Japan Quake Disrupts Air Travel in Pacific and ElsewhereMar 24th, 2011 | By Sue Gonzales | Category: Travel
The crisis triggered by Japan’s earthquake is sending aftershocks through the airline industry, airline representatives reported Tuesday during the J.P. Morgan Aviation, Transportation & Defense Conference. Airlines that serve the Pacific are most directly affected, but even other airlines are feeling the ripples.
The problem radiates beyond Japan because many flights to other parts of Asia connect through Japan. As a result, any airline that connects through Japan is affected.
Delta Air Lines, the US airline that does the most flights through Japan, generating an estimated $2.5 billion in revenue, is on the front lines of the impact. Delta president Ed Bastian estimated that Japan’s crisis could reduce Delta’s profits from $593 million in 2010 to $193 million this year. He announced that Delta is responding to the short-term decrease in demand by decreasing its Japanese service 15% to 20% through May. After that Delta will monitor demand levels to assess the situation.
Following Delta, the US airline companies with the most interest in Japan are United Continental Holdings, holding company for United Airlines and Continental Airlines, and AMR Corporation, parent of American Airlines. United Airlines generates an estimated $1.5 billion of its revenue from Japan. About 50% of American Airlines’ flights through Japan are connecting traffic to other destinations.
Despite the crisis, AMR is pushing ahead with a joint-venture deal with Japan Airlines, scheduled for launch on April 1.
Even airlines with no direct service to Japan are affected. US Airways flies no routes to Japan, but reported that on the day of the earthquake, bookings dropped 20 percent. Weeks later they have bounced back a bit, but remain low.
European airlines like Finnair and Alitalia are also affected. Many Europeans visiting Japan have been advised to leave by their countries, resulting in packed flights. This is complicated by the fact that European carriers have rerouted flights to avoid Tokyo due to radiation concerns.
Shares in several affected airlines fell following Tuesday’s conference.