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.
Local airlines eye additional Chinese routes
Korean Air's Boeing B737-900ER. Courtesy of Korean Air
By Kim Hyun-bin
By Kim Hyun-bin
Local airlines are going all-out to secure rights to fly additional routes to Chinese cities, as the government plans to unlock extra slots next week.
According to the aviation industry, Friday, the Ministry of Land, Infrastructure and Transport plans to hold an aviation traffic deliberation committee meeting, May 2, to distribute 49 additional flight rights on six routes between Korea and China and seven companies are bidding for the extra openings.
The six are routes from Incheon to Beijing, Shanghai, Yanjin, Shenyang and Shenzhen and from Busan to Shanghai.
Some routes are considered lucrative and some cities have been monopolized by the nation's two full-service carriers Korean Air and Asiana Airlines. The competition is getting fiercer in the lead-up to the announcement.
Plus, with the additional routes and escalating competition, many experts believe flight prices to China could be lowered up to 20 percent on key routes such as Beijing and Shanghai.
Since 2014, there have been tensions between Seoul and Beijing due to the deployment of a U.S. Terminal High Altitude Area Defense (THAAD) missile defense system, and the recent agreement to open additional routes in China marks the first aviation exchange in five years.
The most competitive routes are Incheon-Beijing and Incheon-Shanghai which are considered "golden" as their flight occupancy rates reach over 90 percent on average during peak season.
Additional routes for Busan-Shanghai, Incheon-Yanjin and Incheon-Shenzen are also available, which are currently monopolized by the two full-service carriers.
In addition, the opening of the second Beijing international airport in September is expected to bring more passenger traffic to the country as the airport can accommodate close to 100 million passengers annually.
Last month, the two governments agreed to an additional 14 flights a week to Beijing, making a total of 45, and seven more to Shanghai for a total of 56. Out of the additional Beijing routes, budget carriers are expecting two LCCs to win daily flights to Beijing.
In hopes of gaining a competitive edge during the government bidding, the budget carriers are already emphasizing their strengths, such as the number of planes they have in operation and their business experience in other Chinese cities.
The country's largest budget carrier Jeju Air which operates a Daegu-Beijing route three times a week has shown interest in the destination, emphasizing its knowhow in the region.
“Flight rights to China fits Jeju Air's business model to provide short-distance flights and an opportunity to bring results,” Jeju Air CEO Lee Seok-joo said in a press conference last month. “We are prioritizing the locations that Jeju Air currently provides flights.”
Air Busan and Air Seoul are seeking to land Chinese routes and use them as growth momentum.
"For Air Busan to grow even further, I believe it is imperative to provide flights from Incheon," Air Busan CEO Han Tae-keun said in a recent statement. "We will start with winning flight rights to China and focus on developing more routes from Incheon. We aim to start providing flights from Incheon within the year."
Previously, Air Busan provided international flights mostly from Gimhae and Daegu international airports. It is the only local LCC that currently does not provide flights from Incheon.
Experts say Asiana Airlines, which is expected to be sold off in the coming weeks, is working to obtain additional routes as it could raise its market value.
“To award flight rights, the government looks at numerous factors including financial stability. Asiana Airlines' instability will make it more difficult,” an airline official said. “However, before Asiana is sold it will try to enhance its value by obtaining key routes.”
Korean Air's subsidiary budget carrier Jin Air is likely to be excluded from the bidding as it is currently under government sanctions.