Korean Air to establish LCC

(c) Centre for Asia Pacific Aviation PREMIUM: Korean Air announced its Board has approved plans to invest USD21.5 million to establish a new LCC, tentatively named Air Korea. The LCC will commence operation in May-08, and a separate corporate body for the LCC will be established within Dec-07.

 

Air Korea will use Incheon International Airport as its base airport. Starting May-08, it will launch routes to destinations in China’s Shandong and Hainan Provinces, which is under open skies agreement between Korea and China and thus do not limit airlines’ route operations. Air Korea will also open routes to Japan (except Tokyo), Thailand and Malaysia, all also under open skies. It gradually plans to widen its network to other short-or-mid-distance destinations.

Korean Air first announced its intentions to establish a LCC in early Jun-07 to proactively face the developing trends in the Asian airline industry, providing “quality transportation service at a lower price for the benefit of the fast-growing travelling public”.

For operation, Air Korea will secure three A300s and two B737s. Aircraft maintenance and operation training will be outsourced to Korean Air, which has nearly 40 years experience in both fields.

Korean Air and Air Korea, a separately operated subsidiary, will complement each other for a “win-win relationship”, according to the airline. Korean Air shall concentrate on upper class business travel demands and Air Korea will focus on travellers seeking shorter distance leisure travel routes.

 

Date posted: 27-Nov-07