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Air routes, ocean shipping impacted by rising oil costs

Date Posted: 2007-11-09

Crude oil prices are at record highs, passenger levels are declining, and cutbacks in government subsidies are combining to worry local airlines, passenger ferry and cargo companies.

Okinawa has 14 archipelago flight lines and four shipping routes, the Ministry of Land Transport says, compared with 313 archipelago air routes and 122 ocean lines feeling the money crunch nationwide. Officials have slashed federal government subsidies, sending local officials scrambling to find ways to keep services alive.

Okinawa air and water routes suffered losses of ¥9.3 billion last year, as a reduction of more than 2,550,000 passengers on Prefecture routes impacted companies’ financial figures. Okinawa has been dependent on subsidies because those using the routes are mostly senior citizens or young travelers.

The central government has cut subsidy funding to ¥4.7 billion, leaving a shortfall of ¥4.6 billion. The Tokyo government has told local officials to increase fares and curb costs to make up the shortfalls. Okinawa has been arguing there should be more subsidy money, but Tokyo says there’s no way that will happen.

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