South Korean Low-cost Carriers Face Triple Headwinds

 - August 29, 2019, 3:52 AM

South Korean low-cost carriers (LCCs) have been hit with a triple whammy: the reduction in flights to Japan, the ban by China to launch new flights to mainland cities till October 10, and the travel advisory issued by authorities in Seoul for flights to Hong Kong.

Airline operations to Japan are under pressure due to South Korea's "Boycott Japan" campaign, which started in July and urges against traveling to the country and buying its products in response to Japan’s restrictions on the export of chip-making components to its neighbor. Jeju Air, South Korea’s largest LCC, already dropped three of its 22 routes to Japan and will suspend a further six between September and October. During the same period, Korean Air subsidiary Jin Air will reduce its current 131 weekly services to Japan to 78. T’Way Air, Eastar Jet, Air Seoul, and Busan Air also have started reducing flights to Japan.

Jeju Air had initially looked to China to make up for the heavy financial loss on its routes to Japan, but it was forced to postpone the planned introduction of four new services—Incheon-Yanji, Busan-Jiangiajie, Incheon-Harbin, and Muan-Jiangiajie—from August 13-21 to September for operational reasons. Meanwhile, plans have evaporated as a result of the Civil Aviation Administration of China's (CAAC) issuance of an immediate ban on foreign airlines increasing frequencies or launching flights to new destinations in the mainland.

Other LCCs affected are T’Way Air, Eastar Jet, and Busan Air, which had firmed up plans to start services from different points in South Korea to Shanghai, while Air Seoul planned to operate Incheon-Jiangiajie. T’Way Air aimed to fly from Daegu to Jiangiajie and Yanji from September.

Incheon-based Korean Air had also received the nod from CAAC to launch flights to Jiangiajie. According to an official at the Ministry of Land, Infrastructure, and Transport (MLIT) in Seoul, Soh ha-tae, the CAAC decision represents a hard blow as more South Koreans are ditching Japan as a popular holiday destination. A Jeju Air executive who identified himself only as Kim told AIN it is unprecedented for any country to suddenly ban new flights after approving them.

A CAAC official in Beijing, who declined to be named, told AIN the current ban is due to safety and security controls while refraining to give further details on the nature of the safety and security control issues.

In May, China approved an additional 49 weekly flights for South Korean carriers from Incheon to Shanghai, Beijing, Yanji, Shenzhen, and Shenyang, and between Busan and Shanghai. This marked the first major development in five years initiated by China following a tense relationship between the two countries due to the deployment of a U.S. Terminal High Altitude Area Defense missile system on the Korean Peninsula in 2014.

China’s move was regarded as an indication that the ice was being thawed, at least in the civil aviation sector, with the South Korean government hoping it would provide a big boost for the aviation and tourism industries of both countries.

The carriers that were to benefit from the additional services are Korean Air, Asiana Airlines, Jeju Air, Air Seoul, Air Busan, T’way Air, and Eastar Jet.

To add to the LCCs' problems, the South Korean government has issued a travel advisory to Hong Kong amid the ongoing and increasingly violent street protests on the island. According to Soh, this will see a drop in passenger load factors and result in airlines reducing flights. All six South Korean LCCs fly to Hong Kong.