No more flights to Japan
The number of flights going in and out of Japan is being reduced across the board, as main airlines have too little demand and costs are too high to keep sending flights, according to Bloomberg. The Qantas JetStar line, Singapore Airlines, Cathay Pacific Airways and Korean Air Lines have all had much slower business since the March 11 earthquake causing them to cut back flights to Japan.
Delta, in accordance with Reuters, will reduce service levels 15 to 20 percent until May. Between $250 and $400 million can be lost due to the quake, tsunami and nuclear devastation for the company. However, American Airlines has not yet announced it will reduce its service to Japan, which is provided through a joint venture with Japan Airlines. Flights from the United States to Japan are typically fairly full. You will find over 9 million that make this trip yearly.
Increase in gas prices means airlines has more to deal with
There have been problems at airlines due to the oil fuel increase in price. There has been unrest in Libya and the Middle East for the past few weeks which has brought on fuel prices to go up. Before that, the price was already increasing though because of the bad winter. Many airlines are increasing air fare because of this. This year, the air fare has been increased by Forbes already six times. This is in spite of the fact, reports Forbes, which since past year there was a 13 percent increase in Southwest passengers.
Paying for summer vacations means more money
Only 2 percent of the world supply of oil comes from Libya, states CNN. That is why the increase in oil prices does not really have anything to do with a decrease in the supply. In fear of spreading unrest, several raise the prices.
Installment loans may be needed to fund that summer getaway due to this. An airplane ticket will end up costing more while gas costs are ridiculously high. How much more costly air tickets will become remains to be seen, however projections seem to indicate the cost of travel will continue to rise for a while.
Articles cited
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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