Korean low-cost carriers going global

By Lee Hyo-sik

The country’s five budget carriers ― Jeju Air, Jin Air, Air Busan, Eastar Jet and T’way Air ― used to offer only domestic routes.

Now they have flights linking Korea with destinations in Japan, China and Southeast Asian countries. Over the past few years, they have been providing outbound Korean and inbound foreign travelers with more choices in airlines.

Low-cost carriers have been able to woo substantial numbers of customers from Korean Air and Asiana Airlines by offering lower airfare and differentiated services on international routes.

This year local budget carriers have made a huge leap forward as a record number of Koreans have headed overseas. More foreign visitors from China, Japan and Southeast Asian countries have also helped them grow at an explosive pace.

According to the Ministry of Land, Transport and Maritime Affairs, the number of Korean and non-Korean travelers using five low-cost carriers on a combined 13 international routes reached 276,000 during the January to February period this year, accounting for 4 percent of the total cross-border travelers. The corresponding ratio last year was 1.7 percent.

The ministry said the ratio went up to 4.5 percent in July, compared with 2.5 percent a year earlier.

“On domestic routes, budget carriers are handling nearly 50 percent of passenger traffic. The number of international routes operated by budget carriers will increase to 14 by the year’s end. Low-cost airlines will likely attract more Korean travelers heading overseas, boosting their bottom line,” a ministry official said.

Jeju Air

The nation’s largest low-cost carrier currently operates a fleet of eight Boeing 737-800 airplanes capable of accommodating up to 190 passengers and crew members. The airline plans to add two or three new aircrafts to its fleet each year over the next five years.

Jeju Air flies to seven cities in four different Asian countries ― Japan, Hong Kong, the Philippines and Thailand ― from Incheon, Gimpo, Gimhae and Jeju airports. Its overseas destinations include Osaka, Nagoya, Kitakyushu, Bangkok, Hong Kong, Manila and Sebu.

``Our international routes are more profitable than domestic ones as we fly airplanes from late at night to early in the morning, making better use of our facilities. We then operate our fleets on local routes during the day. We are the first domestic low-cost carrier earning more from international routes,’’ Jeju Air spokeswoman Chung Eun-jeong said.

Chung said the airline is seeking to link Korea with destinations in China and Vietnam. “We will also introduce a range of attractive tour packages in partnership with travel agencies for foreign visitors.”

Jin Air

Jin Air, Korean Air’s low-cost unit, currently operates a fleet of six Boeing 737-800 airplanes and will add one more by the year’s end. The airline has six international routes, linking Incheon and Jeju with Bangkok, Guam, Clark, Macao, Shanghai and Sapporo.

Park Jeong-hoon, manager at the airline’s marketing and PR team, said that Jin Air has placed top priority on serving leisure travelers heading to destinations within 4 to 5 hours of flight time from either Incheon or Jeju.

“Business travelers usually fly with flagship carriers because they are not price-sensitive. But leisure travelers are very conscious of price so they are our main target customers. Thus, we serve routes linking Korea with popular tourist spots in Asia,” Park said.

He said Jin Air’s international operation has become more lucrative because it can operate planes 24 hours a day from Incheon airport.

“But at Gimpo, no flights are allowed from 11 p.m. to 6 a.m., which negatively affects our operational efficiency. In 2010, we operated in the black, the first budget carrier to do so. We expect to easily post a surplus in 2011,” Park said.

Air Busan

Air Busan, affiliated with Asiana Airlines, has a fleet of seven Boeing and Airbus airplanes ― three Boeing 737-400, three Boeing 737-500 and one Airbus 321-200. The airline operates six international routes out of the southeastern port of Busan. It flies to Fukuoka, Osaka, Taipei, Sebu, Hong Kong and Tokyo.

“We are based in Busan, serving primarily those residing in the southeastern part of the country. We would like to add three to four new international routes each year. By 2015, we seek to become an airline with the most extensive aviation network linking Busan to other major cities in Asia,” Air Busan spokeswoman Kwak Ji-yoon said.

Easter Jet

Easter Jet operates six Boeing aircrafts and will soon add another Boeing 737-800 plane to its fleet by the end of this year. The airline offers flight services to those who travel from Incheon airport to Narita, Chitose and Kota Kinabalu.

“Domestic routes, particularly the one between Gimpo and Jeju, are very competitive. It has become harder to generate profits by only operating domestic flights. To attract more international passengers, we have and will introduce a series of promotional events to establish our status as a leader in Korea’s low-cost carrier market,” Easter Jet spokesman Kim Young-il said.

T’way Air

T’way Air has a fleet of four Boeing 737-800 airplanes and plans to bring in two more next year. The airline currently serves only domestic routes, but will launch its first international service connecting Incheon with a yet-undetermined destination in Southeast Asia in October.

“We operate the Gimpo-Jeju route 36 times a day, the most among national and budget carriers. But to emerge as Asia’s best low-cost carrier by 2020, we need to expand our reach beyond Korea. Our scheduled international flight service to somewhere in Southeast Asia is only the first step. We will make every effort to launch many additional overseas routes in the near future,” T’way Air marketing manager Kim Jin-hyuck said.