Japan Travel Trade Weekly News
Keeping you abreast of what's going on in the
Japanese travel and tourism industries.
News consolidated by Travel Vision, Inc. updated every week.
JATA Conceives Charter Flights Operation to Key Markets for Accomplishment of 20 Million Overseas Travelers Project
As part of action plan for the accomplishment of 20 million
outbound travelers in 2010, Japan Association of Travel Agents (JATA)
is studying the feasibility of boosting travel demand across the
nation by selecting target destinations and operating hundreds of
charter flights to these places.
The destinations could be 13 countries and areas including the
United States, Hawaii, Australia, Canada, United Kingdom, France,
China, Korea, Taiwan, Hong Kong, Thailand, Viet Nam, and Cambodia.
In view of the fact that operation of some schedules flights has
been suspended or reduced in number and the use of Individual
Inclusive Tour Fare (IIT Fare) is not welcomed to airlines, JATA
regards charter flights as effective means of increasing seat
capacity and creating travel demand locally.
The number of flights to be operated is to be fixed at a later
date, but JATA is going to set a target number of visitors for each
destination and calculate available seats on scheduled flights, then
it will arrive at a desirable number of extra flights to fill the
gap. In case of Hawaii, for instance, it does a trial calculation of
operating 200 to 300 flights in 2008 in one-way basis count, 400
flights in 2009, and 500 flights in 2010.
These flights will be assigned to Haneda Airport as a primal
gateway, but due to the slot constraint at Haneda they will
eventually be split 50-50 with regional airports.
Aside from charter flights operation, JATA have some agenda on
the action programs such as promotional campaigns focusing on
specific age groups, a campaign for becoming passport holders, and
settlement of oil surcharge issue.
JATA will seek acceleration of deregulation from foreign
governments as well as from the Japanese government. As agenda for
such, it demands to remove a ceiling of expenses and duration of trip
imposed on the school excursion, or to waive visa requirement for the
students on bilateral basis. It will also request the Japanese
government to make company travel free of taxation, or to contrive
incentives for workers who want to take longer vacation, or to
further ease the ITC charter rules.
To the foreign governments, it has a mind to talk into
eliminating the limit of staying period in the working holiday
program or waiving a visa requirement strictly for a sightseeing
purpose, especially in India, Russia, and Brazil.
As the schedule for the following months, JATA will announce its
action plan in January 2008 and start on a course of action in April.
JATA's Fuel Surcharge Team to Propose Comprehensive Pricing in Its Recommendation Submitted Next February, Eyeing Consumer Sentiment
Fuel Surcharge Team, formed recently at Japan Association of
Travel Agents (JATA) and headed by Councilor Jun Ishiyama, is moving
to frame the thoughts of travel agencies toward the unified opinion
that fuel surcharge should be included in the travel products in
consideration of consumers' sentiment.
All the member companies comprising the team do not agree on the
comprehensive pricing method yet, but they feel the need to dispel
consumers' mistrust in any possible manner. After a series of
discussion on this matter from various standpoints of company
executives, tour planners, and retailers, the team will determines
the direction to proceed by the end of January 2008.
It submits a proposal in late February and is supposed to have
meetings in March with Ministry of Land, Infrastructure, and
Transport (MLIT), airlines, and Japan Fair Trade Commission.
The team is working to propose comprehensive pricing to include
the surcharge. JATA had earlier conducted a survey on this issue with
travel agencies giving them four options, i.e. (1) to waive the
surcharge on the part of airlines, (2) to denote the amount on the
ticket alongside the authorized fare, (3) to price travel products in
a way to include the surcharge on agency side, and (4) to build the
surcharge into the fare system, From the viewpoint of package tour
sales, the comprehensive pricing method was supported unanimously.
However, the risk remains with package tour operators in this
case because they must absorb any future hike of surcharge and face a
complicated problem of sales commission payment. Therefore, some of
those who are in favor of the method append a note to say such a
method would be feasible only under certain conditions or that it
might be a bit unrealistic.
One of the possible remedies would be to request airlines to
review the surcharge only when it is in time for the travel agencies
to merchandise travel products for the next season.
In view of travel agencies' difficult situation in dealing with
customers, JATA once saw eye to eye with MLIT on the revision of
surcharge amount once every six months, but it did not take effect
after all. This time, being more considerate of consumer sentiment
and reaction, JATA seeks a solution that could wipe out consumers'
mistrust and clarify murky fare construction, which otherwise would
be detrimental to the government's policy of expanding overseas
travel market.
At the stage of introduction, it was assumed from consumers'
perception that they could concede a charge of 500 yen to 2,500 yen
for a portion, but now they claim the current level is too high, thus
the surcharge becoming an impediment to the market growth.
It happens that after a customer makes a contract to buy a travel
product, he or she is often charged more than initially agreed
because of an unexpected revision of surcharge amount. This is
something that consumers do not feel happy about and they even label
the agency as a fraud. With regard to the controversy on oil
surcharge issue, JATA maintains that fare structure has not been
fully accounted for up to now and the airlines are held responsible
for it.
The way to price travel products in lump sum is a sort of
solution to overcome the existing problem, but it may trigger a new
round of price war among travel agencies even at the sacrifice of the
surcharge revenue, which is another risk for the agencies.
On the other hand, MLIT issued an official letter saying that
fuel surcharge is a mandatory cost of travel that travelers have to
pay but does not constitute a part of travel expenses payable to
travel agencies. The letter implies it is a necessary cost item
comparable to the Passenger Facility Charge at the airport, but it
remains to be defined more precisely. For that matter, travel
agencies are said to be discussing their own role of providing
consumers with timely and convincing explanation.
Fare Increase to Absorb Fuel Surcharge as "System Not Transparent, "Says ANA.
Commenting on the fuel surcharge, ANA mentioned, "It should be partly absorbed by fare increase."
ANA public relations office further explained that "The recent
soaring kerosene price has made the fuel surcharge relatively high
compared to the airfare. The customers and many others people claim
that the current fuel surcharge system is nontransparent. It also
gives the burden to the travel agents who have to collect the
surcharge from the travelers. "
The airline has made a proposal to IATA Fare Adjustment
Conference that current airfares be increased to absorb part of the
fuel surcharge, thereby lowering the relative amount of the current
fuel surcharge, said the public relations office.
Despite the rising cost of jet fuel, ANA has decided to retain
its fuel surcharge for January to March 2008 at the present levels,
while JAL has decided otherwise. It is the very first time that two
Japanese carriers took different strategies toward the fuel surcharge.
"The different views taken by the two airlines will have an
influence on the future policy on the fuel surcharge," commented ANA.
The airline will continue to further evaluate the role of the fuel
surcharge.
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