Air Busan to fend off rival with more flights

Air Busan, the nation’s third-largest low-cost carrier (LCC), will add more flights to its Busan-Tokyo route as rival AirAsia plans to fly the same route from next month, breaking the Korean discount carrier’s monopoly among no-frills airlines.

Among five local LCCs, Air Busan is the only one that flies between Gimhae International Airport in Busan and Narita International Airport in Tokyo. The subsidiary of Asiana Airlines, the nation’s carrier, has been operating the flight everyday since June last year.

However, the carrier said it feels the heat from AirAsia Japan, a joint venture between AirAsia and All Nippon Airways, as the foreign LCC is scheduled to fly seven times a week from Nov. 28 using its 180-seat Airbus A320.

“Since AirAsia is a global company, it would be a lie to say we’re not nervous,” Air Busan said in a statement on Monday. “However, its move can also widen the market, so we’ll prepare for the ramped-up competition by focusing on our advantages.”

While Air Busan only operates eight international flights connecting four countries, AirAsia runs over 150 routes with 115 aircraft, including one between its base in Kuala Lumpur and Incheon, with AirAsia X.

But with AirAsia Japan, which was founded on August, the global low-budget carrier is looking to lure more Korean and Japanese passengers.

During his visit last week, AirAsia CEO Tony Fernandes, who owns a house in Busan, has been emphasizing that his company will help more foreigners visit other parts of Korea other than Seoul.

AirAsia Japan came out of the corner swinging as it offered 3,000 free boarding passes. Those who booked via the company’s Web site yesterday only have to pay 23,000 won ($21) - the cost of the airport tax - to grab a one-way ticket from Busan to Narita.

However, Air Busan said it is confident it will keep its edge as it can offer cheaper normal tickets. It also plans to double the number of its Tokyo flights to 14 a week from next summer.

A one-way flight from Busan to Tokyo costs 9,100 won more with Air Busan than AirAsia Japan, but when additional service charges such as baggage fees and beverages are factored in, the former works out to be 26,000 won less, according to the Korean carrier.

The local LCC also claimed it offers improved sales channels, as, unlike Air Asia Japan, it does not charge a handling fee when booking tickets through its call centers. Air Busan also offers refunds after reservations have been confirmed, whereas its Japanese rival does not.

“They have different business models,” said an employee from Air Busan. “AirAsia’s basic fare is low, but it charges for almost every additional service, while our company offers those for free.”

Air Busan said its business model has been successful with Japanese customers. The company referred to a survey from AB-ROAD, a travel Web site in Japan, where it ranked first among low-budget carriers in terms of customer satisfaction.

By Joo Kyung-don [kjoo@joongang.co.kr]