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.
Budget carriers to form mileage program with Union Pay
Jin Air's B777-200ER Courtesy of Jin Air
By Kim Hyun-bin
By Kim Hyun-bin
Local budget carriers plan to join hands with Chinese credit card company Union Pay to launch a joint mileage program, in efforts to reward customer loyalty and better compete with the country's full-service carriers.
According to the aviation industry, Tuesday, six low-cost carriers ― Jeju Air, Jin Air, T'way Air, Eastar Jet, Air Busan and Air Seoul ― are scheduled to hold an alliance ceremony with Union Pay on May 7.
The partnership will be the first of its kind to include the six low-cost carriers (LCCs) under one mileage program. Also, excluding Jeju Air and Jin Air which have already introduced their own mileage systems, it will mark the first time for the other four LCCs to adopt a mileage program.
According to industry sources, the CEO of Union Pay is expected to visit Korea in early May, and he is likely to attend the partnership ceremony.
The specifics of the partnership have not been revealed, but many believe it will likely be a joint mileage program.
“Through the alliance, customers will gain points by using a Union Pay card and will be able to purchase tickets for any of the six carriers with the points. The point system is just like cash,” an official from a local LCC said.
Experts believe the joint points system will benefit customers and could help the LCCs develop a loyal customer base because low airfares have been the main factor attracting passengers to those carriers so far. They believe the mileage system could take loyal customers away from the two full-service carriers ― Korean Air and Asiana Airlines.
Union Pay could also use the opportunity to expand its customer base outside of China and increase its market share here, according to the official.
The local LCCs have largely increased operations in recent years, and their market share surpassed 30 percent for the first time for a first quarter, according to the Ministry of Land, Infrastructure and Transport.
The ratio of passengers using the budget airlines out of all passenger traffic from January to March soared from 13.2 percent in 2015 to 18.1 percent in 2016, 24.6 percent in 2017, 29.5 percent in 2018 and 32.2 percent this year.