Jeju Air, Korea’s biggest low-cost carrier, said on Tuesday it aimed to turn around next year as the easing of virus restrictions releases pent-up travel demand.
Jeju Air posted net losses for three consecutive years through 2021 due to the impact of the Covid-19 pandemic on the airline industry.
Jeju Air’s net losses narrowed slightly to 273 billion won ($217 million) in 2021 from 307 billion won a year earlier. In 2019, it posted a net loss of 33 billion won, compared to a net profit of 71 billion won a year ago.
“It will be difficult to turn around this year due to uncertainties in major (destination) markets. But we are aiming for a turnaround next year as more Asian countries are expected to reopen their borders to tourists,” Kim said. E-bae, CEO of Jeju Air. said at a press conference.
Japan plans to receive groups of international travelers from June 10 and the number of arrivals allowed per day has increased from 10,000 to 20,000.
The CEO expected China, Hong Kong and Taiwan to reopen their borders at least later this year amid the pandemic slowdown, giving airlines a boost.
The addition of a new route and planes will also help put Jeju Air back on track, though it depends on how much travel demand recovers later this year, the executive said.
Jeju Air will be able to start offering four weekly flights on the Incheon-Ulaanbaatar route next month, although flight schedules are only available during the peak season from June to September each year, he said.
The new route became available after Korea and Mongolia agreed in August to double the number of passengers allowed on the route to 5,000 per week from 2,500 in the four-month period starting this year.
In Korea, two full-service carriers – Korean Air Lines and Asiana Airlines – exclusively operated flights on the Mongolia route. Korean Air and Asiana are allowed to offer six and three weekly flights respectively on the route.
Bilateral aviation talks allowed one additional flight each to Korean Air and Asiana, four new flights to Jeju and three new ones to another low-cost carrier, T’way Air, during the peak season.
On existing routes, Jeju Air plans to resume two weekly flights on the Busan-Singapore route on June 24, as Singapore allows fully vaccinated travelers to visit the country without a quarantine period.
The carrier also plans to resume two weekly flights on the Busan-Bangkok route later this month.
It resumed flights from Incheon to Saipan in July and Guam in November. Flights from Incheon to Weihai and Harbin in China, Cebu and Clark in the Philippines and Osaka are currently available.
To support the increase in routes, Jeju Air has ordered 40 B737-8s, formerly known as B737 MAX, for 5 trillion won ($4 billion), with deliveries expected to begin next year and end in 2027.
The low-cost carrier operated 45 B737-800NG charter aircraft on 87 routes, including six domestic routes, before the pandemic. The number of aircraft fell to 39.