Foreign carriers eat up more of local market

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Foreign carriers eat up more of local market

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As more foreign travelers enter Korea, the number of overseas carriers plying air routes to and from the country has surged in recent years, signaling fierce competition among airlines trying to snatch a greater share of the local aviation industry.

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According to data compiled by the Incheon International Airport Corporation (IIAC), there were 73 foreign carriers operating in Korea as of last month, marking a significant increase from 45 in 2001 when the airport first opened its doors.

The number of local carriers rose from two to six over the same period as low-cost carriers like Air Busan, Jin Air and Jeju Air threw their respective hats in the ring. Korean Air and Asiana Airlines are the country’s two largest airlines.

“The government [Ministry of Land, Transport, and Maritime Affairs and the IIAC] has been beefing up its efforts in recent years to attract more foreign carriers,” said an IIAC official. “[Incheon] airport is also geographically close to Japan and China, and more overseas carriers are taking notice of this and are seeing the port as an important hub.”

Foreign carriers’ focus on the Korean market is based on the growing number of foreign tourists. According to the Korea Tourism Organization (KTO), as of 2011 the number of foreign tourists flying into Korea each year reached 9 million, up from 8 million in 2010. It is expected to continue growing at the same pace and hit 10 million this year.

The KTO said it expects the number to grow in reflection of the successful spread of Korean cultural content and cuisine overseas.

“In the past, the majority of travelers came from neighboring nations like Japan and China, but now they come from all over the world like Europe and the Middle East,” said an official from the agency.

Meanwhile, the number of international passengers including outbound Korean travelers grew from 35.3 million in 2008 to a record 42.7 million last year, according to land ministry data. The increase comes despite the global financial crisis stemming from the debt-riddled euro zone as Korea has escaped the brunt of the crisis due in large part to its strong economic fundamentals, according to the government.

Around 66 percent of international passengers flew with a total of six Korean carriers last year, but industry officials expect the proportion of passengers using overseas carriers to grow as they offer a wider selection of destinations and promotions.

Until June 30, Emirates is offering up to 30 percent off its flights leaving Incheon from Monday to Thursday, while Japan Airlines is offering cheap round-trip tickets to cities in the Hokkaido area this month.

Foreign airlines are also stepping up their game on popular routes from Incheon to Bangkok and Osaka. They have already surpassed local carriers in terms of market share for flights heading to and from the Thai capital. Last year, they flew 770,164 passengers on this route, compared to Korean Air and Asiana Airlines’ combined 743,163 passengers.

At present, there are 56 flights running between Incheon and Osaka each week. Of these, Korean Air and Asiana Airlines operate 21 each, while Jeju Air and Japan-based All Nippon Airways both run seven flights.

Japan’s first budget airline, Peach, will also fly the route seven times a week from May.

Also last year, Garuda operated a total of 130,043 flights between Indonesia and Korea, which is a 27 percent increase from the previous year. It expects to see its profits on routes between the two countries grow by around 20 percent this year as it aggressively expands the number of flights.

“Competition will be fiercer than ever this year as local budget carriers are trying their best to increase the number of international routes, while foreign carriers are pushing to increase their presence in Korea,” said another official from the land ministry.


By Lee Eun-joo [angie@joongang.co.kr]

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