Startups ready to enter budget airline market

Korea’s budget airline market will soon be crowded as startups seek the chance to challenge Jeju Air and Hansung Airlines, the only existing homegrown budget carriers. Purple Jet, Estar, Seoul Air and others are in the process of seeking regulatory approval.
Yeongnam Air, a Busan-based company founded in December 2006, is closest to full-fledged operations. In October, the company bought one Dutch jetliner, a Fokker 100, and aims to begin flights in the first half of the year after the Transportation Ministry’s safety inspection.
Other new airlines waiting to enter the fray include Purple Jet, founded by owners of Internet travel agencies, and Estar, created by retired pilots from Asiana Airlines. Purple Jet was founded in August last year, and Estar was created in October.
Korean Air, Korea’s largest airline company, is expected to operate a budget carrier subsidiary, called Air Korea, after it finishes regulatory discussions with the Transportation Ministry. The company caused a stir last year when it announced that it would open a new budget airline subsidiary that would operate only international flights.
It planned to forgo the three-year waiting period during which a new airline is required to operate only domestic flights. The company will likely fly a certain percentage of domestic flights in exchange for running international flights without the three-year waiting period, according to market sources.
It may be hard for budget airlines to turn profits by flying domestically in a small country like Korea, but they have a vision that looks far beyond that, industry observers said.
“The price for a flight between Kimpo and Jeju is 160,000 won [$171], but a flight from Incheon to Fukuoka, Japan, which is nearly the same distance, costs about 450,000 won,” said one industry representative who refused to be named. “They are all looking to fly to China and Southeast Asia where the demand is booming.”

By Jung Ha-won Staff Reporter [hawon@joongang.co.kr]