Flag Carriers Make Huge Losses on Domestic Routes

      September 22, 2015 13:09

      Korea's two flag carriers are suffering accumulating losses on domestic routes. The situation got worse in April, when the bullet train service to the southwest was completed.

      According to the Korea Airports Corporation, Korean Air and Asiana Airlines saw passenger numbers between Gimpo and the southwestern city of Yeosu, South Jeolla Province plummet 24 percent on-year in June.

      Some industry insiders say every domestic return flight loses an airline W3 million, leading to an annual loss of W2 billion per route (US$1=1,177).

      But the airlines cannot cut back on the services.

      Since the bullet train between Seoul and Jinju in South Gyeongsang Province started in 2012, the average occupancy rate on flights between Gimpo and Sacheon in the province dipped to the 30-percent range.

      Korean Air wanted to stop twice-daily flights in June but faced massive resistance from the area, not least from irate politicians.

      Asiana cut the number of flights between Gimpo and Gwangju from five to three a day in July and sparked outrage around the southwestern city, with complainants accusing the carrier of betraying its home province.

      The problem is that carriers then try to make up their losses from other routes, which means consumers shoulder the costs.

      Alternative suggestions include providing flights to areas where there is no fast land transport route, like Gwangju to Yangyang in Gangwon Province or Gimhae in South Gyeongsang Province.

      Underused provincial airports could also reduce landing and usage fees for airlines like Aomori and some other regional airports in Japan.

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