T’way plans IPO to finance long-haul fleetLow-cost carrier T’way Air is planning an initial public offering to raise money for further expansion.
The airline aims to acquire larger planes in order to offer long-haul routes that connect Seoul with Europe and North America, as well as new destinations in southern Asia.
T’way revealed an eight-year plan to navigate the increasingly competitive LCC market at a press briefing at the Plaza Hotel Seoul in central Seoul on Thursday.
“The six LCCs in the country are aggressively expanding their fleets and more companies are waiting for approval to enter the market,” said Jeong Hong-geun, CEO of T’way Air. “The market is quickly becoming saturated so we aim to pioneer a new longer-haul service in order to survive.“
While the company is currently operating 20 planes, it will add 30 more by 2025 including 10 larger planes suitable for mid to long-haul routes. Likely destinations include Germany, India, the western coast of the United States and Hawaii, Jeong announced.
If T’way achieves its goal, it will become the first domestic LCC to operate services to Europe or North America.
The company also hopes to create international offices in popular destinations, such as Japan, Vietnam and China, to expand its short-haul services.
To realize these ambitions, T’way needs stable sources of profit, which is one of the reasons it will pursue an IPO next year.
T’way moved into the black for the first time in 2013 and has since maintained a profit surplus. While the airline carried 5 million passengers and earned 383 billion won in revenue last year, it hopes to achieve 2 trillion won in revenue by carrying 20 million passengers annually by 2025.
BY KIM JEE-HEE [firstname.lastname@example.org]