Korean low-cost carriers (LCCs) are ramping up their fight for market share on Japan routes. Even though international oil prices have risen as the United States and Iran are at war, pushing fuel surcharges to the highest tier, carriers have sharply cut fares to gain an edge, leaving ticket prices similar to or even cheaper than a year earlier.
According to the airline industry on the 20th, Eastar Jet Co. has recently been running a weekend (Friday to Monday) fare discount promotion for passengers on routes between Incheon Airport and major regions in Japan.
With this applied, round-trip fares on the Incheon–Narita route from this month through next month come to 320,800 won at the weekend lowest price. That is about 11% cheaper than the same period a year ago. During the same period, the Incheon–Osaka route is 281,700 won and the Incheon–Fukuoka route is 251,300 won, all 5% to 10% lower than last year.
Eastar Jet Co. sharply raised fuel surcharges starting last month after oil prices surged following the outbreak of war between the United States and Iran in February. On Japan routes, Incheon–Fukuoka and Busan–Osaka rose from $9 to $29, and Incheon–Narita and Incheon–Osaka jumped from $11 to $37.
Fuel surcharges applied from this month also continued to climb. Routes such as Incheon–Fukuoka and Busan–Osaka rose to $52, and routes such as Incheon–Narita and Incheon–Osaka climbed to $66. Compared with March, that is nearly a sixfold increase.
An Eastar Jet Co. official said, "Fuel surcharges have jumped over the past two months, but fares on Japan routes were discounted more steeply than before," adding, "The final ticket price that passengers pay is similar to or slightly lower than the same period last year."
T'way Air also began an "early-bird promotion" for international routes on the 10th and is offering up to 10% discounts on Japan routes. The travel period, when demand is high due to summer vacations and the Chuseok holiday, is set from Aug. 18 to Oct. 24.
Jeju Air has recently moved to expand its market share by significantly increasing flights on Japan routes. The Incheon–Narita route has been increased by 14 weekly flights starting this month to operate 49 times a week. Next month it will operate 46 times a week, and in July 43 times a week.
The Incheon–Nagoya route will be increased by two weekly flights to operate 16 times a week through next month, and in July it will add three more to operate 19 times a week. The Incheon–Fukuoka route has been increased by seven weekly flights starting this month to operate 35 times a week, with 40 times a week next month and 37 times a week in July. In addition, starting on the 11th of next month, the Incheon–Kobe route will launch as a new service operating seven times a week.
LCCs are focusing on Japan routes with fare discounts and more because they are the most in-demand routes from Korea, are less affected by various external factors or seasonal elements, and can maintain stable sales.
Long-haul routes to the United States and Europe, served by some LCCs including T'way Air, have limited demand, and higher fuel surcharges make ticket costs heavier, making it hard for airlines to respond with fare discounts. Another advantage of Japan routes is that flight times are short, around one to two hours, allowing a single aircraft to make multiple round trips a day and achieve high aircraft utilization.
T'way Air applies fuel surcharges to its international routes by distance, divided into groups one through seven. For group one, which includes Japan routes, the fuel surcharge rose from 30,800 won in April to 58,600 won this month, an increase of 27,800 won, while for group seven, which includes routes to the United States and Europe, it increased from 213,900 won to 406,900 won, up 193,000 won.
For Southeast Asia routes, ticket costs are lighter than to the United States or Europe, but demand fluctuates widely with seasonal factors. In particular, from May, when temperatures rise, through the summer vacation season, booking rates often fall.
An airline industry official said, "Among routes to and from Korea, Japan routes are the shortest in distance and have a much higher turnaround rate than other destinations," adding, "Even if LCCs lower fares, they can maximize aircraft utilization to increase revenue, so they have no choice but to focus on Japan routes."