The Current Use of Metropolitan Airports during the First Summer Vacation after the Covid Pandemic and the Latest Initiatives at These Airports

By Tetsuhiro Hagiwara

Introduction

The rush of people spending their summer vacation abroad peaked at Narita Airport on August 10. The departure lobby was crowded from the early morning with families carrying suitcases in anticipation of the first Bon period since the Coronavirus pandemic was designated as a "Class 5" disease under the Infectious Disease Control Law.

On May 8, 2023, the Japanese government shifted the infectious disease status of the Coronavirus from "new-type influenza and other infectious diseases (equivalent to category 2)" to "category 5 infectious diseases" under the Infectious Diseases Control Law, finally eliminating the restrictions that had been in place until then, such as the constraints of going outside and wearing a mask indoors for those infected or in close contact. While Japan is flooded with foreign tourists who have returned to the country as a result of the elimination of border control measures, momentum for Japanese people to take their long-awaited overseas trips during this summer vacation is also gaining.

In this article, I would like to take a look at the usage of airports in the Tokyo metropolitan area during the summer vacation (Bon period) after the Coronavirus pandemic and the efforts of non-aeronautical revenue businesses at Haneda and Narita airports to improve earnings post-COVID.

1. International Flight Usage during the Dummer Vacation Period at Airports in the Tokyo Metropolitan Area (Haneda and Narita)

On August 25, the Tokyo Regional Immigration Services Bureau announced preliminary figures for this year's Bon period (August 10-20) showing that Haneda Airport had 575,940 inbound and outbound passengers and Narita Airport had 802,740 inbound and outbound passengers during the same period. Compared to 2019, before the Coronavirus pandemic, the number of daily passengers at Haneda and Narita airports recovered to 99% and 69% of their pre-COVID levels, particularly at Haneda Airport, which has finally returned to its pre-pandemic level after a long passage of time.

A breakdown of passengers at Narita Airport shows that while the number of daily inbound and outbound passengers recovered to the same level compared to 2019 for foreigners, the number of Japanese was at about 50% of the level of 2019. It appears that overseas travel is still a challenge for Japanese after the Coronavirus pandemic. One reason for this may be the recent relatively high airfares and the declining purchasing power due to a weakened JPY. According to airline companies, many overseas airfares are up 20-40% on many routes compared to pre-pandemic. This is due to soaring energy prices following Russia's invasion of Ukraine, as well as the yen's depreciation from around 106 yen to the dollar before the pandemic (August of the 2019) to around 145 yen at present.

Crowded departure lobby at Haneda Airport with people heading overseas.

(Image Source: Mainichi News)

2. Efforts in Non-aeronautical Revenue Businesses at Haneda and Narita Airports to Improve Profitability

As mentioned above, the number of foreign visitors to Japan is finally returning, but airport revenues were damaged to an unprecedented degree by the Coronavirus pandemic.

During the three years of COVID, what measures have struggling airport companies taken to survive in the midst of deteriorating profitability and record deficits?

The airport itself is a place for extraordinary experiences

Narita Airport: Bus tour in restricted area

Green Port Agency, a group company of Narita International Airport Corporation, is offering a "Narita Airport Special Bus Tour" at Narita Airport. The tour includes a close-up look at aircraft in a restricted area where a variety of aircraft from around the world reside, as well as a 360° panoramic view of the cargo area, maintenance area, and 60-meter-high Ramp Central Tower. The event also provides a unique opportunity to see the behind-the-scenes of Narita Airport, including a photo tour with a famous photographer and a tour of the JAL maintenance hangar.

Narita Airport Special Bus Tour

(Image Source: Green Port Travel)

Haneda Airport: Aircraft Cruise Tour from Tokyo Bay

At Haneda Airport, Haneda Passenger Service Co., Ltd. operates the "Under Jet Cruise", a group company of Japan Airport Building Co. The service offers an extraordinary cruise experience on a boat in Tokyo Bay, where passengers can enjoy close-up views of aircraft takeoffs and landings.

The Haneda Airport Under Jet Cruise

(Image Source: Japan Airport Building Co., Haneda Passenger Service Co., KM Corporation)

Other non-aeronautical revenue business

Narita Airport: "+NRT factory," a brand of local products linked to the area surrounding the airport

In March 2023, Narita International Airport Corporation announced the launch of "+NRT factory," a brand of local products in cooperation with the surrounding area, to develop and sell new products such as local confectionery and gourmet foods, with the aim of communicating the charm of the region to the world. We can look forward to the development of new products based on the theme of "excitement" that is unique to Narita Airport.

(Image Source: Narita International Airport Corporation)

Haneda Airport: Large-scale complex facility "HANEDA INNOVATION CITY

Haneda Mirai Kaihatsu Corporation (an operating company in which nine companies have invested) announced the completion on June 30, 2023 of "HANEDA INNOVATION CITY" (abbreviated name:

HICity), a large-scale complex facility being developed in a public-private partnership with Ota Ward in the Zone 1 development project on the former Haneda Airport site adjacent to the airport. The grand opening of the entire facility is scheduled for November of this year.

HICity is Japan's first smart airport city, which will generate exchanges that transcend the boundaries between "cutting-edge" and "culture" and create new value. The building will house a variety of facilities, including research and development facilities, offices, an advanced medical center, an event hall, accommodations, Japanese cultural experience facilities, and dining facilities. It is expected to become a center for the creation of new business and innovation through the gathering and exchanges of people, goods, and information from Japan and abroad.

(Image Source: Haneda Mirai Kaihatsu Corporation)

3. Efforts at Haneda and Narita Airports to Achieve Carbon Neutrality

While the movement to promote carbon neutrality is accelerating in various countries and sectors around the world, in Japan, the revision of the Civil Aeronautics Law and Airport Law, which went into effect in December 2022, includes the promotion of decarbonization in the purpose provisions of both laws. In this context, I would like to introduce new initiatives at airports in the Tokyo metropolitan area (Haneda and Narita).

Narita Airport: Establishment of Green Energy Frontier Co. Challenge to decarbonize energy supplied to the airport by 2050

Narita International Airport Corporation and Tokyo Gas Co., Ltd. have established Green Energy Frontier Corporation to supply energy to Narita Airport and began operations on April 1, 2023. The company plans to invest 100 billion yen by 2050 through the construction of a new energy plant and the installation of a solar power generation facility, the largest of its kind in the world at an airport. The company intends to be the first in the world to build a "decarbonization model for airports" at Narita International Airport that combines environmental friendliness and resilience, and to apply this technology and know-how to urban development and industrial parks in the airport's vicinity.

Rendering of the new plant Image of solar power generation equipment

(Image Source: Narita International Airport Corporation, Tokyo Gas Co.)

Haneda/Narita Airports: Promoting the Use of GPUs. Contributing to decarbonization by reducing aircraft "idling" on the ground

Haneda and Narita airports have announced that, beginning this spring, they will raise restrictions on the use of APUs (Auxiliary Power Units), which are used to provide the electricity and air conditioning needed by aircraft parked at the airports, to the strictest level in Japan, and will further promote the use of GPUs (Ground Power Units), which have higher CO2 reduction effects, to help decarbonize the airports. The use of GPUs will reduce CO2 emissions to 1/15 or less (in the case of a Boeing 777) compared to the use of APUs, thus contributing to the promotion of decarbonization at airports in the Tokyo metropolitan area.

Conceptual Diagram of GPU Supply

(Image Source: East Japan Civil Aviation Bureau, Narita International Airport Corporation)

Conclusion

According to the Quarterly Air Transport Chartbook, released August 31 by the International Air Transport Association (IATA), air traffic across the industry will recover to about 88% of 2019 levels in the second quarter of 2023 compared to the same period in 2019, with the short-term outlook for total passenger traffic returning to 2019 levels in early 2024, It is expected to double by 2040. In Japan, the number of daily passengers during the summer Bon period has recovered to about 100% of the 2019 level at Haneda Airport and 70% of the 2019 level at Narita Airport. Furthermore, with there also being reports that the ban has been lifted for group passengers from China, which had a significant impact on the Japanese inbound economy before the pandemic, the long period of receding demand and deteriorating profitability caused by the Coronavirus is finally coming to an end.

Airport operators are working to diversify their revenue sources by expanding their non-aeronautical revenue businesses, such as making the airport itself a place for extraordinary experiences and adding commercial facilities, and this trend is expected to continue in the future. This article focuses on the initiatives at Haneda and Narita airports, but we will continue to introduce new initiatives at various airports in the future, including those in other countries.