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.
Korean LCCs ditch 'low-cost' image in push for higher-value customers
Sono Trinity Group Chairman Seo Jun-hyeok delivers welcoming remarks during a brand launch of Trinity Airways and the airline's uniform runway event in Seoul, Thursday. Joint Press Corps
By Lee Min-hyung
Profit recovery remains biggest challenge despite rebranding efforts
Korean airlines are moving away from the low-cost carrier (LCC) label in a bid to attract higher-value customers and build stronger brand identities.
The shift is being led by airlines adopting hybrid models between full-service carriers (FSCs) and traditional LCCs. Air Premia has positioned itself as a premium hybrid carrier, while newly rebranded Trinity Airways is introducing the concept of what it calls “selective service carrier.”
Trinity Airways, formerly T’way Air, explained the new identity reflects the carrier’s willingness to provide selected services based on customer demand by moving beyond typical images from FSCs and LCCs.
The rebranding reflects a broader challenge facing LCCs. The low-cost model, built around cheap fares and limited services, has become increasingly difficult to sustain amid rising fuel costs, labor expenses and intensifying competition.
Despite the rebranding strategy, both Air Premia and Trinity Airways still suffer from losses. Last year, Air Premia was ordered to improve its financial condition by the Ministry of Land, Infrastructure and Transport, after it fell into a state of complete capital impairment due to accumulated losses.
Trinity Airways is also forecast to report 120 billion won ($84.5 million) in operating loss in the second quarter, according to market tracker, FnGuide.
Korean LCCs also face pressure from foreign carriers expanding into the domestic market, which means competing only on price is no longer enough to secure profitability.
Air Premia's Boeing 787-9 passenger jet / Courtesy of Air Premia
The two airlines are not the first to have launched such a strategy. Global airlines also take a similar approach by developing hybrid strategies. Japan’s Peach Aviation has focused on building a distinct lifestyle brand rather than relying solely on its budget image. The airline has emphasized travel experiences and emotional connections with younger passengers.
Similarly, Japan-based ZIPAIR, a low-cost long-haul carrier under Japan Airlines, offers optional services that allow passengers to customize their experience. European LCCs, such as Ryanair and easyJet, have also increased revenue through paid seat selection, priority services and travel packages.
The emerging trend shows that the boundary between FSCs and LCCs is becoming less clear. Airlines are increasingly targeting passengers who want more comfort than a budget carrier but do not require the full range of premium services offered by traditional FSCs.
Industry officials said that for Korean LCCs, the next stage of growth may depend on escaping the “cheap airline” perception.
“By ditching images from low-cost services and offering differentiated services, local budget carriers are rebuilding their corporate identity to capture customers willing to pay more for convenience and better travel experiences,” an official from the aviation industry said.