TOKYO - A surge in fuel prices is set to hit travel demand during Japan’s major holiday period, with airlines across Asia moving to raise fares and impose higher fuel surcharges, while in Japan, domestic carriers are maintaining current surcharge levels for now but are expected to implement significant fare increases from June onward, particularly during the peak summer travel season.
Korean Air announced on March 16th that it will increase fuel surcharges added to ticket prices for tickets issued from April 1st, with routes such as Gimpo–Haneda and Incheon–Narita rising by approximately 3,800 yen.
Cathay Pacific Airways has nearly doubled its fuel surcharge starting March 18th, while Qantas Airways, Thai Airways International, and Malaysia Airlines have also introduced fare increases.
Air New Zealand is planning to reduce around 1,100 flights by May, reflecting mounting cost pressures across the industry.
In contrast, Japan Airlines and All Nippon Airways have decided to keep fuel surcharge levels unchanged for tickets issued between April and May, as their pricing is based on data calculated before the deterioration of the situation involving Iran.
However, fares for tickets issued from June onward, including the summer holiday season, are expected to rise significantly.
A further factor accelerating crude oil prices has also emerged.
Yuichi Tomoda, deputy commentary chief at Fuji Television, said: "That factor is the weak yen. The exchange rate is approaching 160 yen to the dollar, and the depreciation trend shows no sign of slowing. Crude oil is traded in dollars, so if the yen weakens further, more yen will be needed, pushing up the cost of imports. There is a growing risk that households will be hit by the double blow of higher oil prices and a weaker yen."
The impact is also spreading to domestic tourism.
In Matsuyama, Ehime Prefecture, the Dogo Onsen Festival began on March 19th, but businesses are already feeling the strain. At Dogo Prince Hotel, which offers free shuttle services, fuel costs have increased by around 90,000 yen compared to February.
Hiroshi Kawachi, chairman of Princess Travel, said: "If we stop the service, it would result in a major decline in customer service. It has a significant impact on company costs, but for now we have no choice but to endure."
Rising oil prices are also affecting construction sites.
A housing manufacturer interviewed said it builds highly airtight homes using insulation materials and specialized sheets to create a structure comparable to a thermos.
Fumiya Kikuma, managing director of Cleverly Home, said: "Insulation materials and sheets are derived from naphtha. Even the ventilation covers attached to the exterior of homes and drainage components are made from naphtha-based materials."
Naphtha is a liquid produced during the refining of crude oil and serves as a key raw material for plastics and other petroleum-based products. Around 70% of Japan’s imports come from the Middle East.
Adhesives used for tiles and wiring throughout homes also rely heavily on naphtha-derived materials.
Kikuma noted that while existing inventory means housing prices are unlikely to spike immediately, prolonged disruption such as a closure of the Strait of Hormuz could have a significant impact in the future.
The effects of rising crude oil prices show little sign of easing.
Source: FNN
