Trio of New Korean LCCs To Operate From Three Airports

 - March 20, 2019, 4:13 PM

Licenses issued by South Korea’s Ministry of Land, Infrastructure, and Transport (MLIT) to three new low-cost carriers in early March dictate that they base their operations at three different airports in an effort to avoid an undesired competitive scenario in any one market. Plans call for Air Premia to base its operations at Seoul Incheon Airport, Aero K at Cheongju International Airport, and Fly Gangwon at Yangyang International Airport.

According to MLIT official Kim Jung Rak, although Air Premia will enjoy the advantage of operating from a major airport, the ministry did not favor the carrier and based its decision on each airline’s business plan and financial standing.

Cheongju International Airport has operated at a loss for several years. It receives service from four carriers; Jin Air, Korean Air, and Eastar Jet fly from Cheongju only to Jeju and China Southern Airlines to Yanji. Yangyang International Airport, another money-losing facility, has not turned a profit since it started operations in 2002. Last year it handled only 37,000 passengers, carried by air-taxi service Korea Express Air to Jeju and Kitakyushu in Japan.

Lee Jung Sung, another senior official at the MLIT, said that Fly Gangwon and Aero K have a year to apply for their air operator certificates, giving them ample to time to decide the feasibility of operating from Yangyang and Cheongju, respectively.

Despite an already crowded LCC market in South Korea, Kim maintains that a survey carried out by the authorities in 2018 revealed more potential for growth.

The six LCCs licensed in the country—Jeju Air, Air Busan, Jin Air, T’way Air, Air Seoul, and Eaststar Jet—control a combined domestic market share of 55.8 percent. All also operate international flights.

Meanwhile, it remains uncertain whether or not Air Pohang, an LCC that suspended its two-route operation in December, would re-launch in the first quarter as planned with Boeing 737-800s. Kim conceded that any airline operating only two routes would encounter difficulty competing with six other LCCs and two full-service airlines.

Owned by the Dong Hwa Electronics Company, the Pohang Airport-based carrier operated to Gimpo and Jeju.