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Updates on ’s INTERNATIONAL AVIATION POLICY

1.Recovery from The Great East Japan Earthquake 2.The Growth Strategy of MLIT 3.Transformation of HND into a 24-hour International Hub 4.Drastic Functional Enhancement of Narita 5.Opening Japan`s Skies to Asia & the World 6. Deregulation 7. Reorganization of the Civil Aviation Bureau

Yoshiro TAGUCHI Deputy Director, Japan Civil Aviation Bureau (JCAB) 30Jun. 2011 1. Recovery from The Great East Japan Earthquake Restoration of the Facilities Damaged by The Great East JapanEarthquake The Great East Japan Earthquake followed by the massive tsunami on March 11 submerged the entire site of including the airport facilities, such as the passenger terminal building.

Aomori Airport ・No damage ・No damage ・Normal operation (7:30~21:30) ・Normal operation (8:30~20:00) Odate-noshiroAirport HanamakiAirport AOMORI ・No damage 【 】 ・Normal operation(8:00~19:30) with personal Damage ・ Partial damageof the terminal building (Restored on March 17) assistance given.(Without the earthquake, this airport would ・ Partial damageof the aeronautical lights have been operated by the staffs of Sendai Airport.) 【Recovery】 Airport ・24-hours operation until March 31 ・Extended operation for 3 hours until April 20 (7:00~21:30) ・No damage AKITA ・Extended operation for 1 hour from May 31 (8:00~20:30) ※Normal operation:8:00~19:30 ・Normal operation (7:00~21:30) IWATE ShonaiAirport Sendai Airport ・No damage 【Damage】 ・Normal operation (7:00~22:00) ・The runways and air navigation facilities were out of operation because of the tsunami which submerged the entire site of the airport. ・ The runways were filled with about 200 cars, debris, earth and sand, which were washed by the tsunami. ・The JCAB office and Aeronautical Safety College building were submerged by the ・ Partial damageof the office of JCAB YAMAGATA tsunami. ・24-hours operation until April 7 【Recovery】 ・Extended operation for 4 hours until ・March 16:The operation of the B runway (limited to 1,500m) resumed. April 28(6:30~22:00) ・March 29:The operation of the B runway (3,000m) resumed. MIYAGI ・ ( ) ※Normal operation:8:00~19:30 April 13:Commercial flights resumed Night flights resumed on April 29 NIGATA ※Normal operation:7:30~21:30

NigataAirport Airport ・No damage ・ Partial damageof the towerand air navigation facilities ・Normal operation (7:30~20:30) ・24-hours operation until April 19 ・ Extended operation for 4.5 hours until May 13 (6:00~22:00) ※Normal operation:8:30~20:00 (Legend) FUKUSHIMA Damage(Some scheduled flights cancelled) Damage(No scheduled flights cancelled ) ・Partial damageof the terminal building (Restored on March 14) ・ Partial damageof the office of JCAB No damage ・ Normal operation (9:30~21:00) 1 Effect on Aviation Industry ◎ Decrease of Inbound and Outbound Passengers (3/11-4/18) NRT HND(※) KIX NGO 0%

▲ 10% ▲ 9%

▲ 15% ▲ 16% ▲ 20%

▲ 24% ▲ 30% ▲ 28% ▲ 29%

▲ 40% ▲ 39% Outbound

▲ 45% Inbound ▲ 50% (year-to-year comparison) ※HND: Compared to the number during the period of 3/1-3/10, 2011

◎ Temporary Diversion of International Air Service After the earthquake and the nuclear power plant accident, 22 airlines diverted regular flights on 34 routes (NRT:29 HND:5) in total because crew denied to fly to and stay at Japan. However, they have gradually resumed their regular operations. 2 Press Release from ICAO and IATA

○ICAO “No Restrictions on Travel to Japan”(3/18)

“Current Radiation Levels in Japan and Travel Advice”(4/1) “Current Situation for Travel and Transport to and from Japan”(4/14)

○IATA “No Restrictions on Air Travel to Japan”(3/19)

“UN Confirms Safety of Japan Operations -No Recommendation for Passenger Screening”(4/1)

3 Counter Disaster Measures ◎ Dissemination of Accurate Information in Timely Manner JCABlaunchedthededicatedwebsite(infourlanguages:Japanese, English,ChineseandKorean)inordertoprovideaccurateinformation aboutthestatusofairtransportofJapan,includingradiationdosesaround airportsandoperationalstatusofairports.

4 Cancellation of International Flights

<Percentage of Cancellations> 20.0% 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 3/14~3/20 4/18~4/24 5/23~5/29 6/20~6/26 <Date> next( w震災後eek of the1 週間)disaster pea(欠航のピーk of cancellationsク) (ピー1ク mかonらth 1ヶ月後の週)after the peak

※Operational plan approval basis 成田 羽田 関西、中部KIX, NGO, ※ NRT HND Cancellation of International scheduled flights (domestic and foreigncarriers) other ※Compared to the original operational plans at the beginning of 2011S 及び地方空港

5 2. The Growth Strategy of MLIT The Growth Strategy of MLIT

Ⅰ Opening Japan’s Skies to Asia & the World (Promotion of Full-Fledged Open Skies Agreements)

Ø Promotion of Open Skies Agreements including with 300,000 slots per yearat NRT becoming more likely Ø Promotion of a drastic liberalization that goes well beyond what is encompassed by traditional framework and deregulation of forwarder charter rules in order to kick-start the international air logistics business Ø Aiming at agreements mainly with Asian countries in order to develop Japan as a tourist destinationand to encourage the market participation of new airlines including LCCs

Ⅱ Strengthening HND/NRT in order to Enhance the Interurban Ⅲ Streamlining Airport Management by Leveraging Competitiveness of the Tokyo Metropolitan Area “Private-Sector Wisdom and Financing”

Ø Transformation of HND into a 24-hour international hub : 90,000 annual Ø In the short run: Review of the structuring of annual incomes and slots for international regular service, and introduction of long-haul expenditures within the airport development account business routes to destinations in Asia , Europe, and North America Ø In the medium run : Optimization of airport fees (including landing fee) Ø Positioning NRT as one of Asia’s leading hub airports : Further throughthe operational integration of airport-related businesses and strengthening of international flight network, enhancement of the airports themselves, and outsourcing concession to private sector or domestic feeder routes, and encouraging participation of LCCs and privatization business jets

Ⅴ Maintaining Essential Air Networks Ⅳ Active Strengthening of Kansai International Airport (KIX) by Balance Sheet Reform Ø Maintenance of local networks initiated by local governments Ø Balance sheet reform of KIX in order to revitalize KIX as a hub Ø Allocation of domestic takeoff/landing slots at HND based airport in Kansaiby combining utilizing ItamiAirport on more market-oriented mechanisms Ø Strategic operation of KIX such as positioning KIX as a cargo huband attracting LCC participation at KIX

Ⅵ Expanding User Benefits by Promoting LCC Participation

Ø Consideration of construction of a terminal building for exclusive use by LCCs at hub airports such as NRT and KIX Ø Enabling airlines to achieve low cost operation byrelaxations of technical regulations compatible with international trends

Achieve the Growth of Japan through Improvement of Convenience of Consumers 6 Strengthening the International Competitiveness of Tokyo Metropolitan Airports (Haneda/Narita) Development of Tokyo Metropolitan Airports (infrastructure) Expansion of Annual Takeoff and Landing Slots ~ E s pe c i a ll y n A w he r e m k ab l g o t h p ce at Tokyo Metropolitan Airports (Haneda/Narita) o f T k y M e t ropoli an Airpor ts S t reng h e ni n g he I ern a i o nal C m pe v en ss E nhan ce Transformation of HND into Drastic Functional Enhancements of a 24-hour International Hub Narita(Achieving 300,000 Annual Slots)

Annual Takeoff and Landing Slots Expansion at Tokyo Metropolitan Airports (Haneda/Narita) N a t i ona l S tr eng th

Shift to Open Aviation Policy

Promotion of Full-Fledged Open Skies

Promotion of Full-Fledged Promotion of LCC(Low Cost Carrier) Participation Open Skies Agreements and Business Jets Accommodation

【As a nation】 【For Users and Airlines】 ~ Opening Japan’s Sky ・Expansion of air transportation service to Asia & the World (Improving user convenience) ・Promotion of competition among airlines

Creating Level Playing Field for Japanese Airlines (ex. Reduction of Aviation Fuel Tax ) 7 3. Transformation of HND into a 24-hour International Hub Current Status of HanedaAirport

○ As a Hub of domestic routes, Hanedahas 470 flights with 49 airports in Japan ○ Largest domestic airport with about 55million domestic passengers per year in Japan. ○ Established international network with16 cities, 52 flights per day since the opening of international terminal in Oct. 2010,

Dom. Pass. and aircraft movement Domestic Network

(mil pax) 303,000 times (*1) 55.46mil (thoustimes) Domestic routes with <1million passengers in 2009 (17routes) Chitose 7,00070 35035.0 ※ width of the line indicates number of passengers ※ Only for route with more than 1million passenger annum 6,00060 Traffic 30030.0 Hakodate ※ size of a circle indicates number of passengers komatsu 5,00050 25025.0 Hiroshima 2.76mil 4,00040 20020.0 Fukuoka

3,3000003 15015.0 Kita-Kyushu Osaka Domestic Pax 244 Nagasaki 195 Oita 2,2000002 10010.0 162 KIX 130 88 86 86 97 96 85 1,1000001 81 80 73 82 84 505.0 35 Kumamoto Haneda International Pax 15 Miyazaki 0 00.0.0 H 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 (FY) Kagoshima Takamatsu Matsuyama *1 Day time hours(6:00~23:00)capacity. Excluding arrival of 6:00~8:30 and departure of 20:30~23:00. Others 32 routes *2Based on Airport management data survey(2009)(Target:paid and unpaid passengers、regular and non-regular flights) Naha

Share of domestic passengers Haneda (except Haneda-Osaka Centrair and Haneda-KIX) International Network 5.01 mil Others 48.98mil(58.4%) (6.0%) 11.32 mil KIX (13.5%) In OCT 2010, new International passenger terminal opened, 2.38mil re-establishing international network after 32 years (2.8%) Haneda Domestic Pax Osaka 55.46mil International Network 7.92 mil 83.87mil (66.1%) ○ ASIA7 countries 9 cities Narita (9.5%) 1.78 mil (Korea/Taiwan/China/Hong Kong/Thai/Malaysia/Singapore) (2.1%) ○ Europe 2countries 2cities(France/England) Habeda-KiX ○ America 1 countries 5 cities (US) 1.26 mil (1.5%) Haneda-Osaka 5.22mil (6.2%) 8 International Network of HanedaAirport(March 2011-) 13

Networks connecting Hanedaand major cities in Europe and the United States including London, Paris, New York and Los Angeles as well as short-distanced cities in Asia such as Beijing and Shanghai were established with the start of international regular flight services at HanedaAirport in October 2010.

Europe 2 countries,2cities North 1 country,5 cities ・France ・UK America ・U.S.A

London (1)

Paris (1) (14) Detroit New York (1) Beijing (4) (1) San Francisco Shanghai (4) (1) Honolulu Haneda Los Angeles Hong Kong (5) (3) (2) Bangkok(3) (8)

Kota Kinabalu (*) (*) 2 destinations in Malaysia Kuala Lumpur Daytime route are counted as one flight (*) Singapore (4) Late-evening/early morning route Daytime and late-evening/early morning route Asia 7 countries/regions,9cities ・Korea ・Taiwan ・China ・Hong Kong ・Thailand ・Malaysia ・Singapore

Destination (Sum of international flights, both daytime and late-evening/early morning) Maximum of 52 flights per day to 10 countries and regions and 16 cities (25 Japanese flights(2 airlines), 27 overseas flights (16 airlines))

※Operational plan approval basis ※The maximum number of flights based on summer schedule in 2011 9 Development of Enlargement Project of 14 HanedaAirport and Future Plan

Development of the 4th runway (Runway D) and international flight area is underway: ■21st October last year: Started services of Runway D and international passenger terminal building, etc. ■31st October last year: Started regular international flight service for the first time in 32 years (30,000 during daytime and 30,000 during late-evening/early morning, 60,000 flights in total) International passenger terminal building Construction start: 1st May 2008 Completion: 31st July 2010

Start expansion of international passenger terminal and apron to realize 90,000 international slots (60,000 daytime/30,000 【Reference】 late-evening/early morning) after expansion to 447,000 in Start operation of new FY2013 at earliest. Deploy high demand/business lines control tower th including Europe/USA and long-distance Asia. (12 January 2010) Runway D Construction start: 30th March 2007 (2,500m) Completion: 30th August 2010

【Photographed on 15th November 2010】 10 Capacity Increase for International Flight at HND

■Slots for international scheduled flights will increase from current 60,000 to 90,000 in total, as early as FY 2013, pending implementation of safety measures, if necessary, and completion of the terminal expansion project.

Daytime (0600-2300) 30,000slots → 60,000 slots

Late-night and early-morning hours 30,000 slots (2200-0700)

Future Measures Expansion project of the new int’l passenger terminal is scheduled to be completed by around Mar. 2014. Movement restrictions will be relaxed. Daytime slots will be exclusively used for international flights on high- demand, business routes connecting cities of the world with Tokyo.

11 Expansion of International Passenger Terminal

Overall view of HanedaAirport

Expansion of the satellite building of international passenger terminal

Hotel Renovation of the main building of the international passenger terminal

Expansion of the main building of the international passenger terminal

Expansion of aprons *2 Expansion of the multilevel parking tower *1

Expansion project of the new int’l passenger terminal is scheduled to be completed by around Mar. 2014.

*1 Extent of expansion, location and timing of opening will be decided according to the trend of demand. *2 Aprons as well as the passenger terminal building will be expanded (4 spots). 12 Improving Accessibility of HND and NRT from Tokyo CBD and that of Between these Airports by Railways To improve convenience and promote integrated operation of Hanedaand Narita Airports, Narita Rapid Railway Access was opened in July 17, 2010, reducing access time drastically. Short range network around the Tokyo satiation will be examined to improve accessibility to Tokyo as well as between the two airports.

Construction of Narita Rapid Railway Access the Shortcut route 2010.7.17 opened Oshiage [Review to speed up access] With the shortcut route , trying to Nippori-Terminal 2 TK realize Tokyo-Narita 30min, Tokyo- reduced to 36min from 51min O Haneda20min, Narita-Haneda 50min.

Komuro Inba Nihon Idai Sengakuji Narita Takasago Shinagawa Ikebukuro Keisei

Nippori Nippori-Terminal 2 Narita Ueno 61min minimum Akihabara Oshiage Shinuku Tokyo Toei AsakusaLine shibuya Hamamatsucho sengakuji Shinagawa Chiba Monorail JR Narita Express Tokyo –Terminal 1 Tokyo-Terminal 2 28min minimum Tokyo-Terminal 1 24min minimum 50min minimum Kamata

Haneda Kawasaki ※By railway, Haneda–Narita is 95 min minimum, without any transfer. 13 4. Drastic Functional Enhancement of Narita (Achieving 300,000 Annual Slots) Current Situation of Narita Airport ○ Demand at Narita Airport has seen dramatic decrease after Lehman shock, but gradually coming back ○ To realize original plan, it is necessary to acquire unsettled land, but there is no prospect at the moment. There are two dwellers within the premises of Narita Airport today. Passengers and Aircraft Movement(dep. land.) International Passengers by Number and Traffic

Fukuoka Chitose1.6% Chitose1.8% 3.9% Other4.7% Haneda Other 7.1% FY 2009 3.9% Haneda 1 【passenger】 32.74mil 5.2% Fukuoka 4.8% international 31.41mil CENTRAIR 7.8% domestic 1.33mil CENTRAIR Narita 9.2% 51.2% 【departure and landing 】 190,000(capacity 200,000) Narita KIX 58.8% 18.0% KIX (times) (mil pax) 22.0%

【2003】 35 IRAQ Passengers 53.36mil(FY2009) Traffic movemnet336,000(FY2009) SARS Passenger 30 Owner of land and construction in airport area 【2008】 Oil price 【 】 25 2001 Lehman 9.11 Runway B2,500m Land owner Land area Dwellers living in airport area Dwellers living outside 20 airport area Co-ownership Co-ownership 敷地内居住者Kitahara group(1(北原派 hous1e)戸) (many owners) 15 Total E敷地内居住者x Ogawa Group(元小川派 (1hous1e)戸)

Aircraft Constructions 10 Dwellers living Movement in airport area 2 house

Protesters Base 11 house 5

1995 2000 2005 2009 (FY) Runway A4,000m (2011.1) 14 International Network of Narita Airport (March 2011-)

With expansion of capacity from 200,000 to 220,000 in March 2010, Narita airport has been expanding its international network to Macau, Abu Dhabi, Dubai, Qatar and Calgary. Moreover, the number of flights on already established routes is also increasing. Europe 12 counties 14 cities ・U.K. ・Italy・Austria ・Netherland ・Switzerland ・Denmark ・Germany ・Turkey ・Finland North America ・France ・Russia ・Norway 2 countries 17cities Lakselv ・Canada ・U.S. Helsinki Bergen Copenhagen Amsterdam Calgary Frankfurt Moscow Narita London Munich Ulan Bator Paris Vienna Tashkent Vancouver Minneapolis Toronto Zurich Milan Changchun Seattle Detroit Shenyang Portland Chicago Rome Istanbul Beijing Salt Lake City New York Dalian Seoul San Francisco Xian Qingdao Busan Washington, Tehran Islamabad Jeju Los Angeles D.C. Chengdu Nanjing Shanghai Honolulu Dallas Atlanta Cairo Lahore Chongqing Hangzhou Tijuana Houston Doha Dubai Xiamen Abu Dhabi Guangzhou Taipei Karachi Shenzhen GaoxiongSaipan Delhi Macau Hong Kong Mexico City Mumbai Hanoi Manila Guam Bangkok Africa/Middle East Colombo Ho Chi Minh Cebu 4 countries 5 cities Phuket Palau Central and Male Kuala Kota Kinabalu ・Iran ・Egypt Lumpur Singapore Pappete South America ・UAE ・Qatar Jakarta Denpasar Port Moresby 1 country 2 cities ・Mexico Asia Cairns Noumea

17 countries 41 cities Gold Coast Perth

Sydney Auckland International routes as of 2011 Oceania 8 countries 11 cities 44 coutriesand regions ・Austraria ・Guam 90 cities ・Tahiti ・New Caledonia ・New Zealand ・PNG ・Mariana Is. ・Palau ※Operational plan approval basis 15 Agreement to Increase Flights to 300,000 and 21 Efforts toward Capacity Expansion at Narita Airport Annual takeoff and landing slots at Narita Airport increased from 200,000 to 220,000 on 28th March last year. Now that an agreement was reached (13th October last year) with local people on increase of the airport capacity to 300,000 slots, the capacity will be increased gradually aimed at reaching 300,000 by the end of FY2014 at earliest.

Efforts toward achieving 300,000 slots Outline of facility improvement in the future

1. Advancement of flight control method Improvement of Installation of new Extension of aircraft Introduce simultaneous parallel takeoff and taxiway in taxiway at west side parking apron landing methodin FY2011. downturningshape 2. Facility improvement, etc. i) Improvement of taxiway Correspond to LCC/business jet ii) Extension of aircraft parking apron 横風用滑走路 iii) Respond to LCC (Low Cost Carrier)/business Runway B: 2500m jet based on demand 2nd passenger terminal 第2旅客ターミナルビル iv) Extension of terminal (in case 270,000 or building Extension of 3200 more slots) terminal building m Cargo area at the south 3. Others(improvement of access, etc.) 空港南部of 貨air物po地区rt Extension of cargo ≪ ≫ terminal Gradual expansion of airport capacity 貨Ca物取rgo扱 hand施設li区域ng 航A空ircr機af整t m備施ainten設a区域nce facility area facility area Current : 220,000 1st第pa1ss旅enge客ターr ミteナrルmヒinal゙ル building End of FY2011: 250,000 End of FY2012: 270,000 End of FY2014: 300,000 RunA滑走路way A:4 004000m0m

Based on an agreement reached with local people, increase the airport capacity to 250,000 slots by Future the end of FY2011, 270,000 by the end of FY2012 and 300,000 by the end of FY2014 at earliest.

Realize further expansion of network, domestic feeder routes and diversification of airline services including LCC/business jet by making the best use of capacity increase, thereby establish the position as a hub airport in Asia. 16 Capacity Increase Plan at NRT Annual IATA Season PlanedFacilityand Operational Improvement Capacity

2010 W 220 Straightening of Taxiway (R/W B) Additional Relaxation of movement parking S restrictions 2011 stands W 235 Simultaneous operations at parallel R/Ws S 250 Additional 2012 parking W stands New taxiway opens S 270 Additional 2013 parking W stands (thousands per year) *as early as 2014, pending substantial investment in A/P 300* facilities based on NAA’s managerial decision. 17 Capacity Improvement at NRT

IATA S2011 IATA W2011 Sliding scale per 30 minutes Simultaneous operations at parallel will be revised R/Ws will be introduced Sliding Scale per 30 Minutes (Applied to S11) Sliding Scale per 30 Minutes (Applied to W11) A + B Runway A + B Runway Total A + B Arr. Dep. Arr. Dep. Runway Movements 8 16 24 4 23 27 11 15 26 5 22 27 12 14 26 6 21 27 13 13 26 14 13 27 … … … 15 12 27 21 7 28 16 11 27 22 6 28 23 5 28 Drastic increase of hourly limit More desirable time slots in peak hours 18 5. Opening Japan`s Skies to Asia & the World (Promotion of Full Fledged Open Skies) Increase of Takeoff and Landing Slots at 25 Tokyo Metropolitan Airports (Haneda/Narita) Now that the new 4th runway started its service in October last year, takeoff and landing slots of HanedaAirport will be gradually increased up to 447,000. Takeoff and landing slots at Narita Airport will also be increased to 300,000. As a result, takeoff and landing slots of international flight at airports in capital region will increase from 260,000 (present) to 360,000 (end of FY2014). 80(Unit:10,000) 74.7 70 4.0

59.1 61.0 60 4.0 4.0 44.7 52.3 50 40.7 Achieve 90,000 for international flight based on the premise to

H a n e da 39.0 40 37.1 allocate 30,000 for international 33.1 35.0 36.0 30.3 flight, a majority of the total 57,000 3.0 30 26.0 26.0 6.0 20.0 3.0 3.0 20 3.0 3.0 About 80,000 N a r i ta Consider fulfillment of 30.0 27.0 (?) 10 22.0 20.0 22.0 20.0 22.0 20.0 domestic flight while mainly targeting increase in international flight

0 International flight International flight International flight International flight B現在y October 2010 2010B.3y March 20112010.10 Present2011.4 最Tar終形get (On and after 27th March 2011) Haneda: End of FY2013 at earliest Narita: End of FY2014 at earliest About 30,000 during late-evening and early morning About 30,000 during daytime

Narita Airport HanedaAirport (daytime) HanedaAirport(late-evening/early morning) 19 Promotion of Full-Fledged Open Skies Policy

“Open Skies” means mutual elimination of restrictions about the number of airlines, routes and frequenciesbetween contracting countries and regions. Japan is promoting “Open Skies” including Tokyo Metropolitan Airports (NRT/HND) beginning by the agreements with the United States in Oct. 2010.

Japanese Open Skies So Far ・ Japan has negotiated Open Skies with 9 countries and regions(Korea, Hong-Kong, Macau, Vietnam, Thailand, Malaysia, Singapore and Canada) since 2007. ・ However, Tokyo Metropolitan Airports(NRT/HND) and 5th and 6th freedom traffic rights have been excluded from the Open Skies agreements.

Promotion of Full-fledged Open Skies Policy ・ Dramatic increase of the capacity for international flights at Tokyo Metropolitan Airports(NRT/HND) (200,000/year in 2010→360,000/year in 2014) by the consent of the local residents to the capacity increase of NRT to 300,000/year and further internationalization of HND. ・ Full-fledged Open Skies Policy including Tokyo Metropolitan Airports(NRT/HND) and 5th freedom traffic rights. Schedule ・ The first full-fledged Open Skieswith the United States was realized on Oct. 25 2010. ・ Aiming to reach agreements with major countries in 2011, Japan will promote full-fledged Open Skies actively and strategically prioritizing East Asian nations and ASEAN countries. ・ Relaxation of rules & regulations on international aviation business (charter rules, tariff/pricing framework) went into effect in Oct 2010. 20 Strategic Negotiations for Open Skies Agreements

・ Contributing to lasting economic growth of Japan through multiplication of flows of passengers, goods and money by enhancing the Japan-centered international air transportation network by promoting Open Skies with East Asian countries and ASEAN nations ・ According to “New Growth Strategy”(approved by the Cabinet on Jun.18, 2010), Japan is promoting full fledged Open Skies including Tokyo Metropolitan Airports (NRT/HND). As of now, Japan has agreed with 6countries/regions. In the new round of bilateral consultations seeking for Open Skies, Japan will strategically determine whom to negotiate with, and in what order, taking the following elements into consideration.

・ Size and maturity of the aviation markets and potential for future growth ・ Possibility and degree of urgency of new entry or flight increase, (especially 3rd and 4th traffic) including those of LCCs

・ Proactive stance for Open Skies ・ Government capability on safety and security oversight

・ Target of inbound tourism promotion ・ Importance of economic and diplomatic relationship

Agreements so far

○ U.S. Oct. 25, 2010 ○ Republic of Korea Dec. 22, 2010

○ Singapore Jan. 19, 2011 ○ Malaysia Feb. 24, 2011

○ Hong Kong May. 19, 2011 ○ Vietnam Jun. 9, 2011

・ The next air Airtalks with Macau etc. will be held anytime soon (date to be announced). ・ Aiming to reach agreements with major countries in 2011, Japan will promote full-fledged Open Skies actively and strategically prioritizing East Asian nations and ASEAN countries. 21 6. Deregulation Relaxation of Rules & Regulations on Int’l Aviation Business To maximize the effect of Open Skies agreement, Japan will immediately implement new rules & regulationson int’l charter flights and tariff/pricing.

New Regulations on Int’l Charter Flights New Regulations on Tariff/Pricing

・ “Seat-only-sales for individual ・ Filing for approval shall be required passengers” shall be allowed Up to 50%, only for the most expensive airfare regardless of on-line or off-line. applied under each sales condition, ・ Forwarder charter and split charter shall enabling airlines to flexibly set and be allowed (including NRT and HND late change airfare based on market night hours) when; conditions. -Open Skies is agreed with the country 【Already in effect since Oct. 31, 2010】 concerned -Reciprocity on charter rule is ensured ・ Airlines shall be required to show the ・ “Non Objection Letter” shall be no longer total price, as well as price of each required for cargo charter flights by component that passengers must pay, airlines of third countries. such as airfare, surcharge, PSFC, and taxes. 【Already in effect since Oct. 31, 2010】 【Already in effect since Apr. 1, 2011】

22 7. Reorganization of the Civil Aviation Bureau Reorganization of the Civil Aviation Bureau

In order to respond adequately to various challenges of the aviation administrations such as the steady promotion of the policies contained in the Growth Strategy of MLIT, the Civil Aviation Bureau will be reorganized into “Aviation Network Department”, “Aviation Safety and Security Department” and “Air Navigation Services Department” in July 2011. Director-General Director-General Senior Deputy Director-General Senior Deputy Director-General

Deputy Director General Strengthening of Deputy Director General comprehensive and cross- Administration General Affairs Division bureau strategy planning General Affairs Division Department Aviation Strategy Division capabilities Director (Budget and Property Administration Unit) Director for Budget of Civil Aviation Aviation Safety and Security Promotion Division Bureau -Organizing the Department Aviation Network Planning Division -Promotion of Open Skies International Air Transport Division Agreements Department Air Talks Office -Streamlining airport Aviation Industries Division Director for Airport Policy in Kinki -Comprehensive promotion of air and Chubu Area management Airport Airport Policy Division industries administration and Aviation Industries Division airport administration Department Director (Unit for Airport Policy in Kinki and Chubu Area) -Shift of airport policy from Airport Facilities Planning Division Enhancement of the “development” to “operation” functionality and efficient Planning Division Capital Area Airports Division maintenance of airports Environment and Regional Environment and Regional Development Division Development Division Capital Area Airports Division Aviation Safety and Security Aviation Safety and Planning Division Security Department Counselor for Air Traffic Services Safety -Measures for international Engineering Planning Division Policy standard regarding the safety Strengthening safety and security Airport Safety and Aviation Security of airports Engineering Flight Standards Division measuresby integrating the Division -Security measures Department function regarding safety policy Flight Standards Division Airworthiness Division

Director of AircarrierSafety Office (P) Uniform management of safety Personnel Licensing Division audits, ramp inspection, etc. to Air TrafficServices Systems Airworthiness Division air careers Air Traffic Planning Division Air Navigation Air Navigation Services Services Counselor for Air Traffic Services Services Department Planning Division Department Safety Policy Air Traffic Control Division Achievement of more efficient air Air TrafficControl Division traffic based on ensuring safety Operations and Flight Operations and Flight Inspection Inspection Division Division Air NavigationServices Air Traffic Services Engineering Engineering Division Division 23 Thank you for your attention.

Contact: Planning Division Aviation Network Department Civil Aviation Bureau Ministry of Land, Infrastructure, Transport and Tourism

Tel : +81-3-5253-8703 Fax: +81-3-5253-1656