Saturday, November 08, 2008

13 Foreign Airlines Pull Out of Korea


13 Foreign Airlines Pull Out of Korea

By Kim Hyun-cheol
Staff Reporter

The cold spell hitting the global economy is also bringing chills to the airline industry, as with financial pressure intensifying, foreign carriers have begun suspending flights to Korea, government officials said Friday.

Since the last week of October, when winter schedules began for most airlines, a total of 13 foreign companies have not requested the renewal of services on their routes, said an official of the Ministry of Land, Transport and Maritime Affairs (MLTMA). Seven, however, have opened new routes.

The official said both cargo and passenger volume from other countries started to lag behind that of the previous year from June.

Atlas Air, a leading U.S. cargo carrier, and American carrier Kalitta Air, no longer offer services, while two Russian airlines, Russian Sky and Khabarovsk Airlines, have pulled their Korean routes. Three Taiwanese-based companies, including the bankrupt Far Eastern Air Transport, are also no longer servicing Korean routes. Mandarin Airlines of Taiwan, however, is planning to resume flights next month.

On the positive side, Japanese and Chinese airlines are augmenting flights for tourists who are taking advantage of the weaker won.

Chinese-based Great Wall Airlines and China Cargo Airlines started services between the two countries.

Japan Airlines arranged 443 flights in total for its winter timetable, up 21 from last year. JP Express, a Tokyo-based cargo airline, also launched new flights starting this month.

The load factor (passenger occupancy rates) from Japan has gone up 10 percent since last month, as the Japanese yen has jumped nearly 40 percent against the won. The number of Japanese visitors surpassed 200,000 in September, up 4.8 percent year-on-year.

With many carriers rearranging their routes because of falling demand for cargo, a rebound in inbound flights is not likely to happen soon, industry watchers said.

Meanwhile, the ministry was cautious to link the downturn trend directly to the current economic slump.

``Some flight withdrawals are normal for this time of year, a relatively slack season for tourism,'' said Park Jeong-gon, an assistant director of international air transport at the MLTMA.

Currently, 61 overseas carriers from 27 countries are using Korean airports.

Commentary: If Chinese and Japanese tourists can be drawn as export income due to a weaker won than the hypothetical argument may also be made that a weak won is good for Korean exports overall. For regional buyers looking for value priced goods demand might increase enough to meet Government export goals for 2009?

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