Bloomberg News

Tokyo Aims for Millionaires With First Business-Jet Terminal

March 30, 2012

An Airbus SAS ACJ318 aircraft stands on the tarmac of Narita International Airport Corp.'s new business aviation terminal during a media preview at Narita Airport in Narita City, Chiba Prefecture, Japan. Photographer: Kiyoshi Ota/Bloomberg

An Airbus SAS ACJ318 aircraft stands on the tarmac of Narita International Airport Corp.'s new business aviation terminal during a media preview at Narita Airport in Narita City, Chiba Prefecture, Japan. Photographer: Kiyoshi Ota/Bloomberg

Tokyo’s first dedicated business- jet terminal opens tomorrow as Japan (JGDPQGDP) tries to lure millionaire tourists from China and investment from multinationals adding Asian offices.

The facility at Narita Airport, the nation’s biggest international gateway, will have dedicated customs and immigration counters, allowing travelers to bypass queues. The center will cost 250,000 yen ($3,040) per plane, said Hiroaki Suda, a spokesman for state-owned Narita International Airport Corp. There will be 18 parking spaces.

“We want to prepare ourselves so business leaders from overseas can come to Japan, adding to the country’s growth,” said Kunihiko Muroi, a parliamentary secretary at the transport ministry. “We also want Japan’s young small and medium-sized business owners to be flying around the world.”

Japan has also expanded Tokyo’s two airports to boost international flights, begun building new roads to ease congestion and drawn up plans to merge stock exchanges to help the city compete with Singapore, Hong Kong and Shanghai. The terminal may also boost the use of business jets in Japan, where the fleet totaled 55 at the end of 2010, compared with 12,074 in the U.S., according to the Japan Business Aviation Association.

‘High Hopes’

“We have high hopes for the new terminal,” said Junichi Nagano, president of Tokyo-based business-jet operator Japan Jet Charter Co. “It’s a big breakthrough for Japan’s gateway.”

The company will add an additional plane by the end of the year, as demand for business jets from overseas, such as China, grows, he said. That would raise the operator’s fleet to four.

The new center is located about 100 meters from the plane- landing spots at Narita’s terminal two. It’s opening alongside wider expansion work at the airport that has boosted the total annual capacity to 250,000 takeoffs and landings a year from 235,000. That will rise to 270,000 by the end of March 2013, Kosaburo Morinaka, Narita Airport’s president, said yesterday.

“Access to airports and landing slots in Tokyo has always been a problem,” said Ernie Edwards, president of planemaker Embraer SA (EMBR3)’s executive-jet division. By contrast, Hong Kong, Singapore, Shanghai and Beijing all already have dedicated business-jet centers.

The facility at Narita, about 70 kilometers (43 miles) from downtown Tokyo, will be only the fourth dedicated business-jet terminal in Japan, following two in the Nagoya area and one in the western city of Kobe, according to the Japan Business Aviation Association.

‘Big Step’

“This was a problem in Japan, where general aviation wasn’t a priority,” Francois Chazelle, Airbus SAS’s vice president for corporate jets, said at a Shanghai business-jet show this week. The new Narita facility “is a big step.”

Tokyo’s airports had 2,573 business jet take-offs and landings in 2011, according to figures from Japan’s transport ministry. That was little changed from a year earlier, even after the March 2011 tsunami and nuclear-power crisis.

There were about 5,000 business-jet movements at Tokyo, Nagoya and Osaka airports last year. A total of 2,387 flights nationwide involved flights to or from the U.S. South Korea was the second-most popular destination while China ranked third.

Slow to Adopt

The country, the world’s third-biggest economy, has been slow to adopt business jets because of limited slots for international routes and competition from high-speed trains and scheduled air services domestically, according to Geoff Tudor, principal analyst at Japan Aviation Management Research.

“Business jet operation hasn’t taken off up to now in Japan because business jet operations were discouraged by the Japanese transport authorities,” said Tudor. “Japan’s air transport bureaucracy didn’t want to provide room for elite niche markets. That attitude has changed.”

Planemakers expect business-jet use in China to surge, as rising wealth spurs purchases. Cessna Aircraft Co. and Embraer both have plans to build aircraft in the country because of anticipated local demand. The country’s fleet may increase to 2,470 planes by 2030 from 150 in 2010, according to Montreal- based Bombardier Inc. (BBD/B)

Airbus has sold its first corporate jet in Japan, David Velupillai, a marketing director for Airbus Corporate Jets, said in an interview at Tokyo’s Narita airport today. The plane, a A319 VIP jet that costs $68 million, was sold to an individual, he said.

‘Bright Spot’

“Asia Pacific is the bright spot in the corporate jet market,” said Velupillai. “The opening of the business jet terminal here is great. It makes it much easier to fly from Tokyo to other cities in Asia, even places that don’t have regular flight services.”

While the new Narita facility will ease arrival for business-jet travelers, it will still take at least 30 minutes to reach downtown even with a helicopter. For that reason, operators are also demanding a dedicated terminal at Haneda airport, which is located near the heart of the city.

“We should have business-jet facilities at Haneda, not just Narita,” said Kazunobu Sato, vice chairman of the Japan Business Aviation Association. “We’ll keep pushing for more take-off and landing slots.”

Tokyo has fallen behind other Asian cities as a center for regional investment. Singapore and Hong Kong are both more competitive cities, according to an Economist Intelligence Unit report. The Japanese capital was also placed seventh among 15 cities in terms of attractiveness for an Asian headquarters in a survey last year by the European Chamber of Commerce in China. Shanghai, Hong Kong and Singapore took the top three spots.

Hong Kong, China

Japan is also trailing in terms of growth. Its economy will likely expand 1.5 percent this year, about half the pace predicted in both Hong Kong and Singapore, according to economist forecasts compiled by Bloomberg. China is expected to expand 8.3 percent.

The new Narita facility may help Tokyo close the gap on its rivals and also play a small part in reviving the nation’s economy by easing travel for investors, said airport President Morinaka.

“We built the business terminal for people who value their time and security highly,” he said. “We want Japan to regain its strength.”

To contact the reporters on this story: Chris Cooper in Tokyo at ccooper1@bloomberg.net; Kiyotaka Matsuda in Tokyo at kmatsuda@bloomberg.net.

To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net.


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