Korean Air confirms low-cost launch

Korean Air has confirmed that it is to launch a new low cost carrier within the next 3 years. Since 2005, Korean Air organized a special task force to study the feasibility of operating its own low cost carrier. For the new airline, Korean Air is considering using one of its Hanjin Group affiliates, Korea Airport Service, which has charter flight operation experience, rather than setting up a new company. Korean Air is part of the Hanjin Group, one of the world’s largest transportation conglomerates.

Young-Ho Kim, President of Korean Air’s Passenger Division said, “Korean Air aims to differentiate the new low cost carrier with excellence, using the experience, world-class maintenance skills and fleet efficiency know-how accumulated for more than 35 years through Korean Air operation, in order to proactively deal with changes in the airline industry.”

Korean Air’s low cost carrier will operate Korea domestic routes and short and mid-haul international routes using a fleet of Boeing 737s.

The low cost plan takes into strategic consideration the expected changes in Korea’s domestic aviation market. Within 2 or 3 years, when Korea’s high speed railway is completely open for service, much of the domestic air traffic demand is expected to shift to the railway, inevitably calling for a restructuring of domestic route flight operations. It is Korean Air’s conclusion that it must develop new markets and business models to effectively utilize the fleet that will be freed from domestic operations.