'Travel bubble' expected to revive S. Korea's aviation, travel industries from third quarter of 2021
Updated: 2021-06-17 09:54:29 KST
Travel agencies and the airline industry are still crippled by the pandemic.
Many staff are still on unpaid leave as profits have yet to climb back to pre-pandemic levels.
Insiders agree that it will take a while for firms to fully recover.
But they say that the government's announcement of a travel bubble last week brought great hope.
"With the latest travel bubble announcement, it feels like we can finally see the end of the tunnel.
The hardest part is going through a tunnel where you don't know when it's going to end. But now that we know where that is, we just need to bear it for a few more months."
In line with the government's travel bubble plan, local air carriers are gradually resuming international flights and travel agencies are offering tour packages.
The airline and travel industries expect to see an uptick in booking rates during the Korean Thanksgiving holiday 'Chuseok' in September as it will be a five-day holiday.
"By the time we get to the Chuseok holiday, when most of the population has been fully vaccinated, we expect demand for overseas travel to be higher. It could be the start of a return to normal travel."
With the surprise of an upcoming travel bubble agreement, South Korea's airline stocks have seen a large uptick.
On the day of the travel bubble announcement last week, shares of Korean Air closed 4 percent higher at over 30 U.S. dollars and its parent Hanjin KAL rose 4 percent to about 67 dollars.
Low-cost carriers saw their stocks jump on the same day with Jeju Air up almost 6 percent, Jin Air up 5 percent and T'way Air up 19 percent.
Some analysts even expect the stocks to go higher in the second half of this year.
"The pent-up demand in travel means the recovery is expected to continue throughout 2023. The recovery cycle will be quite similar to that of the Lehman Brothers' financial crisis, that went from 2008 to 2010. The only difference is that the gains will be higher since economic fallout from the pandemic was worse."
Industries are gearing up to get their businesses running again to meet that pent-up demand for overseas travel.
Min Suk-hyen, Arirang News.