Korean Air to take on budget carriers
SEOUL – Korean Air will launch a new low cost carrier in a bid to stifle the growth of low cost carriers from China and Southeast Asia into the Korean market.
The airline will use one of its Hanjin Group affiliates, charter flight operator Korea Airport Service, to operate the new business.
Young-Ho Kim, president of Korean Air’s passenger division, said the move was aimed at “dealing with changes in the airline industry”.
The new low cost carrier will operate Korea domestic routes and short and mid-haul international routes using Boeing 737 aircraft.
Korean Air said, “unlike the past when strict government regulations restricted the establishment of new airlines, deregulation and spreading open skies policies has lowered the bar for new players trying to enter the airline industry”.
The airline said its decision to launch its own low cost carrier “is also a display of Korean Air’s will that it shall no longer remain indifferent to the invasion of low cost carriers from China and Southeast Asia into the Korean market”.
“The South Korean flag carrier has asserted many times that dump selling and unreliable tourism packages centered around some low cost carriers, causing market disturbance and customer inconvenience, must be stopped.”
The airline said the low cost plan “also takes into strategic consideration the expected changes in Korea’s domestic aviation market”.
“Within two or three years, when Korea’s high speed railway is completely open for service, much of the domestic air traffic demand is expected to shift to the railway, inevitably calling for a restructuring of domestic route flight operations.
“It is Korean Air’s conclusion that it must develop new markets and business models to effectively utilise the fleet that will be freed from domestic operations.”
Ian Jarrett
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