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| Passengers stand in line for at a check-in counter at Terminal 1 of the Incheon International Airport, Friday. Newsis |
By Anna J. Park
Stock prices of so-called LCCs, or low-cost carriers, continue to move upward lately, reflecting the country's revitalized travel sector, with the number of international travelers increasing.
According to the Korea Exchange (KRX), the stock price of Jeju Air saw a weekly increase of 7.73 percent, as the price rose from 20,700 won ($16.53) logged on May 27 to last Friday's closing price of 22,300 won. When compared to the intra-day trading price of 18,800 won on May 26, the airplane stock rose by 18.6 percent in just eight days.
Other low-cost carriers, including Jin Air and T'way Air, also logged a weekly increase of 2.23 percent and 3.37 percent during the same period.
The rise in flight carriers' stock prices is mainly attributed to the Japanese government's recent decision announced on May 26 to permit the entrance of foreign travelers into the country from May 10.
It has been two years since Japan opened its doors, due to the effects of the global pandemic that began in 2020. The stock price of Jeju Air, which has a larger proportion of flights to Japan compared to other competing carriers, rose much more than other LLCs during the past week, reflecting market expectations.
The Korean government's decision announced earlier this month to normalize the number of international flights to pre-pandemic levels also boosted low-cost carriers' stock value.
The land ministry decided last Friday to lift restrictions imposed on the number of flights per hour as well as flight curfew hours at Incheon international airport, after more than two years and two months. With the restrictions gone, the number of incoming flights at the airport has increased to 40, the pre-pandemic level, from the 20 flights during the pandemic era. The flight curfew hours of 8 p.m. to 5 a.m. will also be removed, officially returning the airport to a 24-hour operation.
With the favorable moves both in and outside of the country, low-cost carriers' revenues are expected to rapidly increase throughout the year.
"With the increase in the volume of traffic, low-cost carriers are expected to make a turnaround in profits during the second half of this year," Jung Yeon-seung, an analyst at NH Investment & Securities, said. "With the restrictions lifting, this year's number of international flights will be recovered to about 46 percent of the number of international flights made in the year 2019," the analyst added.
Facing the summer peak season after a two-year freeze, low-cost carriers have been focusing on capital increases. Jeju Air issued perpetual notes worth 79 billion won last month, while T'way Air increased capital by issuing new stocks worth 120 billion won in May. Air Busan also announced plans to raise 200 billion won by offering new stocks.
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