Air Busan latest carrier to get int’l cargo license

Air Busan yesterday obtained a license from the Ministry of Land, Infrastructure and Transport, making it eligible to operate an international cargo transport business along with all of Korea’s other budget carriers.

Air Busan, an affiliate of Asiana Airlines, said that it will start operating its cargo business next month, starting with its Busan-Taipei and Busan-Hong Kong routes before expanding to international routes.

Air Busan is the latest local low-cost carrier (LCC) to obtain a license. Jeju Air, the nation’s largest budget airline, received its approval in January 2012, followed by Eastar Jet and T’Way Airlines in November 2012. Jin Air just acquired a license in November last year.

Budget carriers typically utilize empty space in their passenger jets to haul cargo rather than operating separate airfreight jets, allowing them to save on expenses.

However, because space is limited, LCCs mostly carry packages that aren’t temperature sensitive or fragile.

International cargo volume coming to and from Korea was 3.24 million tons last year, up 1.2 percent from 2012, according to ministry data.

Nearly 70 percent of international cargo was transported by Korean Air Lines and Asiana Airlines, the local flag carriers.

But as local LCCs expand their businesses to include more international routes, the ministry expects their carrying capacity to increase in the near term.

“Because all local LCCs have now entered into the international cargo business, they have secured a new platform to grow,” the Ministry of Land, Infrastructure and Transport said in a press release.

“We expect that this will enhance customers’ comfort and tap a niche market, transporting a small volume of cargo to smaller airports, which large cargo jets can’t do.”

Meanwhile, passenger traffic among budget carriers has also been growing steadily on both domestic and international flights, according to the ministry.

Last year, Korean LCCs transported 10.7 million passengers on domestic flights, up 13.8 percent from 2012, while increasing its market share 4.4 percentage points to 48.2 percent.

Local LCCs have served 4.9 million passengers on international flights in 2013, up 36.9 percent from a year earlier, while its market share advanced 2.1 percentage points to 9.6 percent.

BY JOO KYUNG-DON [kjoo@joongang.co.kr]