AIR TRAVEL: TWO BIG NEW INTERLINE AGREEMENTS
A number of new interline agreements lead the past week’s air travel news. Airline alliance oneworld has announced a new programme, called oneworld connect, aimed at expanding the alliance’s benefits to areas served by airlines that cannot meet the organisation’s requirements.
Fiji Airways will be the first member of the new programme; while there’s still no date on when Fiji will begin offering oneworld connect benefits, when it does it will be able to offer oneworld members priority access to check-in desks for all Emerald, Sapphire and Ruby frequent fliers, as well as priority boarding for Emerald and Sapphire passengers.
■Cyprus-based Cobalt Air signed an interline agreement with Etihad Airways that will open Cyprus to over 100 routes from Abu Dhabi, strengthening Cobalt’s presence in the Middle East.
IN flight news, Hawaiian Airlines inaugurated service on its new route between Long Beach, California, and Honolulu.
The new route, which is operated by new Airbus A321neo aircraft, will run daily, with more A321neo routes from the West Coast to Hawaii planned for the future.
Kazakhsta-based Air Astana launched new flights from Astana to two destinations in Russia: Tyumen and Kazan. The Astana – Tyumen route operates Mondays, Wednesdays and Saturdays, while the Astana – Kazan route operates on Sundays.
In the Caribbean, American Airlines is adding additional service to Bonaire, the Bonaire Tourism Corporation announced. In addition to the airline’s weekly Saturday service, which launched June 9, the airline will add three new weekly nonstop flights from Miami from December 15, 2018, through March 30, 2019. The new flights will operate Monday, Wednesday and Friday.
In Canada, low-cost carrier Frontier Airlines announced it is adding a new daily, nonstop flight between Ontario and Orlando. The new service kicks of August 13.
This week fellow low-cost carrier Norwegian announced it will launch three new routes from its existing cities in Florida to Europe this fall: Fort Lauderdale Hollywood International Airport to Madrid and Rome; and winter seasonal service from Orlando International Airport to Stockholm.
Finally, in aircraft news, United Airlines became the first North American carrier to operate the Boeing 737 MAX 9 aircraft, a new design known for its fuel efficiency. The new plane entered service as United flight 686 between United’s hub at Houston George Bush Intercontinental Airport and Orlando International Airport in Florida. The MAX is also scheduled to operate flights between Houston and Anchorage, Alaska, and Houston and Austin, Texas.
Japan is a country where the notion of privatising airports has not advanced as far as it has in some economically comparable countries.
But during the last two and a half years since the completion of a tricky concession on the Kansai airports there has been a spurt of activity, with several transactions completed and many others under way.
More drivers of aviation
There are many drivers, including the need for more flexible landing fees to attract more airlines; more efficient management; revitalisation of the airports; capturing the growing foreign and particularly Asian demand; and for non-aeronautical revenues to grow to offset the reduction in landing charges. The big change came about in 2011 when the Ministry of Land, Infrastructure, Transport and Tourism (MLITT) announced it would privatise all national airports by 2020. Japan’s airports are divided into: National (e.g. Tokyo Haneda, Fukuoka and Shin-Chitose), owned by MLITT and the main privatisation target of the government; Local (e.g. Kobe, Shizuoka, Memanbetsu); Corporate (e.g. Tokyo Narita, and Nagoya Chubu); and Defence/civil. The latter two categories are not currently targeted for privatisation. Following on from the Kansai transactions of Osaka Kansai and Osaka Itami airports (to a Japanese/French consortium of Orix and Vinci) and the one on Sendai Airport which took place six months later (Tokyu Group consortium), the same Orix/Vinci consortium took control of Osaka Kobe Airport on a 42-year concession contract on April 1, 2018.
In the same month and in a surprise development the Shizuoka Prefecture concluded an agreement with a consortium led by Mitsubishi Estate and Tokyu Corporation for the private operation of Mount Fuji Shizuoka Airport under the terms of a 20-year concession contract with privatised operations to commence on April 1, 2019.
Since then, attention has focused on forthcoming deals involved the national level airports of Fukuoka and the Hokkaido island airports, which have been grouped together. Most of the potential investors, as in the case of the Kansai and Sendai airports, are Japanese and MLITT is very keen to attract experienced foreign operators into the mix.The formal package privatisation tender for ‘One Hokkaido’ (seven airports on a 30-year concession) was issued on April 25, 2018 with a minimum bid price at JPY72 billion (US$658.1 million) (FJ$ 1,364.9m). A deadline date of August 16, 2018 has been set for the submission of tender documents.
Shin-Chitose is the largest and each of the airports will be marketed on the basis of their ability to attract individual tourist-based route operators.
In May, 2018 MLITT selected the Fukuoka Airport HD Corporationled consortium as the priority negotiation rights holder on its tender to operate privately Fukuoka Airport also under a 30-year concession contract. Members of the consortium include Nishi Nippon Railway Corporation, Mitsubishi Corporation, Kyushu Electric Power Corporation (all Japan) and Singapore’s Changi Airports International.
Private operation
Private operation of Fukuoka’s passenger terminal facilities is anticipated for November 2018 and commencement of full scale private operation in April 2019. MLITT set the minimum bid price on the contract at JPY161 billion (US$1.5 billion) (FJ$3.1bn).
Other, smaller transactions have already taken place or are under way on the Takamatsu and Shirahama airports.
The Takamatsu Airport Corporation, led by Mitsubishi Estate, commenced private operation of that regional airport on April 1, 2018 on a 35-year concession contract. Meanwhile, the Wakayama Prefecture selected a consortium led by Michinori Holdings, a public and tourist transportation service, as the priority negotiation rights holder to operate privately Shirahama Airport from April 2019. The 10-year concession contract here was expected to be a hard sell as at the time the tender was issued there were only three daily flights.
That isn’t the end of it by any means.
Forthcoming transactions will affect airports that fall within the MLITTs main focus and some that don’t.
The two largest ones are Kumamoto Airport, which is to be privatised by April 2020, and Hiroshima Airport (April, 2021).
That may be the end of it for a while, as the MLITT will wish to assess the benefits of the exercise before proceeding further, but it is known that other airports do covet the opportunity to jump on to what is now a bandwagon having previously been a lame horse-drawn cart, amongst them Nagasaki Airport.