The airline industry is facing a gloomy future due to the ongoing scare surrounding Middle East respiratory syndrome.
Air carriers fret the current downturn may continue even after the MERS virus goes away. According to the Ministry of Land, Infrastructure, and Transportation on June 24, the number of air passengers has fallen abruptly in June.
The passenger numbers for the second week of June declined 9 percent from the same period last year while those for the third week declined 19.5 percent year on year. The ministry predicted the passenger numbers for both domestic and international lines will be adversely affected by MERS.
Most airliners cut back or entirely stopped flights to and from Chinese and Japanese destinations. For example, Korean Airlines will reduce the number of flights to and from 17 Chinese destinations including Hong Kong, Shanghai, and Qingdao, as well as five Japanese cities including Tokyo and Okayama. Asiana Airlines, meanwhile, will temporarily suspended or reduced flights to 12 Chinese and six Japanese cities.
Low-cost airlines are doing the same in response to the epidemic. Air Busan said it would reduce the flights to Taipei and Kaohsiung until mid-July. Jeju Air is also reviewing a plan to suspend some flights. Jin Air and T'way Airlines have cut back on two and three Chinese flights respectively. Eastar Air postponed flights of its charter services.
As the number of Chinese tourists visiting Korea is falling abruptly due to the outbreak, air carriers that have relied mostly on inbound Chinese tourists are expected to sustain heavy losses. Kang Dong-jin, analyst with HMC Investment & Securities, said, "Asiana Air is more vulnerable than Korean Air as its sales revenue from Chinese lines accounts for about 20 percent in total."
The crisis mode will likely continue for the time being even after the virus dies down. Kang of HMC Investment & Securities said, "After the end of SARS in 2003, it took two to three months for air passenger numbers to rebound to a normal level. Even though the outbound passenger numbers will recover quickly, it will take quite some time for the inbound numbers to get back to the pre-MERS level."
