Japan and outside world.

4.Exchange of business visitors were heavy especially between Japan and USA/Europe.

5.Distance between Tokyo-USA East Coast and Europe is more than 10,000.

6.Most expensive Heavy Jets are required to be employed to cover this distance.

7.Japan is island nation requiring air transport to visit even the neighboring regions of Asia-Pacific.

8.This requires use of Mid~Heavy Jets priced between $20~50 MM.

9.Marketing agents of aircraft manufacturers were major Japanese trading houses eager to seek new business.

10.One other critical issue was Japanese airports were not readied to receive foreign business aircrafts.

11Japan is highly centralized nation where major activities are centered around Tokyo and few major cities..

12.Most acute problem was access to metropolitan Tokyo where Narita/Haneda had no extra slots to spare.

13.In order to rectify the situation, JBAA (Japanese Business Aviation Association) was established.

14.All the major trading houses except Mitsubishi Corporation joined. JBAA was established in May 1996.

15.Close association between NBAA, EBAA and IBAC (JBAA was admitted as a member in 2001) continues.

16.Major users such as Toyota, Sony, MHI (Mitsubishi Heavy Industries) became founding members.

17.MLIT (Ministry of Land Infrastructure and Transportation) and Tokyo City Government were strong supporters

18.Soon after establishment of JBAA, 3 slots were allocated in Narita gradually expanding then-after.

19.By mid-2000, all but metropolitan Tokyo airports became fully accessible for use by business aircraft.

20.Runway extension in Narita, opening of Ibaragi airport, completion of 4th runway in Haneda was seen by 2010.

21.In October 2013, “cabotage restriction” applied to visiting foreign business aircraft was lifted.

22.By end 2013, MLIT provided new operational rules modeled after US Far Part 135.

23.Though some room of improvement do remain, most of infrastructure for use by business aircraft were provided.

24.All looked well except there was major oversight, namely absence of “real market” user client groups.

25.While all the major trading house aircraft marketing divisions were involved, actual users were left out.

26.Top trading houses employees represent large number of international jet setters do not use business jets.

27.This includes top executives but more ironically not even leaders of aircraft division or their staffs.

28.Currently round trip airliner fare between Narita- NY is $4~5,000 for business, $11,000 for first class.

29.Expenses of Heavy Jet fluctuate widely by fuel cost but ball-park figure of equivalent to above is $400,000.

30. Big oversight was Japanese business communities use business aircrafts overseas for half-a-century.

31.Japanese global enterprises adhere to notion of “No national boundary in sky in age of one global market”

32.Toyata, Sony moved their business operating hab to USA. Other global corporations moved out of Japan.

33.Today Japan own 24 light~microjet not suited to make overseas trip.

34.Domestically, it is used to carry foreign business aircraft passengers but Japan lifted “cabotage” restriction.

35.Super-rich, celebrities, VIP and “Privileged Few” can easily charter heavy jets from neighboring countries.

36.Japan is egalitarian society where obvious show of “Wealth and Power” as bad taste and inappropriate.

37.Japanese “bottom up” decision making style do not produce charismatic leader commensurate to use business jets.

38.Meanwhile, Japan do own approximately 800 business aircrafts for past 15 years.

39.Average cost of aircraft is between $0.3~2.5 MM markedly different from high-end $50~100 MM aircrafts.

40.Japanese corporate community is aware that airfare of business jet is 50~100times that of commercial airliners.

41.128 million Japanese live in area equivalent to State of Delaware connected by web of public transportation

42. No blue chip corporations own or use business aircraft but make use of much inexpensive public transportation

Where-To

1.Total aircraft fleet in Japan is approximately 4,000, civil aircrafts 2,000, out of which business aircraft is 800.

2.Business Jet + Turbo-Prop is 61,Piston 256,rotorcraft 518 or total 835. (see chart attached for more details)

3.Global fleet of Business Jet + Turbo-Prop was 35,517, Asia-Pacific 2,336 so that share of Japan’s 61 was 0.17%

4.Global fleet of rotorcrafts are 32,830, Asia-Pacific 4,432, Japan 677.according to FAA database.

5.More accurate Japanese registration show piston single 177,turbine single 175 and turbine twin 459 or total 811.

6.Piston single market is dominated by 61 Robinson R-22 and 97 R-44.

7. Popular turbine single are Airbus AS-350/EC-130 series, 42 Bell 206 will eventually be replaced by Bell 505.

8.Robinson R-66 received Japanese certificate in June 2013 and 5 is now in commercial operation.

9.Even these light rotorcrafts are not much engaged in corporate passenger transportation because of high fare.

10.High cost is primarily attributed to low operation rate, 260h/y for top performer but average 150h/y.

11.Initial work have started to achieve drastic cost cutting by cross-industry “joint ownership and operation”

12.Airbus bought stocks owned by C. Itoh to reach market first hand establishing service center in Kobe few year ago.

13.Bell established Bell Helicopter Japan this January starting to reach the market directly by themselves.

14.Robinson’s agent Alfa Aviation established assembly, maintenance and training facility few years ago near Narita.

15.Because of highly developed and sophisticated public transportation network in Japan cost competitive is must.

16.Feasibility study will be initiated to provide helicopter as air taxi to complement ground taxi service.

17.Air taxi can connect two points by straight line without ground traffic lights or congestions at 4 times speed.

18.Narita-Tokyo is 60 minutes ride by express train but helicopter 20 minutes, Haneda 30 minutes v.s. 8 minutes

19.Similar as ground taxi, air taxi will serve short distance (25~50) for short ride (8~15minutes)

20.Plan calls for containing air taxi fare within 1.5~2 times that of ground taxi fare of \350/

21.This is a preview of what may emerge out of proposed public/cross industry coalition and collaboration.

22.It also requires global collaboration to finally realize corporate air passenger transportation in Japan

 

Narrowly Defined Business Aircrafts

(Jet+Turbo)

Ascend May 2015

N.America

L.America

Europe

Asia-Pacific

Others

Total

Jet

11,806

2,759

2,855

927

1,226

19,573

Turbo

8,238

2,763

2,043

1.409

1,491

15,944

Total

20,044

5,522

4,898

2,336

2,717

35,517

Share

56.4%

15.5

13.8

6.6

7.7

100.0

 

Global

Asia-Pacific

Share

Japan

Share

Business Jet

19,573

927

4.7%

24

0.12%

Turbo-Props

15,944

1.409

8.8%

37

0.23%

Total

35,517

2,336

6.6%

61

0.17%

 

Japanese Business Aircrafts End 2014

Public Registration

Type

Total

Business

Public

Commercial

Individual

Jet

Twin

Multiple

582

567

15

24

24

0

8

6

2

549

536

13

1

1

0

Turbo

Single

Twin

129

28

101

37

25

12

27

26

64

1

63

1

1

0

Jet+Turbo

711

61

35

613

2

Piston

Single

Twin

540

489

51

256

241

15

5

4

1

26

9

17

253

235

18

Rotocraft

Piston Single

Turbin Single

Turbine Twin

811

177

175

459

518

113

142

263

169

0

12

157

49

3

16

30

75

61

5

9

Total

1,351

774

174

75

328

Grand Total

2,062

835

209

688

330

Global Rotorcrafts Regional Distribution

FAA Database April 2015

Total

N.America

Europe

Asia-Pacific

L.America

Others

32,830

19,505

5,832

4,432

1,678

1,383

Share

59.4%

17.8

13.5

5.1

4.2

Rotorcraft Fleet of Top 15 Nations

FAA Database April 2015

Rank

Country

Number

Rank

Country

Number

1

U.S.A.

17,132

9

Japan

677

2

Canada

2,373

9

Kazakhstan

677

3

U. K.

1,796

11

Italy

670

4

Australia

1,483

12

Brazil

555

5

South Africa

793

13

Mexico

381

6

New Zealand

756

14

Switzerland

296

7

France

753

15

India

259

8

Germany

682

Top 15

29,283

89.2%

Rotorcrafts Within Asia-Pacific Region

FAA Database April 2015 (Asian Sky Group Feb. 2015)

Rank

Country

Number

Rank

Country

Number

1

Australia

(Asian Sky Group)

1,796

6

Indonesia

115

(179)

2

New Zealand

756

7

Philippines

84

(179)

3

Japan

677

800

8

Thailand

83

(115)

4

India

259

9

Malaysia

68

(173)

5

China

Mainland

Hong Kong

Macau

Taiwan

221

(655)

214

(583)

3

4

(31)

(41)

10

Top 10

Others

Region Total

Share

373

362

4,432

91.5%

The most reliable data on China and Southeast Asia is that of ASG (Asian Sky Group)

ASG is joint venture of Avro, Inc of USA and AVIC International of China headquartered in Hong Kong. ASG data is inserted here in parenthesis.

 

Rotorcrafts in Japan

 

Public Registration

Asian Sky Group end Year 2014

FAA Database 2015

Total 811

Piston Single 177

Turbine Single 175

Turbine Twin 459

800

677

The most reliable data available for Japan is Japanese public registration data.

 

Popular Low Cost Rotorcrafts Used in Japan

Japanese Public Registration FAA Data April 2015

Type

Japan

U.S.A.

Global

Airbus

AS-350/ EC-130 Series

EC-120 Series

97

94

3

2,348

2,125

223

3,895

3,503

392

Bell 206 Series

42

4,279

4,619

Robinson

R-22 Series

R-44/ R-44 II

R-66

163

61

97

5

4,918

2,310

2,174

434

7,412

3,233

3,719

460

Since Airbus, Bell, Robinson have strong presence in Japan coupled with full line service and training infrastructure, future competition will center around these three manufacturers. Airbus started production of EC-120 at Harubin, China from end 2013 to bring down the manufacturing cost after securing orders for 150 aircrafts. 42 Bell 206 series are in operation in Japan. High expectation exists for Bell 505 which can replace some of Bell 206 . Robinson R-66 started commercial operation from autumn 2013 with good performing records viewed to be major contender for future air taxi fleet.

End 2014 Low Cost Rotorcrafts in Japan

       Public Registration2015

R-22

R-44

R-66

Bell 206

EC-120

AS-350/EC-130

Piston Single

Total 177

61

34.5%

97

54.8

Turbine Single

Total 175

5

2.9%

42

24.0

3

1.7

94

53.7

Actual market data exhibts types of rotorcrafts that are more congenial to regional environment and customer needs.

4 Airports in Vicinity of Metropolitan Tokyo

(Distance from center of Tokyo)

Airport

Haneda

Narita

Ibaraki

Yokota

Distance

16

64

 85

 32

Time Required

8 minutes

20 minutes

26 minutes

10 minutes

Applied helicopter cruising speed is 200km/h.

                        85

           32

                        64

             16

Narita is major international airport closed during night time because of noise restriction. Haneda is now open for international flights and allow midnight early morning flights. Ibaragi because of distance and less convenient transportation access are utilized by LCC. Once air taxi can connect Ibaragi to metropolitan Tokyo, it will be 26 minutes ride. For instance, Narita-ANA downtown hotel air taxi service will require 20 minutes ride v.s. using express train-ground taxi or limousine bus spending 80 minutes, if no traffic congestion will cause unwanted delay,

 

Scope of Greater Kanto Area

 

地理区分

Area

Population

Regional GDP

Japan Total

372,924

127.8 MM

495.6Trillion Yen

Greater Kanto

70,814 (19%)

51.140%

221.9 (44.8%)

Kanto

32,560 (46%)

42.2 (33%)

186.4 (31.6%)

Greater Tokyo

2,189 (6.7%)

13.2 (10.3%)

91.1 (18.3%)

Metropolitan Tokyo

65 (3%)

 

Greater Kanto area cover 100~150 ㎞(62~93 milesradius of Tokyo. This area occupies 20% of Japanese land area, house 40% of Japanese population and produce 45% of Japanese GDP. While land area is about the size of Ireland and population of Korea, GDP is about Brazil, Russia if exchange rate of \100/$ is applied but at \80~90/$ (Japanese yen has appreciated in past to below \80/$),it can exceed France and UK. In short, there is high concentration of commercial activities within the area that can be served by helicopter. Although all the cities in this area are well connected by express train, local railroad, bus and highways, there are numerous less accessible pockets that can be served by short ride air taxi (25~50)

There are astonishing concentration of major business firms within center of Tokyo which require two-way movement of people between headquarter→neighboring manufacturing sites, research facilities, delivery center and local business clients.

One imminent need is how to cope with visitors of upcoming Tokyo Olympic 2020, but more urgent is mushrooming visitors from neighboring area thanks to growing affluent middle-class. There are large market for EMS, SAR, law enforcement and fire fighting.

 Area

Japan Total

Greater Kanto

372,924

70,814

Closest Overseas Nation

Zimbabwe 390,580 Germany 357,021World Rank 61th

Sierra Leone 77,474, Ireland 70,280 (World Rank 118th)

Population

Japan Total

Greater Kanto

127.8 MM

51.1

Russia142.9, Mexico118.4 (World Rank 10th

S.Africa 53, Korea 50.2 (World Rank 26th

Regional GDP

Japan Total

Greater Kanto

495.6Tl \

221.9

World number 3 after USA and China

Brazil 224.2, Russia 211.8.

Population of Cities           GDP of Cities

Demographia 2012        Brookings Institution 2012

Rank

City

Population

Rank

City

GDP

1

Tokyo

37,126 K

1

Tokyo

$1,520 Bil

2

Jakarta

26,036

2

New York

1,210

3

Seoul

22,547

3

Los Angeles

786.7

4

Delhi

22,242

4

Seoul

773.9

5

Manila

21,951

5

London

731.2

Number of Billion Dollar Corporation Headquater

      McKinsey Data

Rank

City

Number

1

Tokyo

613

2

New York

217

3

London

193

4

Osaka

174

5

Paris

166

Neighboring Regional Airports

 

 

 

 

289 278

200 311

 

 

178 40

 

178                 80

 

308 104 40

 

 

 

 

USA

New York

Washington 379, Boston 333,Pittsuburgh 606, Detroit 407

Europe

Frankfurt

Zurich 306, Wien 594, Milan 515, Paris 475

Above is to demonstrate different sense of distance in Japan and USA/Europe. Japanese distance can be covered easily by low cost light rotorcrafts.

 

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