Jeju Air Crash Sparks Mass Cancellations and Investor Concern in South Korea

Following the tragic Jeju Air crash that claimed 179 lives, the low-cost airline is grappling with a surge in cancellations. The crash, South Korea’s worst aviation disaster, has fueled widespread travel anxiety among customers and investors alike.

Cancellation Wave

Jeju Air reported approximately 68,000 cancellations between Sunday night and Monday afternoon. This included 33,000 domestic flights and 34,000 international flights, according to the airline.

Despite the high cancellation rate, Jeju Air said new bookings were still coming in.

“The cancellation rate is slightly higher than usual. However, the inflow of new bookings remains steady,” said Song Kyung-hoon, Jeju Air’s management support head, during a press conference.

Industry-Wide Impact

Major travel agencies have also experienced a sharp rise in cancellations.

“We got at least 400 cancellations in the first hour of our opening,” a representative from one of South Korea’s largest travel agencies told AFP. Customers are specifically inquiring about aircraft models, particularly the Boeing 737-800, with many opting to cancel if their flight uses this model.

Safety Concerns Deepen

Adding to the uncertainty, another Jeju Air flight on Monday returned to its departure airport due to a landing gear issue. The flight, which also involved a Boeing 737-800, caused further alarm among passengers, with 21 refusing to board the alternate flight.

Stock Market Reaction

The crash has significantly impacted Jeju Air’s financial standing:

• Jeju Air shares dropped by as much as 15%.
• AK Holdings Inc., Jeju Air’s largest stakeholder, fell over 12%.
• Domestic travel agency shares declined by more than 5%.

Broader Implications

This incident is expected to have lasting repercussions on South Korea’s aviation and travel industries as consumer confidence takes a hit.