Munich Re, the world’s largest reinsurer, estimated the company’s claims from the earthquake and tsunami in Japan will reach around EUR1.5 billion (Bloomberg, 23-Mar-2011). Eqecat has estimated that insurers and reinsurers would likely have losses of USD12 billion to USD25 billion from the Japan earthquake and tsunami. Modeler AIR Worldwide had estimated losses of as much as JPY2.8 trillion (USD35 billion) from the quake alone. Swiss Reinsurance Co, the world’s second-largest reinsurer, estimated it would face claims of around USD1.2 billion. Scor SE, the world’s sixth-largest reinsurer, stated its claims would be less than EUR185 million.
Insurance and reinsurance companies to feel impact of Japan earthquake
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LCCs accounted for 1% of available seats between Japan and Korea in 2009, reached 37% in 2016, and so far in 2017 will account for 49% of the market. Limited airport data indicates that LCCs, operating at higher load factors, already transport more passengers than full service airlines, and by the end of 2017 LCCs should easily account for the majority of capacity.
LCCs already fly more airport pairs than their full service counterparts. The LCC development between Japan and Korea illustrates underlying LCC opportunity in Northeast Asia but also reflects on the importance of liberalisation, and for full service airlines to have efficient cost bases.
Finnair accelerates capacity growth, led by long haul; seeks cost efficiency through fleet & labour
In 2016 Finnair accelerated its rate of capacity growth after a modest return to expansion in 2015, following cuts in 2014. It also experienced a fall in unit revenue (as did most European airlines), most notably in the regions of highest capacity growth, i.e. the long haul markets North America and Asia.
Asia is Finnair's most important long haul market (Japan and China are its two biggest markets by ASKs) and its ranking by seats on routes between European and NE/SE Asia is disproportionate. It has ambitious growth plans in the region and will increase frequencies to Tokyo and Hong Kong this summer. Its long haul network, which will also extend to San Francisco this summer and Goa next winter, is largely founded on connecting traffic via its Helsinki hub.
Finnair's return to capacity growth has coincided with a return to profit, but lower fuel prices were the main driver of its bottom line improvement. Its profit margins remain slim and, beyond the vagaries of fuel price benefits, Finnair aims for more sustainable unit cost cuts. Fleet strategy and labour productivity form a two pronged attack on its cost base.