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Thursday, March 14, 2002

U.S. threatens sanctions against Japan over allotment of airport slots to FedEx


Staff writer

In what could trigger a new economic row between Japan and the United States, Washington has recently threatened sanctions against Japanese airlines if Tokyo does not agree to return U.S. cargo carrier FedEx Corp.'s slots at Narita airport.

The Japanese government has defended its position that FedEx has more than enough slots and will send a senior transport bureaucrat to Washington next week to solve the dispute.

Sources in the Land, Infrastructure and Transport Ministry said Wednesday that the ministry received a letter the day before from Susan McDermott, U.S. deputy assistant transportation secretary, requesting that Japan approve as soon as possible the return of 14 slots that Delta Airlines had borrowed from FedEx and is currently using for its own service.

On Feb. 25, the U.S. government notified Japan that Delta wants to return the slots to FedEx due to declining demand. But the ministry slammed the plan, saying FedEx already has more than enough slots, the sources said.

The U.S. side said the issue is "extremely serious" and added it "would consider all options" before making its response, including partly denying the schedules of Japanese airlines, if FedEx's access to the slots is denied.

Japan insists the slots should be placed in the slot pool for reallocation. The U.S. argues that the planned transfer of slots to FedEx is in accordance with the International Air Transport Association guidelines, which allow the transfer of slots between carriers from the same country.

Japan argues the move should not automatically be approved because the two countries agreed in 1998 that such a transfer would be allowed only if it meets reasonable standards.

The Japanese ministry hopes to solve the issue by March 31, when airlines' summer schedules officially begin.

The dispute has been festering between Tokyo and Washington since October.

In October, the ministry threatened to turn down a request by FedEx to continue cargo flights between Narita and Sendai airports because it said the carrier was under-using the route.

FedEx has pushed for expanded rights in past bilateral negotiations, and has used small Cessna 208 aircraft on the route in a bid to protect its slot at the already crowded Narita, the ministry claimed. FedEx later stopped operating small aircraft, according to the sources.

Japan's faltering economy and the Sept. 11 terrorists attacks in the U.S. have recently decreased demand for air traffic between the two nations.

Japan has been urging the U.S. to give up some flights using Narita's existing runway because the U.S. carriers currently hold the dominant share at the airport -- roughly 34 percent of the total slots.

Despite the scheduled opening of the 2,180-meter second runway in April, demand for the 4,000-meter first runway still remains high because the new one is not long enough to accommodate jumbo jets and other large airplanes.

European and other Asian airlines have been waiting to get more slots, according to the ministry.

A FedEx spokesman declined to comment on the issue, saying it is company policy not to comment on issues regarding slots or the volume of their cargo services.



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