Japan is the latest market to illustrate the new reality of the airline industry; that capacity and traffic levels move in inverse relationship to the number of new COVID-19 cases.
From Japan being one of the countries with most success in combatting the pandemic last year, a new surge in infections is threatening to wipe out much of the local airline industry’s hard-won gains.
The latest spike in cases in Japan has prompted the government to declare a state of emergency for the second time since the coronavirus first emerged. This has caused the two major airlines to scale back their domestic schedules in January and February.
Such moves are causing further pain to the country’s tourist industry, which is already hurting from the lack of international travellers. It is also exacerbating concerns about whether the Olympic Games will be held in Tokyo in Jul-2021, as scheduled.
Japan is far from being the only Asia-Pacific market that has had a promising rebound derailed by a new flare-up of COVID cases.
Australia, for example, was finally benefitting from a substantial recovery in domestic capacity in the fourth quarter, but capacity plans have been cut back due to a surge that has resulted in more state border closures. Some of the most successful countries in restoring domestic travel, such as Vietnam and China, have also had temporary setbacks due to spikes.
The question now for Japan will be how long it takes to get the latest resurgence under control.