Dont count Jeju Air out

Budget carrier strives to rival bigger airlines

This is the third and last in a series of articles on the latest offers by Korea’s top carriers. — ED.

By Kim Da-ye

Staff reporter

Jeju Air has flown in the Korean skies for just over four years — the longest history among domestic low-cost airliners — but it dreams big, aiming to become a major airline in the global aviation industry by expanding its international routes.

Its plan to reach the next level in terms of brand status and operation is focused on safety, which will be further ensured by regular, strict maintenance and repair work, the company announced.

Jeju Air, based in Korea’s ultimate tourism destination of Jeju Island and owned by conglomerate Aekyoung Group, was set up in January 2005 and made its maiden flight in June 2006.

In the past four years, it has grown to be not only a popular carrier connecting Jeju-do and the peninsula, but also an airline that operates between Incheon International Airport and Gimpo International Airport, the two main gateways to Seoul and popular nearby holiday spots in Asia including Osaka, Bangkok and Nagoya.

In efforts to expand, the airliner was approved on July 2 by the Ministry of Land, Transport and Maritime Affairs the right to operate three more international routes including one between Incheon airport and Hong Kong and another between Incheon and Manila of the Philippines.

To meet the demand for more aircraft, Jeju Air plans to add two Boeing 737-800s to its fleet by November 2010 and one more by 2012. From 2013, it will acquire six more airplanes to consolidate its business in Korea, Japan and Southeast Asia.

Amid the global expansion, the firm tries to ensure that quality matches the quantity. To distinguish from other low-cost airlines, the airliner says it is strongly committed to safety.

Assuring potential consumers that it is safe to fly with Jeju Air despite its relatively low ticket price is the company’s priority.

Jeju Air, for instance, obtained the IATA Operation Safety Audit (IOSA), before any other low-cost competitor did. The IOSA program is an internationally recognized and accepted evaluation system designed to assess airliners’ operational management and control systems.

And the airliner knows well that winning the trust both from the authority and its passengers involves rigorous maintenance and repair work. When the carrier was just set up, it hired former Korean Air employees for maintenance rather than outsourcing the crucial duty, Jeju Air said.

Because it does not have a hangar yet, “heavy maintenance” that is done every 15 months is outsourced to Boeing Shanghai, a service firm supported by the Boeing Company. According to the firm, it acquired land to build a hangar near Incheon, and as soon as the construction is completed, it will perform all repair work there.

Apart from its investment in safety, the airliner aims to provide more than what low-cost carriers normally do. Many international low-cost operators do not serve drinks, snacks and meals for free, but Jeju Air does. Its passengers are also allowed to check in 15 kilograms of luggage for a domestic flight and 20 kilograms for international routes. A U.S. airliner recently caused a controversy when it announced it would charge passengers for hand baggage.

While Jeju Air expands its international services, it aims to remain competitive in the cutthroat aviation industry by keeping ticket prices low. One of the cost-cutting strategies is keeping aircraft flying as long as possible to maximize efficiency. The average hour each airplane flies a day is now 10 hours and 30 minutes, and it aims to increase it to 12 hours. The airliner has also shortened the time airplanes stay on the ground by having its flight attendants help clean up the aircraft.

Furthermore, Jeju Air sells tickets online, and slashes the cost charged by travel agencies. It says that 63 percent of tickets for domestic flights are now sold online. The carrier has also unified the seating classes into one. Without first or business class seats, the airliner says it raises the number of passengers on the plane.

Jeju Air is growing with its revenue nearly doubling every year. Between 2006 and 2009, according to the company, its annual revenue grew by 96 percent and the number of passengers by 84 percent. The first half of 2010 saw the company gain revenue of 66.4 billion won — up 81.4 percent from 33.6 billion won earned during the same period last year.

The number of passengers on their international flights is where Jeju Air wishes to see even more growth than the 212,000 increase in the first half of this year — an 80 percent hike from 2009.