Jeju Air makes moves to soar with the eagles

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Jeju Air makes moves to soar with the eagles

Jeju Air, the nation’s largest low-cost carrier (LCC), yesterday demonstrated its desire to become a top-three airline, behind flag carriers Korean Air and Asiana Airlines.

The budget carrier, controlled by Aekyung Group, announced its 2013 business plan yesterday.

“This year we will reinforce the fundamentals for sustainable growth,” the company said in a release.

“We will focus on our core abilities, polish our brand image and upgrade our competitiveness to become a global airline.”

The airline said it hopes to reach 480 billion won ($439 million) in sales for 2013. That would be a 40-percent increase from last year’s estimated sales figure of 340 billion won. For operating profit, the company said it aims for 17 billion won.

To achieve its goal, Jeju Air plans to expand flights to China. It has opened four new flights to China since last month: Incheon-Taiyuan, Incheon-Jiamusi, Jeju-Ningbo and Jeju-Fuzhou.

The company said it plans to fly to three or four additional Chinese cities by no later than this March. However, since Korea hasn’t yet reached a full open skies accord with China, these new routes will be operated as irregular flights, the airline said.

The air carrier, meanwhile, will launch new flights to Japan and Southeast Asian countries this year as well.

Jeju Air will also bring in two additional aircraft this year to bulk up its passenger-carrying capacity. It aims to serve 4.95 million passengers in 2013.

The airline carried a total of 3.82 million passengers last year, including 1.19 million people using international flights. Jeju Air was the only local LCC which served more than 1 million international passengers, according to data from the Ministry of Land, Transport and Maritime Affairs.

Although the majority of its 2013 business plan focuses on increasing the size of operations, Jeju Air claims that it will not overlook the quality of its service. The company said another task for this year is to set up a good IT system in areas such as ticketing or on-line booking.

“As competition grows fiercer and the business environment rapidly changes, what’s important is to have a high-tech IT system which customers can easily use,” the company said.

Industry insiders say that local LCCs will face a series of troubles following the volatile currency rate changes and forays into the domestic market by foreign competitors, such as Air Asia and Peach Aviation. Although marketing costs are expected to rise to attract customers, the company said it is ready for the challenge.

“External factors like the economic slowdown, currency rate and oil prices are affecting not only us, but all other airlines, so the key is who can overcome the difficulties most efficiently,” a spokesman from Jeju Air said. “But for this year, we will focus on cementing our long-term sustainability, not just short-term sales performance.”

By Joo Kyung-don []
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