Japan’s outgoing tourism market, a major source of revenue for Australian tour operators, is drying up rapidly, and so is the insurance cover travelers used to take for granted.

Tokyo’s major international airport at Narita has experienced a sharp slump in air traffic since the US terrorist attacks, with passenger numbers dropping as much as 54%. Adding to the airport operator’s misery is the recent loss of insurance cover for terrorist attacks.

Global underwriters are capping airline coverage to $US50 million per aircraft, down from an average $US2 billion.