From the Start, 'COVID-19 Turbulence'... Newborn LCCs Halt Their Wingspread

Fly Gangwon to suspend Taipei route next month... Clark flights reduced, Taichung service delayed

[Image source=Yonhap News]

[Asia Economy Reporter Yu Je-hoon] New airlines are struggling amid the COVID-19 turbulence that has surged since the beginning of the year. Some airlines have suspended or reduced routes just three months after launching operations, while others have postponed their inaugural flights to minimize losses.

According to the industry on the 17th, Aero K acquired its first aircraft (A320) at Cheongju International Airport yesterday. Aero K is a business based at Cheongju Airport and promotes itself as an "ultra low-cost carrier (U-LCC)."

Separately from the aircraft delivery, Aero K plans its actual first flight (Cheongju~Jeju) in June. This is because the Air Operator Certificate (AOC) approval applied for from the Ministry of Land, Infrastructure and Transport is expected to be granted around April at the earliest. Even if approval is obtained in March, April and May are considered the airline industry's typical "off-season," so the practical benefits of launching flights then are limited.

Air Premia also applied for an AOC on the 12th. Based at Incheon International Airport, the company plans to start Southeast Asian routes around September and then fully launch long-haul flights to destinations such as Los Angeles (LA), USA.

However, there is considerable anxiety about the major setback caused by COVID-19 from the very first year of operation. An Aero K official said, "We understand that all domestic airlines are facing difficulties," adding, "We hope that the COVID-19 situation will calm down in the second half of the year and that air travel demand will recover."

Some new airlines have already been hit hard by COVID-19. Fly Gangwon, which was the first among the three new airlines to launch last November, is a representative case. Its Yangyang~Jeju (domestic) route had a load factor of 61% during its first week of operation from November 22 to 28 last year. However, after the COVID-19 outbreak, the load factor dropped to 20% during the week of February 7 to 13.

The situation is even more severe for international routes. The Yangyang~Taipei (Taiwan) route is also struggling. The load factor was 59% during its first week of operation from December 26 to January 1, but plummeted to 15% during the week of February 7 to 13. Consequently, Fly Gangwon postponed the launch of the Yangyang~Taichung (Taiwan) route scheduled for the 20th and decided not to operate the first international route, Yangyang~Taipei, from March 1 to 28. The Yangyang~Clark (Philippines) route, scheduled to start on the 21st, was reduced even before the first flight took off.

Aero K, aiming for a June launch, and Air Premia, targeting the second half of this year, believe they can be relatively free from the impact of COVID-19. They plan to enter the international market in the second half of the year with routes to Japan, where the Tokyo Olympics will be held, and Southeast Asia, which has considerable tourism demand.

However, the industry points out that, as seen in previous outbreaks such as Severe Acute Respiratory Syndrome (SARS) and Middle East Respiratory Syndrome (MERS), even if the spread of infectious diseases subsides, it takes time for demand to recover. Additionally, the domestic aviation industry was already facing "oversupply" before COVID-19, making smooth operations uncertain.

An industry insider said, "This phase is like a fitness test where each airline is using up the strength accumulated during prosperous times to endure," adding, "For new airlines, it will be difficult to survive unless they adjust their launch plans."

Meanwhile, suspensions and reductions of flights by domestic airlines are spreading further. As of the 14th, four airlines?Jin Air, T'way Air, Air Busan, and Eastar Jet?have decided to suspend or reduce additional flights. Notably, popular routes such as Da Nang, Vietnam, which usually have load factors of 80-90%, are included among the suspended or reduced flights.

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