Hokkaido Said to Mull $980 Million Sale of Airport Rights

Hokkaido, the northern Japanese prefecture known for its ski resorts, is considering a sale of rights to operate the nation’s fourth-busiest state-run airport, said people with knowledge of the matter.

Proceeds from selling the New Chitose Airport concession may top 100 billion yen ($980 million), said one of the people, who asked not to be identified as the deliberations are private. The Hokkaido prefectural government plans to hold additional internal discussions before making a final decision on whether to proceed with a sale, they said.

Hokkaido has benefited from a surge in tourism, as more people from China, Taiwan and South Korea visit the island. Three other Japanese state-run airports are already being privatized through concession sales as Prime Minister Shinzo Abe’s government cuts public debt and promotes deregulation.

New Chitose Airport, located outside the prefectural capital of Sapporo, handled 18.7 million passengers in 2013, ranking it fourth among Japan’s 28 state-controlled airports, according to data compiled by the transport ministry. Haneda airport in Tokyo is the nation’s biggest, with 68.7 million travelers last year.

Spokesmen for the Hokkaido prefecture and the transport ministry declined to comment.

In Hokkaido, the number of nights stayed by foreign visitors surged 52 percent to 3.1 million in 2013 from a year earlier, the third-biggest number among Japan’s 47 prefectures, data compiled by the Japan Tourism Agency show.

State-owned New Kansai International Airport Co. is working with the brokerage unit of Sumitomo Mitsui Financial Group Inc. to sell rights to operate two airports in western prefecture of Osaka. In northeastern Japan, an auction is scheduled to start this year of a 30-year concession for Sendai Airport, according to a document released in November by the transport ministry.

New Chitose Airport generated 9.2 billion yen of earnings before interest, taxes, depreciation and amortization in the financial year ended March 31, 2012, according to the latest report compiled by the transport ministry.

To contact the reporter on this story: Shigeru Sato in Tokyo at ssato10@bloomberg.net

To contact the editors responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net

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