[Asia Economy Reporter Yoo Je-hoon] As the peak summer season approaches, domestic regional airports in South Korea are becoming crowded. This is due to the demand for overseas travel, which had been restricted by the novel coronavirus infection (COVID-19), shifting toward domestic travel.
According to the Ministry of Land, Infrastructure and Transport's Aviation Information Portal System, the number of air passengers using domestic flights from the 1st to the 10th of this month was tentatively counted at 1,515,350. Although this figure is about 12% lower than the same period last year, it has more than doubled compared to the same period last month (around 660,000).
The increase in domestic flight passengers is attributed to the vacation season that began in earnest at the end of last month. With the total number of international passengers shrinking to about 1-2% of the previous levels, travel demand is shifting to domestic flights, according to the overall industry assessment.
In fact, the recently launched domestic airline routes from Busan and Gwangju to Yangyang are reported to maintain a load factor of 70-80% on weekends and 50-60% on weekdays. This is a remarkable growth for Yangyang Airport, which had long been stigmatized as a "ghost airport." An industry insider explained, "Tourist destinations on the East Coast, such as Seopi Beach, are being spotlighted as alternatives to overseas travel, helping to maintain decent load factors."
Accordingly, the boom in domestic flights during the summer vacation season is expected to continue. Airlines are actively opening routes to regional airports such as Yangyang, Yeosu, Ulsan, and Pohang, which they had previously been reluctant to serve. Industry insiders expect that by late this month, when the semi-peak season begins, the number of domestic flights at domestic airports could surpass last year's levels.
However, the overall assessment is that this domestic flight boom is unlikely to lead to improved profitability for airlines. The causes include demand contraction due to COVID-19 and low average selling prices. In particular, as airlines competitively open new routes, cutthroat competition is inevitable.
For this reason, airlines are resuming or considering additional international flights starting this month. Although it is too early to expect demand recovery due to the resurgence of COVID-19, these moves are in preparation for future vaccine development and easing of entry restrictions. An industry insider said, "It is difficult to expect profitability from either international or domestic flights at this stage. The only option is to operate according to demand as it arises while reducing cost expenditures."
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