Kim Hyun-bin began his journalism career at Arirang TV from 2012 to 2017, specializing in defense, foreign affairs and the economy. In 2018, he joined The Korea Times, covering society and business, and is currently responsible for embassy affairs.
Korean skies to be crowded with LCCs
Photo of Eastar Jet's Boeing 737 Max8 Courtesy of Eastar Jet
By Kim Hyun-bin
By Kim Hyun-bin
For the first time in four years, the Korean government issued business licenses to three new low-cost carriers (LCC) ― Aero K, Air Premia and Fly Gangwon ― raising the country's total number of airlines to 11, consisting of two full-service carriers and nine budget airlines.
This was the first time for the transport ministry to issue licenses to multiple firms.
Some say the increase in competition will be better for consumers as this will result in lower airfares and more routes. But others say the air travel market here has been saturated for years and some budget airlines already face difficulties in recruiting experienced pilots and maintenance personnel, raising safety concerns.
According to data from the Ministry of Land Infrastructure and Transport, over 44 million passengers traveled on domestic budget airlines last year, four times that of 2011. This shows the growing number of LCCs has led to an increase in demand for air travel, officials say.
However, worries are on the rise as many experts and people in the aviation industry believe passenger traffic will start to decrease in the latter half of this year.
“We don't believe the demand for air transportation will rise sharply as it has done in recent years, so it is questionable whether the new budget airlines will be profitable, when a couple of LCCs are struggling already. We have one too many airlines for a country of this size,” an official from a local LCC said.
The number of budget airlines ― nine ― is very large compared to other countries: the U.S., which has six times the population of Korea, also only has nine LCCs; Japan, which has about double Korea's population, has eight; and Canada, which is the world's second-largest country in size, has four.
However, the government has a different perspective and believes market demand could rise further.
“The government does not agree with the analysis that demand for the aviation market will take a downturn,” said Jin Hyun-hwan, the director general for aviation policy at the ministry. “It is natural and proper for airlines to compete with each other, and for those falling behind in the competition to be merged.”
For the airline industry, the shortage of experienced pilots and maintenance personnel is the greatest concern.
Korean airlines have already suffered from an outflow of pilots and skilled engineers to Chinese carriers offering much higher salaries.
“We are not only competing with local but also foreign airlines, and the addition of the new local airlines will make competition much fiercer. We hope the competition won't bring about an outflow of personnel as it is already hard enough to recruit and maintain experienced employees,” an official from another local LCC said.
To prevent a shortage of personnel in the future, the ministry said it would help train pilots and maintenance personnel and also recruit experienced pilots who have moved to foreign airlines.