Domestic airlines' earnings are recovering due to several positive factors, not least a continuing fall in oil prices. Another factor has been an increase in parcel deliveries as more Koreans shop on overseas websites like Amazon.
Earnings in the second and third quarters, by contrast, were poor as consumer spending slumped after the April 16 ferry disaster.
Aircraft fuel sold on the Singapore oil exchange fell from US$126 a barrel early this year to $87 late last month. A Korean Air spokesman said, "We saved W130 billion on fuel costs alone this year (US$1=W1,112)."
That has led to a drop in fuel surcharge for passengers, which has attracted more travelers. Fuel surcharges on international flights have fallen almost W100,000.
Asiana Airlines says seats on popular flights to China are mostly booked.
Low-cost carriers are benefitting even more, since fuel costs account for up to 45 percent of their operating expenses.
Passenger and cargo traffic have started to rise in the fourth quarter. According to the Ministry of Land, Infrastructure and Transport, airline passengers totaled 7.46 million in October, up 16 percent on year and the most ever for that month.
Incoming Chinese visitors increased more than 30 percent. A ministry official said the number of flights to and from China has grown, while Korean passengers flying to Japan and Europe increased more than 10 percent.
Cargo traffic totaled 330,000 tons, up more than five percent over the same period. Cargo for mobile phones, IT equipment and LCD parts surged, prompting the carrier to add 26 more cargo flights to Los Angeles and Chicago.
Asiana saw cargo traffic rise 14 percent over the last two months due to backlogged container traffic following a go-slow at western Los Angeles port.
But aviation analysts say oil prices and currency volatility could pose risks. If oil prices rise again, carriers could take a direct hit due to the slow pace of economic recovery. They are particularly vulnerable to foreign exchange volatility since they have to purchase fuel in dollars.
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