Fuel costs part of lowering of Japan services by Delta and other air lines

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By ash_c on Fri, 03-25-11, 06:25

Flights to Japan will be reduced by Delta Air Lines. Delta, along with other airlines, is being put to the situation because of conditions imposed by the earthquake and tsunami. Demand for air travel in Japan has plummeted in the past few weeks, and reducing service for the moment is an option that airlines had to look into. The airline industry as a whole is facing problems. Fuel prices have been rising steadily for months, which are causing revenues to drop off.

No more flights to Japan

Bloomberg reports that main airlines haven’t had enough demand to send flights to Japan which means most companies are decreasing the number of lights. Service to and from Japan is being reduced by the Qantas JetStar line, Singapore Airlines, Cathay Pacific Airways and Korean Air Lines, as the earthquake that struck on March 11 has crippled demand.

Service will reduce 15 to 20 percent until May at Delta airlines, reports Reuters. The company estimates that the quake, tsunami and nuclear disaster will cost it $250 to $400 million. There might not be reduced service with American Airlines though as it works with Japan Airlines together. More than 9 million individuals fly to the United States from Japan each year.

Fuel prices wreak havoc with airlines

Airlines worldwide have been contending for the past several months with increasing jet fuel prices. Rising oil prices because of unrest in Libya and the Middle East have been part of the increased cost of jet fuel, however harsh winter conditions during the past few months have also negatively impacted fuel prices and airline revenue. Several airlines are increasing air fare due to this. Forbes reports that even though there have been 16 percent more Southwest Airline passengers added since past year, the airline has already increased air fares six times this year.

Expect summer vacation to cost a bit more

The increases in oil, gasoline and jet fuel costs have nothing to do with any actual shortage of supply caused by unrest in Libya, which provides only 2 percent of world supply, according to CNN. In fear of spreading unrest, several raise the costs.

Unfortunately means that a full tank of gas is going to cost more during the summer, and many people might need short term loans to finance plane tickets for summer travel. Many think that the cost of travel will increase quite a bit no matter how much the air tickets end up costing in the end.

Information from

Bloomberg

bloomberg.com/news/2011-03-22/delta-air-lines-cuts-japan-seats-up-to-20-amr-says-quake-damped-revenue.html

Reuters

reuters.com/article/2011/03/22/us-delta-idUSTRE72L3HG20110322

Forbes

forbes.com/feeds/ap/2011/03/22/business-industrials-us-southwest-outlook_8368679.html

CNN

money.cnn.com/2011/03/22/markets/oil_prices/index.htm

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