South Korea’s budget air industry is undergoing a sweeping makeover as the pandemic crisis brought about mega mergers, streamlining and new entries.

Air Premia formally can start business upon arrival of Boeing 787-9 aircraft next month and gaining air transport certificate (AOC). The certificate is a system in which the Ministry of Land, Infrastructure and Transport comprehensively verifies whether a carrier with business license has secured safety operations capability. The ministry grants operation permit to those with a certificate.

In March 2019, Air Premia received an air transport license from the transport ministry under condition that it receives destination route permit in two years and applies for an AOC in one year.

Despite the ongoing Covid-19 crisis, Air Premia is expected to get its license by March deadline as planned.

Air Premia is currently in talks with overseas airport authorities such as of Singapore, Vietnam, and Thailand, with an aim to announce a Southeast Asian country as its first destination. The fledging carrier plans to bring in two additional Boeing 787-9 aircrafts this year.

Another newcomer Aero K that received operation permit last month plans to launch operations as early as next month. The transport ministry is currently reviewing its operation application.

Aero K plans to introduce the 180-seat Airbus 320 to the Cheongju-Jeju route. It plans to provide international routes with the two of the same aircrafts.

Fly Gangwon, which received an aviation operation business license with Air Premia and Aero K, had also launched flights from Yangyang to Jeju in November, 2019, and Yangyang to Gimpo and Yangyang to Daegu.

Fly Gangwon has suspended all of its routes except for those flying to and from Jeju but it is hoping to reintroduce the routes once air travel demand improves and it receives operation subsidy.

The merger between Korean Air Lines Co. and Asiana Airlines Inc., the country’s two biggest full-service carriers, is also expected to bring changes in the aviation landscape as their budget carriers – Jin Air, Air Busan, and Air Seoul – would also become one.

As of last year, the three low-cost carriers accounted for 44 percent of the budget airline market. After merger, they will beat out Jeju Air Co., the current biggest low-cost carrier.

The merger of the three budget carriers will gain speed once Korean Air’s takeover of Asiana Airlines is complete in June.

Another budget carrier Eastar Jet Co. that had suspended international and domestic flights in March plans to resume operations in the first half of this year at the earliest on the back of court-led acquisition.

Industry insiders noted that the landscape of the country’s budget carrier market will change to one that is led by the trio – Jin Air, Air Busan, and Air Seoul – followed by Jeju Air and Tway Air Co.

The Covid-19, meanwhile, remains a variable in the industry reshape as the pandemic, if prolonged, will leave the entrants in the air.

Jeju Air that had attempted to acquire Eastar Jet last year could also seek other acquisitions.

An unnamed industry official said that passenger demand will recover once Covid-19 situation stabilizes in the second half of this year.

By Pulse

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]