A Jeju Air passenger plane collided with a concrete embankment while landing at Muan International Airport in South Jeolla Province, leading to a decline in airline stocks and travel stocks. This incident seems to reflect concerns that the travel industry may shrink as a result.

On the morning of the 30th, debris from a Jeju Air passenger plane lies scattered at the site of the collision explosion at Jeju Air's international airport in Muan-gun, Jeollanam-do. /Courtesy of Yonhap News

As of 9:56 a.m. on the 30th, travel stocks continue to show weakness. At this time, Hana Tour shares were trading at 54,000 won, down 2.7% (1,500 won) from the previous trading day. Modetour shares were down 2.15% (210 won) at 9,560 won, Yellow Balloon Tour shares were down 1.70% (80 won) at 4,615 won, and Cham Joheun Travel shares were trading at 5,480 won, down 4.20% (240 won).

The government noted it is considering a pilot program for a visa-free system for Chinese group tourists to expand the inbound tourism market as of the 26th. It also stated that starting next year, it will allow visa-free entry for Chinese group tourists arriving by cruise ship. The announcement is a response to expectations of impacts on the inbound tourism market due to ongoing political uncertainties, such as the impeachment crisis.

Travel stocks experienced a brief rise on the 26th in light of this news. Hana Tour ended the day 1.79% higher at 56,800 won, Cham Joheun Travel finished up 3.13% at 5,610 won, and Yellow Balloon Tour closed 1.58% higher at 4,820 won. Government policy aims to increase inbound (foreign tourist) demand, while travel stocks are primarily focused on outbound (domestic travel) journeys, yet there is still an expectation that the travel industry environment will improve.

Shinhan Investment Corp. Research Institute analyst Ji In-hae predicted, "This is the disaster with the highest number of casualties among domestic aircraft accidents, and the political instability in the country has caused the won-dollar exchange rate to soar, making a decline in travel demand and deterioration in investor sentiment towards travel stocks inevitable."

Earlier, around 9:03 a.m. on the 29th, the Jeju Air flight 7C2216 collided with a concrete embankment while attempting to land at Muan International Airport. As a result of the accident, the aircraft was engulfed in flames, and all but 2 of the 181 passengers on board perished. The aircraft was so severely burned that, except for the tail section, no recognizable form remained after the collision.