LCCs in tight race to secure Jakarta route

Jeju Air's Boeing 737-8 passenger jet / Yonhap

Local low-cost carriers (LCCs) are rushing to secure the lucrative Incheon–Jakarta route, which has opened to new entrants after Korean Air relinquished the rights following its acquisition of Asiana Airlines.

Jeju Air and Eastar Jet are considered the leading contenders for the route, as both are looking for new revenue sources to reduce their heavy dependence on short-haul flights to nearby Asian countries, such as Japan.

Jin Air, one of the three major LCCs along with Jeju Air and Eastar Jet, is restricted from bidding for the route, as it is a subsidiary of Korean Air. The company is now preparing to launch a combined LCC with Air Busan and Air Seoul, two LCC affiliates of Asiana.

Jakarta, the capital city of Indonesia, has seen a growing number of major Korean companies expand their investments, thanks to the country’s geographic proximity to key Asian economies such as China, Taiwan and Japan.

Eastar Jet's Boeing 737 Max 8 aircraft / Courtesy of Eastar Jet

Data also show that demand for tourism between Korea and Indonesia has been rapidly increasing over the past few years.

According to data from Indonesia’s Ministry of Tourism and Creative Economy, the number of Korean tourists visiting Indonesia from January to July exceeded 280,000, an 18 percent increase from the previous year.

Jeju Air, the nation’s largest LCC by annual sales, is particularly eager to expand its revenue streams to other routes, as its earnings growth has remained modest due to intensifying competition and external risk factors, such as the strengthening dollar against the won.

According to data from market tracker FnGuide, the LCC is estimated to have reported an operating profit of around 16.8 billion won ($11.5 million) in the third quarter, down 63.9 percent from a year earlier.

Eastar Jet, an unlisted airline that does not disclose its earnings, is also expected to have posted similarly disappointing results, as the industry enters a phase of structural slowdown.

Industry officials said LCCs can no longer sustain growth by simply increasing flights on already oversupplied routes to destinations such as Guam or Japan.

“The route from Incheon and Jakarta will serve as a major stable profit booster for the airlines, as demand for the flight still appears to exceed its supply,” an official from the aviation industry said.

The Fair Trade Commission is currently accepting bids for the traffic rights, and the winning airline is expected to begin operations on the route sometime in the first half of 2026.