Budget Carrier to Boost Busan-Fukuoka Ties
By Do Je-hae
Air Busan, Asiana's low-budget affiliate, has chosen two Japanese cities, Fukuoka and Osaka, as destinations for the 2010 launch of its first international services.
The selection of the two Japanese cities is reflective of the Busan-based carrier's dedication to facilitate visits between the two countries with cheaper and faster access.
In particular, a supranational project to join the economies of Busan and its 20-year sister city of Fukuoka will spur additional passenger demand, Kim Soo-cheon, president and CEO of the airline, said in a briefing Tuesday in central Seoul.
"Busan and Fukuoka already share a long history of economic and cultural cooperation. The common economic zone project has created an urgency to increase flight connections," Kim said.
It takes about 50 minutes by air to cover the 208 kilometers between the two cities. Airfare will cost from 150,000 and 170,000 won, 30 percent lower than major air carriers. On-board duty-free shopping will be available.
Currently, almost 800,000 travel to Fukuoka by ship and 150,000 by air. "We are confident that more people will choose to fly to Fukuoka in the future due to reduced travel time," Kim said. Air Busan purchased an additional B737-400 jet for daily operations to Fukuoka on March 29 from Busan and to Osaka on April 26
The Busan-Fukuoka service will be run once a day during the initial stages, but frequency could increase to three or four times a day in the next few years, he said.
The Korea-Japan strait economic cooperation zone initiated by local administrations in the two neighboring countries ultimately aims to combine the economic synergy of the southeastern Korean Peninsula and Kyushu Island of Japan.
The supranational project will include a joint nurturing of future-oriented businesses, facilitating a common living sphere, easing trade regulations and boosting mutual investment.
When completed in 2023, Busan-Fukuoka is expected to be the seventh-largest economy in Northeast Asia, after Beijing, Shanghai, Hong Kong, Tokyo, Osaka and Seoul and its vicinity, Busan officials said.
To expedite business exchanges between Busan and Fukuoka, the airline will apply its "business-friendly" program to businessmen fliers on international connections.
The business-friendly program is a trademark initiative of Air Busan, providing special discounts to frequent fliers from corporations and public entities. More than 5,000 organizations are signed up for the program.
"As a regional-based airline, we have a responsibility toward balanced regional development and will continue to do our part," Kim said. Air Busan is jointly owned by Asiana Airlines, the country's second largest carrier, and the Busan Metropolitan Government.
The forthcoming services to Japan will make Air Busan the second low-cost carrier in the nation to provide international connections, after Jeju Airline with services to Osaka, Kitakyushu and Bangkok.
Going international is one of the airline's main strategies to lift itself out of the red and start seeing profits in 2011. "We expect 1 billion won (US$857,000) in annual revenue from the new routes," Kim said. Sales are expected to reach around 73 billion won this year, with negative 5 billion won for the current account.
The airline is also hoping to improve its profile through flying beyond Korean soil. "We do not get a lot of press attention outside Busan. However, 60 percent of our customers are from Seoul and the metropolitan area," Kim said.
Since 2008, the airline has been operating five aircrafts for domestic connections to Gimpo and Jeju. It code-shares with Asiana Airlines, making it possible for passengers on Air Busan to collect Asiana mileage.