INTERVIEW 'Korea does not have a true LCC'
An image of Air Asia's A320 flight. Courtesy of Air Asia
By Kim Hyun-bin
Korea does not truly have a low-cost carrier (LCC), only airlines disguised as such, said Tony Fernandes, CEO and founder of Air Asia Group.
“Korea needs one really true low-cost airline. Korean Air and Asiana (operating their own LCCs) just block other airlines from entering the market. They are full-service airlines,” Fernandes said in an interview with The Korea Times during his visit to Seoul last week.
Fernandes came to Korea for the Korean-version publication of his autobiography “Flying High.”
In Korea, two full-service carriers (FSC) are operating, Korean Air and Asiana Airlines, as well as six budget carriers, Jeju Air, Jin Air, T'way Air, Eastar Jet, Air Busan and Air Seoul.
However, half of the LCCs are operated by the two FSCs ― Jin Air is affiliated with Korean Air, while Air Busan and Air Seoul are with Asiana Airlines.
Fernandes believes the most important factor of a budget carrier is low prices, which he claims the local LCCs do not provide.
Tony Fernandes, CEO of Air Asia Group
“Low cost carriers have to have low fares. I don't think fares are particularly low here. Look at the flights between Busan and Seoul. You can fly to KL (Kuala Lumpur) for the same fare, so I don't necessarily think they are low-cost airlines,” he said.
The transport ministry is currently reviewing whether to issue operating licenses for four other budget airlines, while experts believe two of them are likely to get approval.
The CEO says the move will help enhance competition and better lower prices.
He also criticized the Korean government for applying too many restrictions on foreign carriers to operate within the country, which has become a major barrier to fully enter the Korean market.
“When foreign airlines do better than the local airlines, they are blocked. Countries are opening up; Korea needs to open up, too. I think we can do a great job for the people of Korea in creating jobs and bringing tourists,” the CEO said.
Air Asia was established in 2001 and started with 20 pilots and currently employs 2,500 pilots, with 80 percent of them taught at the Air Asia Academy, according to the airline.
“One of my first investments was in the academy. When I had seven planes, I brought in all my profits and built the academy,” he said. “The most important decision I made. We wouldn't be this size if we hadn't taken that investment decision.”
Air Asia started with just two airplanes. Currently the airline has evolved into the largest low-cost carrier in Asia operating 250 planes to over 130 cities in 26 countries.
Earlier this month, the airline was named the world's leading low-cost carrier for the sixth straight year in the World Travel Awards.
Fernandes's autobiography shows his success and life story, starting from how he established Air Asia to how he took over a Formula One team and became the owner of Queens Park Rangers FC.