日本におけるビジネス機の在り方を考える

Executive Summary

1.Under   pressure in 90’s to “open sky” business aircraft desiring to visit Japan   under the banner of “No boundaries in Sky”, 3 slots daily for use for business   aircraft in Narita were allocated in 1996 following the founding of JBAA   (Japan Business Aviation Association) that year.

2. By   mid-2000, use of business aircrafts at all regional airports were allowed.   Today more than half of the visiting foreign business aircrafts land in  regional airports.

3. Opening   of Haneda finally took place during 2009~2010. Narita’s slots for business   aircrafts quadrupled from daily 3 to 12. Ironically, 3 slots allocated in 1996  in Narita were never fully utilized even 17 years after its allocation.

4. Opening   of Ibaragi Airport and possible co-use of Yokota Airport pose unique  opportunity for business aircraft which opt to avoid congested main   international airport for peripheral secondary airports. Helicopter service   can be made available between Ibaragi-Roppongi, Tokyo (25 minutes ride) or   Yokota-Roppongi (less than 10 minutes ride). Current fare of Roppongi-Narita  is $500 per person one way.

5.   While free access of metropolitan airports were cited as critical deterrence,  central issue of whether chartering cost of business aircraft vis-à-vis   commercial airline airfare would be competitive was never placed in front  burner

6. As  the issue was left unattended for nearly two decades, time has come to  squarely address the “Cold Reality”.

a. There   were more than 30,000 turbo-props plus jet business aircrafts actively in  operation globally during 2012 out of which Japan owned 35, a totally   insignificant number. (See Appendix A)

b. There   is not a single Japanese civil business aircraft available to make mid-long  distance flight to USA/Europe or even to most of China. Only few light jets do exist  but hardly of any significance. Few of mid,~heavy jet that were available  moved out of Japan during mid-2000.

c. Reason being use  of commercial airliner v.s. business aircraft shun any room for ordinary   Japanese businessmen including top executives to use business aircraft. Full  fare first class round trip commercial airfare between Narita-New York/London  is $20,000 v.s. business aircraft of $350~400,000 or $1.00/㎞ v.s.$17.50~20/㎞. Majority of Japanese   businessmen would use business class or more up-graded fare of $4,000~10,000   or $0.20~0.50/㎞. Domestic use of light jet business aircraft will cost $12~18/㎞whereas full fare first class of commercial airline will cost $0.50/㎞. Recent report of Ministry of Land & Transportation cited that  average airfare customer paid for commercial airliner during first three  months of 2013 was $0.12~0.18/km, LCC $0.058~0.074/㎞. First class fare of super speed express train in Japan cost $0.35/㎞whereas most expensive ground transportation taxi was $3.30/㎞. Domestic light jets are employed to carry mainly VIPs and wealthy  individuals.

c. 35 civil business aircrafts   are comprised of 11 turbo-props and 24 light jets, largely owned by midcap or   small regional independent owner enterprise, mass media and  business aircraft operators. Not a single  light jet is owned by blue chip companies.

7. As No. 3 economic   power in the world this poses a mystery.   Current report attempts to offer explanation providing possible future  course of Japanese business aviation.

8. In 2012, Japan   owned approximately 4,000 aircrafts (4,387) more than half of 2,390 was military  use leaving 2,390 as non-military aircraft. (Refer Appendix A)

Military and public sector owned   62 heavy, mid ,light business jets plus 83 twin engine turbo-props of total  of 145, a fairly impressive line-up of business aircrafts  excluded from Japan’s list of business   aircraft. Further elimination of aircrafts used by commercial airliner,   commuter service and use for leisure leave 1,100( 1,128) aircrafts that will   fall in “broadly defined” business aircrafts as opposed to “narrowly defined”   business aircraft encompassing twin engine turbo-props and jets only. In   2012, 97 twin engine turbo-props and 530 jets were in existence.  None-the-less, they were owned either by public sector or by commercial   airliner, regional commuter etc. leaving only 11 twin engine turbo-props and  24 jets or total of 35 as “narrowly defined” business aircraft.

b. Major misconception and confusion arise  out of the fact that “broadly defined” business aircraft represents 25.7% of  total aircraft. “Narrowly defined” business aircraft is scant 0.8%. One must apprehend  uniqueness of  “Japanese Model”

c. Japan possesses highly developed  and sophisticated transportation system. Public transportation such as super-speed  train, railroad, urban transport such as subway, and bus connect every region   of Japan including web of highways. There are 98 airports that make Japanese to  reside within 50㎞ (31 miles) radius from airport.   Besides there are 30,000 heliports scattered all-over Japan. Ordinary   business person using public transportation including commercial airlines are   charged $0.20~30/㎞ fare in comparison to $12~17/㎞ for light jet.

d.  In order to meet competition, “broadly   defined” Japanese business aircraft cannot be Airbus A-380 ($250 MM up), nor   Heavy Jet （$50~70 MM）, nor light jet （$7~12 MM） nor micro jet （$3.5~5 MM） but single engine piston   costing $0.3~1 MM or low cost rotorcraft costing $0.25~2.5 MM. There are 444 single   engine pistons and 631 rotorcrafts in Japan falling under “broad definition”   of business aircraft. This is after deducting public and aircrafts used for leisure   (20%)

d.  Japanese model employ  inexpensive aircrafts to complement highly developed and reliable  well-established transportation system. Remember Commodore Perry when he  arrived in Japan in 1853 by “Black Ship” presented locomotive model manufactured  in Philadelphia. After Meiji Restoration of 1868, the new Meiji regime opened  the first railway between Shinbashi-Yokohama on 1872. Japan adopted state of  art technology demonstrated by visiting Commodore Perry fairly quickly amidst   major political changes that took place at that era..

9. Japanese  model can be summarized as following ;

a. For mid~long distance overseas   travelling, commercial airlines are used even by top business executive.   There is no reasonable logic that can change the course. It has  half-a-century of history and is solidly established business practice.

b. Few super-rich, celebrities, VIP who wish  to use business aircraft can charter heavy jets from near-by region such as  China, Korea, Philippines and Guam.

c. None-the-less, inexpensive single piston  or rotorcrafts of 1,100 are available domestically  to supplement other highly developed means of transportation. Even these  light aircrafts require innovative and creative thinking to compete with  conventional means of transportation. (Purpose of opening this site)

Need for Further Improvements and Overseas Assistance

1.Despite   there exists reasonable size of general aviation(GA) market, GA is treated as   “secondary citizen” As an advanced economic power, Japan may be the rare exception  of where appropriate legal rules such as comparable to FAR Part 135 is  conspicuously absent. While the government is putting an effort recently to  redress the issue, foreign assistance such as FAA, GAMA, NBAA etc. may  greatly expedite the process.

2. In  the same vein, because of extensive use of rotorcraft, foreign assistance of  FAA, GAMA, AHI and rotorcraft manufacturers to allow instrumental flight by Japanese  authority in light of development of Garmin type of avionics could greatly contribute in enhancing use of rotorcraft as “broadly defined” business   aircraft.

3. Even with appearance of inexpensive rotorcrafts, way must be devised to achieve service fee competitive with highly developed and reliable conventional means of transportation available in Japan. $500~1,500/h chartering fee is probably required.

4. In order   to achieve such pricing target, central purchasing of aircraft, maintenance   and management of operation are required. Currently, Japanese operators are   dispersed to operate at uneconomically low utilization of aircrafts. Some   operators of rotorcraft employ them only 100~200 hours per year. Here again, advises from foreign trade organization or manufacturers can greatly benefit Japan.

5. Japan is relatively small island with highly dense population.. Kanto region which   can be covered within 150km radius from Tokyo can be reached within 45 minutes by helicopter. Population is almost   equal to Korea surpassing Spain. GDP is greater than either France or UK with 521 industrial parks within.( See Appendix B)

6 .One vital issue is to receive permission to build heliports in cities and adjacent to major railway stations. Tokyo for instance, is Japanese business center. Over 2,000 companies traded on stock market maintain head-office in Kanto out of which over 1,600 in Tokyo. There are only 3 heliports within metropolitan Tokyo but only one in Roppongi which is anywhere close to business center. Application by Mitsui & Co (Otemachi), C.Itoh (Aoyama), Peninsula Hotel (Hibiya) were all rejected because of the most archaic reason that use of helicopter is “disrespectful” because it overlook Imperial Palace when heliport for Foreign Press Club (Hibiya) is long in use. Same logic of building tall offices facing Imperial Palace was retracted years ago. Concerted petition by Japanese business community and foreign representatives is needed to overturn such out-dated rules. Heliport on top of Roppongi Hills was achievement of political clout of broadcasting and real estate company not an aviation related entity.

7. Finally, Japanese need to be educated and enlightened to calculate cost/benefit in terms of savings of manpower cost by use of business aircraft. NBAA for instance market software to calculate cost/befit of using commercial airlines vis-à-vis business aircraft. There is urgent need to develop Japanese version taking in consideration of Japan’s regional peculiarities. Here again, NBAA’s co-assistance can greatly enhance the process.

8. All   of above have long been pronounced. None-the-less, efforts and works are made   independently and in isolation. Nobody in industry or business community is opposed to utilizing business aircraft to enhance productivity. Only thing needed is to unite “Three Arrows” to form a unified front. Here again such practice which is daily occurrence in Washington to form business coalition to unite the front is needed in Japan. Fortunately there is established coalition of Diet members to expedite use of business aircraft both in Liberal Democratic Party and Democratic Party acting in isolation and waiting direction from industrial and business community. Added request by foreign entity is most effective known to all foreigners as “Gaiatsu”( foreign pressure)

Free Use of Japanese Airports by Visiting Overseas Business Aircrafts

Issue

1 .As part of liberalization of aviation industry in 1978 and pursuing “Open Sky” policy led by USA, “Open Sky” and free access to airports in sovereign nations became a heated issue. It developed into front burner trade issue between USA and Japan.

2. After quarter century, the process delivered handsome dividends to both countries. A new treaty between two countries correcting some of inequalities in favor of Japan went into effect. Restructuring and drastic reorganization of global airliners resulted ANA to join Star Alliance and JAL to One World benefiting customers to secure access to greatly extended global air-network,   increasing convenience and reduced airfare.

3.Though Japan was latest in joining global band-wagon of introducing LCC, Japan did allow operation of LCC which should attract increased air travelers both ways, especially travelers from near-by Asian countries to enhance needed sight-seeing travelers from China, Korea and South-East Asia where personal income have dramatically increased.

4. Japanese authority lifted restrictions on use of business aircrafts at regional airports during mid-2000. Now more than half of overseas visiting business aircrafts land in regional airports. Russians fly to Hokkaido and into coast of Sea of Japan. Airports located in Western Japan are becoming more popular because of proximity to Asian continent. Fukuoka in northern Kyushu is located half way between Tokyo and Shanghai. Northern Kyushu always served as cross-road between Korea and China. Okinawa is favorite resort area for Taiwanese because of proximity.

5. The greatest hurdle was opening of two metropolitan Tokyo airports, Narita and Haneda. Here physical capacity to receive business aircrafts were severely limited. All the overseas airliners were scrambling to secure more slots. 3 slots daily were allocated for business aircraft in 1996 at occasion of founding of JBAA (Japanese Business Aviation Association). These slot allocation was gradually expanded during course of time, until 2009~2010 as extension of Narita’s B runway, opening of new Ibaragi Airport and completion of Haneda’s D runway greatly enlarged airport capacity allowing more slot allocation for use by business aircrafts.

6. There are still trailing issues such as shortened time for securing use   permission, length and space for aircraft parking and above-all reducing airport use service fees.

7. Although there is room for further improvement, they are secondary issues by   now.

a. 3 slots/day allocated in Narita for business aircrafts back in 1996 have never been fully utilized. Ironically, expanded use of Haneda (limited for use during mid-night~early morning only) shifted   use of many business aircraft from Narita to Haneda to further expose under-utilized slots in Narita. Only 2 slots/day out of 3 slots/day allocated in 1996 are in use (currently 12 slots/day are available)

b. Haneda’s airport use fee for Gulfstream  G-550 is currently around $6,500 which is 2~3 times higher than comparable fees overseas. However, round trip airfare of G-550 between Narita-New   York/London is $350~400,000. Some Asian operator would charge $5,000 premium for calling Haneda. While it is still a factor, in proportion for what customers are willing to pay for chartering business aircraft, the amount is secondary issue.

c. One strange phenomena is newly opened Ibaragi Airport is never taken seriously as business aircraft airport. Many of issues associated to Haneda can be solved by use of Ibaragi. All the major   countries like USA, UK, France will use secondary airports around metropolis to avoid traffic, port congestion, and take benefit of lower use fee. Major business aircraft airports in New York are not Kennedy, La Guadia, nor Newark but Teterboro, Westchester County and Morristown. London use Farnborough, Stansted, Luton and Paris le Bourget. While access to Ibaragi has been debated,   helicopter from Ibaragi to Roppongi Hills heliport in center of Tokyo will take approx. 25 minutes with estimated cost of several hundred dollars one way (Narita-Roppongi is $500) if chosen as suitable airport. It is insignificant amount in light of hundred and thousand dollars spent to charter business aircraft.

8. Aside from some trailing secondary issues, there is no major deterrents preventing overseas business aircrafts from visiting Japanese airports. Several thousand business aircrafts visit Japan annually, less than half destined to Narita or Haneda. Rest scattered around regional airports, Nagoya being the most conspicuous after Chubu International Airport opened. Nagoya airport cater for general aviation that encompasses business aircraft. By the way, several thousand visiting aircrafts to Japan annually represent two decimal figures below what one major city in USA/Europe will receive .Japan is located too far away to economically justify use of business aircrafts limiting users to most privileged.

Factors   that Differentiate Japanese Model

Greatest criticism or comments addressed against Japan during the past 20 years is that Japan as world’s No.3 economic power (was No.2 till recently) should utilize business aircrafts commensurate to its economic power and global business activities. More recently, oil rich nations and BRIC’s notably China are purchasing high-end aircrafts that rejubinated the otherwise depressed current business aircraft market.

Is business aircraft folly of wealthy or judicial business tool for common businessmen

Current report takes the stand that both arguments can be valid depending on set condition.

1.   Business aircraft in many occasions do represent display of “Wealth and Power” and seen as muscle showing. There is no such denial.
2.   Equally, both in USA or Europe it is employed as judicial business tool enhancing business productivity resulting in higher corporate profitability.
3.   There are considerable incidents where it borders the two.

Although   same can be said of Japan, Japan does possess some unique features.

1.   As in any country there is rich and poor as well as class differences that is seen equally in Japan but less conspicuous than many other societies. Ruling class was wiped out during Meiji Restoration. Wealthy land lords or newly rich grown after Meiji Era vanished after World War II. American occupationally force and post-war Japanese bureaucrats were strongly   influenced under leftist ideology that led Japan to become fairly equal society allowing closely 90% of people to identify themselves as “middle class”. Gorbachov once remarked that Japan is only country in the world that reached close to goal of communist society under free democratic process and economy. As such, there is no comparative wealthy in Japan as one will find in USA or Europe. Russian President Putin once remarked that 2/3 of Russian   national wealth were held by only 7 individuals. 1% of Chinese holds 60% of China’s national wealth which is currently larger than Japanese GDP. China is not shy to propagate that China is fast becoming world’s top ranking nation in number of wealthiest. Japanese definition of wealthy by Nomura Security is super-rich who own liquid assets of above $5 MM and wealthy whose liquid assets exceed $1 MM, hardly wealthy under global standard. Both combined   represents 1.6% of population. Critical mass own liquid assets under $300,000 which is 80.4% of population. In between is semi-wealthy and upper mass (most of upper reach of businessmen fall in this category) who own liquid assets between $300,000~1,000,000. Culturally in Japan, display of wealth is considered as show of arrogance and expression of vulgarity.
2.   Above will translate that there is few that can afford to own business aircraft but even then they would not attempt to attract criticism of display of wealth. There is not a single high end business aircraft owned by civil sector.
3.   Japanese finance minister who attended G-20 finance minister meeting in Rome paying $410,000 to charter business aircraft was questioned by opposition party in Diet that there was business class seat available on commercial airline at $8,500 leaving approximately the same time to Rome. He had to apologize publicly, resigning later coupled with other scandals. His predecessor was also summoned to testify acknowledging use thrice during his tenure   pledging never to use business aircraft again. Web-sites were flooded by storm of anger and outrage accusing them as “tax robber”
4.   The most convincing argument of why there is no business aircraft capable of flying long distance is, even the top business leaders are mostly self-made people of humble origin. They are wage owners employed by stockholders and stakeholders. They are accountable to present judicial and rational explanation to use business aircraft. There is no way to justify use of business aircraft paying $350~400,000 to visit Europe or East Coat USA. when full fare first   class seat is available from any airline at $20,000. Emirates offer $10,000 first class round trip fare between Narita-Dubai (Same distance as Tokyo-New York) by Airbus A-380 where seat can be converted into flat bed with partition to provide single room privacy complete with shower and free drink cocktail lounge. Same   route will cost $350~400,000 by use of business aircraft.
5.   This is actually “deja vu” incident in Japan. Detroit has once reminded Japanese to purchase Cadillac commensurate with economic power Japan grew in and to reduce trade imbalance. Black stretched limousine with curtain became a status symbol of boss of gangsters but never employed as corporate executive’s vehicle. Corporate executives were accountable to explain why they needed large cars which do not suite Japanese road condition nor to justify expensive gas consumption and maintenance fee..
6.   One more persuasive reason any American can understand is even in USA, no common business person would ever pay $350~400,000 to travel to Japan. Only handful of charismatic business leaders use heavy jets to travel long distances. Only several hundred business aircrafts from USA visit Japan every year carrying various celebrities aside from business leaders. They number fraction of business visitors from USA visiting Japan. Average flight time of business aircraft used by American business clients is just 1.8 hours per trip. Only handful can afford chartering business aircraft for 25 hours to complete travel back-and-forth between USA/Japan. Overwhelming number of executives both in USA and Europe rely on commercial airlines not glamorous executive jets.
7.   The aircraft common American business person use is not shiny, state-of-art, luxurious aircrafts displayed at various air shows. Often they are second hand turbo-props operated by retired pilots and low over-head regional operators. They are often used as air taxi for short distance and short period with chartering cost 1/3~1/10 of what one would have to pay in Japan.
8.   Japan is searching ways to develop market for at least upper management and staffs of business community. Quarter century of history relates that no high end heavy jets are needed because use of commercial airlines is much cost effective. Aside from privileged few who will call in business aircrafts from neighboring countries, airliners offer “EcoPure – Premium   Economy” seats for junior business travelers at $1,000 round trip to New York or 1/400   of business aircraft.
9.   Although there are only 34 “Narrowly Defined” business aircrafts in Japan, there are more than 1,100 “broadly defined” business aircrafts comprising of small piston planes and rotorcrafts. Even they are too expensive for ordinary business people including upper management people for regular use.
10.   Japan probably can achieve to provide competitive charter rate to compete with highly developed various ground transportation means not available in many large continental countries .However, it requires careful study to meet needed conditions and innovative thinking.

Region

Jet ＋ Turboprops

America

North America

Central America

South America

23,154

19,219

1.471

2,464

76.１

（63.1）

Europe

4,034

13.2

Asia-Pacific

East/West Asia

Middle East

Oceania

2,246

1,094

546

606

7.4

（3.6）

Africa

947

3.1

Others

63

0.2

Total

30.444

100.0

Country

Business

Jet ＋ Turboprops

Public+Commercial

China

315

363

48

India

226

252

26

Philippines

60

64

4

Indonesia

55

73

18

Thailand

38

59

21

Japan

（Japanese Registration）

35

（35）

165

（610）

130

(575)

34

52

18

Type

Total

MSA

JCAB

Public

Civil

Civil   Business

％

Twin eng props

97

22

4

26

61

11

11.3

Twin Eng Jet

513

2

4

6

484

24

4.7

Total

610

24

8

32

545

35

5.7

Country

Type

Reference

China

ACJ318~319

Gulfstream G-550

G-IV, G-V

Global Express

Beijing  :    Deer Jet,

Air China Business Jet

China

Hong Kong

Metrojet

Jet Aviation

TAG Aviation

Gulfstream G-550 x 6, G450 x 2, Global Express x 1, Global 5000 x 1

Global Express x 2, Global Express XRS x 3,Global 5000 x 7,   Gulfstream G-450 x 3, Falcon 7X x 2, Falcon 2000LX x 1,Challenger 605 x 8

Philippines

Falcon 2000LX

ACL (Aviation Concepts LLC)

Korea

Global Express XRS

Gulfstream G-V

Samsung

Guam

Challenger 605

Share Jet

Year

2006

2007

2008

2009

2010

2011

2012*

Share %

Single Engine Piston

561

565

562

568

570

511

503

11.4

Turbo-Props

21

23

23

23

24

23

26

0.6

Twin-Eng Piston

46

45

43

46

54

54

52

1.2

Twin-Eng Turboprops

112

111

111

109

113

102

97

2.2

Twin Engine Jet

394

419

436

455

474

479

513

11.7

Multi-Engine Jet

106

90

76

68

36

18

17

0.4

Fixed-Wing Total

1,219

1,230

1,228

1,246

1,247

1,187

1,208

27.5

Rotorcraft

778

773

768

777

781

777

789

18.0

Total

1,997

2,003

1,996

2,023

2,028

1,964

1,997

45.5

Military Fixed-Wing

1,878

42.8

Military Rotorcraft

512

11.7

Military Total

2,390

54.5

Grand Total

4,387

100.0

Kanto

Greater   Kanto

Kinki

Chubu

Population

Japan   Total

Share   %

42,842

128,057

33.5

47,969

37.5

20,850

16.3

16,931

13.2

Area   (1,000km) Japan Total

Share   %

26.1

377.9

6.9

56.8

15.0

27,5

7.3

37.8

10.0

GDP   (Bil. Dollar)

Japan   Total

Share   %

1,878

5,051

37.1

2,076

41.1

797

15.8

726

14.4

Industrial   Park

Japan   Total

Share   %

405

1,782

22.7

521

29.2

257

14.4

317

17.8

Population（1,000）

Area(1,000㎢)

GDP（Bil. Dollar）

Greater Kanto

Comparison

47,969

Korea   48,184

Spain   46,077

56.8

Croatia   56.6

Denmark   43.1

2,076

France   2,061

UK   2,047

Chubu

Comparison

16,931

Netherland   16,613

37.8

Netherland 37.4

Taiwan   36.2

726

Australia   733

Netherland   622

Flight Area

Kanto

Tokyo,Yokohama

Can be covered by 150km radius from Tokyo   Haneda Airport

Can fly 100km in 30 minutes by rotorcraft 15 minutes   by small plane

Chubu

Nagoya

Can be covered by 150km radius from Osaka   Itami Airport

Can fly 100km in 30 minutes by rotorcraft 15 minutes   small plane

Kinki

Kyoto,Osaka,Kobe

Can be covered by 150km radius from Nagoya   Komaki Airport

Can fly 100km in 30 minutes by rotorcraft 15 minutes   by small plane

Geneva    228㎞、Milan  203㎞ Paris  474㎞、Vienna  597㎞、Amsterdam  597㎞。

Albany 250㎞、Boston 428㎞、Washington DC 380㎞

Price（$1,000）

Remarks

Airliner

150~250,000

2 Boeing 747 is employed as Air Force One   Japan

Heavy Jet

50~65,000

Many owned by public sector but none by civil sector

Mid Jet

20~35,000

Many owned by public sector but none by civil sector

Light Jet

7,000~12,000

20 are owned by owner enterprise and mass   media

Micro Jet

3,000~5,000

4   Citation Mustang exist

Twin Eng,Turbo

400~8,000

11 civil aircraft but with diminishing   trend

Piston

300~1.000

As broadly defined business aircraft estimated around   450.

Piston Helicopter

250~500

Robinson R-22 Beta II $276,000 R-44 Raven II $442,000

Turbine Helicopter

850~3,000

Robinson R-66 $830,000 Eurocopter  AS-350 $2~3 MM

Area

Area Span（㎞）

Reference

USA

4,500 x 2,500

Europe

3,200 X 3,300

Canada

4,000 x 3,000

Australia

4,000 x 3,700

Brazil

4,300 x 4,400

India

2,500 x 2,500

China

5,000 x 5,500

Russia

9,000 x 3,300

 Japan

 3,000 x 3,000