“We Earn the Money, but It’s Spent on Roads and Railways… Now We’re Expected to Shoulder Deficit Airports Too”: Incheon Airport’s Concerns

70% of Special Transportation Account Dividends Come From Incheon Airport
Korea Airports Corporation Contributes 0%; Significant Transfers by Other Entities as Well
Experts: "Consensus on Integration, But Sufficient Deliberation Needed"

Incheon International Airport Corporation is facing growing concerns over the government’s plan to merge it with Korea Airports Corporation. Internally, there are worries that, as Incheon Airport’s profits are already being heavily diverted to fund other projects such as roads and railways, being tasked with overseeing the chronically deficit-ridden regional airports could deplete resources needed to strengthen global airport competitiveness.

Incheon Airport’s ‘Solo Dividend Feast’... Regional Airports Receive ‘Zero Won’

According to materials from the National Assembly Budget Office and the Board of Audit and Inspection on March 24, Incheon International Airport Corporation plays a key role as a funding source for the Special Account for Transportation Facilities. Excluding the COVID-19 period, Incheon Airport has maintained a dividend payout ratio of around 46% since 2019. The dividends paid are reflected in the Special Account for Transportation Facilities, with Incheon Airport’s dividends accounting for about 70% of the government’s dividend revenue in this account. In 2024, it paid KRW 224.8 billion, which is 66% of the total, and last year, it paid KRW 221 billion, or 71%, into the special account.

Among the nine dividend-paying institutions, this is the largest amount. Compared to Korea Expressway Corporation and Korea Development Bank, which each paid about 11–16%, Incheon Airport’s share is particularly significant. Even last year, Incheon Airport paid out KRW 319.4 billion, which is 46% of its net income, and this amount is expected to be reflected in the national Special Account for Transportation Facilities this year.

Incheon International Airport Corporation Dividend Trends Over the Last 10 Years. Incheon International Airport Corporation

Airport Profits Diverted to Roads and Railways... Billions of Won Transferred Out

The excessive diversion of Incheon Airport’s revenue into non-aviation sectors is also an obstacle to integration. There are concerns that, if Incheon Airport is forced to take responsibility for the many deficit-ridden airports under Korea Airports Corporation, as well as the new airport under construction in Gadeokdo, there will be additional costs on top of the current outflows. In addition, most of the revenue that the government collects from airports such as Incheon International Airport is transferred to the road and rail accounts. According to a 2019 report by the National Assembly Budget Office titled “Analysis by Committee of the 2019 Fiscal Year Settlement,” there were already concerns about excessive transfers from airport revenue accounts to the road and rail accounts.

In 2018, out of about KRW 803.4 billion in airport account revenue, approximately KRW 544.9 billion (79.6%) was transferred to the road and rail accounts. In other words, a large portion of funds that should be used for airport facilities and service development is already being diverted to other ministries. In 2019, KRW 422.3 billion (69.6%) out of total revenue of KRW 615.6 billion was also transferred out. This trend reportedly continues today.

 Runway Utilization Rate 3.6%... Regional Airports Are ‘Bottomless Pits’

The main reason Incheon Airport employees oppose the merger is the poor management of regional airports. Of course, it is difficult to blame Korea Airports Corporation alone for the deficits, as some regional airports were pushed through for political or local convenience reasons, even when lacking business feasibility. However, according to an audit by the Board of Audit and Inspection in September 2023, as of 2024, the average runway utilization rate at nine regional airports—excluding Incheon, Gimpo, Gimhae, and Jeju among the 15 airports nationwide—was only 3.6%. In contrast, Incheon recorded 82.6% and Jeju 91.4%, indicating a stark difference.

In particular, Yangyang Airport (0.3%), Sacheon Airport (1.2%), and Wonju Airport (1.2%) were pointed out as virtually non-functional as airports. Their financial status continues to deteriorate. As of 2024, the combined deficit at the 11 regional airports and headquarters, excluding Gimpo, Gimhae, and Jeju, has reached KRW 138.4 billion. Muan, Yangyang, Ulsan, and Yeosu airports each posted losses exceeding KRW 20 billion, having failed to escape the deficit trap for the past 10 years. Furthermore, according to the Board of Audit and Inspection, KRW 23.4 trillion is expected to be invested in planned regional airport construction projects, indicating the financial burden will only continue to grow. This is why there are concerns within Incheon International Airport Corporation about proceeding with integration without sufficient internal discussion of countermeasures.

Experts: “Sympathetic to Integration, But Sufficient Discussion Needed”

Experts agree that, as the split roles of the corporations have reduced public convenience, integration is necessary. However, they emphasize that ample discussion is needed to ensure Incheon Airport’s competitiveness is maintained.

Kim Kyuwang, professor of aviation operation at Hanseo University, said, “It is true that Incheon Airport is already generating significant profits and contributing to national finances, but the current structure—where each airport operates independently—reduces overall efficiency. The discussion should not be about simply using Incheon Airport’s money to cover other airports’ deficits, but rather about operating all airports as one network to generate greater profits and efficiency.”

Lee Hwiyeong, professor of aviation management at Inha Technical College, commented, “Airports are public goods, so they can be built even if they are not highly profitable, considering their social value. However, some regional airports were constructed even though there were virtually no users, and that was excessive. Even now, most regional airports are running deficits, yet proposals are being made to build more. These problems need to be addressed first.” He added, “There are advantages to integrating the two airport corporations, so it is important to listen carefully to the opinions of all stakeholders regarding possible side effects.”

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