Incheon International Airport Terminal 1 departure hall is crowded with tourists. News1
Air travel between Korea and Japan is heading toward a record high, with annual passenger volume expected to approach 15 million as cross-border trips become part of daily life rather than occasional tourism.
Choi Jung-ho, executive vice president and head of sales at Korean Air (003490.KS), said passenger traffic on Korea-Japan routes will expand from about 13 million last year to 15 million by 2027, according to an interview with Nihon Keizai Shimbun published Wednesday.
This year alone, travelers from Korea to Japan are expected to approach 11 million, while demand from Japan to Korea will surpass 4 million, he said.
The growth appears to reflect a structural shift rather than a temporary phenomenon. Tourism demand has been steadily rising amid improving Korea-Japan relations, while lifestyle-related travel — including international marriage, overseas study and family visits — is making cross-border trips as routine as domestic travel.
The airline industry is keeping the door open for capacity expansion to match the trend. Choi signaled an intention to maintain existing routes even after the integration of Korean Air and Asiana Airlines, while expanding the number of routes and flight frequencies depending on conditions.
Earnings are also showing clear growth momentum. Korean Air’s first-quarter revenue rose 14% year-on-year to 4.5151 trillion won ($3.3 billion), while operating profit jumped more than 47% to 516.9 billion won. The gains were driven by travel demand during the Lunar New Year holiday and advance bookings ahead of fuel surcharge hikes. Japan routes also posted a 12% revenue increase in the first quarter on the back of stable demand.
The fact that fuel cost pressures have not yet been fully reflected also supported earnings. First-quarter fuel spending came to 1.0795 trillion won, down slightly from a year earlier. The decline is attributed to cost-cutting efforts including the introduction of newer aircraft and improved operational efficiency.
The outlook, however, is not easy. Potential spikes in oil prices tied to Middle East tensions and the cost burden from the Asiana Airlines integration are cited as variables. Korean Air entered emergency management mode this month, launching cost reductions and scaling back investment. Profitability could deteriorate in the second quarter, when the impact of high oil prices and a strong dollar is expected to intensify.
Still, the prevailing view is that Korea-Japan routes will continue on a relatively stable path. Because flight distances are short, fuel surcharge burdens are lower than on long-haul routes, leaving the segment better positioned to defend profitability even in a high-oil-price environment.
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AloJapan.com