South Korean airlines decry Asiana’s 2nd budget carrier

PLANS for Asiana Airlines’ new LCC is facing fierce opposition from other operators, who argue that the airline already has regional airline Air Busan under its wing.

The new airline is tentatively called Seoul Air and Asiana hopes to have the new carrier airborne in 2H2015.

Eastar Jet, Jeju Air and T’way Air have jointly submitted a letter to the transport ministry in Seoul, demanding that Asiana not be permitted ownership of a second LCC in order to maintain competitiveness in the market.

“Approval will only protect the interests of large commercial airlines, rather than expanding options for consumers,” they said.

LCCs claim that they are being forced out of competition from two fronts: international flight routes are monopolised by large domestic flag carriers, while shorthaul tourist routes are snapped up by foreign budget airlines.

Analysts, however, believe that Asiana’s influence on the domestic aviation scene will be sufficient to push the project through.

Geoffrey Tudor, an analyst for Japan Aviation Management Research, commented: “The South Korean market is much smaller than the Japanese market, so there will be concern among the South Korean LCCs that they are going to get squeezed out of business.

“And that’s even more likely if the giant Asiana is behind the new airline, especially for LCCs that are not affiliated with a major airline,” he added.

Tudor noted that Asiana would not be the first airline to own two budget airlines – All Nippon Airways has a stake in Peach Aviation and Vanilla Air – and that the government is likely to approve Asiana’s request.

“At the end of the day, it’s the consumer that counts and more competition is good for the people who buy the tickets,” he said.

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