Photo/IllutrationKansai International Airport (Asahi Shimbun file photo)

Kansai International Airport, built on reclaimed land off the Senshu area in southern Osaka Prefecture, will mark its 25th year of operations this month.

In the 1980s, when it was the norm for airports to be built and operated by the central or local governments as public investment opportunities, the Cabinet of then Prime Minister Yasuhiro Nakasone picked the planned new facility as the first project for its policy initiative to tap the private sector’s resources to stoke economic growth.

As it was decided that the airport would be operated by a newly established shareholder-owned company, many private-sector businesses, along with the central and local governments, invested in the operator.

For many years, the airport struggled to stay afloat due to a heavy debt burden and sluggish passenger traffic.

But after revamping its management through integration with Osaka (Itami) International Airport, Kansai took off into sustained revenue growth. It has chalked up strong earnings in recent years by capitalizing on a surge in foreign visitors to Japan.

Three years ago, Kansai became the first major Japanese airport to adopt a new privatization system that allows a private-sector company to operate its facilities, such as runways and terminals, which are owned by the state and local governments. Kansai Airports, a private-sector company, has also taken over the operation of Kobe Airport.

Kansai International Airport has been leading the trend toward privatization of the operations of publicly owned airports. But flooding caused by last year’s Typhoon No. 21, which pounded the Kansai region in early September 2018, exposed its weak underbelly.

A larger-than-anticipated storm surge caused seawater to flow over the seawall and onto the artificial island. Runways and underground power-supply facilities were inundated, causing an extensive power outage in terminal buildings and elsewhere.

To make matters worse, an access bridge linking the airport with the Honshu mainland was damaged and rendered impassable by a drifting tanker cut loose in the typhoon, leaving some 8,000 people stranded in the airport.

The airport operator failed to respond swiftly to the crisis, causing serious confusion.

As the company is equally owned by Japan’s Orix Corp. and VINCI Airports of France, which both hold a 40 percent stake, it had no clearly defined chain of command to deal with such emergencies.

The disaster underscored the need for the airport to urgently review its organization and operations.

This practice of spinning off airport operations to a private-sector entity has spread to other airports in Japan, including Sendai, Takamatsu, Fukuoka and Shizuoka airports.

Seven airports in the northernmost main island of Hokkaido, as well as Kumamoto and Hiroshima airports, are also in the process of adopting this approach.

Shareholders of the operators of these airports include both major and local real estate developers, construction companies, trading houses and railway firms. They need to take another look at their operational systems to assess the risk of their airports making the same mistake that Kansai Airports did.

Another key challenge facing these airports is how to clearly split the roles and responsibilities between the owner and the operator.

This requires a system to determine in advance how the financial burden of installing and operating facilities and equipment, and dealing with damage caused by disasters, should be divided among the parties concerned.

The flooding caused by the typhoon a year ago incurred larger losses than expected. Emergency work is under way to raise the seawall and build new ground-based power supply facilities to replace the underground ones at an estimated total cost of 54 billion yen ($509 million).

The central government has agreed to meet half of the cost as special spending to accelerate the work.

Airports also need to serve as centers for rescue and relief operations during disasters. Besides making every possible effort to protect airports from possible disasters, it is also vital to establish reliable systems to ensure quick restoration of operations when facilities are damaged. One big question is how the cost should be shared in such cases.

The central government, which has been promoting the separation of ownership and operation for airports, needs to discuss how to jointly identify and tackle related challenges with the local governments concerned.

--The Asahi Shimbun, Sept. 7