Jet Fuel Shortage Hits Japanese Aviation Industry

DALLAS — The past few weeks have seen a jet fuel shortage impact Japan's commercial aviation industry, extending from regional airport to international hubs.

This is according to a Japan Times report. The jet fuel supply dwindle has forced airports large and small to abandon plans for new routes or increase frequencies as fuel delivery delays amount.

The jet fuel shortage comes at a time when the industry is finally reeling back from the fallout of the pandemic and the summer high flying season is seeing an increase in demand for international flights to and from Japan.

Last month, the Japanese government initiated discussions on emergency countermeasures, but reports suggest that deeper structural aspects could "hinder the country’s bid to become a top tourist destination."

A United Search for Countermeasures

The first public/private-sector joint meetings to discuss the jet fuel shortage took place on May 18. Among the attendees were officials of the transport ministry, the Natural Resources and Energy Agency, airline representatives and oil wholesalers.

Kyoji Kuramochi, head of the Land, Infrastructure, Transport and Tourism Ministry’s Aviation Network Department, stated at the time, “As we are trying to attract foreign visitors to areas outside of the big cities, the situation now poses an even more serious problem than before.”

According the Japan News, Eneos Holdings, Japan’s biggest oil refiner, "has been fielding calls from carriers and is working with the government to ease the problem." Labor shortages at airports and logistical bottlenecks are other factors that have contributed to the fuel not reaching destinations, Eneos said.

This all comes as international travel rebounds and with that global jet fuel consumption. Air transport traffic from Asia alone is set to climb by 23% in 2024 from 2023, according to Bloomberg NEF.

Furthermore, the Japanese yen has been steadily depreciating since the beginning of the year, due in part delayed prospect of rate cuts by the U.S. Federal Reserve and the strength of the US economy.

As a result, Japan is in the middle of a significant uptick in inbound travel, with the government expecting to attract "around 60 million international tourists annually by 2030."

Japanese Airports Affected by Shortage

At Hiroshima Airport (HIJ), a foreign airline company reported in May that it was unable to procure fuel in Japan, halting the airport's plan to increase its number of flights.

“The shortage of fuel is causing serious damage to our economy,” said a Hiroshima prefectural government official.

Narita International Airport (NRT) has also been hit by the jet fuel shortage, stating that operations of six unnamed Asian carriers and around 57 weekly flights have been affected. The airport says it has requested stable fuel distribution from domestic suppliers without avail.

Akihiko Tamura, the chief executive officer of NRT, said, "We need to increase fuel suppliers and have requested the government and distributors to directly receive fuel from overseas as well.”

As for affected carriers, Korean Airlines (KE) has canceled its plans to operate charter flights in the next two months at Tokachi-Obihiro Airport (OBO) in Hokkaido because it could not procure fuel in Japan.

As the jet fuel shortage hits Japanese aviation by surprise, is it a tell-tale sign for the rest of the world that jet fuel production is at a decline—down more than 30% since 2019—due in part to the industry's push for net-zero emissions?