'Reopening' Disappears Amid COVID-19 Resurgence

[Asia Economy Reporter Kwon Jae-hee] The reopening (resumption of economic activities), which had raised expectations since the beginning of the year, has disappeared due to the resurgence of COVID-19. Although it is the peak summer vacation season, reopening-related stocks are still on a downward trend.

According to the Korea Exchange on the 4th, as of 9:34 a.m., Jeju Air recorded 15,600 won, up 2.63% from the previous day. Compared to the highest price of 22,550 won recorded on June 8, it has dropped by about 31%. Other low-cost carriers (LCCs) are in a similar situation. Jin Air was at 14,500 won, and T'way Air was at 2,025 won, down about 22.40% and 28%, respectively, during the same period.

Although sustained by cargo demand, large carriers are facing similar circumstances. Korean Air traded at 25,550 won, up 1.79% from the previous day. Compared to the peak on May 30, it has fallen by about 14.41%. Asiana Airlines recorded 15,050 won, up 2.38%. This is a 21.56% decrease compared to the peak on June 7. Travel and leisure stocks were also hit. Hana Tour showed 50,400 won, up 1.20% from the previous day. This is about a 34% difference compared to the peak on June 7.

Initially, there were expectations that reopening would accelerate with the summer peak season as COVID-19 showed signs of subsiding. Earlier, Incheon International Airport Corporation predicted a total passenger number of 1,712,420 during the summer peak season from the 22nd of last month to the 10th of this month, about 20 days. The daily average was expected to be 85,621, which is a 791% increase compared to the same period last year. However, due to the resurgence of COVID-19, actual daily users remained at around 60,000.

However, experts evaluated that the recovery is slow but the corporate value itself has not been damaged.

Lee Jin-hyup, a researcher at Yuanta Securities, said, "It is only that the recovery of travel, such as airline routes that have not normalized, has not met market expectations, but the investment point has not been damaged."