Jetstar cuts flights after big fall in demand from Japanese travellers
Jetstar cuts flights after big fall in demand from Japanese travellers
JETSTAR will cut flights between Australia and Japan - its most important long-haul destination - because of a fall in demand from Japanese travellers.
Jetstar today will halve the number of services between Australia and Tokyo to seven, after redeploying the ''lion's share'' of flights to Osaka due to ''operational issues'' and fewer people wanting to fly to the Japanese capital amid fears about the crisis at the Fukushima nuclear power plant.
The airline will maintain 25 flights a week between Australia and Japan, but it conceded yesterday that there could be ''some lessening of capacity'' in the longer term.
Jetstar will bear the brunt of a longer-term slump in travellers because over the past four years it has taken over the majority of flying on the route from its parent, Qantas.
Qantas now has only 10 flights a week to Japan. About 80 per cent of the passengers on Jetstar flights between the two countries are Japanese.
Travel agents have reported cancellation rates of about 50 per cent for bookings by Japanese tourists for trips to Australia since the earthquake and tsunami on March 11. A downturn in demand from Japanese travellers creates additional headaches for Qantas and Jetstar executives, who already face jet fuel prices hovering near a three-year high.
CBA Equities analyst Matt Crowe said a fall in demand for flights on the route would have a impact on Qantas.
''I don't think it will be as material as the Queensland floods, but it will be material,'' he said.
Qantas has estimated the floods will cut $55 million from pre-tax profit in the second half. Mr Crowe said there was likely to be a big fall in passengers on the route once the immediate rush by people to leave Japan due to the nuclear crisis and earthquake abated.
Qantas shares rose 1¢ to $2.10 yesterday, slightly above a 20-month low reached last week.
Qantas said demand for its flights to Japan had been affected by the natural disaster but until events stabilised, it would be difficult to calculate the impact.
Jetstar and Qantas have gained an estimated $500 million a year in revenue from the Japan-Australia route.
Two years ago, Jetstar had to cut a third of its flights between Australia and Japan for several months due to Japanese travellers' fears of swine flu.
Air New Zealand also warned last week that it would post a second-half loss due to high fuel prices and the Christchurch and Japanese earthquakes.