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2013年5月25日 (土)

日航支援検証 公正な競争を保つ指針作りを

The Yomiuri Shimbun May 25, 2013
Rules needed to ensure fairness in extending govt aid to airlines
日航支援検証 公正な競争を保つ指針作りを(5月24日付・読売社説)

If corporate rehabilitation of failed companies after the injection of public funds is to be truly successful, the side effects of such aid, which distort fair competition in the market, should not be left unaddressed.

Rules are needed for both “assistance” and “competition” to coexist.

An expert panel of the Land, Infrastructure, Transport and Tourism Ministry has compiled a report to reexamine whether the government’s assistance to Japan Airlines, which went bankrupt in January 2010, was appropriate.

Although the report said the government’s aid was necessary to maintain both domestic and international airline networks, it also pointed out: “Measures to secure a fair, competitive environment were insufficient. Consideration for competing companies was lacking.” We think the panel’s findings are appropriate.

JAL pushed through business reforms such as personnel cuts and withdrawal from unprofitable routes to achieve a V-shaped recovery in its business performance. In September, the company succeeded in relisting its shares on the Tokyo Stock Exchange. The company’s speedy reconstruction can be said to have been well handled.

However, it cannot be denied that the injection of about 350 billion yen in public funds and preferential treatment such as exemption from corporate taxes pushed up JAL’s profits far more than the effects of the corporate restructuring measures.

ANA Holdings Inc.--the holding company of JAL’s rival All Nippon Airways--posted the biggest-ever operating profits in its consolidated financial statement for the business year 2012, which ended in March. However, JAL’s operating profits for the same business year were double those of ANA.

Sound criticism on JAL case

ANA’s criticism of the situation is quite understandable, as fair competition in the market was distorted due to the government’s excessive assistance of JAL. If JAL were to offer new services or price cuts using its current corporate management strength, the operations of rival companies would be hit hard and JAL’s price control power in the market would likely be bolstered further.

If airline passengers are inconvenienced as a result, it will be problematic.

The panel’s report called on the ministry to continue its monitoring of JAL until the end of fiscal 2016, when JAL’s current medium-term business plan is set to end. The ministry must keep an eye on the airline to avoid a situation in which JAL leverages its advantageous position to further hamper fair competition in the market.

We also urge the government to establish an appropriate procedure to follow when failed airlines are given government assistance, and a mechanism for placing limits on their businesses.

Increasing policy transparency

It is understandable that the report proposed a system to hear the opinions of parties concerned for consideration when a rehabilitation plan is compiled, based on guidelines from the European Union. The transparency of government policy will be increased if various opinions, including those of rival companies in the airline market, are taken into account.

On the other hand, the report did not propose restrictions such as those on the expansion of flight routes that are stipulated in the EU guidelines. There may be concerns that excessive restrictions will hinder the rehabilitation of failed companies. We feel this issue should be discussed further.

The report also pointed out the need for cross-industrial guidelines.

Due to global competition, companies in some fields in the manufacturing industry are facing difficulties in running their businesses. In principle, a firm’s corporate rehabilitation must be carried out under its own steam. It is thus undesirable for the government to extend a helping hand to ailing firms so easily. If rules governing multiple industries are to be created, it is important to ensure that the necessity of extending public assistance is assessed in a fair manner.

(From The Yomiuri Shimbun, May 24, 2013)
(2013年5月24日01時02分  読売新聞)


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