The airlines continue to struggle with what to do with the once-lucrative Japanese market, as some airlines slash capacity and others hold steady despite radiation woes.

Delta Air Lines announced today that it would reduce seating capacity on its flights to Japan by up to 20 percent until May.

The seat reductions at Delta will cost the airline around $250 million to $400 million, the airline reported.

Among the U.S. airlines, Delta has the most seating capacity on flights to Japan, with around 7 percent of the Japanese air travel market.

Also cutting their seat capacity to Japan were Singapore Airlines and Qantas Airways, citing waning demand.

Singapore Airlines announced that starting March 27 it is cutting one of its two daily flights to Haneda airport. Australian carrier Qantas will cut half of its 14 weekly Jetstar flights to Tokyo and redirect them instead to Osaka.

The Japan earthquake not only affected travel to Japan–Japan Tourism Plummets After Earthquake–but it also hit the entire global travel industry: Japan Earthquake Damages Tourism Worldwide

Other airlines that are at least temporarily reducing capacity to Japan include Cathay Pacific Airways and Korean Air Lines.

American Airlines, meanwhile, is taking a contrarian position by maintaining its full schedule of flights and pushing ahead with a new trans-Pacific joint venture with Japan Airlines in April.

On Tuesday, American announced that not only will it continue to fly its full slate, but also that partner Japan Airlines will operate all of its scheduled international connecting flights.

Most of American’s passengers to Japan are connecting to other destinations in Asia.
Though the earthquake and tsunami in Japan had an effect on airline cutbacks, the airlines in general have been cutting capacity and slowing growth this year.

Delta said Tuesday it would slash seating capacity across the board by 4 percent, especially in slow performing markets. US Airways, which does not currently fly to Japan, also trimmed its system-wide growth plans for 2011 from 2 percent to 1.5 percent.

American announced earlier this month that it would not grow as much this year as expected.

By Adriana Padilla for PeterGreenberg.com.

Related Links: PeterGreenberg.com, BusinessWeek, MSNBC, Bloomberg

Related links on PeterGreenberg.com:

• Japan Tourism Plummets After Earthquake, Tsunami
• Japan Earthquake Damages Tourism Worldwide
• Japan Earthquake News: Travel Tips For Helping Americans Evacuate
• Travel Advice On Dealing With The Japan Earthquake & Tsunami
• Flights Rerouted As Japanese Radiation Leaks Affect Airspace
• Japan Earthquake Update: Travel Advisory Issued
• Natural Disasters section

For more on the history of the tie-up between Japan Airlines (JAL) and American Airlines, check out: Major Alliances Vie For Control Of Struggling Japan Airlines