Japan’s Ministry of Land, Infrastructure, Transport and Tourism (MLIT) will conduct an airfare monitoring survey starting June 1.
The survey has two objectives: to confirm whether the fare setting and sales practices of domestic airlines are not undermining passenger convenience or fair competition, and to examine which cost items should be taken into account when issuing fare revision orders.
It will measure sales fares at various points in time, such as 75 days, 60 days, 30 days, and 7 days before departure, and will also conduct hearings with airlines. Based on the data obtained, it will calculate the break-even point of airfares using available information and analyze the relationship between each carrier’s fare setting and cost structure by comparing the break-even point with prevailing fare levels.
Experts had pointed out, for example, that “a mechanism for sound price competition is needed” and that “regarding the relationship between costs and fares, we would like you to consider whether there are other cost items that should be treated as variable costs, while also taking into account the variety of fare types and the differing situations of each company, such as economies of scope.”
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