Airlines cut back on routes to Japan
By Winny Wang |
March 25, 2011, Friday
|
Print Edition
Print Edition
BARBARA Yuan, an office worker in Shanghai, has scrapped plans to visit Japan after a major earthquake and tsunami crippled a Japanese nuclear power station earlier this month.
"I spent more than 10,000 yuan (US$1,526) on a travel package to Japan and have already got my visa, but the earthquake and nuclear radiation scared me, so I dumped the package and will go to Xiamen instead," Yuan said, referring to the city in southeast China.
Although Yuan said she would like to visit Japan, the threat of nuclear radiation hanging over the country has pushed those plans back a long way. And she's not alone. It's an attitude shared by many Chinese tourists who have suddenly cross Japan off their holiday list.
Faced with that sentiment and the continuing uncertainty about how the nuclear disaster at the Fukushima power plant will play out, domestic Chinese carriers are reconsidering plans to extend routes to Japan.
Zhang Wu'an, a spokesman for Spring Airlines, China's only budget carrier, said almost all passengers who planned to fly from Shanghai to Japan returned their tickets after the tragedy struck.
"Many tour groups, accounting for 80 percent of our passengers, chose to return their tickets after the National Tourism Administration of China warned tourists not to visit Japan, so we have suspended plans to launch a new route between Shanghai and Kagawa," Zhang said.
The Shanghai-based budget carrier opened its first Japanese route, linking Shanghai with Ibaraki, in July. The success of that foray encouraged the carrier to plan four or five additional routes to Japan this year, including service to the southeastern city of Kagawa due to start on Sunday.
Zhang said those plans are on hold, but only temporarily, because the airline is confident travel to Japan will eventually be restored to near normal.
The International Air Transport Association said the most exposed airline market to the events in Japan is the Chinese mainland, which derives about 23 percent of its international revenue from Japan routes.
Taiwan and South Korea are equally exposed, with 20 percent of their revenues related to Japanese operations, followed by Thailand, the United States and Hong Kong.
"Japan is an important link in global air transport," said Giovanni Bisignani, chief executive of the association, which represents about 230 airlines.
"The US$62.5 billion Japanese aviation market represents 6.5 percent of worldwide scheduled traffic and 10 percent of the industry's revenues," he said. "A major slowdown in Japan is expected in the short term. And the fortunes of the industry will likely not improve until the effects of reconstruction begin to be felt in the second half of the year."
The extent to which these lucrative travel routes weaken will be largely shaped by what happens to the Japanese economy. Many economists are suggesting that once reconstruction begins, the world's third-largest economy will rebound. However, the length of the current downturn will depend critically on developments at the nuclear power plant.
Luo Zhuping, board secretary of China Eastern Airlines, told Shanghai Daily that the travel market will be affected and passenger volumes are likely to drop on its China-Japan routes if nuclear radiation continues to worsen in Japan.
He said China Eastern's flights to Japan account for 5 to 6 percent of the carrier's total flights. Japan is one of the most profitable markets for China Eastern.
Among China's three biggest carriers, Shanghai-based China Eastern is likely to feel the heaviest brunt of the Japanese disaster, said Chen Jiansheng, an analyst at Guosen Securities Co. The impact on Air China and China Southern Airlines will be smaller, he said.
"Revenue from Japanese routes account for 5 percent of China Eastern's total revenue, so its revenue is expected to decrease 1.19 billion yuan this year," Chen said.
He said the airlines will redirect Japanese flights to serve domestic markets to relieve excess capacity in the short term.
Meanwhile, global airlines also have adjusted flights to Japan as demand plummets. Delta Air Lines announced it is suspending the launch of two new routes to Tokyo's Haneda Airport. It had planned to launch a Los Angeles-Tokyo route and a Detroit-Tokyo route this week.
Singapore Airlines said it will suspend two of its four daily flights between Changi Airport and Haneda Airport beginning on Sunday.
The carrier also postponed the introduction of Airbus A380 services on flights between Singapore and Los Angeles via Tokyo's Narita Airport. The flights will continue to be operated with smaller Boeing 747-400 aircraft.
Jetstar, the budget unit of Qantas Airways Ltd, said it will redirect half of its 14 weekly Tokyo-bound flights to Osaka after a fall in demand.
Cathay Pacific Airways and Korean Air Lines have also ended temporary capacity increases on Tokyo routes.
It's not only the passenger segment that is hurting.
Air cargo volumes between China and Japan will also be affected by closures or curtailed production at Japanese chip and auto factories. The earthquake, tsunami and radiation threat have crippled transport systems and disrupted the supply chain.
Japan is China's third-largest trading partner. Last year, China exported US$121 billion of goods to Japan and imported US$176.71 billion. About 48 percent of exports China shipped to Japan were electrical and audio-visual equipment and 9.5 percent were auto and aviation facilities.
"The impact on domestic air cargo companies is not as great as their Japanese peers because most goods shipped from Japan to China were carried by All Nippon Airways and Japan Airlines," said Liu Haiming, an aviation analyst.
"I spent more than 10,000 yuan (US$1,526) on a travel package to Japan and have already got my visa, but the earthquake and nuclear radiation scared me, so I dumped the package and will go to Xiamen instead," Yuan said, referring to the city in southeast China.
Although Yuan said she would like to visit Japan, the threat of nuclear radiation hanging over the country has pushed those plans back a long way. And she's not alone. It's an attitude shared by many Chinese tourists who have suddenly cross Japan off their holiday list.
Faced with that sentiment and the continuing uncertainty about how the nuclear disaster at the Fukushima power plant will play out, domestic Chinese carriers are reconsidering plans to extend routes to Japan.
Zhang Wu'an, a spokesman for Spring Airlines, China's only budget carrier, said almost all passengers who planned to fly from Shanghai to Japan returned their tickets after the tragedy struck.
"Many tour groups, accounting for 80 percent of our passengers, chose to return their tickets after the National Tourism Administration of China warned tourists not to visit Japan, so we have suspended plans to launch a new route between Shanghai and Kagawa," Zhang said.
The Shanghai-based budget carrier opened its first Japanese route, linking Shanghai with Ibaraki, in July. The success of that foray encouraged the carrier to plan four or five additional routes to Japan this year, including service to the southeastern city of Kagawa due to start on Sunday.
Zhang said those plans are on hold, but only temporarily, because the airline is confident travel to Japan will eventually be restored to near normal.
The International Air Transport Association said the most exposed airline market to the events in Japan is the Chinese mainland, which derives about 23 percent of its international revenue from Japan routes.
Taiwan and South Korea are equally exposed, with 20 percent of their revenues related to Japanese operations, followed by Thailand, the United States and Hong Kong.
"Japan is an important link in global air transport," said Giovanni Bisignani, chief executive of the association, which represents about 230 airlines.
"The US$62.5 billion Japanese aviation market represents 6.5 percent of worldwide scheduled traffic and 10 percent of the industry's revenues," he said. "A major slowdown in Japan is expected in the short term. And the fortunes of the industry will likely not improve until the effects of reconstruction begin to be felt in the second half of the year."
The extent to which these lucrative travel routes weaken will be largely shaped by what happens to the Japanese economy. Many economists are suggesting that once reconstruction begins, the world's third-largest economy will rebound. However, the length of the current downturn will depend critically on developments at the nuclear power plant.
Luo Zhuping, board secretary of China Eastern Airlines, told Shanghai Daily that the travel market will be affected and passenger volumes are likely to drop on its China-Japan routes if nuclear radiation continues to worsen in Japan.
He said China Eastern's flights to Japan account for 5 to 6 percent of the carrier's total flights. Japan is one of the most profitable markets for China Eastern.
Among China's three biggest carriers, Shanghai-based China Eastern is likely to feel the heaviest brunt of the Japanese disaster, said Chen Jiansheng, an analyst at Guosen Securities Co. The impact on Air China and China Southern Airlines will be smaller, he said.
"Revenue from Japanese routes account for 5 percent of China Eastern's total revenue, so its revenue is expected to decrease 1.19 billion yuan this year," Chen said.
He said the airlines will redirect Japanese flights to serve domestic markets to relieve excess capacity in the short term.
Meanwhile, global airlines also have adjusted flights to Japan as demand plummets. Delta Air Lines announced it is suspending the launch of two new routes to Tokyo's Haneda Airport. It had planned to launch a Los Angeles-Tokyo route and a Detroit-Tokyo route this week.
Singapore Airlines said it will suspend two of its four daily flights between Changi Airport and Haneda Airport beginning on Sunday.
The carrier also postponed the introduction of Airbus A380 services on flights between Singapore and Los Angeles via Tokyo's Narita Airport. The flights will continue to be operated with smaller Boeing 747-400 aircraft.
Jetstar, the budget unit of Qantas Airways Ltd, said it will redirect half of its 14 weekly Tokyo-bound flights to Osaka after a fall in demand.
Cathay Pacific Airways and Korean Air Lines have also ended temporary capacity increases on Tokyo routes.
It's not only the passenger segment that is hurting.
Air cargo volumes between China and Japan will also be affected by closures or curtailed production at Japanese chip and auto factories. The earthquake, tsunami and radiation threat have crippled transport systems and disrupted the supply chain.
Japan is China's third-largest trading partner. Last year, China exported US$121 billion of goods to Japan and imported US$176.71 billion. About 48 percent of exports China shipped to Japan were electrical and audio-visual equipment and 9.5 percent were auto and aviation facilities.
"The impact on domestic air cargo companies is not as great as their Japanese peers because most goods shipped from Japan to China were carried by All Nippon Airways and Japan Airlines," said Liu Haiming, an aviation analyst.
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