Medium-Term Business Plan

About Our Medium-Term Business Plan: “To Be a World Best Airport”

The Japan Airport Terminal (JAT) Group, moving forward with the realization of our long-term vision of constructing airports that bring ultimate satisfaction to all of our stakeholders, has put together a new medium-term business plan, “To Be a World Best Airport 2020”.
Our Group is well aware of the difficult situation that we are currently facing. On the one hand, we have the steady increase in inbound visitors to Japan, while on the other we have the uncertainty arising from the unclear future of the domestic economy that has been brought about by the normalization of geopolitical risk and the resulting slowdown in the economic growth of China and other developing nations that have been driving the world economy.
Several factors are contributing to the increased internationalization of Tokyo International Airport, better known as Haneda Airport. We have the 2020 Tokyo Olympic and Paralympic Games, the expansion in the number of airport landing slots as part of the overall effort to enhance airport facilities in the greater Tokyo region, the faster than envisioned progress in the Government’s drive to make Japan a world travel destination and its efforts to spur regional revitalization, and Japan’s improved economic vitality. This means our role and our importance are expanding and we see this as an opportunity for growth.
Our Group remains dedicated to enhancing our business environment. Our final objective, and our guiding principle and long-term vision for each and every one of our employees, is “To Be a World Best Airport”. We are well aware of our significance as a company and of our social mission and, in addition to raising the level of stakeholder satisfaction, we will strive to strengthen our organizational governance and improve the efficiency of each of our business enterprises by committing ourselves to this medium term business plan.

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1. Our Long-Term Vision: To be a World-Best Airport

As part of our continued dedication to increased stakeholder satisfaction, we have created a long-term vision emphasizing our desire to make Haneda Airport the world’s number one airport and the most highly rated airport in the world.
Our entire group is collaborating to identify and improve the various problematic aspects of our current business environment so as to make this long-term vision an unwavering principle, a dream all of our staff can share and devote themselves to until it becomes a reality.

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2. Implementing Our New Medium-Term Business Plan

As the first phase in the realization of our long-term vision, we must build a strong business foundation, and utilize a wide range of management resources to help Haneda Airport reach its full potential. Then, while developing new businesses and profit-making opportunities, we must work on reorganizing the revenue bases of our existing enterprises and establishing a competitive edge.

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3. Strategic Direction

We are currently expanding our earnings from Haneda Airport which is already the Group’s leading source of profit. In order to respond to new domestic and international competition brought about by major changes in airport management and the relaxation of government regulations, we are further enhancing our existing businesses and raising their level of operational excellence. In order to alleviate our over-dependence on our duty-free business we are expanding our business domains by creating future profit-making businesses and optimizing our regional portfolio balance.

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4.Medium-Term Business Plan “To Be a World Best Airport 2020”

Our perception of the current mid- and long-term business environment sees the Japanese and the world economies remaining in a state of uncertainty. Positioned as we are in the airline industry, and with the 2020 Tokyo Olympic and Paralympic Games coming up, airport facilities in the Tokyo metropolitan region are being enhanced, a new annual target of 40 million foreign visitors has been set for the year 2020, and the demand for airport facilities and services is expected to continue rising.
Up to now our Group has been the first to foresee the increase in inbound tourism and has consequently been opening up and promoting new duty-free stores in the city. From now on, however, we have to prepare for a wide range of new risks such as those stemming from the unstable world economic situation and the entry of new rivals into the market, yet also take into account how to enhance our earnings and avoid geopolitical risk. To this end we are undertaking a transformation in our strategy to allow us to cope with the highly complex and uncertain state of the current business environment by creating new businesses and by moving into new markets outside of the capital region.
With our new middle-term business plan based on this course of action, we have developed a three-pillar strategy aimed at realizing our long-term vision of “To Be a World Best Airport” and with these 3 pillars acting as our actual foundation we are implementing organizational and governance reorganization and enhancement.

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5. An Overview of Our Business Strategies

(1) Optimizing Haneda Airport

We are adding new value to Haneda Airport, the main source of our economic viability, by first anticipating social change and customer needs, and then pursuing tangible customer value while also creating new latent customer value.

①Facilities Management

To ensure the Tokyo Olympics and Paralympics are held successfully, we are taking this opportunity to increase the number of landing slots at airports in the greater Tokyo region and doing our utmost to functionally enhance airport facilities.
The latest technology is being introduced to further strengthen security levels and counter any possible terrorist threats that may arise as Japan becomes increasingly more international, and to ensure absolute safety so that Haneda Airport can carry out its role as a gateway to Japan.

②New Initiatives

As one way of using Haneda Airport as a stage for providing visitors with greater insight into such various aspects of Japan as its highly advanced technology, its culture, industry, and education, we are promoting robotics, regional revitalization, and education (University Hub Haneda Airport / UHHA).
In response to increasingly diversified customer needs, we have revised our corporate policy with the intention of maintaining our SKYTRAX 5-star rating and aiming at raising our service rating by one rank. All of the airline staff and other related personnel are working together to provide optimum service and to firmly establish the Haneda Airport brand.

(2) Expanding into Business Domains that Leverage Our Strengths & Diversifying Our Revenue Sources

While promoting the creation of new businesses centered around our Haneda hub, we are also leveraging the airport terminal management expertise we have acquired since our founding 60 years ago to contribute to expansion at other airports in other regions.

①Facilities Management

We are creating new revenue sources while at the same time enhancing Haneda Airport’s overall advertising value by diversifying the advertised merchandise we handle and increasing the points of sale.

②Merchandise Sales

We are continually creating new businesses by collaborating with companies in other industries. We are also leveraging our strength as the leading company in Japan’s duty-free business, and monetizing such in-house know-how our duty-free delivery system by making it available for direct sales.

③Food and Beverage

We undertaking an expansion of our business base in the in-flight meal sector by tying up with LSG, but while this medium-term business plan is in effect we are seriously considering an even greater expansion for this sector.

④New Initiatives

Taking advantage of our Haneda hub, we have been proactively tendering bids on the rights to manage other airports, both domestic and overseas. We are pushing forward with the monetization of our expertise by offering consulting services to domestic and foreign airports as well as technical cooperation for Government projects.

(3) Restructuring Our Financial Foundation & Enhancing Our Competitive Edge

We are renewing and dynamizing the revenue bases of our current business domains – facilities management, merchandise sales, food and beverage – and boosting our daily operation efficiency and enhancing our competitive advantage.

①Facilities Management

We are enhancing our earnings through the upgrading of our airport lounges, multi-purpose halls, and rental conference rooms, and the renovation and expansion of our parking facilities, while also promoting energy saving by switching to LED in our interior lighting and installing water-saving devices.

②Merchandise Sales

To enhance earnings we have renovated the Marketplace in Domestic Passenger Terminal 1 and remodeled the duty-free stores serving the domestic airlines, and to give us a competitive edge we are expanding the scale of our business through the opening of multiple airport-style duty-free outlets in the city and setting up an in-airport distribution business.

(4) Restructuring and Enhancing Our Organizational Governance

We are enhancing our organization and our human resources by taking swift and bold measures in response to the complexity of risks stemming from such multiple factors as the diminishing size of the labor force, social uncertainty, and the diversification of individual values. Furthermore, by strictly enforcing our corporate governance code, we are trying to provide our stockholders and investors with information that is highly transparent and attempting to expand opportunities for personal engagement.
We are establishing an enhanced group management system through organizational restructuring, and increasing our implementation speed by utilizing advanced information technology. Furthermore, by expanding childcare facilities within the airport, and by providing an environment that allows women to take on a more active role, we are enhancing employee satisfaction and enabling greater access to quality human resources.

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6. Roadmap to the Realization of Our Long-Term Vision

We will duly implement each of the measures of the Medium-Term Business Plan (2016~2020) and as a result by 2020, when this plan is terminated, intend to have in place new management resources that will enable us to manage the entire airport. From 2021 onward we will execute new plans aimed at the continued realization of our long-term vision. By raising the level of expertise of our management resources and by building up the value of Haneda Airport so we can expand into air freight, we can grow and eventually position ourselves to be chosen to operate the entire Haneda Airport.

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7. Guidelines (Target Indicators)

We are carrying out our management duties with ROA as our target indicator and from the perspective of raising asset valuation so that we can respond to the needs of all of our stakeholders while providing timely and reliable facility maintenance services that meet social demands.

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8. Investment Plan (2016-2020)

As a result of the decision to internationalize portions of Haneda's domestic Terminal 2 and in order to accommodate the construction and maintenance work necessitated by the Tokyo 2020 Olympic and Paralympic Games and the strengthening of airport facilities in the Tokyo metropolitan region, the term of the initial investment plan has been extended from 3 to 5 years and the amount being sought has been raised to 135 billion yen.

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9. Profit-Loss Plan (2016-2020)

[FY2020 Forecast]
With the investment in the internationalization of parts of domestic Terminal 2, temporary costs will increase and operating profit will decrease, so after 2020 when the new facilities are in use, everything will be done to increase demand and meet target goals.

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