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Struggling Tourism Industry Hit by Loss of JAL Seats

By James Wilkinson

The struggling Australian tourism industry has been hit again this week, following an announcement by Japan Airlines (JAL) that it will downsize aircraft on its daily Australian flights from March 29, resulting in the loss of almost 300 seats.

Japan Airlines is downsizing its Australian routes

In a statement released today (Jan 29), JAL said it was “responding to weak demand, especially on international routes, resulting from the global economic slowdown”.

“JAL aims to better match supply to demand by conducting a bold review of its network and flight frequency, whilst continuing to implement its fleet strategy of aircraft downsizing,” the statement said.

The Tokyo-Brisbane route will fare the worst, with JAL switching from a Boeing 747-400 to a Boeing 767-300ER aircraft, resulting in the loss of 210 seats daily in each direction, while the airline’s daily Tokyo-Sydney service will be changed from a Boeing 747-400 to a Boeing 777-200ER, resulting in the loss of 79 seats.

With the aim of improving profitability, JAL has not just culled Australian seating capacity, but has reduced flights to a number of global destinations, including New York, Bangkok and Seoul.

While environmentalists will be happy that both services will result in reduced emissions due to smaller aircraft, the loss of seats on the Japan route is not the news the Australian tourism industry was hoping for to start 2009.

Iinternational visitor numbers fell by 16,000 in the month of October compared with the same period in 2007, with Tourism and Transport Forum (TTF) executive director Olivia Worth forecasting that the worst is yet to come.

“The lead time involved in planning and paying for an overseas holiday means the full impact has yet to hit. TTF’s recent Quarterly Sentiment Survey revealed our members felt that while the Christmas period would be stable, they had grave fears about the state of play from February onwards, so the economy will continue to be the major issue for 2009,” Worth told HM magazine.

“In the short term, things will be tough for many in the tourism industry. It’s hard to know just how long and severe the global financial crisis will be, and exactly what it means for Australia. In the longer term, we know the economy will recover, so the best thing tourism operators can do is to keep refreshing and reinventing their product, while government needs to keep promoting Australia as a must-see destination, investing in critical tourism infrastructure and creating an environment conducive to private investment in tourism.”

The bad news from Japan Airlines comes as good news gets set to reach Australia. On Monday, February 2, Emirates will commence Airbus A380 services on the Dubai-Sydney-Auckland route, while on February 27, V Australia launches flights between Sydney and Los Angeles in a major boost to trans-Pacific travel.

See the February 2009 edition of HM magazine for Olivia Worth’s complete column.