As Soon as They Took a Breather... LCCs on Edge Amid Signs of COVID-19 Resurgence

On the 14th, the domestic terminal at Gimpo Airport in Seoul is bustling with travelers taking advantage of the golden holiday weekend./Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Yoo Je-hoon] Low-cost carriers (LCCs) are facing deep concerns amid signs of a resurgence of the novel coronavirus infection (COVID-19). They have been seeking survival by increasing domestic flights due to the suspension of international flights, but the peak season (July-August) is ending, and COVID-19 is also holding them back.

According to the quarantine authorities on the 17th, as of 0:00 a.m. that day, the number of new COVID-19 cases nationwide was counted at 197. Among them, 188 were locally transmitted cases, and 9 were imported cases, raising concerns that the country may be entering a phase of COVID-19 resurgence.

LCCs are in a critical situation. Since the large-scale suspension of international flights due to the spread of COVID-19 in March, LCCs have been seeking survival by increasing domestic flights. Since they do not operate separate cargo businesses, this was considered a desperate measure.

They also achieved some results. In fact, as demand for overseas travel shifted domestically, domestic passengers reached 418,631 on July 1-2, marking the first year-on-year increase (7.3%) since the COVID-19 outbreak. A representative of a domestic LCC said, "Although it is not enough to make a profit, it will have some effect on improving cash liquidity."

However, the peak season continuing until this day is coming to an end, and to make matters worse, with signs of COVID-19 resurgence, LCCs are facing a crisis. They have pursued aggressive expansion strategies, including launching inland routes, but they may face a boomerang effect.

Meanwhile, domestic LCCs experienced turbulence in the second quarter, each posting losses in the hundreds of billions of won. Leading the industry, Jeju Air (operating loss of 85.4 billion won), followed by T'way Air (48.5 billion won), Jin Air (59.6 billion won), and Air Busan (51.4 billion won), all recorded losses exceeding their sales. An industry insider said, "For now, we can only watch the COVID-19 transmission situation."

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