IATA bracing for possible Japanese fuel shortage

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Voluntary tankering of jet fuel to preserve supplies is among measures being promoted by IATA to mitigate the impact of the Japanese earthquake.

IATA says some of the fuel infrastructure in Japan has been damaged and, while most Japanese airports have fuel supplies for the next 10 days, it is briefing carriers on rationing should stock run short. Japan produces 3-4% of global jet fuel, and IATA says that higher prices could result from the situation.

"Japan is an important link in global air transport," says IATA chief Giovanni Bisignani, adding that the Japanese aviation market is worth $62.5 billion and represents 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."

IATA manages $20 billion in settlements annually in the market and its Tokyo settlement system is functioning normally. The organisation is also co-ordinating operational, regulatory and medical information.

"The combination of crises and issues facing Japan is truly unprecedented," says Bisignani, adding that the long-term impact of these on air transport has yet to become clear.

But IATA points out that the $19 billion domestic market is the "most exposed" while China, Taiwan and South Korea are the most vulnerable on the international front.