(EnergyAsia, March 28 2011, Monday) — The International Air Transport Association (IATA) said jet fuel supplies are running low in Japan after key jet fuel infrastructure facilities were damaged by the earthquake and tsunami that struck the country on March 11.
More than 20,000 people are dead or missing after a 9-richter scale earthquake struck off the coast of northeastern Japan, triggering a tsunami that destroyed coastal towns and damaged a major nuclear power facility.
• On March 18, IATA, which reported that Japanese airports had enough fuel supplies for 10 days, said it was working with the Japanese government and several international organisations including the International Civil Aviation Organisation, World Health Organisation, International Maritime Organisation, International Atomic Energy Agency, World Meteorological Organisation and Airports Council International to ensure that its 230 member airlines have the best medical and operational advice.
IATA said it is tracking regulatory measures being imposed by governments around the world for flights and passengers arriving from Japan. Airlines and government officials in Japan have agreed to implement rationing regimes in the event of supply shortages.
Giovanni Bisignani, IATA’s director general and CEO, said:
“Japan is an important link in global air transport. The US$62.5 billion Japanese aviation market represents 6.5% of worldwide scheduled traffic and 10% of the industry’s revenues. A major slowdown in Japan is expected in the short-term. 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.”
Japan’s domestic aviation market of 83 million passengers per year yields US$19 billion in revenues. IATA said it manages US$20 billion in industry settlements annually in the Japan market.
The most exposed market to Japanese operations is China where Japan accounts for 23% of its international revenues. Chinese Taipei and South Korea are equally exposed with 20% of their revenues related to Japanese operations, followed by Thailand (15%), the United States (12%), Hong Kong (11%) and Singapore (9%). France is the most exposed European market at 7%, followed by Germany (6%) and the United Kingdom (3%).
In addition, Japanese refineries produce up to four percent of global jet fuel supply, some of which is exported to Asia. As up to a third of Japanese refining capacity has been shutdown, IATA said the supply restriction could lead to higher jet fuel prices.
“The combination of crises and issues facing Japan is truly unprecedented. For aviation, global standards and coordinated efforts will provide the needed solutions as we move through this difficult time. IATA stands ready to assist in any way possible to ensure continued safe and efficient air transport,” said Mr Bisignani.