August 07, 2019 12:17
Japanese provincial officials recently visited budget carriers in Korea to dissuade them from shutting down loss-making flights to their regions.
One staffer at a budget airline said representatives from three Japanese provincial governments visited last month and three more have asked to visit.
A staffer at Air Seoul said, "A majority of our flights to provincial areas of Japan are the only international flights out of that town, so the provincial governments want to keep the flights."
Three destinations that are for the chop are Takamatsu in Kagawa Prefecture, Yonago in Tottori Prefecture and Toyama Prefecture, and officials from the prefectures were the first to visit.
Jeju Air and Eastar Jet have also had visits from several Japanese prefectures. More than 60 percent of Air Seoul's flights connect Korea and Japan, while Jeju Air operates 19 routes to Japan. Eastar Jet generates a quarter of its revenues from flights to Japan.
The Japanese officials said they were aware of deteriorating profitability but proposed cutting airfares and running promotions in the Japanese towns to boost traffic.
Japanese carriers do not fly to many provincial airports there. But according to an industry insider, Korean low-cost airlines have little incentive to keep flying to these destinations and can make up for any lost revenues by boosting flights to other destinations.
Bookings have already declined sharply as bilateral relations have been deteriorating over historical and trade issues, and will only drop further now a Korean boycott of Japan is in full swing.
As of late July, the booking rate on flights to Japan at Air Seoul stood at 45 percent for August and 25 percent for September, down between 20 and 30 percentage points compared to the same period of 2018.
Jeju Air's reservation rate for August has fallen from 80 percent to 70 percent. Eastar Jet's passenger load fell five to 10 percentage points on-year last month, and from September between 30 to 50 percent.
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