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S. Korea budget carriers ferry 50 mln passengers since launch: report

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(Globalpost/GlobalPost)

SEOUL, Jan. 14 (Yonhap) -- The number of passengers that has flown with South Korea's low cost carriers (LCCs) has surpassed the 50 million mark, a report by local airport authorities said Tuesday.

According to Korea Airport Corp. (KAC) and Incheon International Airport Corp. (IIAC), the five budget airlines have handled 44 million passengers on domestic flights and over 11.4 million people on international routes since they started operations eight years ago.

Local LCCs include Jeju Air Co., Air Busan Co., Jin Air Co., Ltd., Eastar Jet Co. and T'way Airlines.

These companies fly 350,000 domestic flights and 80,000 international routes per year.

Of the five, Jeju Air, the largest of the country's LCCs with 13 B737-800 jets, has ferried 17.2 million passengers since it was launched in 2005.

It was followed by Air Busan, with 11 jets, which hauled 12.2 million people. Jin Air and Eastar trailed at 9.8 million and 9.6 million each, with T'way Airlines bringing up the rear by servicing more than 5.7 million passengers.

Jin Air has 11 passenger planes, and Eastar and T-way have nine and six planes, respectively.

On international flights, Jeju Air again led the pack by ferrying 4.35 million people with Jin Air and Air Busan reporting passenger numbers of 2.42 million and 2.05 million.

The KAC and IIAC said while budget carriers got off to a difficult start that included limitations on the types of planes they could operate and chronic deficits that resulted in the country's first LCC, Hansung Airlines, discontinuing operations in 2008, overall conditions have improved.

"In 2008 Korean Air Lines Co. and Asiana Airlines Inc., the country two main flag carriers, created Jin Air and Air Busan which triggered a sharp increase in routes offered," insiders said.

They said passenger numbers that stood at around 1 million per year surpassed the 5 million mark in 2009. This rose to over 10 million in 2011. It reached 15.6 million last year, with more than 10 million flying on domestic flights and some 5 million on international trips.

As of 2013, LCCs accounted for 48.9 percent of all domestic flights and 18.2 percent of overseas services.

With companies such as Jeju Air and Air Busan announcing expanded fleets, the market share of budget carriers is expected to go up in the new year.

Jeju, owned by Aekyung Industrial Co., said it will increase its fleet to 16-17 planes this year, with the goal of pushing up sales by 23 percent on-year.

Air Busan, meanwhile, said it will turn in two older jets and incorporate four new A320 jets into its fleet this year to bring its number of planes to 13.

In a press release, the company said it will strive to push up sales to 350 billion won (US$330 million), with the operating profit target set at 10 billion won for 2014. These numbers represent double digit gains compared to the year before.

It also wants to post its fifth straight year of profit this year, which would be a first for a South Korean LCC.

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