DELAYS MAY SINK TROUBLED KANSAI

DELAYS MAY SINK TROUBLED KANSAI

Think of it as throwing away $4 million a day.

That's what the delayed opening at Japan's Kansai International Airport is expected to cost Kansai International Airport Co. Understandably, the corporation is less than delighted with the postponed ribbon-cutting.Kansai Airport originally was scheduled to open in March 1993. But in late 1990, the reclaimed land under the airport started to sink. This required additional engineering work and delayed the opening until July 1994. Most recently, airlines said they needed more time to switch their operations from nearby Osaka. The latest date is now September 1994.

What difference does a few weeks make? Quite a bit, the airport company says.

CRIPPLING INTEREST

Interest payments on the 1.43 trillion yen, or $13.6 billion borrowed for the first phase of construction amount to about $1.9 million a day.

Then add lost revenue, which is about another $2.9 billion, and you have a lot of anxiety at the corporation.

The latest delay isn't over construction deadlines. The terminal building is on schedule for completion in June, so the airport could open by mid-July.

By some accounts, however, the airport and the Ministry of Transport approved the July opening date without checking first with airlines about their requirements. So much for the consensus system. Airlines reportedly protested and demanded at least three months to shift their operations from the nearby Osaka Airport.

While that speck of dust settles, meanwhile, Japan's government is laying out further expansion plans. The Transport Ministry announced in late August it will request a budget appropriation of $9.5 million in the fiscal year beginning April 1994 toward further Kansai expansion.

As outlined, of the 1 billion yen ($9.4 million) 49 percent would come from the federal government and 51 percent from the Osaka regional government. The money will be used to survey the seabed in preparation for new runways due for completion in the year 2000. By then, the airport is forecast to be out of room.

Kansai's first phase will cover an area of 511 hectares (1,262 acres) and include a single 3,500-meter (3,850-yard) runway. This will give it an initial capacity of 160,000 takeoffs and landings annually.

Subsequent phases call for the facility to be bumped up to 1,200 hectares (2,934 acres) and two more 4,000-meter (4,400-yard) runways, allowing it to handle 260,000 takeoffs and landings a year. The airport hopes to be the first 24-hour airport in Japan. Strict noise restrictions will hurt late night flights, but Kansai has no neighbors other than some sea creatures given its location on a massive man-made island 5 kilometers (3.1 miles) offshore.

SURVEY FUNDS

Japan's Ministry of Transport has also requested about $760,000 to conduct a survey on future passenger and cargo demand.

These are in addition to a $66 million request in the next budget to complete terminal and customs buildings and other facilities.

Kansai is seen as the great hope for Japan's airport system because Japan has for so many years faced serious capacity problem. These have been worsened by noise restrictions, limited flat land, fierce anti-expansion opposition

from farmers and a lack of long-range planning.

Planners had hoped to expand New Tokyo International Airport at Narita, 66 kilometers (40.9 miles) from Tokyo and Japan's main gateway. But this summer, after a 27-year battle with local farmers, the government finally bowed to the inevitable and announced it would abandon any hope of a second runway.

The long-standing battle has left Japan's airports bulging at the terminals as demand skyrocketed. The volume of international air cargo handled in Japan was 530,000 tons in 1980, 1.03 million tons by 1986 and 1.58 million tons by 1990, with Narita handling 84 percent of that. More than 3 million tons of air cargo is projected by 2000. Similar growth curves are evident in passenger demand.

Narita has been forced to park passenger planes in cargo areas and bus passengers back to terminals in one of many stop-gap measures. Airport officials now are considering a plan to turn cargo operations over to a private company that would locate terminals over a mile from the airport - hardly a model of convenience.

One issue still under review, however, is landing fees. Japan has long been expensive for operators. A 1990 report by TM Economics/Avmark cited Narita as the most expensive airport to land at in the world.

Landing fees at Narita airport are now approximately $8,100 for a jumbo jet on an international flight and about $5,700 for domestic flights.

Landing fees at Kansai have not been announced, but some very high figures have been leaked with "sources" arguing that since Kansai cost four times more to build than Narita, the landing fees should be four times higher.

Kansai officials, meanwhile, say part of the fee structure will depend on how other sources of revenue shape up. But they promise that fees will be competitive with other airports in Japan.

The landing fee issue aside, Zenjiro Ogawa, managing director and vice president of the airport corporation, said he wants to put the airport on the aviation map as soon as possible.

Kansai expects to have an initial cargo capacity of 800,000 tons a year with start-up demand of 600,000 tons. Eventual operating capacity is slated at 30 million passengers and 1.4 million tons of cargo a year.

As far as physical layout is concerned, Kansai's cargo facilities are slated to fill 26.4 hectares (64.2 acres) - an area as large as the entire Narita Airport.

The cargo facilities will be developed in stages but plans call for separate export and import warehouses with export operations located beside the ramp. Forwarder warehouses will abut airline export warehouses and import cargo facilities won't be far away.