Air Premia and two new budget carriers get state green light

By Lim Chang-won Posted : March 5, 2019, 15:51 Updated : March 5, 2019, 18:05

[Courtesy of Air Premia]


SEOUL -- Air Premia, South Korea's first hybrid service carrier which will offer mid to long-haul routes, was licensed to launch services along with two new budget carriers, fueling competition in South Korea's saturated carrier market.

Two other budget carriers licensed by the Ministry of Land, Infrastructure and Transport are Fly Gangwon based in the eastern airport of Yangyang and Aero K based in the central city of Cheongju. Aero K plans to purchase six A-320s by 2021 for flight services to China, Japan, Taiwan and Vietnam.

South Korea has two full-service airlines, Korean Air and Asiana Airlines, and six low cost carrier -- Jeju Air, Jin Air, T’way Air, Air Busan, Eastar Jet and Air Seoul. 
 
The transport ministry has tightened licensing requirements for budget carriers, reflecting concerns about growing competition in South Korea's saturated low-cost carrier market and a price war. Budget carriers transported 29.2 percent of passengers on international routes last year.

"It was not desirable to limit competition by artificially limiting market entry," a ministry official told reporters, adding that an airline that falls out of competition could be acquired by other companies. "If necessary, a merger is possible between airlines."
 
Air Premia, which plans to launch services in 2020, will introduce the latest model of wide-body aircraft with 300 seats such as Boeing 787-9 or Airbus A330neo to provide services primarily to high-demand destinations.

Air Premia will offer a low-density seat configuration, a premium service such as free snacks and more affordable prices than full-service carriers. CEO Kim Jong-chul headed Jeju Air, the country's top low-cost airliner based on the southern resort island of Jeju, from December 2009 to March 2012 and was credited with leading a successful turnaround in Jeju Air's profit.
 
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