Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
T'way Air sets sales target of W1.8 tril. in 2024 with planned European routes
T'way Air CEO Jeong Hong-geun speaks during an interview with The Korea Times at the airline's headquarters at Gimpo International Airport in Seoul, Dec. 12. Courtesy of T'way Air
By Lee Min-hyung
LCC plans to launch first flight to Paris in June
T’way Air has high hopes for stronger earnings growth next year, fueled by potential expansion into Europe in place of the nation’s two mega carriers which may merge, according to the company's CEO.
“Our target sales are forecast to hit 1.8 trillion won ($1.38 billion) in 2024, if we are granted permission to operate air routes from Korea to major European cities,” T’way Air CEO Jeong Hong-geun said in a recent interview with The Korea Times.
The European Commission (EC) is still reviewing whether T’way Air is qualified to operate four air routes from Korea to Frankfurt, Paris, Rome and Barcelona, after Korean Air decided to give up the traffic rights for its high-stakes acquisition of Asiana Airlines. The decision is part of a tradeoff offered by Korean Air to seek approval for the long-delayed deal.
But the head of T’way displayed confidence that the antitrust watchdog will give the green light to the deal.
“We will create new opportunities by launching our first European air routes,” he said. “If Korean Air’s ongoing takeover of Asiana makes smooths progress, we will be able to lease five A330 passenger jets from Korean Air. Under the optimistic scenario, T’way is ready to launch our first air route to Paris sometime around June next year.”
Jeong has spent more than three decades in the aviation industry after starting his career at Korean Air in 1986. He is one of the most renowned sales experts in the industry, having taken on executive roles in sales at Korean Air and Jin Air, before joining T’way Air in 2013.
Under his leadership, T’way succeeded in generating record earnings for the three quarters combined this year. According to the airline, the company chalked up sales of 990.1 billion won during the same period. Its operating profit also soared to a historic high of 135.9 billion won between January and September.
This enabled T’way to become the nation’s second-largest low-cost carrier (LCC) by sales this year.
Jeong gave the credit to the firm’s boldness to take risks even at a period of the COVID-19 pandemic.
“Most LCCs returned their leased aircraft during the pandemic, but we introduced more at a discounted price, in a preemptive move to brace for the post-pandemic era,” he said. “The strategy generated tangible outcome this year when flight demand was on track for rapid recovery.
T'way Air's A330 passenger jet / Courtesy of T'way
Another key factor for the airline’s eye-catching earnings rebound is its push to diversify air routes with a focus on long-haul routes. T’way introduced the A330 passenger jet last year and has since expanded more long-distance routes from Incheon to Sydney, Bishkek – the capital of Kyrgyzstan, and Mongolia’s Ulaanbaatar.
Jeong identified Central Asia as a region with huge growth potential for the airline.
“Central Asia looks very attractive, as competition for flights to the region is less intense than other major tourist attractions in other Asian markets,” he said. “We particularly focus on targeting demand from students who choose Central Asia as a layover destination on their way to other regions. They choose to do so due to the high ticket prices of national flag carriers.”
He expressed his vision to attract more foreign tourists, to maximize and stabilize the carrier's revenue areas. Sales from foreign customers account for around 20 percent for most LCCs here, with the rest coming from domestic travelers.
“Our top priority is localization when we attract foreign customers,” he said. “For instance, we contact online travel agents abroad and ask what customers from each country want. We gradually raise awareness of our brand identity there by reflecting their appetite. After we possibly launch our flights to Europe, we will engage in the same process for deeper penetration into the untapped territory.”
T’way Air is also stepping up its marketing efforts to build its loyal customer base. The airline launched a subscription-based membership service, T’way Plus, for the first time in the local aviation industry in March. This is different from typical mileages offered by most carriers. One key difference is that the service provides users with more diverse benefits by giving them ticket discount coupons or opportunities to access early bird promotion events.
An evacuation slide is set up at T'way Air's new training center in Seoul. Courtesy of T'way Air
New training center
T’way Air also promoted its new training facility set up on the first floor of its office at Gimpo International Airport in western Seoul.
“We invested 12 billion won for the construction of the training center, as part of efforts to enhance our in-flight safety,” he said. “I believe safety comes from repeated training.”
The facility comes with various separate training booths for pilots and flight attendants to repeatedly train for emergency situations.
“Our fire-fighting simulator equipment is the only one in Korea,” he said. “The center is also used for our corporate social responsibility activities, as we invite a group of students and offer special education courses on how to ensure in-flight safety.”