Airline Sales Hit by Radiation Fears, Oil Prices

      March 29, 2011 09:24

      Sales have dropped at airlines amid soaring oil prices and mounting fears of radiation leaks following the earthquake in Japan.

      Korean Air and Asiana Airlines have seen their ticket sales decline on Japan routes, which account for 20 percent of their overall sales, since the disastrous earthquake there on March 11.

      Korean Air said Monday its passenger numbers on routes to Japan from March 11 to March 23 decreased by around 10 percent from 177,027 last year to 159,388, while the passenger load factor on the routes dropped from 83 percent to 70 percent.

      Asiana Airlines, which has a higher proportion of flights to Japan, saw a 17.7 percent drop in passengers on the routes. Asiana has been hit harder as it has suspended operations to regions that have yet to fully recover from the disaster including Sendai, Ibaraki, and Fukushima, while Korean Air is operating all its Japanese routes.

      "The load factors on routes close to stricken areas remain at 60 to 70 percent," an industry insider said. "Sales are unlikely to recover soon as tourist demand has dropped sharply due to radiation fears."

      Meanwhile, oil prices are on the rise again after a slight decline in the days after the quake. The two major airlines set their business plans based on oil prices of around US$84-85 a barrel this year, but the price hit $105.40 on Friday.

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