A Low-Fare Airline in the Plan

Korean Air expects to launch discount airline soon to help its further growth

Korean Air is on the verge of launching a discount airline dubbed Air Korea following the emerging need for a safe and trusty low-priced airline. It was designed to ward off damage done to airline passengers by the indiscriminate competition among discount airlines that have been budding lately, the airlines said recently.
The airline set up a task force to study the feasibility of one such airline several years ago. If the decision were made it would be either operated by Korean Air directly or by an affiliate. It would most likely be Air Korea, with years of experience in running irregular chartered flights and air cargo transportation, rather than setting up a new company to take charge of the new venture.
President Kim Young-ho in charge of passenger service for Korean Air said the aviation company started to look into the new airline service to actively cope with changes in the airline market environment. He said the new airline would be able to provide very good services in its domestic flights and short-medium range international flight operations, helped by Korean Air's long experience as a global air carrier.
The discount airline will use B737'. They are highly effective small and medium range passenger jets in domestic and short-range overseas flights based on low-price and low-cost operations to create demand for such air flight services.
Korea Air will continue to serve as a high-class commercial airline maintaining its global image and the new airline will take charge of tourism air routes to complement each other as part of a win-win strategy.
The current airline business trends show that low-priced airlines take up nearly 20 percent of the aviation industry in North America and they are fast emerging in the Asia-pacific region. This includes China. They have begun to change the shape of the air transportation industry globally.
To further allow the situation, the regulations for starting new air carrier services have been eased and the open sky policies have spread around the world to make it even easier to set up new air carriers. To help the situation further, the number of air passengers has increased substantially with an increasing number of middle-class families travel long distances to reach their tourism destinations. Along with the expansion in the number of overseas trainees - potential market for air passengers has grown much in the past several years.
Korean Air has decided to provide a low-priced and good quality air service to attract more passengers in a bid to adjust to changes in the market. This means that the air carrier would not just watch foreign discount air carriers taking away passengers from Korea.
The airline has been calling out the need to focus on a situation that allows discount airlines to dump airfares and bring disorder to the market with poor tourism products. These practices are hurting customers and Korean Air is seeking to correct them.
Korean Air is confident that its discount airline venture will change the discount airline business around the world. They will be among a select few that have already accumulated top maintenance capability, effective management of equipment and expertise with differentiated operations.
Korean Air assumes that when the Seoul-Busan High-speed Railroad is completed, many domestic air passengers would switch to the railroad, spurring the need for airlines to change their domestic operation patterns in two to three years. The new discount airline is expected to play a role in the changing domestic airline market to secure passengers as projected when the plan for the start of a new discount airline was visualized.
Korean Air has already become the largest air carrier in terms of cargo transportation and targets to become a global leading air carrier and the launch of a new discount airline is expected to help the main airliner to accomplish the new take-off. nw

KAL Chairman Cho Yang-ho.