Society

Haneda airport train slashes fares to dominate access to Tokyo hub

Nov 01 (Nikkei) - As companies across Japan raised prices to adjust to the 2 percentage-point hike in consumption tax on Oct.1, railroad operator Keikyu went against the grain by reducing fares on its cash cow Haneda Airport-to-central Tokyo route by about 30%.

It was not as if the rail operator needed a shot in the arm. Keikyu commands a comfortable top share of 32% of the passengers using the urban airport. The fare revision is expected to blow a 4 billion-yen ($36.7 million) hole in revenue.

But a closer look at the decision making reveals a strategy of taking short-term losses for the sake of an even brighter future.

"I always used the monorail but after hearing that the prices went down, I tried Keikyu," a 51-year-old man told Nikkei in mid-October on his way to Haneda to take a plane back to his hometown in Oita Prefecture.

The price drop is considered significant, especially in an industry where it is not common globally to see fares reduced. Keikyu now charges 300 yen for a ride from Shinagawa Station to the airport, down from its previous 410-yen fare.

Rival Tokyo Monorail, an elevated line that follows the western coast of Tokyo Bay, charges 500 yen for a Haneda-Hamamatsucho ride. A limousine bus operated by Airport Transport Service asks for 730 yen for a ride to Shinagawa Prince Hotel.

For a comparison with an overseas airport, a train ride between Heathrow Airport to central London would cost about $30, whereas a subway trip from New York's JFK Airport to Manhattan will incur a payment of over $10. Both make Haneda's affordability stands out.

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