April 25, 2024

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[THE INVESTOR] Six low-cost carriers are seeking to launch in Korea amid growing concerns over market saturation, industry sources said on May 1.

The airlines include K-Air, Fly Yangyang, Nambu Air, Air Daegu, Air Pohang and Prime Air, all based in small regional airports across the nation. 

If they are successfully launched, the total number of low-cost carriers here will double to 12 in the coming years.

Leading the pack is K-Air, based in Chungju, North Chungcheong Province, which will seek the government’s approval for a business license within the month. The airline has already placed orders to purchase eight Airbus A320ceo aircrafts in March.

“Our goal is to create new air travel demand by invigorating Chungju Airport,” a company official said.

Fly Yangyang, based in Gangwon Province, also plans to seek an operational license in May hoping to bring more tourists to the region. In an earlier attempt in February, the Transport Ministry denied to issue a the license citing the airline’s financial status and a lack of safety measures.

International air passengers using budget carriers have surged in recent years to make up more than 30 percent of the total air travelers last year, according to the Korea Airports Corp.

Jeju Air, the nation’s No. 1 no-frills carrier, logged 746.6 billion won in revenue last year, an almost fivefold surge compared to 2010.

As competition heats up, concerns are also mounting that the market could get saturated, affecting the industry.

“Airliners will compete with cheaper fares and that will affect overall service quality negatively not to mention safety issues,” an industry watcher said.

Currently, two budget carriers Tway Air and Eastar Jet have run out of cash, while Air Seoul has posted operating losses since its launch in 2016.

By Park Han-na (hnpark@heraldcorp.com)