Asiana Airlines (OZ, Seoul Incheon) is considering whether or not to set up a new, wholly-owned Low Cost Carrier to partner Air Busan (BX, Busan), in which it holds a 46% share. The carrier will likely be based in the Seoul metropolitan area, flying out of Seoul Gimpo and Seoul Incheon international airports.
“It would be senseless not to have [one more] when there’s a need,” Asiana spokeswoman Lee Hyo-min told the Wall Street Journal. The company said it will file for a business license with the Ministry of Land, Infrastructure, and Transportation as soon as its plans are fixed.
In February, CEO Kim Soo-cheon warned that the rise of LCCs had become a very real threat which all full service carriers had to confront.
The move has been greeted with some consternation by industry analysts who fear its entry will only lead to more market saturation. Presently, South Korea is home to five LCCs namely: Air Busan, Eastar Jet (ZE, Seoul Gimpo), Jeju Air (7C, Jeju), Jin Air (LJ, Jeju) (owned by rival Korean Air (KE, Seoul Incheon)) and t'way Air (TW, Daegu).
In December 2013, AirAsia (AK, Kuala Lumpur International) filed an application with the Korean Ministry of Land, Infrastructure & Transport to establish AirAsia Korea (Seoul Incheon); a joint venture between the Malaysian group (25% shareholding) and an undisclosed group of local investors (75%). Should it be granted the go-ahead, the startup will reportedly focus on the local Cheongju to Jeju route before going international.
