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Japanese facing higher fares to Hawaii

By Allison Schaefers

POSTED: 01:30 a.m. HST, Dec 27, 2008

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The struggling Japan visitor market, down 9 percent year over year in Hawaii, will have to contend with higher airfares come spring.

RAISING THE BAR

Japan Airlines has proposed raising the base rate for international travel from Japan to Hawaii by 13 percent. The change, subject to government approval, is slated to take effect on April 1. An example for round-trip business-class travel departing from Tokyo to Honolulu:

» Current price: $6,053 or approximately Yen548,700

» New price as of April 1: $6,841 or approximately Yen620,100.
Japan Airlines Group yesterday announced that it has filed an application with the Japanese Ministry of Land Infrastructure, Transportation and Tourism to raise prices for all classes of travel on international flights.

The revision, slated to take effect April 1 pending government approval, will cause rates to Hawaii and the U.S. mainland to go up by 13 percent. JAL plans to raise rates to South Korea and India by 10 percent and to other parts of Asia 7 percent. The company is still reviewing possible fare changes to Europe, the Middle East and Oceania.

As a result of the rate increase, Japan travelers who are flying business class to Hawaii could see their base round-trip rates rise to about $6,841from $6,053.

JAL Group is Asia's biggest airline group in terms of sales revenue and the second-largest passenger carrier in Asia. All Nippon Airways, JAL's primary competitor in the Hawaii market, has not announced further rate revisions.

While JAL's decision to increase ticket prices may have some impact on Hawaii's tourism from Japan, hopefully it will be offset by further declines in fuel surcharges and by the continued strength of the yen relative to the dollar, said Akio Hoshino, senior vice president at Jalpak in Hawaii.

Both JAL and All Nippon Airways already have announced that they will drop their fuel surcharges from Jan. 1 to March 31 and further drops are expected in April, Hoshino said.

"I think JAL had a certain reason to raise the airfare, but we are expecting the fuel surcharge to be reduced again from April and the yen is keeping height," Hoshino said. "There is a possibility that with this offset the amount per ticket for travelers might be the same or less than it is now."

Although building momentum for travel to Hawaii is challenging due to a downturn in the Japanese economy and price sensitivity, there are signs that Japanese consumers respond to favorable exchange rates, Hoshino said.

"Japan travelers are now visiting South Korea; the news has reported that 200,000 have visited within the last three months," he said. "They are visiting because the South Korean won is now very, very cheap."

Since there have been many recent reports about the favorable rates in Hawaii, Hoshino said that there is a chance that Hawaii also will see more Japan visitors.

The struggling Japan visitor market, down 9 percent year over year in Hawaii, will have to contend with higher airfares come spring.


RAISING THE BAR

Japan Airlines has proposed raising the base rate for international travel from Japan to Hawaii by 13 percent. The change, subject to government approval, is slated to take effect on April 1. An example for round-trip business-class travel departing from Tokyo to Honolulu:

» Current price: $6,053 or approximately Yen548,700

» New price as of April 1: $6,841 or approximately Yen620,100.
Japan Airlines Group yesterday announced that it has filed an application with the Japanese Ministry of Land Infrastructure, Transportation and Tourism to raise prices for all classes of travel on international flights.

The revision, slated to take effect April 1 pending government approval, will cause rates to Hawaii and the U.S. mainland to go up by 13 percent. JAL plans to raise rates to South Korea and India by 10 percent and to other parts of Asia 7 percent. The company is still reviewing possible fare changes to Europe, the Middle East and Oceania.

As a result of the rate increase, Japan travelers who are flying business class to Hawaii could see their base round-trip rates rise to about $6,841from $6,053.

JAL Group is Asia's biggest airline group in terms of sales revenue and the second-largest passenger carrier in Asia. All Nippon Airways, JAL's primary competitor in the Hawaii market, has not announced further rate revisions.

While JAL's decision to increase ticket prices may have some impact on Hawaii's tourism from Japan, hopefully it will be offset by further declines in fuel surcharges and by the continued strength of the yen relative to the dollar, said Akio Hoshino, senior vice president at Jalpak in Hawaii.

Both JAL and All Nippon Airways already have announced that they will drop their fuel surcharges from Jan. 1 to March 31 and further drops are expected in April, Hoshino said.

"I think JAL had a certain reason to raise the airfare, but we are expecting the fuel surcharge to be reduced again from April and the yen is keeping height," Hoshino said. "There is a possibility that with this offset the amount per ticket for travelers might be the same or less than it is now."

Although building momentum for travel to Hawaii is challenging due to a downturn in the Japanese economy and price sensitivity, there are signs that Japanese consumers respond to favorable exchange rates, Hoshino said.

"Japan travelers are now visiting South Korea; the news has reported that 200,000 have visited within the last three months," he said. "They are visiting because the South Korean won is now very, very cheap."

Since there have been many recent reports about the favorable rates in Hawaii, Hoshino said that there is a chance that Hawaii also will see more Japan visitors.

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