Andrzej Jeziorski/SINGAPORE

The Japanese transport ministry plans to revise its policy on domestic airport slot allocation, taking into consideration applicants' load factors and fares.

The move could cause concern among the big three Japanese carriers - Japan Airlines (JAL), All Nippon Airways (ANA) and Japan Air System (JAS) - facing stiff competition on ticket prices from small start-up domestic carriers Air Do and Skymark, which are attracting high load factors on two key routes.

JAL plays down the significance of the change, stressing that some of the airline's recommendations have been adopted in the proposal. "As long as we get our fair share, we do not mind if Skymark and Air Do get more slots," says JAL.

The ministry is to submit a bill revising Japanese aviation law to the Japanese Parliament for approval. If given the go-ahead, the new law will be adopted from the second quarter of 2000, coinciding with the anticipated opening of a third runway at Tokyo's crowded Haneda domestic airport, and the associated bonanza of new slots.

Slots will be awarded according to a scoring system, which will assess airlines' punctuality, safety and reliability, as well as fares and load factors.

The ministry says it intends the new system to increase competition, which has been restricted through lack of slot availability at major Japanese airports.

In addition to the revised slot allocation at Haneda, slots are expected to be reallocated at Osaka's Itami Airport and possibly Kansai International, Sapporo-Chitose Airport and Fukuoka. Some of the slots will be redistributed every three to five years.

JAL and ANA have been forced into a fare war with the two start-ups, formed since the 1997 deregulation of domestic air travel. Skymark and Air Do, which respectively operate the Tokyo-Fukuoka and Tokyo-Sapporo routes, have been offering fares which undercut their rivals substantially.

JAL, and later ANA, responded with a 50% fare cut on half its 24 daily Tokyo-Fukuoka flights, and 32% on half the 24 daily Tokyo-Sapporo flights, to match the newcomers' fares. The new fares were initially introduced up to the end of March, but JAL says they will remain until the end of May.

ANA says it is examining a possible extension to its lower fares.

Air Do and Skymark are claiming load factors of 80.4% and 76% respectively on their six-times-daily services.

By comparison, JAL was drawing December load factors of 60.9% to Sapporo and 48.4% to Fukuoka. Overall, JAL averaged a load factor in December of 54.3% on domestic services, while ANA achieved 53.5%.

Source: Flight International