the impact of mers on south korean airports · the impact of mers on south korean airports ©...

The impact of MERS on South

Korean Airports

© Counter Intelligence Retail Ltd www.counterintelligenceretail.com

[ 2 ]

TABLE OF CONTENTS

INTRODUCTION p. 3

1 PASSENGER TRENDS p. 4

1.1 TOTAL AIRPORT PASSENGER NUMBERS p. 4

1.2 INTERNATIONAL ARRIVALS BY DESTINATION p. 5

1.3 INTERNATIONAL ARRIVALS BY ROUTE p. 6

1.4 INTERNATIONAL ARRIVALS FROM CHINA p. 7

1.5 SEAT CAPACITIES – FLIGHTS SCHEDULES FOR THE NEXT 6 MONTHS p. 8

1.6 10 YEAR FORECAST p. 9

[ 2 ]


[ 2 ]

[ 3 ]

INTRODUCTION

The MERS virus outbreak in Asia, and in

particular the effect this has had on

Chinese passenger travel to South Korea

has received wide coverage by the

international and TR trade press recently.

CiR, using the data resources at our

disposal have taken an In-depth look at

exactly how big the impact of MERS has

been in South Korea and what the

outlook is for passenger travel to the

country.

We hope that you find the enclosed informative and useful, and it helps

position the alarming changes that are being reported into a more rounded

contextual view.


[ 2 ]

[ 4 ]

Total passenger figures from

South Korean airports for July

2014-June 2015 are showing

healthy growth at 13% versus

the previous twelve months

with all airports bar Seoul

Gimpo seeing double digit

growth in the last twelve

months.

When we look at these figures

by month, up to and including

May, average passenger

growth had been 15% with

May 2015 seeing the highest

growth at 26% versus the

previous year despite the MERS

virus warnings beginning to

grow louder.

It is not until June we see the

MERS issue have an effect on

passenger numbers, falling by

almost 9% to 7.9m from 8.7m in

June 2014.

1.1 Total Airport Passenger Numbers

Source: CAPA

1. PASSENGER TRENDS

Total PAX By Airport (July 14-June 15 & Growth v July 13-June 14)

Total PAX By Month (July 2014-June 2015 v July 2013-June 2014)

Total PAX By Airport (June 2015 v June 2014)

The charts below look at total passenger numbers by airport showing the

passenger growth for South Korean airports which has grown by a healthy 13% in

the past twelve months. It is not until June 2015 that we see a significant fall in

total passenger numbers throughout South Korea of almost 9%.


[ 2 ]

[ 5 ]

Overall passenger arrivals from

Asia have fallen by 26% with

arrivals from China seeing the

largest decline at -42%.

Passengers from Oceania and

CIS (Ex Soviet Union states)

have seen sharp increases in

arrivals into South Korea (93%

and 114% respectively). Whilst

important, the number of

passengers from these regions

is minimal versus other Asian

locations.

Each of the main South

Korean airports are seeing the

largest fall in passenger arrivals

from different areas of Asia,

highlighting the importance of

available routes from each

airport and how this can

effect overall passenger

numbers. For example, Seoul

Gimpo has seen a 49% drop in

arrivals from South East Asia

whilst at Jeju this is only a 29%

drop, yet arrivals from China

are down by 62% at Jeju and

only 28% at Seoul Gimpo.

Source: KAC

1.2 International Arrivals By Destination

International Arrivals To All KAC Korean Airports (June 2015 v June 2014)

International Arrivals By Korean Airport (June 2015 v June 2014)

Jeju Seoul Gimpo

Busan Gimhae Daegu

Having seen that South Korean airports saw a decline in passenger

numbers in June 2015, these charts look at where this decline has

come from. As we see, passengers from China are having the

largest effect, with arrival numbers down by 42% versus June 2014

with Jeju experiencing the largest decline of 62% in passenger

numbers from China.


[ 2 ]

[ 6 ]

Passenger arrivals from all the

main Greater Chinese airports

into South Korea saw a decline in

June 2015 v June 2014. Mainland

Chinese and Hong Kong airports

saw the heaviest fall in departure

numbers to South Korea with an

average 39% fall.

Arrivals from Taipei into South

Korea are seeing differing results

dependent on destination airport.

Whilst departures are down by

only 8% overall, passengers flying

to Jeju are down by 86% whilst at

Busan Gimhae they have grown

by 18% to almost 11,000.

Whilst the picture at most airports

is of decline in arrivals from China,

Daegu airport counters this trend,

seeing a 20% growth in

passengers from China, due to

the number of flights via China

Eastern and Air China having

increased versus 2014.

Source: KAC

1.3 Int’l Arrivals By Route

International Arrivals From Greater China To All KAC Korean Airports (June 2015 v June 2014)

International Arrivals From Greater China To Selected Korean Airports (June 2015 v June 2014)

Jeju Seoul Gimpo

Busan Gimhae Daegu

Having seen that passenger numbers from China have seen the

largest decline to South Korea, these charts highlight the Greater

Chinese airports to see if there is a particular region or airport that is

causing this decline. The large Chinese international airports all

show a similar size of decline with the exception of Taipei which has

been comparatively unaffected seeing only an 8% decline.


[ 2 ]

[ 7 ]

Although the MERS virus first

came to prominence in late

April, the decline in passenger

arrivals from China to South

Korea wasn’t felt by Korean

airports until June where there

was a sudden 42% fall in

arriving passengers. Prior to

this, passenger arrivals to South

Korea from China had grown

by an average of 27% each

month versus the previous

twelve months.

This fall was felt particularly at

Jeju airport which recorded a

62% fall in arrivals whilst Seoul

Gimpo and Busan Gimhae

airports recorded

comparatively more

moderate falls of 28% and 19%

respectively.

Source: KAC

1.4 Passenger Arrivals From China

International Arrivals From China To Korean Airports (July 2014-June 2015 v July 2013-June 2014)

International Arrivals From China To Selected Korean Airport (July 2014-June 2015 v July 2013-June 2014)

Jeju Seoul Gimpo

Busan Gimhae

The charts below show the dramatic decrease of passengers from

China travelling to South Korea in June 2015 to a level well below

the figure in June 2014 - with Jeju seeing the biggest decline in June

2015. However, this drop off has to be considered in the context of

the prolific pattern of growth of passengers travelling from China to

S Korea in the last year, making the drop off appear even more

dramatic.


[ 2 ]

[ 8 ]

Looking at the number of

scheduled flights in the next 4

months, it appears that the

airlines expect the current

downturn in passengers from

China to South Korea to continue

until July 2015.

However, the current situation is

not anticipated to have a lasting

effect on travel to South Korea

with airlines scheduling more

flights from August onwards,

matching 2014’s figures, with

growth expected to return from

September onwards.

The airlines seem to have taken

a more cautious approach

to the smaller seasonal airports,

where the recovery is less

pronounced.

Source: Flight Global

1.5 Seat Capacities 6 Month Outlook

Scheduled Seat Capacity From China To South Korea (Mar-Nov 2015 v Mar-Nov 2014)

Scheduled Seat Capacity From China To Selected Korean Airports (Mar-Nov 2015 v Mar-Nov 2014)

Prior to July, Airline seat capacities to South Korea from China had

been, on average, 30% higher in 2015 than in 2014. The outbreak of

MERS in Asia has seen the available number of seats in July fall by

24% versus 2014 to just over 700,000 from 930,000 in 2014.

Jeju Seoul Gimpo

Busan Gimhae


[ 2 ]

[ 9 ]

The ten year forecast for

passenger numbers to South

Korea from Greater China is

extremely positive with total

passenger numbers expected to

reach 33.3m by 2024, a growth of

78% versus 2014.

Passengers from Mainland China

are expected to see the highest

growth to South Korea of 86% to

25.7m versus the 2014 number of

13.8m. This growth is expected to

come from a growing travelling

Chinese Middle Class and a

growing number of regional

Chinese airports operating

International flights. In the past

twelve months (May 14-Apr 15)

airports such as Tianjin and

Shenzhen have seen growths of

24% and 72% in passengers

travelling to South Korea with

growth expected to continue in

the long term.

Source: Oxford Economics

Forecast Passenger Numbers To South Korea From China (2014-2024)

Indexed Forecast Passenger Growth To South Korea From China (2014-2024)

1.6 10 Year Forecast

Looking ahead, using the Oxford Economics air passenger forecasts,

that are driven largely by socio-economic factors; traffic from Greater

China to South Korea is forecast to grow by 78% by 2024 to over 33

million passengers.

Although the MERS virus has had an immediate and dramatic impact

on passenger travel in the short term, it is unlikely that such a

phenomena will have a significant effect on the longer term socio-

economic drivers that have been the cause of the recent growth and

will fuel the predicted growth in the future.

Counter Intelligence Retail

The Pallion,

Whinchat,

Skipwith Road,

Escrick,

YORK,

YO19 6EJ

United Kingdom

TEL: +44 (0) 8459 013641

E-mail: [email protected]

Website: www.counterintelligenceretail.com

the impact of mers on south korean airports · the impact of mers on south korean airports ©...

Documents