Maintaining air links with Japan

IATA has mobilised its resources to support the aviation industry in several critical areas including:

Settlement operations: IATA manages $20 billion a year in industry settlements in the Japan market. Its Tokyo office remains open and the settlement system is functioning normally.

Fuel: Some key fuel infrastructure facilities in Japan have been damaged. Most Japanese airports have fuel supplies for the next ten days. IATA is coordinating actions among airlines to maximise existing fuel supplies, including voluntary tankering of jet fuel. IATA is also briefing airlines and officials on industry-agreed rationing regimes, should supply shortages arise.

Coordinating information: IATA is working with the Japanese government and major UN and industry organisations (International Civil Aviation Organisation, World Health Organisation, International Maritime Organisation, International Atomic Energy Agency, World Meteorological Organisation and Airports Council International) to ensure that its 230 member airlines have the best medical and operational advice.

Regulatory measures: IATA is tracking regulatory measures being imposed by governments around the world for flights and passengers arriving from Japan. A full list of regulations will be on www.iata.org.

Financial impact on global aviation: IATA says it is too early to assess the long-term impact of the Japanese disaster on the global air transport industry. However, understanding the structure of the Japanese air transport industry does give insight on the potential short-term impact of a major slowdown in Japanese air travel. 

According to IATA’s director general & CEO Giovanni Bisignani, the $62.5 billion Japanese aviation market represents 6.5% of worldwide scheduled traffic and 10% of the industry’s revenues. "A major slowdown in Japan is expected in the short-term. And the fortunes of the industry will likely not improve until the effect of a reconstruction rebound is felt in the second half of the year."

The most exposed market to Japanese operations is China where Japan accounts for 23% of its international revenues. Taiwan and South Korea are equally exposed with 20% of their revenues related to Japanese operations, followed by Thailand (15%), the US (12%), Hong Kong (11%) and Singapore (9%). France is the most exposed European market at 7%, followed by Germany (6%) and the UK (3%).

The extent to which these travel markets weaken will be largely shaped by what happens to the Japanese economy.  Many economists are suggesting that, once reconstruction begins. the economy will rebound, but the length of the current downturn will depend critically on developments in the nuclear power situation.