Business travel to Japan is shrinking quickly.
With concerns about radiation spreading beyond northern Japan following the March 11 earthquake and tsunami and the subsequent nuclear crisis, corporate travelers and companies are canceling trips to Tokyo and other cities, forcing airlines to cut flights and leaving travel agents to hustle for last-minute changes.
Yasu Kambe, manager of Amnet, a New York-based travel agency that specializes in corporate travel to Japan, says "about 95%" of his clients' trips to Japan in the next month have been canceled. Its sister agency, Tabit, which handles leisure travel, has also seen 60% to 70% cancellations. "It's just too much," he says.
Meanwhile, multinational employers with large exposure to Japan, including InterContinental Hotels and Honda's U.S. headquarters, are following the U.S. State Department's lead by prohibiting trips to Japan for non-essential employees.
Richard Catalano of Cleveland, an anti-bacterial wipes manufacturer, was scheduled to fly to Tokyo last Friday, but was hesitant about the trip for much of last week. Radiation and aftershocks didn't worry him as much "as getting stuck" there, he says. "I don't want to base my decision on what I see on TV."
Still, the State Department's decision last week to evacuate dependents of U.S. government personnel spooked him enough. On Thursday, he called off the trip. "I figure if the State Department is evacuating, it's time to postpone," he says.
Doug Smith, a semiconductor executive in Austin who travels frequently to Japan, says business travel there will be on hold "for a couple of months" as all meetings have been canceled for him and his colleagues. "Businesses have slowed so much. There's no good reason to go," he says.
Smith was on the 13th floor of a building in Tokyo when the earthquake struck. "You actually felt the building hop in one direction. You jump up, and the building moves under your feet," he says. He considers himself lucky to have found a seat on his return flight on March 12. "So many flights were canceled, but for some reason, mine hadn't. I heard other horror stories."
Airlines are adjusting to customers' reluctance. Last week, Delta Air Lines said it would temporarily suspend its new flights to Haneda Airport in downtown Tokyo, which were launched earlier this year. German carrier Lufthansa said it will continue to divert Tokyo-bound flights to airports in Nagoya and Osaka in southern Japan until March 28.
Korean Air's flights leaving Japan are packed, but its inbound flights "aren't so full," says John Jackson, a Korean Air vice president in North America. Its traffic from Los Angeles to Tokyo is down about 50% since the crisis began.
Tim Smith, a spokesman for American Airlines, says its outbound flights from Japan are also full or nearly full, but estimates about 25% of customers on Japan-bound flights have postponed or canceled. "An overwhelming majority has flown as scheduled," he says.
A shutdown in the Japanese aviation market could have a wider impact worldwide, warned the International Air Transport Association (IATA), which represents airlines worldwide, last week. Predicting "a major slowdown in the short term in Japan" - which represents about 6.5% of global scheduled traffic - Geneva-based IATA says losses in business could spill over to neighboring countries.
China's air travel market is the most exposed, with 23% of its international revenue coming from Japan travel. Taiwan and South Korea generate 20% of their international revenue from Japan-related operations. "The length of the current downturn will depend critically on developments in the nuclear power situation," it says.
Business travelers who are merely connecting in Tokyo are also scrambling. Stephen Boggs, a communications director at InterContinental Hotels, left for Shanghai last week and is scheduled to return to Atlanta via Tokyo Narita on Friday. He wants to avoid flying into Tokyo, but U.S.-bound connecting flights in Seoul, China or other hubs in Asia are full. "It's been slim pickings," he says. In addition to suspending trips to Japan, InterContinental is also encouraging employees to avoid connecting in Japan, he says.
To accommodate travelers looking to leave Japan, Korean Air has added more seats in its Tokyo-Seoul route by replacing Boeing 737s with 777s, which seat about 100 more passengers. Last week, the carrier added 18 flights between the two cities. "People are getting to Seoul first and figuring out what they want to do next," Jackson says.
Companies that rescue corporate executives and business travelers say they're also anticipating a wave of new demand from clients as the rolling blackouts and infrastructure problems move through the rest of Japan, and if the nuclear crisis worsens. Last week, rescue company iJet arranged a charter flight to Hong Kong for a corporate client, an operation that can cost as much as US$250,000. It can take up to three days to receive a Japanese government permit to land a charter flight, says Bruce McIndoe, president of iJet.
"Any major company with a footprint in Japan has a crisis management team operating 22 hours a day," he says. "They, including me, are not getting much sleep. There has been a real uptick in demand from companies allowing expats to leave. What triggered that was the slightly elevated radiation. That scared ... people."
With concerns about radiation spreading beyond northern Japan following the March 11 earthquake and tsunami and the subsequent nuclear crisis, corporate travelers and companies are canceling trips to Tokyo and other cities, forcing airlines to cut flights and leaving travel agents to hustle for last-minute changes.
Yasu Kambe, manager of Amnet, a New York-based travel agency that specializes in corporate travel to Japan, says "about 95%" of his clients' trips to Japan in the next month have been canceled. Its sister agency, Tabit, which handles leisure travel, has also seen 60% to 70% cancellations. "It's just too much," he says.
Meanwhile, multinational employers with large exposure to Japan, including InterContinental Hotels and Honda's U.S. headquarters, are following the U.S. State Department's lead by prohibiting trips to Japan for non-essential employees.
Richard Catalano of Cleveland, an anti-bacterial wipes manufacturer, was scheduled to fly to Tokyo last Friday, but was hesitant about the trip for much of last week. Radiation and aftershocks didn't worry him as much "as getting stuck" there, he says. "I don't want to base my decision on what I see on TV."
Still, the State Department's decision last week to evacuate dependents of U.S. government personnel spooked him enough. On Thursday, he called off the trip. "I figure if the State Department is evacuating, it's time to postpone," he says.
Doug Smith, a semiconductor executive in Austin who travels frequently to Japan, says business travel there will be on hold "for a couple of months" as all meetings have been canceled for him and his colleagues. "Businesses have slowed so much. There's no good reason to go," he says.
Smith was on the 13th floor of a building in Tokyo when the earthquake struck. "You actually felt the building hop in one direction. You jump up, and the building moves under your feet," he says. He considers himself lucky to have found a seat on his return flight on March 12. "So many flights were canceled, but for some reason, mine hadn't. I heard other horror stories."
Airlines are adjusting to customers' reluctance. Last week, Delta Air Lines said it would temporarily suspend its new flights to Haneda Airport in downtown Tokyo, which were launched earlier this year. German carrier Lufthansa said it will continue to divert Tokyo-bound flights to airports in Nagoya and Osaka in southern Japan until March 28.
Korean Air's flights leaving Japan are packed, but its inbound flights "aren't so full," says John Jackson, a Korean Air vice president in North America. Its traffic from Los Angeles to Tokyo is down about 50% since the crisis began.
Tim Smith, a spokesman for American Airlines, says its outbound flights from Japan are also full or nearly full, but estimates about 25% of customers on Japan-bound flights have postponed or canceled. "An overwhelming majority has flown as scheduled," he says.
A shutdown in the Japanese aviation market could have a wider impact worldwide, warned the International Air Transport Association (IATA), which represents airlines worldwide, last week. Predicting "a major slowdown in the short term in Japan" - which represents about 6.5% of global scheduled traffic - Geneva-based IATA says losses in business could spill over to neighboring countries.
China's air travel market is the most exposed, with 23% of its international revenue coming from Japan travel. Taiwan and South Korea generate 20% of their international revenue from Japan-related operations. "The length of the current downturn will depend critically on developments in the nuclear power situation," it says.
Business travelers who are merely connecting in Tokyo are also scrambling. Stephen Boggs, a communications director at InterContinental Hotels, left for Shanghai last week and is scheduled to return to Atlanta via Tokyo Narita on Friday. He wants to avoid flying into Tokyo, but U.S.-bound connecting flights in Seoul, China or other hubs in Asia are full. "It's been slim pickings," he says. In addition to suspending trips to Japan, InterContinental is also encouraging employees to avoid connecting in Japan, he says.
To accommodate travelers looking to leave Japan, Korean Air has added more seats in its Tokyo-Seoul route by replacing Boeing 737s with 777s, which seat about 100 more passengers. Last week, the carrier added 18 flights between the two cities. "People are getting to Seoul first and figuring out what they want to do next," Jackson says.
Companies that rescue corporate executives and business travelers say they're also anticipating a wave of new demand from clients as the rolling blackouts and infrastructure problems move through the rest of Japan, and if the nuclear crisis worsens. Last week, rescue company iJet arranged a charter flight to Hong Kong for a corporate client, an operation that can cost as much as US$250,000. It can take up to three days to receive a Japanese government permit to land a charter flight, says Bruce McIndoe, president of iJet.
"Any major company with a footprint in Japan has a crisis management team operating 22 hours a day," he says. "They, including me, are not getting much sleep. There has been a real uptick in demand from companies allowing expats to leave. What triggered that was the slightly elevated radiation. That scared ... people."
