South Korea’s top two budget carriers Jeju Air and Jin Air are preparing a possible buyout opportunity for another low-cost name Air Busan under the country’s second largest full-service carrier Asiana Airlines that is now under HDC Hyundai Development, industry sources said Sunday.

The two companies are closely watching the move to strengthen their market position amid fierce competition, a source added.

To Jin Air, it could be an opportunity to narrow the gap with the LCC market No. 1 Jeju Air as it has been disallowed to add new planes to its fleet or new flight routes since August 2018 as the punishment for management’s wrongdoing.

Jeju Air also shows much interest to cement its market dominance. With Eastar Jet recently added to its umbrella, Jeju Air expects the potential buyout of Air Busan would help it keep its lead as the Korean aviation market No. 3 after full-service names Korean Air Lines and Asiana Airlines.

Rumors on the Air Busan buyout potential has started circulating as HDC Hyundai Development is reviewing various options to avoid violation of the country’s fair trade law after its acquisition of Asiana Airlines that was packaged with its various units including budget carriers Air Busan and Air Seoul. Under the current law, HDC Hyundai Development, a holding entity, must either own a full stake of Air Busan, which is a subsidiary of Asiana Airline, or sell it off within two years after its acquisition.

But some experts expect HDC Hyundai Development may decide to turn Air Busan into a subsidiary to keep it, citing its lucrative business. Air Busan, based in the southern city of Busan and South Gyeongsang Province, secures many prime-time landing slots at Gimhae International Airport.

By Song Gwang-sup, Choi Keun-do and Lee Ha-yeon

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