Following the accident involving a Jeju Air passenger plane at Muan International Airport in South Jeolla Province, the stock price of AIR BUSAN among airline shares has surged. The aircraft involved in the incident is a B737-800, and AIR BUSAN's all-Airbus fleet structure appears to significantly influence this.
However, given that airline stocks have undergone short-term adjustments following past accidents, investor sentiment is expected to wane due to this tragedy.
Jeju Air shares traded at 7,490 won on the KOSPI market at 10:20 a.m. on the 30th. This marks a decline of 8.77% (720 won) from the previous day. During the trading session, the share price dipped as low as 6,920 won, recording the lowest price since its listing.
Shares of other airlines, including Korean Air, Asiana Airlines, Jin Air, and T’way Air, also showed weakness, which is interpreted as a fallout from the Jeju Air aircraft tragedy at Muan Airport. The Jeju Air flight 7C2216 collided with a concrete mound while landing on the runway at around 9:03 a.m. the previous day. Among the 181 passengers on board, 179 lost their lives.
The stock price of AIR BUSAN rose exceptionally. AIR BUSAN shares traded at 2,505 won, up 12.33% (275 won) from the previous trading day. The fact that AIR BUSAN does not own any Boeing aircraft is cited as a reason for the increase in share price.
According to the Ministry of Land, Infrastructure and Transport's aircraft registration data, there are currently 101 B737-800 aircraft in operation. Jeju Air has the highest number with 39, followed by T’way Air with 27, Jin Air with 19, Eastar Jet with 10, AIR INcheon with 4, and Korean Air with 2. AIR BUSAN operates an all-Airbus fleet, including A321-200 aircraft.
However, it has not been confirmed whether the cause of this tragedy is an issue with the aircraft model. Aviation authorities plan to collect the flight data recorder (FDR) and cockpit voice recorder (CVR) black boxes to investigate the exact cause of the accident. It is expected that it will take at least six months to obtain precise results from this investigation.
In the past, when passenger plane accidents occurred, not only the affected airline but also the stocks of other airlines experienced short-term adjustments. On April 15, 2002, during an accident in which a China Airlines passenger plane crashed while landing at Gimhae Airport in South Gyeongsang Province, resulting in 129 fatalities and 37 serious injuries, both Korean Air and Asiana Airlines shares were weak on the same day. Following that, the stock prices surged in the short term but returned to their previous levels after about a month.
Similarly, when an Asiana Airlines passenger plane collided with a seawall while landing at San Francisco International Airport on July 7, 2013, both Asiana Airlines and Korean Air stocks were also on a declining trend. At that time, three passengers died and 174 were injured.
Airline stocks have faced compounded negative factors. Due to domestic political instability, inbound tourist demand is declining, and there are concerns that the soaring won against the U.S. dollar may also reduce outbound travel.
Choi Woong, a researcher at Korea Investment & Securities, noted, "The unstable domestic situation, combined with the economy, is likely to adversely affect passenger demand for airlines," adding, "Investigations into aviation accidents take a long time, and it may take even longer for social anxiety to be alleviated."