A, 33, whose in-laws live in Bali, Indonesia, was shocked to see the price of a flight to Bali this summer. It was more than 1.2 million won per person roundtrip. With no other option but to fly direct, Kim had to postpone his trip because he was bringing his elderly mother-in-law. “Even if the pandemic ends, we will be forced to become a separated family because of the ticket price,” he sighed.
According to the airline industry, direct flights to Bali, Indonesia, in August are selling for between 600,000 won and 900,000 won each way.
Korean Air (003490) is the only airline operating direct flights on the Incheon-Bali route, which is about a seven-hour flight. Similarly, Asiana Airlines (020560), which has Indonesian concessions, focuses on Jakarta. When you connect with a foreign carrier, the flight time from Incheon to Bali can be as short as 10 hours to more than 30 hours.
In contrast, a direct flight to Jakarta, Indonesia, with the same seven-hour flight time, costs between $400,000 and $500,000 one-way. Asiana Airlines and local carrier Garuda Indonesia Airlines serve Jakarta along with Korean Air.
The vast difference in ticket prices between neighboring regions with similar flight distances is believed by the industry to be due to route monopolization. This also reflects the nature of Bali, which is especially popular during the peak summer travel season.
On the other hand, Kuala Lumpur, Malaysia, which is similar to Indonesia with a flight time of around 6 hours and 40 minutes, can be found in the $200,000 range for a one-way direct flight. In addition to Korean Air, Malaysia Airlines and Batik Air Malaysia also fly there.
“The more monopolistic the route, the higher the airfare스포츠토토,” said an industry insider, adding, “It is necessary to have a multi-carrier system like Mongolia and Guam-Saipan so that consumers can enjoy traveling at a lower price through competition.”
Previously, Korean Air had been the sole operator of the Ulaanbaatar route in Mongolia since 1995, but after criticism that ticket prices were too high, the government allowed Asiana Airlines to enter the market in 2019 and later added low-cost carriers (LCCs) to stabilize ticket prices.
The industry is expecting more domestic carriers to enter the Bali route as the Ministry of Land, Infrastructure, and Transport is holding aviation talks with the Indonesian government next week. June 14 and 15 are the most likely dates for the talks.
The Indonesian route is known as an alpha route due to high travel demand, especially to Bali, and strong business demand as domestic companies such as Hyundai Motor (005380) and LG Energy Solutions (373220) have entered the market. It is also a region where LCCs are trying to enter to replace the saturated Japan-Southeast Asia route.
However, even if new concessions are awarded after the talks, it is virtually impossible to launch this summer. It will take at least a month for MOLIT to announce the allocation and for airlines to apply for them. Add to that the two-month process for a new airline to prepare to launch a new service. At the earliest, flights could not begin until September.
Depending on the outcome of the talks, it is also possible that only some routes from regional airports other than Incheon-Gimpo will be allocated, or that the talks will be canceled altogether.