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Rough week for Japan's Airline and Beef Industries - 2001-09-21

Japan's largest airline reports more than 100,000 passenger cancellations following the terrorist attacks in the United States. Meanwhile, Japanese beef exporters say sales are falling after the country's first case of mad cow disease.

Japan Airlines, Asia's biggest carrier, says that 12 percent of its international passengers have cancelled flights as a direct result of the terrorist assaults in New York and Washington last week.

The company reports that 130,000 tickets were cancelled, with about one-third of those occurring between September 11 and 15, when U.S. airspace was closed to all flights.

The carrier predicts further losses as Japanese vacationers avoid traveling to the United States. But unlike airlines in the United States and Europe, Japan Airlines says it has no plans to cut jobs or reduce the number of flights.

Japanese beef exporters are seeing a decline in sales, after six countries, including the United States, decided to ban the country's meat products. The import bans follow the first reported case of an animal testing positive for mad cow disease, a brain-wasting illness that has been linked to the fatal variant Creutzfeldt-Jakob disease in humans.

Mariko Takeyama is a researcher for Japan's Beef Information Service Center, an industry-run group. She says domestic consumption appears to be slowing down. "The proportion of Japanese beef exported to foreign countries is not that great," she says, "so it may not have too much of an affect on the country's overall beef industry. However, within Japan, beef prices are dropping and that could be quite damaging."

To manage the crisis, Tokyo said Wednesday that it plans to slaughter one million cows a year to test for the illness. Japan's Agriculture Minister Tsutomu Takebe also said that he regretted his government's rejection, in June, of a European Union warning that Japan was vulnerable to an outbreak of the disease.

U.S. based Wal-Mart, which is the world's biggest retailer, may soon buy into one of Japan's biggest supermarket chains. Local media reports that Wal-Mart is in the final stages of negotiations to buy more than 50 percent of Mycal, which recently declared bankruptcy.

The strategy fits in with Wal-Mart's plans to build a bigger presence in Asia. It already has outlets in China and South Korea.

British mobile phone giant Vodafone is eager to increase its stake in Japan Telecom, the third-largest telecommunications company in Japan. Vodafone is expected to soon make an offer, which would raise its 45 percent stake in Japan Telecom to 67 percent.

The British company says it sees the Japanese wireless market as essential to its global strategy. The deal would bring Vodafone into direct competition with NTT DoCoMo, one of the world's most successful cellular phone companies.