South Korean low-cost carriers all saw operating losses widen significantly during the first quarter of 2021 amid the coronavirus pandemic.
Jeju Air’s operating loss for the three months ended 31 March widened to W86 billion ($76 million) from W78 billion in the first three months of 2020, with total revenue diving 82% to W41.3 billion.
Given international travel restrictions, the carrier flew 47% fewer seats during the quarter. Domestic ASKs rose 40.2% and international ASKs dived 99.2%.
The airline, however, saw domestic load factors rise 2.5 percentage points to 87.1%.
In a brief management statement, Jeju Air said that it is working to improve its cost structure, and reducing staff expenses via executive pay cuts and extended leaves. It also benefited from government subsidies for new domestic routes.
Korean Air sister carrier Jin Air, meanwhile, saw its operating loss for the third quarter widen to W60.1 billion from W31.1 billion a year earlier. Revenues dived 69.5% to W43.9 billion.
The collapse in international travel hit Jin Air especially hard. In the first quarter of 2020, international domestic traffic accounted for 75% of revenue, while domestic passenger revenue accounted for just 12%. In the first quarter of 2021, domestic passenger revenue accounted for 82% of revenue, and international passenger revenue accounted for just 8%.
T’way Air also saw its operating loss widen, to W44.9 billion from W22 billion a year earlier. Its revenue fell 76.3% to W35.3 billion.
As with Jeju Air, both airlines ramped up their domestic operations to cope with the disappearance of the international market.
