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Korean airlines expand traffic cuts on coronavirus

  • : Crude oil, Oil products
  • 20/02/19

Asiana Airlines, one of South Korea's two major air carriers, has expanded flight suspensions from China's coronavirus outbreak, reducing demand for jet fuel as traffic across Asia-Pacific slows.

South Korean airlines have been halting service on some of their routes to China since late January, as the virus scared away passengers during one of northeast Asia's busiest times of year for air traffic. The suspensions have also spread to southeast Asia.

Asiana has suspended 79pc of its flights to and from China, as well as 25pc of flights on southeast Asian routes. A notice on the company's website shows that flights to Bangkok and Hanoi will be suspended from 19 February through to 9 March at the earliest, while service to Singapore will be halted until 7 March. Other Incheon-southeast Asia routes, such as Phuket, Da Nang and Nha Trang, also will have reduced service, including a 3 March-15 March suspension to Chiang Mai.

Some of Asiana's China routes, such as Guangzhou, Shenzhen, Harbin and Beijing, are suspended through at least 28 March. Service also is being affected to destinations such as Saipan, Hong Kong and Taipei. Flights to Japan, which have been disrupted since a trade war began between Seoul and Tokyo last summer, remain at reduced levels, including Incheon-Fukuoka and Incheon-Okinawa routes.

The South Korea-Japan trade war had led to anti-Japan boycotts in South Korea, and reduced demand for travel between the countries. Air carriers were able to partially make up for losses by increasing flights to other destinations such as Vietnam.

Budget carriers Seoul Air and Jeju Air have halted all flights to China since late January. Asiana's rival, flagship carrier Korean Air, is expanding service cuts to China. One of two Incheon-Beijing flights was suspended from 4 February, and the second will be halted on 20 February. Both will be idle through at least 28 March. The situation is similar with service to Shanghai, with the second of two flights out of Incheon being suspended as of today, after the first flight was stopped on 7 February.

Executives at Asiana are taking pay cuts as high as 40pc to help weather the slowdown. All employees will be forced to take unpaid leave for 10 days, while unions are offering more cuts, including pilots taking voluntary unpaid leave of 15 days and giving up part of their bonuses.

South Korea's government earlier this week announced measures to help airlines during the travel slowdown, including offering loans and deferring airport fees. The transport ministry said air traffic is being reduced much more quickly than during previous health scares, such as the Sars and Mers outbreaks. South Korean airline flights to China have been cut by 70pc, to 162 per week, since last month.

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