Domestic Air Passenger Numbers Plummet Following Social Distancing Upgrade... Aviation Industry in Distress

Cases of Cancellation for International Tourist Flight Packages

[Image source=Yonhap News]

[Asia Economy Reporter Yoo Je-hoon] The aviation industry, which had barely managed to survive on domestic flights after the outbreak of the novel coronavirus infection (COVID-19), is now taking a direct hit from the third wave of the pandemic. With social distancing measures raised to level 2.5, domestic air travel demand has plummeted by more than 40%, and the 'international non-stop sightseeing flights' introduced as a profitability improvement strategy have also lost momentum.

According to the Ministry of Land, Infrastructure and Transport's Aviation Information Portal System, the number of domestic passengers at 15 airports nationwide last week (November 7-13) was tentatively counted at about 883,000. This represents a decrease of approximately 41% compared to the second week of November (November 9-15), when social distancing level 1 was applied in the metropolitan area.

Due to the contraction in international flight demand, domestic passengers, which had even turned positive year-on-year last month, are now on a declining trend again amid the third wave of COVID-19. The higher the social distancing level, the greater the decline.

In fact, domestic passengers reached about 1.49 million in the second week of November under level 1, but dropped by about 5% to approximately 1.41 million in the third week of November (16-22), when level 1.5 was applied. Furthermore, with level 2 social distancing applied in the metropolitan area in the fourth week of November (23-29), the number decreased by about 15% to around 1.2 million, and last week, with the full application of level 2.5, it fell again by about 26%.

Meanwhile, the popularity of international non-stop sightseeing flight products, which domestic carriers have been competitively launching to recover profitability, has not met expectations. When the sightseeing flight product targeting domestic routes was launched in October, all tickets were sold out, showing strong demand, but recently, despite being international flights where duty-free shopping is possible, the reservation rate has not reached that level.

In particular, the timing of international sightseeing flights coinciding with the application of social distancing level 2.5 has posed significant challenges for each airline. Ultimately, Air Seoul canceled its international sightseeing flight products (scheduled for the 19th and 26th) just two days after their release on the 9th, on the 11th. An Air Seoul official stated, "This decision was made after much deliberation due to the resurgence of COVID-19," adding, "Operations in January will be decided based on future developments."

As the decline in domestic passengers becomes more pronounced, domestic carriers, especially low-cost carriers (LCCs) that heavily rely on domestic routes, are facing deep concerns. Recently, with daily COVID-19 cases exceeding 1,000, discussions about raising social distancing to level 3 are underway.

The deterioration of the aviation industry's performance, centered on LCCs, also seems inevitable. The securities industry estimates operating losses this quarter of 63.9 billion KRW for Jeju Air, 42.4 billion KRW for Jin Air, and 32.4 billion KRW for T'way Air. An industry insider said, "Inquiries about flight cancellations are increasing due to the raised social distancing," adding, "If the situation continues, airlines will also begin to reduce flights."

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