JAPAN'S NEW CIVIL AVIATION LEADERSHIP

C O N F I D E N T I A L SECTION 01 OF 02 TOKYO 002108 SIPDIS STATE FOR EAP/J, EEB/TRA FOR BYERLY PASS TO USTR FOR BEEMAN PASS TO DOT FOR GRETCH E.O. 12958: DECL: 07/28/2013 TAGS: EAIR EINV PGOV JA SUBJECT: JAPAN'S NEW CIVIL AVIATION LEADERSHIP REF: A. TOKYO 1489 ¶B. TOKYO 1432 Classified By: Ambassador J. Thomas Schieffer for reasons 1.4 (b,d). ¶1. (C) Summary: Japan's new civil aviation leadership offered no new ideas on civil aviation talks with the U.S. in their initial meeting with Emboffs. The GOJ does not plan to allocate Haneda Airport daytime slots to U.S. airlines. The GOJ, they reiterated, will not negotiate with the EU as a whole on civil aviation but only bilaterally with EU members. They acknowledged continuing lack of consensus regarding foreign investment in Japanese airports, but indicated they do not oppose limitations in principle. End Summary. -------------- Japanese Civil Aviation Plans -------------- ¶2. (C) The new Ministry of Land Infrastructure Transport and Tourism (MLIT) Japan Civil Aviation Bureau (JCAB) Director-General Ryuhei Maeda and Deputy Director-General Kenji Takiguchi met with econoffs July 23 after assuming their new roles in early July. Citing fuel prices and network restructuring, Takiguchi observed the Japanese aviation market is in "bad" shape. He noted an example of ANA canceling both flights on a twice daily Niigata-Fukuoka route, but then in response to pressure from both governors reinstating one flight, which is at a roughly 70% average passenger load. ¶3. (C) The Ministry is proposing an annual increase of 30,000 daytime slots at Haneda Airport, limited to short-haul services no further than Hong Kong, when expansion is complete. Takiguchi indicated MLIT will not open daytime slots to U.S. airlines. MLIT has expanded night-time hours to 10:00PM - 7:00AM, noting commercial feasibility concerns with the current 11:00PM - 6:00AM. The expanded hours would allow for long-haul flights from Japan to the U.S., said Takiguchi. ¶4. (C) Takiguchi responded to EMIN,s points regarding airlines, concerns about the lack of nighttime ground transportation, saying MLIT could ask railways serving Haneda to expand their hours of operation to 2:00AM. MLIT Railways Bureau is also considering a direct rail link between Narita and Haneda. However, Takiguchi argued Centrair/Chubu Airport (NGO) and Kansai International Airport (KIX) may be underutilized but attractive alternatives for Japanese and other travelers, in comparison to transfering between Narita and Haneda for international-domestic connections. ¶5. (SBU) EMIN stressed the need to improve competitiveness of Japan's aviation sector, if the GOJ is serious about its Asia Gateway Strategy. Facing rapid changes in technologies and Asian aviation markets, Japan will be left behind unless it acts strategically to remain competitive. While noting the validity of the point, neither Maeda nor Takiguchi offered any substantive comment. -------------- Discussing Aviation With Europe -------------- ¶6. (C) The GOJ will not negotiate aviation with the EU Commission, DG Maeda said, but rather, will negotiate bilaterally with EU member states. Building on negotiations with Germany, he expects the German record of discussion (ROD) to be a template for talks with other EU members. The exemption of nationality clause, however, is especially complicated in their talks with EU members, Maeda added. ¶7. (C) Regarding European Union proposals to include foreign international carriers in its emission trading scheme, Takiguchi said Japan continues to oppose the idea. He noted however that part of the EU,s thinking is that the move is necessary to put pressure on Brazil, China, and India in order to get them to reduce their emission levels. TOKYO 00002108 002 OF 002 -------------- Foreign Investment in Japan,s Airports -------------- ¶8. (C) EMIN noted press reports on the establishment of a panel to examine foreign investment in Japan,s airports, as well as the G8 leaders, statement encouraging foreign investment. Maeda acknowledged controversy regarding foreign investment in Japan's airports. Maeda suggested he, like his predecessor, sees a need to have legal provisions in place restricting the level of foreign investment in any particular airport. Most countries did so, he said, and argued foreign )- and private individuals, )- stakes in U.S. airports are also limited. There would be considerable international precedent, he continued, if Japan were to establish restrictions on foreign ownership in airport companies. Government plans to privatize Narita make it important for the GOJ to come to a determination soon on the issue. ¶9. (SBU) The study group to review foreign investment in Japan,s airports will begin deliberations in early August with the aim of presenting recommendations to the MLIT Minister and Chief Cabinet Secretary by year end, Maeda said. The findings would then be reflected in legislation to be submitted to the 2009 regular Diet session. Members of the 13-member panel include economists, lawyers, accountants and academics, but not any representatives of the aviation industry. Tokyo University professor (and CEFP member) Takatoshi Ito and Keio University professor Ushio Chujo, both strong advocates of increasing FDI to Japan, are members of the panel. -------------- Bio Notes -------------- ¶10. (C) Takiguchi was born 17 July 1955 in Oita Prefecture, graduated from Tokyo University's School of Law in 1979, and joined MLIT in the same year. During the meeting, Takiguchi mentioned having worked at the Japanese Embassy in London in the mid 1990s. Previous MLIT assignments include: Deputy Director of the Administration and Legal Affairs Division of the Minister's Secretariat (1992); Director of the Railway Planning Office (1998); Director of the International Shipping Division, Maritime Bureau (2000); Director of ATS System Planning Division, Air Traffic Services Department, JCAB (2002); Director of Accounting and Provision Division, Administration Department, JCAB (2003); Director of Policy Division of the Policy Bureau (2005); Director of General Affairs Division of the Railway Bureau (2006). Takiguchi, as incoming lead negotiator, offered comments and spoke freely in front of Maeda (his superior). However, he sat stiffly and without facial expression during the meeting, and he did not respond even to jokes or light comments. ¶11. (C) Maeda,s jump to the Director-General slot was unexpected, given he entered MLIT in 1977. Industry press had speculated he would be promoted to Senior Deputy Director-General. SCHIEFFER