"Domestic Airfare Increase Unavoidable" Aviation Industry Appeals for Free Emission Allowance Designation

Submission of Proposal to Ministry of Environment
"Designation of Free Allocation Industries Absolutely Necessary for Policy Consistency"

On the 16th, when the air route between Incheon and Wuhan, which had been blocked due to the spread of the novel coronavirus infection, reopened after 8 months, the departure board at Incheon International Airport Terminal 1 showed the departure of a passenger flight bound for Wuhan, China. Photo by Jinhyung Kang, Yeongjongdo aymsdream@

[Asia Economy Reporter Yu Je-hoon] National airlines have requested the government to designate the aviation industry as a sector eligible for free allocation of greenhouse gas emission permits, considering the crisis caused by the novel coronavirus disease (COVID-19).

The Korea Air Transport Association (Chairman Son Chang-wan, President of Korea Airports Corporation) announced on the 18th that it sent a 'Request for Designation of the Aviation Industry as a Free Allocation Sector' to the Ministry of Environment. The Korea Air Transport Association is an organization comprising national airlines such as Korean Air, Asiana Airlines, and Jeju Air.

Earlier, on the 15th, the Ministry of Environment announced through a public hearing on the '3rd Phase National Emission Permit Allocation Plan' that the aviation industry would remain a paid allocation sector. In the case of paid allocation sectors, additional costs are incurred corresponding to the allocated amount. The industry estimates that if not designated as a free allocation sector, additional costs of approximately 27.5 billion KRW will arise.

The national airlines stated, "In a situation with almost no income and concerns about survival due to the prolonged crisis, the failure to designate the industry as a free allocation sector is a policy decision that does not consider the industry's reality at all," and emphasized, "Since the government supports the public interest and special nature of air transportation through measures such as the Industrial Stability Fund, designation as a free allocation sector is absolutely necessary for policy consistency."

Furthermore, they appealed in the request letter that the additional costs caused by domestic greenhouse gas regulations will inevitably act as a factor for increasing airfares, considering the current conditions such as COVID-19.

A representative of the association stated, "The air transport business is classified as an essential public service under the Labor Union Act," and added, "Since bus and railway operators were designated as free allocation special companies during the 3rd phase, designation as a free allocation sector is necessary for fairness among similar industries."

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