Asiana board approves second LCC
Asiana Airlines’ board of directors has approved the establishment of a new budget carrier, tentatively named Seoul Air, despite strong opposition from domestic rivals.
May 1, 2015
Asiana Airlines’ board of directors has approved the establishment of a new budget carrier, tentatively named Seoul Air, despite strong opposition from domestic rivals. In a Korean Stock Exchange fi ling, Asiana said it would capitalise Seoul Air with at least KRW15 billion (US$13.6 million) with KRW500 million to be used as initial investments.
Asiana plans to have Seoul Air operational by the end of the year with the new carrier’s CEO, Ryu Kwang-hee, telling the Korean Times in an interview that the carrier would operate out of Seoul Incheon plying Asiana’s short-haul international routes that are currently unprofi table.
But domestic rivals T’way Air, Jeju Air and Eastar Jet have collectively written to the South Korean Ministry of Land, Infrastructure and Transport (MLITT) to urge the government not to approve Seoul Air’s establishment.
Yonhap news agency reported that the carriers contend in their letter that Seoul Air will only serve to further crowd an already saturated domestic and international market. Th e government, they said, “should not give permission to the new air transportation business operator as it is expected to weaken the domestic air carriers’ competitiveness.
Approval will only protect the interests of large commercial airlines, rather than expanding options for consumers.”