Jeju Air’s Guam gamble pays dividends as seats fill

Jeju Air, the nation’s No. 1 low-cost carrier by sales, has got off to a flying start with its new Incheon-Guam route as it recorded a passenger occupancy rate of 69 percent in the first month of operations.

The budget airline, which is controlled by Aekyung Group, said on Monday it has filled 7,300 of 10,600 available seats on its flights to the West Pacific island from Sept. 27 to last Friday.

Korean Air and its sister company Jin Air were the only local airlines offering the route before Jeju Air stepped in.

Last year, the two Hanjin Group affiliates notched average occupancy rates of 78 percent on their Guam flights, according to the Korea Civil Aviation Development Association.

Despite being 8 percentage points worse off, Jeju Air said it was satisfied with the result.

“It’s a really successful performance considering we’ve only just completed our first month,” said an employee at the airline. “This also shows that Korean customers wanted more flights to Guam.”

Boosted by its strong start, Jeju Air said it has added more flights to Guam from Sunday. Previously, it flew there once a day using its 186-seat Boeing 737-800, but it now offers 11 flights a week after adding several evening flights. Korean Air provides 14 flights a week, while Jin Air offers seven.

According to data from the Guam Visitors Bureau, 89 percent of travelers who visited Guam last year used package tours by local agencies. But Jeju Air said it’s seeing a rising number of free independent travelers (FITs), who usually just book flights and perhaps hotels, but who organize the rest of their itineraries themselves.

The no-frills airline said that 31 percent of its passengers on the Guam flights were single travelers or small groups of less than 10 people. The same demographic only accounts for around 10 percent of fliers among its rivals, it said.

To meet the needs of FITs, the low-cost carrier (LCC) said it has signed a partnership deal with local resorts and rent-a-car companies to offer discounted prices to its customers.

Jin Air, Korea’s No. 2 LCC, said it is monitoring how Jeju Air’s success affects its business but remains confident it can win over fliers in the future.

“We have been safely flying the Guam route since 2000 and since demand is so large, Jeju Air’s operation will not make a big dent in our business,” said a spokesperson for Jin Air.

Meanwhile, Jeju Air said it plans to add a flight to Saipan next year, hoping to break another monopoly by Asiana Airlines.

“We have given customers who wish to travel Guam more choice, and we want to do the same vis-a-vis Saipan,” the company said. “We’re hoping to become the first Korean airline to fly to both destinations.”

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