Jeju Air, travel agencies flooded with mass cancellations after tragic plane crash

Passengers wait in line to ask questions about boarding at Jeju Air’s counter at Gimpo International Airport in Gangseo District, western Seoul, on Dec. 30. [YONHAP]

 
Travel agencies are handing out refunds, changing flights and halting promotional activities following the devastating Jeju Air crash that killed 179 on Sunday.  
 
The tragedy is another major blow to Korea’s tourism industry, which already faced a potential drop in both inbound and outbound travelers and spending due to ongoing political turmoil and a weakened currency following President Yoon Suk Yeol’s short-lived yet consequential issue of martial law.
 
 
The fallout is especially expected to affect low-cost carriers like Jeju Air as consumers worry over their safety, with many speculating online how budget airlines are compromising on safety protocols to save on costs. 

Screenshots from online community app Blind where Jeju Air employees warned months ago to avoid taking the airline’s planes, as the workers were “overworked” and because the planes had faulty engines due to the company saving on maintenance costs, were widely circulated on social media. Blind is an anonymous community website where employees have to be verified through their company email to join.

 
Jeju Air said passengers had canceled around 68,000 bookings as of 1 p.m. on Monday. Starting from midnight on Sunday, around 33,000 domestic flights and 34,000 international flights had been canceled, according to Jeju Air, most of them coming after the crash happened at Muan International Airport in South Jeolla.
 
The carrier said Sunday that it would exempt customers from paying additional charges should they want to cancel tickets bought before or on Dec. 29, the day of the accident.
 

A man watches a Jeju Air plane preparing to take off at Gimpo International Airport in Gangseo District, western Seoul, on Dec. 30. [YONHAP]

 
Local newspapers reported Monday that travel agencies were seeing twice the number of cancellations for their services while new bookings also dropped by half. A spokesperson for Hana Tour, the country’s largest travel agency by revenue, told the Korea JoongAng Daily that the number of cancellations had indeed increased as of Monday but that it was difficult to determine at this point the exact scale of how the Jeju Air crash has influenced and will affect consumer sentiment.
 
All travel agencies are exempting customers from paying penalty fees for canceling or changing travel packages that include flights with Jeju Air. However, depending on the company or which airport they leave from, customers may have to pay additional charges for other services included in the package.  
 
Hana Tour said it will waive penalty fees for customers who want to cancel or change their travel packages with Jeju Air flights that leave through Jan. 10 at all airports, including for accommodation and other services.
 
It also changed flights for its Laos travel package, originally scheduled to leave from Muan Airport on Monday, to depart from and return to Incheon International Airport. Jeju Air flights from Bangkok scheduled to arrive at Muan Airport were changed to board on other airlines that would arrive at Incheon, Daegu and Busan airports.  
 
 
Jeju Air’s shares dropped 8.65 percent from the previous trading session to close at an all-time low of 7,500 won ($5) on Monday. AK Holdings, the airline’s majority stakeholder with 50.37 percent, shot down 12.12 percent to close at 9,640 won.
 
The holdings company for the Aekyung Group encompasses chemical, household detergent and retail affiliates. Consumers have called for a boycott across the group’s broad portfolio of goods and services, including cleaning products and cosmetics.
 
Low-cost carrier shares fell. T’way Air dropped 3.23 percent to 2,400 won, while Jin Air shed 2.83 percent to 9,620 won.
 
Travel agency shares also dipped. Hana Tour fell 2.16 percent to 54,300 won. Mode Tour and Yellow Balloon, both on the Kosdaq, fell 0.72 percent and 2.02 percent, respectively, to 9,700 won and 4,600 won.

BY KIM JU-YEON [[email protected]]