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Economy

Northern Japan's new bullet train line sees slow start

The Hokkaido Shinkansen drew more than 90,000 passengers in its first 16 days through April 10.

SAPPORO -- The newest Japanese bullet train line to Hokkaido operated at less than one-third of capacity in its first 16 days, making a far less auspicious debut than the previous extension of the nation's ultrahigh-speed rail network.

     With no prospect of the new line turning a profit anytime soon, the challenge will be to limit losses by attracting more visitors to the northern island of Hokkaido, both from Tokyo and further north.

     The 149km Hokkaido Shinkansen, which connects the main island of Honshu with Hokkaido, opened March 26. Together with the Tohoku Shinkansen, which ends at Shin-Aomori at the northern tip of Honshu, the line creates an unbroken corridor of ultrahigh-speed service from Tokyo all the way to the new northern terminus of Shin-Hakodate-Hokuto.

     More than 90,000 passengers rode the new segment through April 10. But that totals only 27% of capacity, barely more than the pre-opening estimate of 26%. By contrast, the Hokuriku Shinkansen, which links Tokyo with the city of Kanazawa to the west, ran at 49% capacity in its first 18 days of operation last year.

     One drawback to the Hokkaido Shinkansen for passengers from Tokyo is travel time. The 4-hour, 2-minute ride to the new northern terminus fails to break the so-called four-hour wall, under which rail competes favorably against air travel. Cost is another factor: The express fare is 52% higher than on the Tohoku Shinkansen.

     State-owned operator Hokkaido Railway expects its bullet train line to incur an average annual operating loss of 4.8 billion yen ($43.1 million) through fiscal 2018. Cash flow won't improve before the line is due for extension to Sapporo in fiscal 2030, JR Hokkaido President Osamu Shimada said.

     JR Hokkaido lost money on every line it operated in fiscal 2014, when labor and other administrative costs were included. Its railroad business is expected to log a 49.5 billion yen operating loss in the current fiscal year.

     Yet the new train line has improved tourism, judging by increases in visitors to attractions in the city of Hakodate and elsewhere. The Goryokaku Tower, which offers sweeping views of the cherry blossoms surrounding the city's star-shaped fortress, saw a 43% rise in visitors April 1-23 compared with the same period last year. Of these 39,000 visitors, 13,400 were from Tokyo and the rest of the Kanto region, an increase of 74%. Admissions to the Mount Hakodate Ropeway were up 14% on the year April 1-24.

     "The Hokkaido tourism season begins with the [Golden Week] holidays," Hakodate Mayor Toshiki Kudo said, referring to a cluster of national holidays starting Friday. "We have [strong] expectations going forward."

(Nikkei)

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