Airlines search for ways to survive COVID-19

Korean Air and Asiana Airlines planes at Incheon International Airport amid the prolonged COVID-19 pandemic, Dec. 8. / Korea Times file

By Kim Jae-heun

The local airline industry has been experiencing an unprecedented crisis following the onset of the COVID-19 pandemic this year as countries around the world have put in place travel restrictions leading to the cancelation of many international flights.

As the coronavirus situation continues, airline companies have started to come up with survival measures, first offering paid and unpaid leave to staff then carrying out restructuring. Airlines also expanded their domestic flights.

As a result, the number of passengers on domestic routes operated by eight local airways increased to 5.87 million last month, up 2.5 percent from 5.73 million a year ago, according to Air Portal, an aviation data provider run by the Korea Civil Aviation Association.

However, the number of those travelling internationally plunged by 97.2 percent to 128,175 from 4.51 million the previous year.

Airline companies recently began to sell no-destination plane tickets, where people can fly over various locations ― without landing ― and then return to the departure airport. This too, though, is insufficient to provide a turnaround for airlines.

While travel on some routes is still technically possible, airline ticketing policies and government quarantine regulations make travel much less accessible and more expensive.

A vaccine is the only hope to rescue the decaying aviation industry. A number of global pharmaceutical companies have been successful in developing vaccines but it will take longer before they become commercially available here as the government said vaccinations will start next March at the earliest.

Full-service carriers such as Korean Air and Asiana Airlines showed surprise earnings in the second and third quarters thanks to their active freight transportation businesses.

Exports of semiconductors and auto parts have kept the two airlines in business, and with the resurgence of the pandemic, the transportation of emergency quarantine materials keeps their planes flying.

The demand for freight transportation is predicted to grow more when global vaccine distribution commences. The International Air Transport Association estimates that more than 8,000 Boeing 747 cargo planes will be needed to transport vaccines around the world. Korean Air and Asiana Airlines have already established taskforces to prepare for this.

However, low-cost carriers (LCC) are unlikely to enjoy the benefits of the cargo transportation business. Instead, they are aiming for domestic travel demand by expanding local routes and offering ticket discounts.

Some of the local airways put themselves on the market for sale.

Struck hard by the Boeing 737 Max incidents last year and the “Boycott Japan” movement, LCC Eastar Jet was put up for sale this year.

The largest LCC firm Jeju Air showed interest in acquiring Eastar Jet, but the prolonged COVID-19 pandemic meant no deal was reached.

Meanwhile, Korean Air announced it will purchase Asiana Airlines, which was put up for sale in April after being struck hard by COVID-19.