Korean Air and Asiana Airlines planes are seen on the runway of Incheon International Airport, Feb. 13. Yonhap
T’way, Air Premia to reshape strategies due to creation of mega LCC
By Lee Min-hyung
Low-cost carriers (LCC) in Korea are gearing up for significant changes to their growth strategies, bracing for the envisioned launch of a mega-sized budget airline after Korean Air completes its acquisition of Asiana Airlines, according to industry officials, Monday.
The outlook comes amid growing optimism for the two full-service airlines to secure final approval for the deal from U.S. authorities, possibly by the end of the year. Upon completion, Korean Air is widely anticipated to proceed with the integration of Jin Air, Air Seoul, and Air Busan — three LCCs operated by the two carriers. The newly launched LCC will be the largest budget carrier here, surpassing Jeju Air and T’way Air in terms of annual sales.
Local aviation industry sources said other budget carriers have already started internal reviews to restructure their growth strategies as a preemptive measure to adapt and thrive amidst the anticipated paradigm shift in the LCC landscape.
T’way Air is focusing on expanding its presence in Europe by introducing additional air routes connecting Incheon with major destinations such as Frankfurt, Paris, Rome, and Barcelona. This expansion follows the transfer of route rights from Korean Air to T’way Air. Earlier, Korean Air decided to relinquish those routes in exchange for conditional approval for its acquisition of Asiana from the European Union.
T’way Air promotes the introduction of an A330-300 passenger jet at Gimpo International Airport in Seoul, March 17, 2022. Joint Press Corps
“T’way Air is set to inaugurate an air route from Incheon to Croatia, marking a significant milestone as the first instance of a Korean LCC launching a route to Europe,” an official at the airline said. “We will also prepare for the launch of four routes to Europe’s key tourist destinations this year.”
In an earlier interview with The Korea Times, T’way Air CEO Jeong Hong-geun outlined a vision to achieve 1.8 trillion won ($1.4 billion) in sales this year, driven by the anticipated launch of the European routes.
Air Premia is targeting an expansion of routes to the U.S., with plans to inaugurate a new route between Incheon and San Francisco on May 17. The budget carrier presently operates three routes from the Korean city to New York, Los Angeles, and Hawaii. Additionally, it is expected to obtain five of Korean Air’s routes to various U.S. cities, including Seattle and New York, following antitrust concerns expressed by the U.S. Department of Justice over the routes after the Korean Air-Asiana deal.
Jeju Air is exploring opportunities to boost sales at its cargo business, potentially through the acquisition of Asiana Airlines’ cargo unit. While the budget airline has not officially confirmed this plan, it is widely viewed as the most likely candidate to purchase Asiana’s cargo business. The sale of Asiana’s cargo business was also stipulated as a precondition for Korean Air’s acquisition of Asiana Airlines.
“The introduction of the merged LCC will have a profound impact on the nation’s aviation industry, with the combined entity wielding significant influence, particularly in short- to medium-distance routes to Southeast Asia,” an official at a local airline said on condition of anonymity. “With the advent of the new merged LCC, other carriers in the industry will face mounting pressure to seek opportunities in alternative air routes, as the rivalry in the conventional Asian routes will get tougher after the launch of the new LCC.”
