Finally Spring... "Overseas This Summer" Will Airline Stocks Soar?

[Asia Economy Reporter Kwon Jae-hee] Airline stocks, which had been sluggish for a while despite the 'reopening,' have finally taken off. This is due to the government's clear stance on easing quarantine measures, raising expectations for the resumption of overseas travel, combined with a drop in international oil prices.

According to the Korea Exchange on the 5th, Korean Air closed at 31,950 KRW, up 2.4% from the previous trading day. Asiana Airlines ended the day at 23,000 KRW, up 1.32%. The stocks continued to show slight gains in the morning session.

Not only major airlines that had been relying on cargo transport demand in the absence of passenger demand but also key low-cost carriers (LCCs) are gaining momentum in their stock prices. The increase was even greater among LCCs, with Jeju Air rising 6.46%, T'way Air 5.56%, and Jin Air 5.53%. In particular, Jin Air has surged 37% over the past month, making it the strongest performing stock among major LCCs in the last month.

The collective strength of airline stocks is attributed to the government's push for 'endemic' status regarding the pandemic. Despite daily new confirmed cases exceeding 200,000, the government has shifted its policy to 'no quarantine upon overseas entry.' Previously, since the 21st of last month, the government has exempted self-quarantine for overseas entrants who have completed COVID-19 vaccination both domestically and abroad.

The recent stabilization of soaring international oil prices has also acted as a positive factor for airline stocks. International oil prices, which had surged sharply due to the Russia-Ukraine conflict and reached over $130 per barrel following the U.S. decision to release strategic reserves, closed below $100 per barrel last week.

Park Soo-young, a researcher at Hanwha Investment & Securities, stated, "A clear rebound in the daily average number of international passengers is being confirmed in line with the government's easing of quarantine measures," adding, "Recovery in international passenger performance is expected, centered on demand that can no longer be postponed, such as business trips and honeymoons."

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