Jin Air to hit Kospi next month

Korean Air’s low-cost arm, Jin Air, is listing in the Korean stock market next month, aiming to enlarge its fleet and tackle the Asian market, the airline said Friday.

As the local low-cost carrier market becomes more competitive, carriers have been vying to list on the stock market as a basis for expansion. Currently, the only listed LCC in the Korean market is Jeju Air, Korea’s largest LCC. Other LCCs, including T’way Air and Air Busan, are preparing for IPOs.

The listing on Seoul’s benchmark Kospi is scheduled for Dec. 8, with two-day presales beginning Nov. 29. It is offering 12 million shares to the public with an estimated stock price between 26,800 and 31,800 won ($24.69 to $29.31). The price will be finalized next week, the carrier said.

Jin Air, founded in January 2008 by Korea’s largest airline, differs from other LCCs in that it operates the mid-to-long range B777-200ER, working together with affiliates of the mother company, Hanjin Group.

Jin Air was the first LCC to offer longer-haul flights connecting Seoul with Hawaii and Cairns in Australia, the carrier said. From January, the airline will also start services to Johor Bahru in southern Malaysia. As Korean Air and Jin Air are both under Hanjin Group, sharing infrastructure for plane maintenance and offering joint services has helped the LCC more quickly stabilize its business.

According to Jin Air, it has been growing at an average of 45 percent annually for the last three years, based on revenue earnings. In 2013, it posted 283.3 billion won in revenue and 7.1 billion won in operating profit, while last year it posted 719.7 billion won in revenue and 52.3 billion won in operating profit. This year, the company posted an accumulated 656.4 billion won in revenue and 78 billion won in operating profit through September.

To boost its business after the IPO filing, Jin Air announced an aggressive expansion plan on Friday. It hopes to add five planes to its fleet every year until 2020, to operate 38 total by that time, going from 20 to 30 189-seater B737-800s and from four to eight 393-seater B777-200ERs.

Its new target destination for 2019 is Eastern Europe. To reduce its dependence on the domestic market and attract foreign customers, it also plans to implement frequently used payment systems for foreign customers and increase its foreign staff.

“We will expand our presence in overseas markets to first become the leading LCC of Asia,” said Choi Jung-ho, CEO of Jin Air, “and ultimately become the world’s leading LCC.”

BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]