North Korea aviation: Korea's airlines may benefit from liberalisation

South Korean airlines have started preparing for the potential opening up of the North Korean market. Airspace restrictions may be lifted in the near term, resulting in significant fuel savings, followed by services from Seoul to Pyongyang.

North Korea is an undeserved market as it currently has less than 200,000 annual seats despite a population of more than 25 million. Outbound demand should increase significantly if travel restrictions are eased. North Korea tourism also has huge potential, driving inbound demand along with ethnic traffic from South Korea as families are reunited. 

South Korean carriers will likely be the main beneficiaries if the North Korean aviation market opens up. South Korea’s largest airline, Korean Air, is well positioned and eagerly awaiting opportunities in the North Korea but South Korean LCCs may be best positioned given North Korea’s future market could consist mainly of price sensitive leisure passengers.