Category: Econ & Business

Skymark vs. the SDF

The new airport in Ibaraki Prefecture just lost its only domestic route, though it will still have a flight to Korea.

There were reasons to expect this. The airport is far from Tokyo, even farther than Narita, and it has no rail service. It is only particularly convenient for people in Mito, Tsukuba and other cities in the immediate surroundings. (More on this at CNNGo and Yen for Living.)

But economics didn’t kill Skymark Airlines’ Ibaraki-Kobe route: instead, the neighbors killed it. Ibaraki Airport was originally built as an Air Self-Defense Force base, and it still houses units of fighter defense jets and military civil defense transport planes. This is not really a unique situation to Ibaraki: Itami, Komaki and New Chitose Airports all have SDF units on-site, and Misawa Airport shares its runways with the U.S. Air Force. These airports manage to keep a balance between civilian and defense traffic, but the officials in Ibaraki were apparently less cooperative.

Yomiuri (English):

It’s possible the ASDF could ask us to suspend our flights when they are holding a troop inspection ceremony. We are therefore unable to conduct this service on a regular basis,” a Skymark spokesperson said.

The cancellation has shocked local officials. “I am very surprised. I will ask the officials concerned to fine-tune any differences as soon as possible, and give top priority to passenger convenience,” Ibaraki Gov. Masaru Hashimoto said late Thursday.

Toyo Keizai (Japanese):

Skymark management explained the cause of the service cancellation: “There is a need for consideration for the Air Self-Defense Forces in excess of what was expected, and this harms our ability to provide steady service.” They have also indicated that there is a possibility of resuming service if the situation improves, but the relationship with the SDF was expected at the time the service began, and some related parties are calling [Skymark] irresponsible.

Load factors on Skymark’s Ibaraki-Kobe route are high, exceeding 75%, but the route is running in the red when maintenance and other operating costs are included. Skymark aimed to make the route profitable by providing service three or more times per day in the future, instead of the current single daily round trip, but apparently determined that such a schedule would be difficult to arrange because of the SDF relationship.

Asiana Airlines are maintaining daily flights between Ibaraki and Seoul, so the airport is not totally a ghost town. Assuming passengers can get there, it’s actually great for ultra-cheap flying because of its low construction budget and lack of frills. The terminal is extremely compact (it doesn’t even have jet bridges to the planes) and on-site parking is free.

Excited about Chrome OS

Not Japan-related per se, but…

As some already know I am extremely excited about Google’s upcoming Chrome OS. The prospect of a laptop that turns on instantly and “just works” like the iPod Touch give me a warm, tingly feeling. I’ve recently come across some articles that tie together some of my thoughts on the subject, so here goes:

Why Chrome OS Is a Game Changer
…
Historically, open-source operating systems and applications have had a rough time attracting consumers. For example, Microsoft completely dominated Linux in netbooks. But Android proved that the Google name resonates with consumers and manufacturers looking for something fresh to push. Companies that bet on Android — such as Motorola (MOT) and HTC — are seeing that gamble pay off. Android has basically paved the way for manufacturer adoption of Chrome OS.

The primary criticism against the Chrome concept is that it’s almost entirely Internet-focused and doesn’t have much use when not connected to the Web.

However, I don’t see how that’s a bad thing because, for most consumers, all computers are bricks when they’re not online. Google wants eyeballs on the Web — not on desktop applications — so it has a direct incentive to push Web-centric devices. In the late ’90s, Internet appliances were big jokes, but that’s all computers are these days — a way to get on the Internet.

  • Some more details on how the OS is coming together from TechCrunch, with some good signs that it will include at least one OS essential – mindless video games.
  • One potential drawback – the relatively high specs Google is demanding from PC makers (solid-state hard drives, HD screens) might make Chrome notebooks a bit pricey.

My ideal machine would be a “convertible laptop” with a screen that can swivel into a tablet. If someone can pull that off (so far all the convertible laptops I have seen are atrocious) whatever OS it runs could work.

Is anyone else as interested as I am? I wonder if Chrome OS could take off in Japan. Maybe if they come out with Chrome tablets…

Most Congressional hearings are now “kabuki”

Click here to watch some wrinkled political blowhard casually dismiss an entire branch of government with our favorite tired cliche:

(The BP hearings are) not a forum where we can expect answers. It’s kind of a “kabuki drama” if you will, like most congressional hearings.

You can leave comments on the BP oil spill under this post. Bill Maher said that even he is too depressed to read the news these days, and I agree. It seems like such devastation for so much of the gulf I am tempted to block it out of my mind, which is the kind of tactic I usually reserve for the suffering in third world countries.

(Borrowed the fun image from Google. Bloomberg’s Youtube channel doesn’t allow embedding)

JAL’s Middle East Adventures

Japan Airlines (JAL) is in the hotel business, and not surprisingly, it wants to get out. As the company seeks to restructure itself into a viable business, one of its plans is to sell its hotel arm, possibly to Hotel Okura. JAL currently owns 41 hotels in Japan and 17 overseas, and those overseas hotels are overwhelmingly in large cities — Beijing, London, Mexico City, Hanoi, Hong Kong, and on and on. Others are in tropical resorts popular with Japanese tourists, such as Bali, Palao, and Guam. There is also one JAL hotel in the Middle East, in a somewhat unusual location.


One of these things is not like the other…

The only JAL Hotel in the Middle East is not in a major city such as Dubai, Abu Dhabi, Doha or Beirut. It’s in the tiny emirate of Fujairah, one of the seven emirates that make up the United Arab Emirates, situated not on the Persian Gulf but on the Gulf of Oman. (Don’t rely on the JAL map above for the accurate location — click here for a map that explains where Fujairah is in the context of the other UAE emirates).

The hotel was announced in October 2005 to much fanfare and at that time was scheduled to open in December 2006, with another hotel in Dubai to open in 2007. The JAL Fujairah actually opened in May 2007 — not a bad time lag, actually. The hotel itself is owned by a Kuwaiti company called ACICO — which stands for Aerated Concrete Industries Co., a more old-school construction company that is not a typical player in the luxury hotel business. JAL is the manager of the hotel, and its truly distinguishing characteristic is the cuisine, which is genuinely Japanese and said by some to have some of the best sushi in the entire Middle East. I have heard of more than a few people driving the 2 hours from Dubai to Fujairah just to have a sushi lunch, and then drive home.

Objectively, to international standards, the JAL Fujairah is a beautiful beachside hotel located near a number of other luxury hotels along the Fujairah coast. But locally, I have heard it referred to as a “motel”, and substandard when compared to the other modern luxury coastal resorts in Fujairah such as the Rotana and Le Meridien.

JAL had bigger plans for the Middle East, and was one of countless companies that got caught up in the Dubai property boom and the hotel boom. But they ran into problems. The Dubai hotel originally announced for 2007 was pushed ahead, and when construction was underway on the JAL Tower, built on prominent real estate along Sheikh Zayed Road, across from the iconic Emirates Towers in early 2007, it was at that time scheduled to be opened in 2008. It was also to be followed by the JAL Hotel and Spa Resort Bahrain in 2009. The later project has since been cancelled, and the former has yet to open as of this writing in early 2010.

At this point, the cause of the delay is not clear. The tower had just about been completed when I arrived in Dubai last autumn — check out these photos of the building that were taken shortly thereafter — and as of December 2009 it was scheduled to open in April 2010. But it remains closed, and it has yet to open or announce an opening date, only stating on its web page that it will open sometime in 2010. Something must be planned — last month they hired a new director of finance, and last week they hired a new manager, and their web page says they are hiring. But I would be surprised if they opened anytime during the summer months or during Ramadan in August, which means an opening in September at the earliest.

By that time, JAL Hotels may not be JAL Hotels anymore. With a possible sale of JAL Hotel’s assets to Hotel Okura, the first Japanese-managed hotel in the Middle East could be run by a relatively domestic Japanese hotel business. Dubai’s Japanese are hopeful that they can maintain the best sushi in the region.

Thanks Kamei! Japan’s taxpayers now guaranteeing about 500,000 deadbeats

In the autumn of last year, Shizuka Kamei pushed through a debt moratorium law, primarily with the provincial goal of backing the small real estate companies in his home town of Hiroshima that were hit hard by the recession. At the time, I called this woefully short-sighted:

Small companies across Japan’s countryside that are having trouble making repayments should either restructure themselves, or fail and be restructured by creditors or new management. Many have antiquated management with regards to accounting, employment rosters, operational efficiency, supply chains, etc. Companies that can’t adapt to changed economic environments are supposed to fail. Yes, some good companies caught in unlucky times are destined to be caught in the current credit crunch as they are unable to repay loans and go bankrupt. But bankruptcy is a good thing! It is the engine of economic development that allows bad companies to fail, stifled talent to move elsewhere, assets to be sold at whatever price the market will bear, and bad management to be replaced. Yes, it sucks that people lose jobs and shareholders forfeit their investments, but that’s life! Letting this happen is a necessity for economic growth.

And on top of this, the poor local banks, only barely functioning after 15 years of treading water with the bad loan crisis, will now inevitably reduce their limited lending activities to nothing. There will be no money to lend, thus no local business growth or economic development, and thus no entrepreneurial activity. A short-term benefit for stabilized employment rates means the countryside gets screwed in the long term.

While my concern about small businesses refusing to restructure remained true, my concern for local banks was addressed when the final bill was passed (which you can read in Japanese here). The Japanese government — in other words, tax dollars — provide a statutory guarantee for these deadbeats. The mechanics of this are, under Article 11 of the Moratorium Law, that the government provides sufficient financial backing to the Credit Guarantee Union, which backs the financial institution undertaking the new obligation to support the small business. The Credit Guarantee Union is a government-backed public interest corporation that provides credit and loans to small businesses.

How many people and “small businesses” (defined as a company with less than US$3 million in capital and less than 300 employees) have applied for the moratorium in the last half year? About half a million:

Japanese banks have received a total of 521,030 applications for the easing of loan repayment terms from small and midsize companies and homeowners under the so-called debt moratorium law, the Financial Services Agency said Friday.

The applications, as of the end of March, since the law took effect in December last year involved 13.64 trillion yen and more than 90 percent of them were approved, the FSA said.

Congratulations, Japanese taxpayer — your tax yen are now financing these deadbeats. When the world is buzzing that Japan could be the next Greece, and could be sparked by one of any number of events (a failed Japanese bond auction, a sharp drop in tax revenue, a failure to implement tough fiscal and budgetary standards, a sharp contraction in Japanese GDP, a downgrade in sovereign debt by the ratings agencies), this is one of the worst policies that could be put in place.

Hello Kitty owner turns things around by licensing anything and everything


Source: Pop Crunch

I’ve long been a detractor of Sanrio’s policy of licensing Hello Kitty’s image to appear on just about anything (and some offerings have been downright questionable [NSFW]). But apparently, if you throw hundreds of darts at the board over ten years, you’re eventually going to hit a few bulls-eyes:

Sanrio Co., the Japanese owner of the Hello Kitty character brand, may boost profit after arresting a 10-year slide in sales by slapping its logo on wine, wallpaper and minicars.

The popularity of Hello Kitty, a white cat with a red bow and no mouth, with celebrities including Lady Gaga and Paris Hilton, has led the company to focus on licensing and to pare its retail and restaurant businesses (Sanrio intends to shut 40 of its 260 gift shops in Japan over the next three years).

Sanrio almost doubled overseas licenses last year and counts clothing chains Hennes & Mauritz AB and Inditex SA as customers. President Shintaro Tsuji, 82, plans to set up an office in Dubai this month to grow in the Middle East.
…
An appearance by Hilton, a reality TV player, at Sanrio’s 35th birthday party for Hello Kitty, and by Gaga, a pop singer, on Japanese television holding a stuffed toy, helped the company boost fiscal 2009 sales 0.8 percent from the previous year, the first annual gain since 1999.

“Hello Kitty’s Zen-like calmness and faceless expression are the major reasons for its appeal across age groups and markets,” said Martin Roll, chief executive officer of Singapore-based consulting firm VentureRepublic.

Note that a major part of the strategy is to “expand beyond Europe, North America, and Japan” — in other words, the developed world might have had enough of Hello Kitty, so now it’s time to endear her to the rest of the world. Click through to see Lady Gaga in a Japanese TV appearance, decked out in Hello Kitty everything:

Continue reading Hello Kitty owner turns things around by licensing anything and everything

White American pop singers marketed in Japan

Update: They are apparently not managed by Johnny’s.


Every girl’s fantasy English teachers?

Meet the EastWest Boys. Assembled by Johnny’s Entertainment Sony Music Japan through an audition process, the group, dubbed a “5 in 300 million miracle,” is being solely marketed and promoted within Japan, where they are competing for the hearts of teenage girls.

For their latest single “Take Me There,” they have entered a promotional tie-up with fashion brand Peach John (whose president was mired in scandal last year over a dead woman in her apartment). They are on the cover of the latest catalog and lucky viewers will be able to catch their song on TV ads.

Here’s a YouTube video of a single that recently got some play on Japanese TV, “This Time”:

Sure, I have seen dozens of cheap, poorly produced Japanese pop acts, and some pretty bad American pop groups as well. But watching Americans run through the exact same half-baked dance routines as SMAP produces a special kind of cognitive dissonance.

Johnny’s has made sure to add a few bells and whistles to maximize appeal – the songs are in simple English, and the melody has enough of a pop-punk/emo feel to seem kind of foreign. This was the tune I saw on a few morning shows promoting the group as a new kind of pop act. Girls attending promotional appearances looked overjoyed to hug their new idols.

The music gets much worse when you watch the videos for songs that people didn’t pay enough attention to. “Yesterday’s Hero” was obviously filmed in the exact same warehouse, and the song is 100% cookie-cutter J-POP – no halfway-redeeming nods to American emo to be found. Are they wearing primary colors to make them look like Power Rangers?

While there’s not much to compare, a much, much more listenable American entrant into the Japanese pop world is Jero, the African American enka singer.

The group’s videos are hosted on an official channel, which is kind of a departure for Johnny’s who until recently had a strictly Internet-phobic PR stance. By offering some of their content for free on the web, they are clearly trying to save some PR money by generating buzz online. The upside of that strategy is it gives us a lot of information on these guys that is usually not available on your typical J-pop group.

Continue reading White American pop singers marketed in Japan

Coverage of Yoshida-ryo piece on CNNGo

Reaction to my recent CNNGo photo/article feature about Kyoto University’s famous Yoshida Dormitory has been very positive. I want to thank whoever it was that submitted it to Boingboing, who kindly linked to it as they have several Mutantfrog posts in past years. I also want to especially thank frequent MF commenter KokuRyu, who posted a link to the piece on MetaFilter, where there have been some pretty interesting comments from people who seem to have experience in other cooperative/squat type housing, making some comparisons between them and Yoshida-ryo.

I am also planning on doing a follow-up piece sometime, discussing a little bit more about the history of Yoshida-ryo and the other self-administered dorms at Kyoto University, as well as some of the  “self run” (自治) student activity areas in the university, and the relationship between Yoshida-ryo and the various squatting protests that have occurred on campus over the years, such as the Ishigaki Cafe and the currently still ongoing Kubikubi Cafe. Since CNNGo would not really be an appropriate venue for this sort of piece, I’m hoping readers can suggest or introduce someplace that might be interested!

Mainichi announces new, Twitter-enhanced dead-tree edition

National news daily Mainichi has announced a new dead-tree version of its newspaper to go on sale June 1. Named Mainichi RT, the daily tabloid will print the most-viewed stories online, along with Tweets about those stories and some other extras. A subscription will cost Y1980 a month, which would come out to around Y100 on newsstands assuming they only print weekdays. It’s somewhat similar in concept to Sankei Express, a concise Y100 edition of Sankei Shimbun released a couple years ago, and the many free newspapers distributed in major metropolitan areas in the US (except of course, those are free).

Could there possibly be a less useful idea? Are people supposed to buy it to see if their tweets made it in? If you know all the stories are already online, why bother picking up a newspaper? Someone please tell me what I am missing.

(found via J-Cast, cross-posted from Google Buzz)

Japan Times on Geos collapse – read Adamu’s UNCUT commentary

Richard Smart writing for the Japan Times has an article looking at the Geos meltdown in detail. I am quoted with my take on how Geos handled its demise and the outlook for eikaiwa employment.

Adam Richards, a 28-year-old translator and writer on Japan at the Web site and travelogue Mutant Frog, argues that the G.communication takeover has in some ways made the best of a bad situation.

“Geos seems to have done relatively well by students and teachers by finding a backer before announcing the bankruptcy,” he says. “That said, Nova’s messy bankruptcy was such a nightmare Geos can’t help but look better by comparison.”
…
Japan Economy News’ Worsley agrees that the eikaiwa schools need to change to survive.

“The industry itself will continue to shrink as does the population and number of younger people in Japan. In order to avoid disappearing, language school operators are going to have to embrace new technologies, diversify their products and services, and appeal to new market segments,” he says.

This, argues Richards of Mutant Frog, is likely to lead to worse conditions for newcomers to Japan.

“It really looks like the era of easy employment is over, though it seems like there are still opportunities out there,” he says.

In the interest of context, here is what I commented to Richard in response to his questions:

I obviously don’t know exactly what happened, but a multitude of factors have conspired against the eikaiwa industry – cutbacks in consumer spending, corporate belt-tightening, cuts to government subsidies, and tighter regulation are the big ones. It seems like Geos was unable to shrink down to size fast enough to adapt to the changing environment. Geos adopted a somewhat similar strategy to Nova – grow large and bring in lots of new students. Then, in April 2006 a Supreme Court decision led to a swift change in the regulatory environment – eikaiwa schools suddenly had to set up sensible refund policies (and in Nova’s case front a flood of refund requests), and this made the economics of a large chain less attractive. Geos apparently weathered the change relatively well, but once Nova failed so spectacularly it did serious damage to the reputation of eikaiwa as a service. This, combined with the economic downturn starting in 2007, probably did Geos in as their sources of cash dried up.
It really looks like the era of easy employment is over, though it seems like there are still opportunities out there. Berlitz and ECC seem to be hiring. Generally, I would recommend applying for JET or even teaching English in a different country, but if you have your heart set on working in Japan and don’t mind the salary levels, then why not?
There is a danger the Geos bankruptcy will continue the downward spiral that Nova set in motion. When there is a bankruptcy, you inevitably have students with contracts that are either broken or not satisfactorily fulfilled, and you have teachers who find themselves either out of a job and possibly unpaid or thrust into the arms of new management that may treat them differently. The general dissatisfaction gets reported in the media and spread by word of mouth, fueling the perception that eikaiwa is a scam or otherwise not worth the trouble. However, Geos seems to have done relatively well by students and teachers by finding a backer before announcing the bankruptcy. That said, Nova’s messy bankruptcy was such a nightmare Geos can’t help but look better by comparison.
Japanese people want to learn English as much as they ever did. All are required to study it in school but most never come within a mile of fluency. They spend their childhoods being fed the idea that speaking English is the key to success yet they never get there! So as long as the public education system keeps creating this demand, I think there will always be supplemental learning options like eikaiwa.