 ▲ Korean Air A380 First Class Photo (Photo = Korean Air) © Popcorn News |
(Popcorn News = Reporter Kwon Hyun-jung) As Korean Air began operating non-landing international tourism flights on the 27th, all domestic airlines with international passenger routes will start selling related products. The non-landing flight that started with foreign airlines has spread to all domestic airlines.
As each airline and affiliated duty-free shops show satisfactory results, the expansion of related product groups is expected to continue for a while.
However, there are voices that the expansion of the product line is only a’struggle’ to avoid the worst, and not to improve profitability. It is pointed out that the actual sales improvement effect is insignificant compared to the revealed figures.
Market expansion, profitability insignificant
In January, there were a total of 15 non-landing international tourist flight routes. Jin Air had 5 times, Air Busan 3 times, Jeju Air 3 times, T’way Air 3 times, and Asiana Airlines 1 time.
This month, Asiana Airlines operates four times, Korean Air operates once, and Air Busan operates four times. Even Korean Air, which had not launched a non-landing flight until last month, launched, and all domestic airlines joined. Accordingly, the number of related routes is gradually increasing.
The average level of passengers is also showing satisfactory results, with Air Busan at 90% and Asiana Airlines at 50%. Some say that the aviation industry has found a’pore’ to withstand the end of Corona 19.
However, the industry is putting weight on the argument that the actual sales improvement effect is insignificant.
For example, for Air Busan, the figure of 90% is not a sales rate of all seats, but about 1345 seats, which is 66% of all available seats.
Asiana also succeeded in selling 50% of about 280 seats sold out of the total 495 seats, so the actual seats sold were around 140 seats.
Duty-free shops are not different.
Lotte Duty Free and Shinsegae Duty Free are actively working with airlines that operate non-landing international tourism flights for domestic sales.
Lotte Duty Free has partnered with domestic airlines such as Air Busan, T-Way, Jeju Air, and Air Seoul to provide discount coupons that can be used for duty-free shopping.
Shinsegae Duty Free Shop is also promoting coupons for non-landing tourist flights.
With the expansion of related flights, sales are gradually increasing.
In February compared to January, related sales increased by 70% at Lotte Duty Free and 15% at Shinsegae Duty Free.
However, as domestic sales, especially those related to non-landing international tourism flights, account for a very small proportion of the total sales, it is explained that there is no direct impact on sales growth.
An official at Shinsegae Duty Free said, “The proportion of profits related to non-landing tourism flights to the total sales is not very large.” .
An official at Lotte Duty Free also said, “It will vary depending on the route, but the trend is that the growth rate will continue for the time being.” I drew it.
The airline industry also explains that expectations for’profitability’ are initially low.
A Korean Air official said, “It is not a very helpful situation.”
A voice saying “I can’t be pointy”… It seems to be expanding the product for a while
Jeju Air will operate related flights for 3 days on March 7th, 13th and 21st, and Korean Air will operate related products three times on March 6th, 13th and 27th in partnership with Hanjin Tourism. Asiana also operates the Incheon-Fukuoka-Incheon route on March 14, 20, and 28.
Air Busan is also scheduled to operate on March 6th, 13th, 20th and 27th.
Although the profit improvement is insignificant, the industry explains that the reason why the industry continues to compete in related product groups is’the reason there are no other sharp points.’
Hee-young Heo, a professor at Korea Aviation University (Dept. of Economics), said, “Aircrafts are less expensive to fly than if they are left on the ground. Flight will be necessary for maintaining pilots’ licenses and maintaining the employment of crew members. No, it seems like a kind of’struggle’ trying to create cash flow.’
The duty-free shop industry also has a mindset to avoid’the worst’.
An official at Lotte Duty Free said, “If the duty free shop cannot use up all of the applicable items, it must be disposed of. Rather, domestic sales are a way to help in terms of profitability.” We are looking for significance in that regard,” he said.