Japan Airlines System Corp, Qantas Airways Ltd and other carriers are increasing airfares and cutting flights, as costs rise and travel bookings fall with the invasion of Iraq by US forces.
Japan Air said it may raise fares by as much as 3 percent for some international routes on the recommendation of an industry association. Korean Air Co suspended two weekly flights to Cairo via Dubai and Singapore Airlines Ltd said it will cut flights to the Middle East, Europe and the US, without elaborating.
International traffic is expected to fall 10 percent because of the Iraqi war, the International Air Transport Association said yesterday. Continental Airlines Inc plans to slash 1,200 jobs as Chief Executive Officer Gordon Bethune said losses in the airline industry may be as high as US$13 billion.
"It's critical now that airlines are actively managing costs," said Kenneth Tang, who helps manages about US$2 billion at Credit Agricole Asset Management (Singapore) Ltd.
"Most airlines are cutting back frequencies to the Middle East, so the question is whether they can manage the spare capacity at this time."
Qantas Airways Ltd, Australia's largest carrier, said it will raise fares on international flights to and from Australia by 3 percent starting April 15.
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