Airlines keep flying to Japan despite losses
‘Halting, resuming operations may cost more when demand bounces back’
The impact from the Korea-Japan trade dispute, which led to the “Boycott Japan” movement in the country, has taken a severe toll on local airlines, especially budget carriers, which used to rely heavily on Japanese routes for profitability.
Despite the low demand for flights to the neighboring country and resultant major deficits, Korean carriers have no choice but to continue operations, because they fear that, if they halt flights to certain cities, they may not be able to resume them after tensions ease.
“According to aviation agreements between Korea and Japan, any airline that wants to fly can operate when there are available time slots at the airports of the destination countries. But once an airline halts operations to a certain destination, the airports on both sides could give the vacant slots to another airline, making it more difficult for the carrier to resume flights there later,” an airline official familiar with the matter said.
To hold onto the time slots, among other business considerations, local carriers have been bearing the deficits and continuing their operations.
“It is hard for an airline to halt operations as it costs a substantial amount of time and money to reallocate slots, personnel and airline offices at the Japanese airports,” a Jin Air official said. “On top of that, we can’t only take into consideration the tourist demand but also the business customers.
That is the reason airlines could reduce operations to small cities but not major cities even though it is unprofitable at the moment.”
The situation is pushing airlines to sell flight tickets with no margin — or even at a loss.
Air Seoul, one of the budget carriers here, has sold round-trip tickets between Seoul and Osaka for 1,000 yen ($9.40), according to Asahi Shimbun, which cited a Japanese online travel site.
Normally Osaka-Seoul round-trip tickets cost around 6,000 to 7,000 yen, but started to drop drastically starting August, according to the newspaper. A round trip between Fukuoka and Seoul usually costs around 5,000 yen but it has dropped to 3,000 yen lately, it reported.
According to the Japan National Tourism Organization (JNTO), only 201,200 Koreans visited the country last month, a 58.1 percent drop compared to the same period last year.
A similar sharp decline was seen in April 2011 right after Japan was struck by an earthquake and tsunami, when the number of Koreans visiting Japan dipped 66.4 percent, and 58.3 percent in May that year.
Japanese provincial cities popular with Koreans, such as Hokkaido, Yufuin and Tottori, have been hit hard by the large reduction of Korean travelers since July.