Video: Japan crisis and fuel costs test Asia-Pacific airlines

I had an interesting chat with CNBC’s Oriel Morrison this morning on the challenges facing the Asia-Pacific airlines, and she had some great questions about how they are affected by the crisis in Japan and rising fuel costs.

The importance of Japan to the airline industry cannot be over-stated – it is a major leisure and business travel market, and its airports serve as an important hub for traffic between Asia and the USA.

Qantas Airways, which is also reeling from natural disasters in its key Australian and New Zealand markets, is badly affected. The Korean carriers, for whom Japan is immensely important, will suffer as well. Japan is also a big market for Singapore Airlines, which has deferred plans to operate its Airbus A380 on the Singapore-Narita-Los Angeles route due to the crisis. Many other carriers are reducing frequencies in line with lower demand on these high-yield routes.

Factor in rising fuel prices – and the risks associated with hedging that comes with it – and it has turned out to be a tough first quarter of 2011 for Asia Pacific carriers. 

There are going to be be some testing times ahead for the airlines in this part of the world, and we will be covering how they are coping with these challenges.


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