Korea-Japan aviation market: national disputes dent demand

Among the biggest sufferers from the Korea-Japan dispute are Korea's airlines.

The Korea-Japan aviation market is one of the most important in the region, particularly for airlines based in South Korea. So the dramatic drop in demand on routes between the two countries in recent months is quite a significant development in Asia-Pacific market dynamics, with major repercussions for several airlines. Combined with the intense competition among Korean airlines, this has driven most into the red.

The main cause for the relatively rapid falloff is increasing political and trade tensions between South Korea and Japan. Dating back to before the Second World War there are obviously some highly charged issues between these two nations, which have always formed an uneasy backdrop to relations between the countries.

Some of these issues - such as the question of reparations - have come to a head this year, and the impact on travel demand has been severe. Leaders of the two nations are making the right noises about resolving the standoff, but it remains unclear when a real breakthrough will come.