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Thursday, Sept. 3, 1998

High costs, low demand stifling Kansai airport growth


Staff writer

OSAKA -- When Kansai International Airport opened Sept. 4, 1994, local business and government leaders dubbed it the "Gateway to Asia," believing it would be the catalyst in revitalization of the region's economy.

Four years later, the airport faces turbulent times as flights to Asia, Europe and the U.S. have been canceled due to sagging demand and high operating costs.

In the first three years of operation, the airport experienced upward growth, with about 7.9 million international passengers during its first year, 10.1 million in the second and 11.3 million in the third, according to airport officials.

But with Asia's financial troubles and Japan's worsening economy, the number of international passengers has dipped to 11.29 million. The number of international flights has posted the biggest decline, with many airlines canceling or temporarily suspending flights given the Asian economic crisis and Kansai's economic slump.

One of the most dramatic cancellations came last week when British Airways announced it will stop flights to Kansai, citing insufficient demand for its Kansai-London route.

That cancellation was followed by an even more surprising announcement -- United Airlines, which had introduced a Kansai-to-Chicago nonstop flight just two months earlier, was going to discontinue the service at the end of October.

Northwest has also announced that it is suspending flights from Kansai to its Minneapolis hub beginning in November, although it plans to reinstate the route next June. The airline will add flights to Taiwan and Malaysia.

Other airlines that have canceled flights to Kansai International Airport include Egypt Air, Aeroflot and Papua New Guinea Air.



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