Japan Crisis Expected to Hurt International Airlines

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The global airline industry will have to suffer through another financial setback because of the earthquake and subsequent nuclear crisis in Japan, according to the International Air Transport Association.

Geneva-based IATA said that Japan, which has a $62.5 billion aviation market, represents 6.5% of the world's air traffic and 10% of global revenue.

"A major slowdown is expected in the short term," said Giovanni Bisignani, director general and chief executive of IATA, "and the fortunes of the industry will not likely improve until the effect of a reconstruction rebound is felt in the second half of the year."

Major Japanese carriers described the situation as in flux, and warned the industry could not yet provide a clear view of the long-term impact.

According to IATA, about 9.2 million travelers connect to Japan from the U.S. per year and that represents $10.5 billion in revenue, making the U.S. one of the top markets in the world.

Earlier this week, IATA warned that the Japan crisis would hurt premium airline traffic, which generally refers to first, business and premium economy class tickets. Japan accounts for 6-7% of the world's premium traffic market.

Delta Air Lines said it would suspend a daily flight between Detroit and Tokyo's Haneda Airport, which it just launched on Feb. 19.

American Airlines said it will allow passengers scheduled to travel between March 19 and April 10, to postpone trips until May 10.

United Continental Holdings Inc., which operates 183 weekly flights from Japan and operates a hub at Tokyo Narita airport, has seen a "modest" decline in travel bookings, spokesman Mike Trevino told AOL Travel News.

United and Continental are allowing passengers booked through the end of March to change their travel dates for no charge through their respective websites, and customers booked for travel through March 31 can cancel flights and get a full refund.

Officials at some of Japan's largest airlines said it was also too early to get the full impact of the nuclear crisis.

"There have been changes to the number of bookings, which include cancellations as well as new reservations," said Carol Anderson, spokesperson for Japan Airlines. "It's too soon to fully assess the effects of the current situation."

All Nippon Airways (ANA) spokesperson Nao Gunji said the carrier did not have any immediate comment on cancellations or passenger traffic, but would make some announcements next week.

Germany's Lufthansa Airlines warned that the Japan crisis may delay a planned joint venture deal with ANA. The airlines last month filed for antitrust immunity on routes between Japan and Europe, which would allow them to operate as an integrated carrier.

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