Rising Expectations for LCCs: "Japan Opens Up and Quarantine Measures Ease"

[Image source=Yonhap News]

[Asia Economy Reporter Yoo Hyun-seok] As COVID-19 restrictions ease in South Korea and Japan, expectations are rising for low-cost carriers (LCCs). The easing of the costly polymerase chain reaction (PCR) tests and the revitalization of Japan routes, which accounted for a large portion of sales, are expected to accelerate performance improvements.

According to the aviation industry on the 3rd, the governments of South Korea and Japan relaxed COVID-19 measures on the 31st of last month. South Korea will completely abolish the mandatory COVID-19 test before entry for overseas arrivals starting from the 3rd of this month.

Previously, everyone entering South Korea had to submit a negative PCR test result within 48 hours before entry or a professional rapid antigen test (RAT) negative certificate within 24 hours. This requirement was criticized for cost burdens and the short time interval between pre- and post-entry tests, and the aviation industry argued that it was an obstacle to the recovery of passenger demand.

A Jin Air official said, "With the removal of the pre-entry COVID test, which made it difficult to decide on overseas travel, we have high expectations that this will be an opportunity for travel demand to recover."

Along with this, the Japanese government will allow foreign group tours without accompanying guides starting from the 7th. Additionally, the daily entry quota will be expanded from 20,000 to 50,000 people.

These measures are expected to be favorable for LCCs, especially since Japan is one of the popular travel destinations for Koreans. The number of tourists visiting Japan was 2.75 million in 2014, rising to 7.14 million in 2017 and 7.54 million in 2018. However, anti-Japanese sentiment emerged due to Japan's export restrictions in 2019, leading to a boycott of Japanese products. As a result, the number of tourists dropped to 5.59 million in 2019. Furthermore, with the outbreak of COVID-19, the number plummeted to 19,000 last year.

In fact, this route accounted for a significant portion of sales for LCCs. In the past, 20-30% of total sales revenue came from Japan routes. For example, Jeju Air had 12.01 million passengers in 2018, of which 3.08 million were on Japan routes, accounting for 25.7% of total passengers.

However, concerns remain that the practical effect may be limited as free travel to Japan is still not allowed. Currently, foreigners can only visit Japan for tourism purposes through group tours accompanied by travel agency staff.

An LCC industry official explained, "Japan is a travel destination characterized by a high proportion of individual travelers," adding, "For Japan travel demand to recover, individual visas or visa-free entry systems are urgently needed."

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