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Japan crisis: Travellers urged to leave Tokyo, air fares spike, flights cut. 71 airlines hit

18th March, 2011

For travellers and local residents, the situation in Tokyo is deteriorating amid rolling power cuts, infrastructure problems and ongoing aftershocks, while rising concerns over the Fukushima nuclear plant has prompted several governments around the world to advise its residents to avoid travelling to Tokyo or leave the city/country entirely.

International and domestic air fares from Japan's main gateways, Tokyo Narita and Tokyo Haneda airport have spiked in several key markets in recent days as a growing number of people attempt to leave Japan. See related report: Airfares from Japan spike as travellers exit or move south, inbound fares drop

The situation is critical for the main Japanese carriers, Japan Airlines (JAL) and All Nippon Airways (ANA), which together control around 77% of the domestic market.

Japan domestic market seats per week - Mar-2011

Airline Seats
per week
Market
Share
All Nippon Airways 1,021,110 40.6%
Japan Airlines 549,505 21.9%
Air Nippon 168,596 6.7%
JAL Express 149,286 5.9%
Air Do 125,594 5.0%
Skymark Airlines 123,708 4.9%
Skynet Asia Airways Co. Ltd 107,016 4.3%
Japan Transocean Air 90,380 3.6%
Star Flyer Inc. 64,324 2.6%
Japan Air Commuter Co. Ltd 59,276 2.4%
Ibex Airlines 27,980 1.1%
Oriental Air Bridge Co. 13,416 0.5%
Fuji Dream Airlines Co ltd 12,528 0.5%
GRAND TOTAL 2,512,719 100.0%

US carriers heavily exposed to Japan's international market

JAL and ANA together account for 22.3% of total international capacity to/from Tokyo, according to Innovata for flights scheduled for this month. The next biggest market share goes to US carriers at 14%. Delta (following its takeover of Northwest) is Japan's second biggest international carrier, while United is ninth largest.

See related report: Japan crisis: USA, China and South Korea most exposed to downturn in traffic

International flights to/from Japan and seats per week: Mar-2011

Airline Flights
per Week
Seats
per Week
Market
Share
Japan Airlines 792 199,078 13.5%
Delta Air Lines 508 135,944 9.2%
Korean Air Lines 504 134,556 9.1%
All Nippon Airways 541 129,281 8.8%
Asiana Airlines 428 89,262 6.0%
Cathay Pacific Airways 205 69,926 4.7%
China Eastern Airlines 288 52,480 3.6%
China Airlines 182 50,446 3.4%
United Airlines 168 49,602 3.4%
Air China 262 47,948 3.2%
Thai Airways 118 37,665 2.6%
Singapore Airlines 114 37,550 2.5%
Continental Airlines 198 35,538 2.4%
China Southern Airlines 142 26,222 1.8%
Air Japan 113 24,367 1.7%
EVA Air 98 23,752 1.6%
Vietnam Airlines 85 20,861 1.4%
American Airlines 84 20,748 1.4%
Lufthansa 52 19,494 1.3%
Philippine Airlines 64 18,844 1.3%
Air France 42 15,752 1.1%
Jetstar Airways 50 15,150 1.0%
Garuda Indonesia 48 14,232 1.0%
JAL Express 84 13,776 0.9%
Malaysia Airlines 44 11,398 0.8%
KLM 34 11,054 0.7%
Alitalia 34 9,894 0.7%
Air Nippon 82 9,840 0.7%
Finnair 36 9,736 0.7%
Emirates 24 9,600 0.7%
Jeju Air Company 48 8,112 0.5%
Air Canada 28 7,648 0.5%
Shanghai Airlines 32 6,922 0.5%
British Airways 24 6,788 0.5%
Qantas Airways 20 6,708 0.5%
Coast Air A.S. 42 6,258 0.4%
Hong Kong Express Airways 36 6,084 0.4%
Turkish Airlines 20 5,954 0.4%
Shenzhen Airlines 36 5,644 0.4%
Air New Zealand 18 5,052 0.3%
Air India 14 4,788 0.3%
Qatar Airways 14 4,690 0.3%
Virgin Atlantic Airways 14 4,312 0.3%
Hawaiian Airlines 14 3,640 0.2%
Air Macau Company Limited 24 3,524 0.2%
Hong Kong Airlines 14 3,514 0.2%
Dragonair 18 3,372 0.2%
Austrian Airlines 12 3,336 0.2%
SWISS 14 3,192 0.2%
Aeroflot 14 3,052 0.2%
Scandinavian Airlines System 12 2,940 0.2%
Air Caledonie International 12 2,892 0.2%
Caribbean Star Airlines, Ltd. 12 2,724 0.2%
Vladivostok Air 16 2,572 0.2%
Jetstar Asia Airways 14 2,520 0.2%
Etihad Airways 10 2,344 0.2%
AirAsia X Sdn. Bhd. 6 2,262 0.2%
Sri Lankan Airlines 6 1,570 0.1%
Iran Air 4 1,184 0.1%
Aeromexico 6 1,086 0.1%
Air Tahiti Nui 4 1,000 0.1%
CEBU Pacific Air 6 936 0.1%
Uzbekistan Airways 4 920 0.1%
Air Niugini 4 920 0.1%
Spring Airlines Limited Corporation 6 894 0.1%
Pakistan International Airlines 4 736 0.0%
Shandong Airlines 4 556 0.0%
Miat - Mongolian Airlines 4 488 0.0%
Sakhalinskie Aviatrassy 7 425 0.0%
Mandarin Airlines Ltd. 4 388 0.0%
Xiamen Airlines 2 276 0.0%
GRAND TOTAL 6,027 1,476,219 100.0%

International airlines seeing solid near term demand, especially outbound - big question marks ahead

A total of 71 airlines serve Japan and some are making schedule changes in response to the situation in Japan. Many carriers are expressing deep concern about the unfolding situation in Japan, which accounts for 6-7% of global premium traffic.

  • Air China: Announced it will cancel planned ChengduTokyo Narita and WuhanNarita service, due to start on 27-Mar-2011. Both routes were planned to operate twice weekly (Chengdu to increase to three times weekly from Jul-2011). The carrier however stated it is using larger aircraft on Japan services this week;
  • Cathay Pacific: Stated travel to Japan is showing declining levels of seat occupancy, while travel in the opposite direction is “persistently high”. CEO Tony Tyler stated: “At the moment, with the extra flights we’ve got, we’ve got enough seats to accommodate all the passengers who want to come back. But we’ll keep a very careful eye on demand and of course if we need to put more flights on we’ll do so. The longer-term financial, economic impact really remains to be seen, but clearly it will probably be something of significance because Japan’s a very important market for us. It’s very different from the old days. Thirty years ago Cathay Pacific got 30% of its revenue from Japan, but that is very, very different of course nowadays. It’s nothing like that, but it’s an important market to us";
  • Jetstar CEO Bruce Buchanan stated demand has held up well despite natural disasters in key markets, including Australia, New Zealand and Japan. The LCC has been monitoring demand and could compensate for any reduction by either reducing service or slowing growth. The airline was continuing to fly its full schedule to Japan. However, he stated LCCs were likely to feel the impact of the Japanese disaster later than the full service airlines because of the immediacy with which the larger airlines would have to respond to the business travel segment. Mr Buchanan also did not rule out the possibility of consolidating its operations in Japan.
  • Hawaiian Airlines: CEO and President Mark Dunkerley said cancellations have been “pretty modest”. Bookings are mostly handled by travel partners in Japan and they “continue to demand the level of service that we’ve already been providing and intending to provide in the coming months," he said. The carrier stated it would continue its Japan schedule and expansion plans, according to spokesman Keoni Wagner. Meanwhile, Hawaii Governor Neil Abercrombie predicted the economic consequences will be severe for Hawaii. “It’s going to be terrible. It’s going to be rough. It’s something that we have to come to grips with," he said. Hawaii is the top US destination for the Japanese, with more than 1.2 million visitors in 2010 contributing USD1.9 billion or 17% of the economy;
  • Philippine Airlines: Stated it may have to review projections for the fiscal year starting Apr-2011 to consider the impact of the Japan situation;
  • Lufthansa-ANA: Lufthansa CEO Christoph Franz stated Lufthansa’s planned alliance with All Nippon Airways may be affected by recent events. “Preparations were going according to plan and approval of the competition authorities in Japan was expected around mid-year. This might change due to current developments,” he said;
  • Malaysia Airlines: MD Tengku Datuk Azmil Zahruddin said the earthquake adds to the aviation industry's challenges for 2011 even though its impact would not be as severe as the Iceland volcanic eruption in Apr-2010. He added that it was too soon to determine how the quake will affect carriers' earnings, but will certainly be a factor weighing down profitability come the end of a "challenging" 2011.
  • SAS: “To Scandinavia from Japan we’ve had quite full flights with just some seats left,” spokeswoman Elisabeth Manzi said;
  • Singapore Airlines: Stated it would delay the launch of A380 services to Narita and Los Angeles due to "lesser demand" for travel to Japan. "In view of the developments in Japan, Singapore Airlines is postponing the introduction of Airbus A380 services on flights SQ11 and SQ12 between Singapore and Los Angeles via Tokyo Narita until further notice," the carrier said. The service will continue to be operated with B747-400 aircraft. The carrier had originally planned to launch the A380 service later this month;
  • United Continental: Stated it has had a “measurable decline” in US-Japan travel demand. The change is part of a “modest” drop in Japan travel, spokesman Andrew Ferraro said. United and ContinentalGuam airlines have kept their schedule of 183 weekly departures to Japan except for a route between and Sendai, where the airport was damaged. United Continental is the first major US carrier to say it has noticed a downturn in travel demand to Japan.

Sources from 17-Mar-2011: Xinhua, Bloomberg, Dow Jones, Reuters, Wall Street Journal, Airline Route, Itar-Tass, Gulf News, Singapore Business Times, Huffington Post, NBC Chicago, Fox Business, abs-cbnNEWS.com, Kyodo, IANS, New York Post, Prime-Tass, Bernama, CNBC, Agence France-Presse, LA Times, Post Media

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