Jeju Air swings to net loss as demand fallsJeju Air said Tuesday it shifted to a net loss in 2019 from a year earlier due to lower demand for travel on Japanese routes.
Jeju Air swung to a net loss of 34.1 billion won ($29 million) last year from a net profit of 70.88 billion won a year earlier, the company said in a statement.
“With competition with smaller rivals getting tougher, the bottom line was affected by lower demand on Japanese routes due to local campaigns against Japanese products following Japan’s restrictions of exports to Korea since July,” the statement said.
Lower demand on Hong Kong routes due to protests against the Chinese government also cut into its bottom line, it said.
In July, Japan tightened regulations on exports to Korea of three high-tech materials crucial for the production of semiconductors and displays. In August, Japan removed Korea from its list of countries given preferential treatment in trade procedures.
Japan took the moves as retaliation against a Seoul court ruling that ordered Japanese companies to compensate Korean workers forced into labor during World War II.
Jeju Air also swung to an operating loss of 32.89 billion won last year from an operating profit of 101.2 billion won a year ago. But sales rose 9.9 percent to 1.38 trillion won from 1.26 trillion won over the cited period.
The airline expected weak performance in the first quarter of the year as the coronavirus outbreak further weighs on travel demand.
Jeju Air has suspended seven out of 17 routes to mainland China since Jan. 29. It also temporarily halted the Incheon-Macau route from Friday and reduced the number of flights on the Incheon-Weihai route from Monday, while planning to halt the Jeju Island-Hong Kong route from Feb. 19.
Jeju Air currently serves eight routes to Hong Kong, Macau and Taiwan.