x Abu Dhabi, UAESunday 21 January 2018

'Near total avoidance of travel to Japan' threatens aviation market

The global aviation industry is counting the cost of flight disruptions and cancellations triggered by the earthquake in Japan.

The crisis in Japan is threatening to cause major disruptions to the country's US$62.5 billion aviation market.
The crisis in Japan is threatening to cause major disruptions to the country's US$62.5 billion aviation market.

The crisis in Japan is threatening to cause major disruptions to the country's US$62.5 billion (Dh229.56bn) aviation market, which equates to 10 per cent of global airline industry revenues.

The country's $19bn domestic air travel market, with 83 million passengers a year, is the most vulnerable, while international carriers in the Middle East, the US and Europe are also scrambling to re-route operations to safe airports.

"Travel patterns will most certainly be disrupted over the short term, with the likely near total avoidance of travel to Japan," the Centre for Asia Pacific Aviation (Capa) said.

"A number of carriers have adjusted their schedules to minimise overnight stops and related crew changes in Tokyo."

Foreign carriers are dealing with concerns over fuel shortages, damage to airport infrastructure as well as the threat of seismic aftershocks, power outages and even nuclear radiation.

However, the March 11 earthquake and resulting tsunami have caused highly variable travel patterns, and Capa said airlines were busy in the short term ferrying outbound passengers.

"Most international airlines are responding by operating full schedules to and from Japan and some have deployed larger capacity aircraft in response to rising numbers of passengers wishing to leave the country," it said.

The International Air Transport Association (Iata) on Friday similarly warned of "a major slowdown" in air travel but said it was too early to assess the long-term impact of the Japanese tragedy on global air transport.

"The fortunes of the industry will likely not improve until the effect of a reconstruction rebound is felt in the second half of the year," said Giovanni Bisignani, the Iata director general and chief executive.

The world's third-largest economy, crippled in parts because of the earthquake, tsunami and damage to nuclear reactors, is a major link in global air transport, representing 6.5 per cent of worldwide scheduled traffic.

Japan's main hub, Narita International Airport in Tokyo, is an important market for first and business-class travel. While an average of 6.2 per cent of passengers world-wide fly premium, the total is double that out of Tokyo Narita, where 13.4 per cent of weekly capacity is in first or business class, according to Innovata, a flight scheduling company.

Emirates Airline and Etihad Airways launched direct non-stop services last April from the UAE to Tokyo. Emirates also flies to Osaka and Etihad serves Nagoya.

Etihad said last week it would temporarily serve Tokyo Narita indirectly via Nagoya with an "air shuttle" because its Tokyo operations were compromised by power outages, the threat of aftershocks and limited fuel supplies.

Also last week, Alitalia and Lufthansa said they would drop services to Tokyo and re-route aircraft to Osaka and Nagoya.

Crews from those European carriers are spending nights in Seoul to avoid staying in Japan.

Japanese authorities said a reactor containment vessel may have been breached at the Fukushima Dai-Ichi power plant, increasing the risk of radioactive leaks.

Key fuel infrastructure facilities in Japan have been damaged, although most of the nation's airports had fuel supplies for about 10 days, Iata said.

In addition, Japan produces 3 to 4 per cent of global jet-fuel supply, some of which is exported to Asia. Some of this refinery capacity has been lost because of damage caused by the earthquake. This supply restriction could lead to higher aviation fuel prices, according to Iata.