Exemption from Quarantine for Overseas Arrivals... Passenger Demand Recovery Expectations '↑'

Government to Exempt 7-Day Self-Quarantine Starting from the 21st

[Asia Economy Reporter Yoo Hyun-seok] As the government has decided to exempt overseas arrivals who have completed COVID-19 vaccination from mandatory self-quarantine, the aviation industry is expected to see a gradual recovery in passenger demand.

According to the industry on the 12th, the Central Disaster and Safety Countermeasures Headquarters (CDSCH) announced at a regular briefing the day before that those who have completed vaccination domestically or abroad and have registered their vaccination records will be exempt from the 7-day quarantine. The implementation will begin on the 21st.

The 'fully vaccinated' recognized under this measure refers to those who are 14 days past their second dose (one dose for Janssen) and within 180 days, as well as those who have received a third dose.

Until now, all overseas arrivals were required to self-quarantine for 7 days regardless of vaccination status. However, under this new measure, those who have completed vaccination in Korea or have been vaccinated abroad and registered their records will not need to self-quarantine upon entering the country.

This decision resolves a factor that had been holding back the aviation industry, and passenger demand is expected to recover. Last month, the total passenger demand at nationwide airports was 3,227,953. Of these, international flights accounted for 323,355 passengers and domestic flights 2,904,598, representing increases of 93.5% and 25.6% respectively compared to the same period last year. However, these figures are still sluggish compared to the pre-COVID-19 numbers in 2019, which recorded 7,472,743 international passengers and 8,685,702 domestic passengers.

Due to COVID-19, the aviation industry has experienced poor performance. According to FnGuide, securities firms forecasted last year’s consolidated results for Jeju Air at KRW 266.9 billion in sales and an operating loss of KRW 323.4 billion. Similarly, T'way Air was expected to record KRW 206 billion in sales and an operating loss of KRW 157 billion. Asiana Airlines achieved an operating profit of KRW 91.6 billion last year but posted a net loss of KRW 618.1 billion. Only Korean Air recorded strong results with KRW 9.0168 trillion in sales and an operating profit of KRW 1.418 trillion, but most of this performance came from cargo operations.

However, securities analysts do not expect the government’s decision to lead to a rapid recovery in passenger numbers. Jeong Yeon-seung, a researcher at NH Investment & Securities, said, "The government has announced plans to gradually expand air routes and flight frequencies," adding, "The possibility of a sudden increase in flight frequencies (supply) is limited."

He explained, "Looking at overseas cases, there tends to be a surge in overseas travel booking demand ahead of changes in quarantine policies," and "In conclusion, the speed of supply recovery will be slower than booking demand, and airfare prices are expected to rise." He added, "With the abolition of the quarantine system, domestic overseas travel demand is expected to recover in earnest, but it is necessary to continuously monitor future fuel costs and inflation."

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