Aviation Industry on Alert Amid Tensions in Han-Chung Relations

The aviation industry, recovering from COVID-19, is closely monitoring the rapidly cooling Korea-China relations. Diplomatic ties are showing signs of strain as China continues to prohibit group tours to Korea. Concerns are rising that revenue recovery on China routes will be delayed.

According to data compiled by Incheon International Airport Corporation on the 25th, 197,302 passengers used the Korea-China routes through Incheon International Airport from the 1st of this month to the 25th. This is a 1,873.41% surge compared to 9,998 passengers during the same period last year.

Last month, Korea and China agreed to increase the number of weekly flights between the two countries to 608. This decision has steadily increased the number of travelers between Korea and China.

From January this year to the 25th, 546,558 passengers traveled between Korea and China, marking a 557.53% increase compared to the same period last year. Although this figure has not yet reached the pre-COVID-19 level of 3,965,772 passengers in 2019, the increased flight frequency between the two countries is boosting the number of travelers on China routes.

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In line with this, domestic airlines have actively increased flights on China routes. For example, Korean Air plans to operate 99 flights per week until next month, and Asiana Airlines will increase to 89 flights per week until this month on international China routes. Additionally, Jeju Air is scheduled to resume flights on the Qingdao, China route starting from the 30th.

China routes account for a significant portion of airline revenues. In 2019, China routes made up 12% of Korean Air's total route revenue and 17% for Asiana Airlines. The number of tourists reflects this as well. In 2019, 6,023,021 tourists from China visited Korea, representing 34.4% of the total 17,502,756 foreign visitors to Korea. Furthermore, 4,346,567 travelers visited China from Korea in 2019.

However, recent diplomatic tensions between Korea and China have left airlines anxious. China routes have experienced fluctuations depending on diplomatic circumstances. For instance, the number of passengers on China routes dropped sharply from 9,944,541 in 2016 to 6,969,614 in 2017 due to the fallout from the deployment of the Terminal High Altitude Area Defense (THAAD) system.

Currently, there is no significant change in the number of passengers on China routes. An airline official explained, "There has been no major change since increasing flights on China routes," adding, "Reservation rates are gradually rising."

However, concerns remain that revenue recovery on China routes may be delayed due to diplomatic tensions. Another airline official said, "It is definitely not a good situation that group tours to Korea have not yet been approved," and added, "We are worried that the timing of revenue recovery could be further delayed."

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