China Followed by Southeast Asia Air Routes Also Reduced... Spreading Contraction of Air Travel Demand

Asiana Suspends and Reduces Flights on 7 Southeast Asia Routes

On the 10th, amid ongoing concerns about the spread of the novel coronavirus infection, the domestic check-in counters at Gimpo Airport in Seoul showed a quiet scene. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Yu Je-hoon] The reduction in supply in the aviation industry due to the COVID-19 pandemic is spreading beyond China to Southeast Asian routes. Given that Korean airlines have actively developed Southeast Asian routes as alternative routes following last year's boycott of travel to Japan, it is expected to directly impact the profitability of the aviation industry.

According to the industry on the 13th, Asiana Airlines will sequentially suspend and reduce flights on seven Southeast Asian routes departing from Incheon International Airport starting from the 16th. This is the first time Asiana Airlines has decided to suspend or reduce flights on routes outside China since the COVID-19 outbreak.

The routes subject to suspension are ▲Taichung (February 26 to March 15) and ▲Chiang Mai (March 3 to March 15), while the routes subject to reduction are ▲Bangkok (14 flights per week → 7 flights per week), ▲Hanoi (21 flights per week → 14 flights per week), ▲Singapore (10 flights per week → 7 flights per week), ▲Incheon~Nha Trang (7 flights per week → 3 flights per week), and ▲Incheon~Saipan (14 flights per week → 7 flights per week). This includes a significant portion of the main Southeast Asian routes.

Asiana Airlines is not the only one downsizing Southeast Asian routes. T'way Air has decided to suspend one Southeast Asian route (Daegu~Taipei), Air Busan three routes, and Eastar Jet seven routes. Jin Air is also sequentially suspending and reducing flights on seven routes.

The overall industry is reducing Southeast Asian routes due to a sharp decline in reservation rates caused by the COVID-19 outbreak. This is interpreted as a result of travel demand rapidly shrinking following confirmed cases of 'third-country infections.'

A representative from a Korean airline said, "Popular routes that had reservation rates of 80-90% during the same period last year have now dropped by 30-40 percentage points to around 50%." Since the usual aircraft load factor (L/F) needs to be around 70-80% to ensure profitability, proactive measures have been taken.

The aviation industry's concerns are deepening. Following last year's boycott of travel to Japan and the early-year COVID-19 outbreak in China, demand for major short-haul routes has sharply declined, and even the Southeast Asian routes considered as alternatives are being hit. Low-cost carriers (LCCs), for which Southeast Asian routes are the mainstay, are particularly pushed to the brink. For example, as of the fourth quarter of last year, Southeast Asian routes accounted for 36% of Jeju Air's revenue. Professor Heo Hee-young of Korea Aerospace University said, "It feels like the aviation industry is undergoing a fitness test," adding, "Even if this situation is resolved early, it will take considerable time for demand to recover."

Meanwhile, the aviation industry has recently been struggling with delays in refunds as cancellations of short-haul international flight reservations continue following the COVID-19 outbreak. An industry official said, "With the massive suspension of flights on China routes due to COVID-19, inquiries about refunds have surged."

This content was produced with the assistance of AI translation services.