Relax - Korean budget carriers expand overseas

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Travellers are now offered a wider range of choices in the air travel market as low-cost carriers in Korea are increasing their international flights.

Taking advantage of price competitiveness, budget carriers had taken over 32 per cent of the domestic air travel market. Thanks to their relatively successful performance, the carriers are jumping into the international travel market.

The moves of Korea, Japan and China to liberalise some aviation rules this year to increase travel traffic among the three countries are also boosting the carriers' overseas operations.

Jeju Air is currently operating four international routes to Osaka, Kita Kyusu and Bangkok from Incheon, the country's main airport, and one flying to Osaka from Gimpo.

Jin Air, wholly owned by the country's largest air carrier Korean Air, has been running a daily flight to Bangkok from Incheon since December 21.

The portion of international operations by the two budget carriers is only 1 per cent of the total. But the market is likely to become competitive as two other carriers - Air Busan and Eastar Jet - are jumping into the race.

Air Busan, partly owned by the second-largest carrier Asiana Airlines, will start operating international routes in March between the port city of Busan and cities in Japan, Hukuoka and Osaka. Eastar Jet, a new budget carrier based in North Jeolla Province, will also run 11 non-regular flight services between Cheongju and Hong Kong. It plans to fly to some cities in China as it sees an increase in air traffic during the Shanghai Expo.

In the same month, Jeju Air, owned by cosmetic giant Aekyung Group, will add another route between Gimpo and Nagoya while Jin Air flies to Guam in April.

Jin Air saw 94 per cent of available seats on its Bangkok route occupied since late last year. Ticket reservation for this month is already full, Park Jeong-hoon, publicist for Jin Air, said.

What attracts most travellers to choose low-cost carriers are competitive prices, industry officials said. The average ticket price offered by budget carriers is 20-40 per cent lower than major carriers.

For an example, a ticket for a flight between Incheon and Bangkok ranges from 670,000 won (S$$812) to 920,000 won with major carriers, while budget carriers offer tickets from 470,000 won to 650,000 won.

Low-cost carriers say they reduce operation costs by not offering mileage, hot meals, magazines or newspapers, but no major changes in service quality compared to other major carriers, Park of Jin Air said.

Budget carriers expanding their business in overseas market will eventually increase the size of the country's air transport market, officials at the land, transport and maritime affairs ministry said.

"We expect that the growth of budget carriers will increase the size of the air market, as well as bring a healthy impact to the market currently dominated by the two major airlines," said Shim Ji-young, an official at the transport ministry.

With low-cost carriers gaining popularity even in the short-distance international routes, major carriers will have to focus on long-haul travel or find new destinations, she explained.

Business portfolios for budget carriers are bright, they could also attract Korean pop culture fans in Southeast Asia wanting to visit Korea but on a tight budget, the official said. Low-cost carriers are already popular in Europe and in North America taking 30-50 per cent of the market share there, according to the government.

Korean budget carriers expand overseas

By Cho Chung-un, The Korean Herald, ANN | Thu, Feb 4 2010

Low-cost carriers are now gaining popularity even in the short-distance international routes.

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