Topic of the Week: The (Temporarily) Shrinking Japanese Market

March 18, 2011 CF 13 comments

In light of the earthquake/tsunami/nuclear meltdown 1-2-3 punch, traffic to Japan is plunging. Delta has suspended its Haneda flights for a few months, Singapore has indefinitely postponed its A380 service there, and other airlines around the world are cutting back as well. Discuss.

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Written by Eric on March 18, 2011. Reply

My heart goes out to the people of northeast Japan….it seems they can not catch a break. From what I have read on some other message boards, HND has been grossly under-performing since launch….and the 74-4 is way to much airplane for that market. The disaster was the tipping point, but some speculate that it was doomed before the disaster.

I think the real wild card here is how will this impact the already precarious JAL. Will the Transportation Ministry throw more money at it? Will AMR? If so…where is the $$$ going to come from…since both are not exactly flush with cash. IMHO, the JAL/AA link up could be at risk…since AA really does not have the luxury of time to wait out the resolution to this crisis and a return to normal traffic levels.
- Written by Sanjeev M on March 18, 2011. Reply
  
  Yes, for Haneda, the saver will be the 787. Even 777 is too much A/C But with this disaster, I’m not sure what will happen.
  
  Korean Air must really be licking its chops right now with lots of the Japan (NRT) transfer passengers shifting to Seoul. However Korean Air actually has more seats to Japan than United (something like 9% of intl capacity) so watch for some downguage substitutions on KE.
  
  Oneworld should be scared. Yes they have Cathay, but they need to get Hainan Airlines and someone in Asia (other than Kingfisher) on board. But remember, China like the US does not allow international transfers without doing immigration. So people don’t like to transfer in China unless going in or out of there.
  
  Not gonna be pretty considering Japan is a very premium heavy market. I also fully expect United to drop SEA-NRT until the 787 comes in.
  - Written by Crisp on March 18, 2011. Reply
    
    For SEA-NRT, I think that would seem less likely to be dropped, especially since it is the closest mainland destination to Japan. This means a lower load is needed to break even (less fuel) and it potentially could be switched to a 767. Although SEA certainly isn’t a hub for United, it has a good amount of O/D traffic and enough other flights to make it worthwhile.
Written by Rhombus on March 18, 2011. Reply

AZ and LH are diverting their Tokyo flights to Osaka now, but do you think that they can still keep the capacity up? There will still be some traffic, but with far less tourism and business travel, is sending flights to Osaka better than reducing capacity?
Written by JC Edwards on March 18, 2011. Reply

The triple punch will most likely affect traffic at both NRT and HND at least until the end of the year. In the meantime it may help develop KIX and NGO as veritable gateway airports to Japan’s premium market and as transfer points between North America and Asia much like NRT has been until recently.

My heart goes out to the people of Japan affected by the earthquake, tsunami and nuclear plant meltdown.
Written by Nicholas Barnard on March 18, 2011. Reply

Heres the other side of the coin, perhaps there will be a larger bump after the initial down draw? We know that disasters necessitate rebuilding, which causes an economic bump up of activity. How much if this will manifest itself in airline trips and cargo remains to be seen..
Written by Joe Jones on March 18, 2011. Reply

I am an adopted Tokyoite and an airplane geek so let me weigh in on this.

The situation on the ground in Japan is MUCH better than CNN etc. would have you believe. Although the tsunami zones up north are complete disaster areas, the Tokyo metropolitan area didn’t sustain much direct damage from the quake and completely missed the tsunami. The main issues for Tokyo at this point are (a) a lack of electricity due to the non-functioning nuke plants and (b) mass hysteria about radiation risk, mostly among non-Japanese who don’t appreciate that Tokyo and Fukushima are quite far apart. Think New York and DC – did they evacuate NY and Boston after Three Mile Island?

Once the foreign journalists get out of the country, and once some backup power generators come online, things should stabilize a bit. Japan is still the world’s #3 economy by a long shot, and a highly globalized one at that. The tsunami losses are staggering but the vast majority of the country’s production capability is still ready to go.

It’s a holiday weekend right now and the airports were quite busy from what I have heard. Incidentally, my wife and I are in HNL right now–we booked UA saver awards on Wednesday night and flew over on Thursday night, mainly so that my parents would quit incessantly calling me and repeating misinformation from Fox News. The fact that saver awards were available at all should shed some light on the truth behind the “evacuation” stories circulating in the media.
- Written by Sanjeev M on March 18, 2011. Reply
  
  Hey, thanks for the insight. To be fair, news did report here that Narita was back to normal pretty fast. But yes, news does over dramatize things.
  
  But either way, the hype outside of Japan (esp in the US) is going to affect traffic numbers cause of paranoia alone.
  
  Enjoy your stay in Hawaii!
Written by Mickey on March 19, 2011. Reply

The Japs send us (USA) those crappy defective TOYOTAS and then expect help from us. NO WAY!!!!
- Written by keith on March 19, 2011. Reply
  
  Just bc you likely own a toyota doesn’t mean you can start moaning here. Buy American next time. I have and always will.
  - Written by Mickey on March 19, 2011. Reply
    
    NO! I own a Chrysler 300M 2000 year model with less than 80K miles. I am not moaning, but the JAP CARS are simply not as good as the foolish Americans who buy them claim them to be. Enough said–I hope!
- Written by Nicholas Barnard on March 19, 2011. Reply
  
  The defective Toyotas were mostly made in the US.. Besides, we’re chatting about how the natural disaster will affect the air travel market in Japan, not the Japanese’s car designing skills.
  
  Also, I will help all but a few of my enemies. (and probably when faced with them actually needing help, I’ll help them to.) We’re all human, and relieving human suffering is a goal that we all share. (Unless we’re into BDSM, in which case its a different story..)
Written by JordyC on March 20, 2011. Reply

Frankly I couldn’t care less if i never transited NRT again ever mostly because of the tedious, pointless hike of a mile round trip for screening of inbound transit pax connecting often but a single gate away from the inbound a/c on NWA/DL or even the same a/c. Its exactly the same hastle as the week after 9-11 for no discernable purpose whatsoever. The girls in their cute 50′s era livery are often cute though. Wonder what they do with all the duty free perfume they confiscate?

The storied efficiency and courtesy of the land of the rising sun is just so much poppy-cock. At least you seldom have to endure the tedious bus rides anymore. I’ll take Inchon or HKG or even Osaka anytime over NRT. Haneda should have been re-developed instead of NRT leaving it for cargo and charters.