Friday, March 18, 2011

Airlines face "major slowdown" due to Japan: IATA

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The International Air Transport Association said it was too early to assess the long-term impact but with the $62.5 billion Japan market representing 6.5 percent of scheduled worldwide traffic and 10 percent of industry revenues "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."

IATA said the most exposed international market to Japanese operations was China, where Japan accounts for 23 percent of its international revenues.

Taiwan and South Korea were equally exposed with 20 percent of their revenues related to Japanese operations, followed by Thailand (15 percent), the United States (12 percent), Hong Kong (11 percent) and Singapore (9 percent).

France was the most exposed European market at 7 percent, followed by Germany (6 percent) and Britain (3 percent).

Earlier on Friday, Deutsche Lufthansa (LHAG.DE) said a sharp rise in fuel costs could hurt its profit, although economic recovery should boost the airline's revenues and operating profit this year and next.

Japan produces 3-4 percent of global jet fuel supply, some of which is exported to Asia, IATA said.

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