Covid-19 Spike Frustrates Japan’s Domestic Air Travel Rebound

From Japan being one of the countries with most success in combatting the pandemic last year and slowly growing back its aviation industry, a new surge in infections is threatening to wipe out the local airline industry’s hard-won gains.

New reports claim the Japanese government have declared a state of emergency for the second time since the coronavirus first emerged. This has unfortunately caused the two leading airlines to scale back their domestic schedules in January and February.

Last year, Japan’s travel industry was expecting to be a banner year following Tokyo’s scheduled hosting of the Olympic Games and expanded flight capacity at Tokyo’s airports.

However, the emergence of COVID-19 crushed these expectations. Statistics released by Japan’s Ministry of Land, Infrastructure, Transport and Tourism (MLIT) show that domestic passenger volume was down by 93% year-on-year in May-2020, and in October (the most recent month available) it was rising, but was still down by 50% versus the previous year.

2021, however, also got off to a bad start in terms of travel thanks to the spike in coronavirus cases, which is putting pressure on hospital capacity. This led the government to declare a state of emergency for Tokyo and surrounding areas on 7-Jan-2021, extending to 7-Feb-2021. This has since been expanded to other prefectures.

Under the state of emergency, restaurants and bars are asked to close by 8 p.m., and people are urged to stay home as much as possible – particularly after 8 p.m.

These measures are still less stringent than those imposed in a previous state of emergency in Apr-2020. Japan’s COVID-19 vaccination program is expected to begin in late Feb-2021 at the earliest, with health workers set to receive it in the first phase, followed by those in higher-risk categories.

At the end of 2020 it would have been reasonable to conclude that 2021 was going to be much better for Japanese airlines, and that a strong domestic recovery would provide a succor until international travel returns.

Such hopes have already been dampened in the first few weeks of the new year. This underlines the difficulties that airlines face in doing any kind of planning – the pandemic can roar back with little warning and undermine any demand assumptions. This means that airlines are forced to be reactive rather than proactive with their business decisions.

This leaves the aviation industry with little to do until mass immunity is achieved.