Airlines avoid Tokyo; shares plunge 10.55%

Author: 
REUTERS
Publication Date: 
Tue, 2011-03-15 22:51

Deutsche Lufthansa said it was diverting flights to Osaka and Nagoya at least until the weekend, adding that planes returning from Tokyo on Monday were not contaminated.
Air China said it had canceled flights to Tokyo from Beijing and Shanghai, mainly due to the lack of operational capacity at some airports, while Taiwan’s EVA Airways said it would cancel flights to Tokyo and Sapporo until the end of March.
Joerg Handwerg, spokesman for German pilots’ union Vereinigung Cockpit, said aircraft exteriors offered no protection against radiation and that as soon as any was measured in Tokyo, flights would certainly be stopped.
The Japanese government has already imposed restrictions to keep civilian flights away from the Fukushima nuclear reactor, which is now sending low levels of radiation toward Tokyo.
Some airlines also took steps to limit staff presence in Tokyo. Other international companies such as SAP and Infineon, are moving staff out of the capital to locations further south because of radiation concerns.
Air France-KLM, Europe’s largest carrier by revenue, moved all of its crew on Monday out of Tokyo to Osaka, KLM spokeswoman Gedi Schrijver said.
Swiss International Air Lines said it had introduced an interim stop in Hong Kong on its route to Tokyo in order to shorten turnaround times in the Japanese capital.
Others, such as British Airways, Virgin Atlantic and Finnair said they were still flying to the Narita and Haneda airports in the Japanese capital.
The top five international carriers, according to US-based aviation data company Innovata, are Japan Airlines with a market share of 13.5 percent, Delta Air Lines with 9.2 percent, Korean Air with 9.1 percent, ANA with 8.8 percent and South Korea’s Asiana Airlines with 6 percent.
Delta and American Airlines said they were operating a normal schedule to Japan.
The US Federal Aviation Administration on Tuesday said it was prepared to take action including the rerouting of flights to Japan if the nuclear crisis there worsens.
Governments also issued travel warnings in the wake of rising radiation levels.
The Netherlands Foreign Ministry said it had no plans thus far to launch an evacuation plan as long as commercial flights were still available.
As with the unrest in Egypt and Tunisia, Air France also said it was sending larger planes to Japan to accommodate demand.
A Lufthansa spokesman added its flights to Japan were well-booked and it had not seen a wave of cancelations so far.
Meanwhile, the Bank of Japan on Tuesday continued to flood the money market with cash while top policymakers sought to contain a sharp sell-off in Tokyo stocks with reminders they kept a close watch over market moves and assurances about the economy’s overall health.
Japanese shares plunged 10.55 percent, the largest fall since October 2008, as more explosions rocked a quake-stricken nuclear plant, triggering a rise in radiation and prompting investors to dump riskier assets across Asia.
The yen rose on Tuesday, sparking market speculation that the authorities might intervene to prevent the currency’s strength from further damaging an economy reeling from a triple blow of Friday’s 9.0 magnitude earthquake, a tsunami and an escalating nuclear crisis.
While the dollar spiked up at one point, Finance Minister Yoshihiko Noda declined to comment on whether Tokyo stepped into the market and traders later dismissed the dollar’s rise as a result of a one-off trade.
A senior government official also told Reuters speculation was behind sharp movements in the currency and stock markets.
“We will continue to monitor the market,” Noda told reporters.
The comments signal that Tokyo is not ready to step into the market just yet, but wants to keep speculators on guard and prevent them from pushing up the yen.
The central bank, for its part, eased its policy on Monday by doubling to 10 trillion yen a fund earmarked for purchases of assets such as government and corporate bonds in hopes that together with money market cash injections will improve sentiment, since it lacks the authority to directly buy shares to prop up prices.
The BoJ on Tuesday offered to pump 8 trillion yen ($98 billion) into the banking system, continuing its huge fund injection aimed at easing market jitters in the face escalating nuclear crisis and fears of unprecedented damage from the earthquake.
The auction, which follows a record 15 trillion yen the BoJ offered in same-day market operations on Monday, drew bids of 5.4 trillion yen.
Japan can intervene in the currency market but does not have authority to buy stocks directly from the market.
Investors rushed to unload shares of Tokyo Electric Power again on Tuesday, pushing them to a 27-year low. 
Tokyo Electric’s shares were untraded with a glut of sellers at the indicated price of 1,221 yen, down by the daily limit of 400 yen or 25 percent from Monday, when it also spent the session untraded before closing down 24 percent. 
The two-day slide has wiped away about 1.45 trillion yen ($17.8 billion) in market value and pushed the stock to its lowest since 1984.

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