Incheon Airport pushes first passenger fee increase in 24 years

Flying out of Incheon International Airport could soon cost 5,000 won ($3.70) more, as the airport’s operator pushes to raise its passenger service charge for the first time in 24 years.

The Incheon International Airport Corporation said that the increase is needed to bring long-frozen charges in line with the rising costs of maintaining the facility and ensure that the airport remains a competitive hub.

It plans to raise the passenger service charge on international departures from 17,000 won to 22,000 won, or by about 30 percent, according to data it submitted to Rep. Yoon Jong-kun, a ruling Democratic Party (DP) lawmaker on the National Assembly’s Land, Infrastructure and Transport committee, on Tuesday.

The charge for transfer passengers would rise 50 percent, from 10,000 won to 15,000 won.

Airlines would also pay more. In consultation with carriers, the corporation aims to raise the cost recovery rate on landing fees and other charges from 44 percent in 2024 to around 88 percent. The rate measures how much of the cost of running the airport's facilities is covered by the fees collected.

The airport operator argued that the freeze has left its charges trailing inflation. The passenger service charge has not changed since 2002. Apron charges have been frozen for 25 years, aircraft parking and boarding bridge charges for 22 and landing fees for 10.

“Keeping charges frozen for so long despite steadily rising prices has had the same effect as cutting them every year,” it said.

It also cited its dependence on duty-free shops as grounds for the increase. Aviation revenue, which comes from sources such as the facility charges paid by passengers and airlines, comprised 38 percent of Incheon Airport’s total revenue in 2024, the corporation’s data showed. That was 16 percentage points below the 54 percent average for four major overseas airports: London Heathrow, Amsterdam Schiphol, Tokyo Narita and Singapore Changi. Nonaviation revenue, mostly commercial income such as duty-free sales, accounted for the remaining 62 percent. Duty-free stores alone generated 60.8 percent of the total commercial revenue.

The corporation expects its revenue structure to weaken, as Shilla Duty Free and Shinsegae Duty Free pulled out of some duty-free zones last year. The zones were then rebid at lower rents. The airport operator also stressed that it will need up to 18 trillion won over the next decade for expansion and a renovation of Terminal 1 to keep Incheon’s place as a Northeast Asian hub.

The increase would also mean bigger dividends for the government, the corporation said. A 10 percent rise in charges would bring in about 100 billion won more per year. At the airport operator’s payout rate of 46 percent, about 46 billion won of that would go to the government.

Every passenger on an international flight departing from Incheon Airport would pay 5,000 won more in airport fees under the plan. Fares could climb further if airlines pass higher landing fees and other charges on to ticket prices.

“Plane tickets have been pricier than usual since the Iran war,” said a self-employed worker surnamed Choi who flies to Japan once a month for work. “Even a rise of a few tens of thousands of won can change the first digit of the fare, so naturally, it weighs on me.”

Fuel surcharges on Korean carriers hit record highs this spring as the conflict in the Middle East drove up oil prices.

The airport operator is also facing questions about its push for the plan, given that passenger demand and profits have recovered from the Covid-19 pandemic. Incheon Airport handled 74.07 million passengers last year, the most since it opened in 2001. The corporation posted a net profit of 691.4 billion won last year, its third straight year in the black since 2023.

“Raising airport facility charges leads to higher airfares,” DP Rep. Yoon said. “With passenger demand back to prepandemic levels, any push to raise charges that could affect everyday prices should be put on hold.”

The plan also goes against the government’s push to keep prices stable. Major public utility rates, such as electricity and gas, will stay frozen through the second half of the year, the government said in June.

“Airport charges have also been held down to some extent, much like public utility rates,” a source in the aviation industry said. “It’s safe to say that no government wants to raise fees [that could stir public discontent].”

BY LEE YOUNG-KEUN [[email protected]]