Boeing cites LCCs as key to growthBoeing on Monday said it considers low-cost carriers (LCCs) the key growth engine for the commercial aviation markets in Northeast Asia, including in Korea.
The U.S. airplane manufacturer said the aviation market in Korea is currently led by LCCs. They are projected to continuously expand their traffic volumes and the share of seats on back of the strong market and the growing propensity to travel. LCCs in Northeast Asia account for 65 percent of all aviation traffic, according to Boeing.
“The landscape [of the aviation market in Northeast Asia] is changing,” said Randy Tinseth, vice president of commercial marketing for Boeing, at a press event held in the Conrad Seoul hotel in Yeouido, western Seoul, on Monday to share the company’s 20-year commercial market outlook.
Today, half the traffic is generated within international services like the U.S. and European markets while the other half is generated within the Asian market, according to Tinseth. “Traffic from the Asian market is growing much faster. As a result, 20 years from now, almost 70 percent of traffic will be to, from or within Asia.”
The number of LCCs in Northeast Asia over the past decade tripled while their ability to transport passengers increased sixfold. They added 231 new routes over the past 10 years, which is an 18-fold increase, according to Tinseth.
LCCs in Korea account for 47 percent of the share of seats, a 7 percent jump on year. Korea has six budget airlines: Jin Air, Air Busan, Jeju Air, Air Seoul, Eastar Jet and T’way Air.
Boeing projected Northeast Asian airlines to require some 1,420 new fleets worth $315 billion from this year to 2038 on the back of the rise in demand for LCCs and the need for full-service carriers to renew their fleets.
On a global scale, the air travel market is projected to be 2.5 times larger in 20 years, and the global commercial jet fleet will grow to double its size by 2038, according to Boeing. Robust demand will continue in the next two decades followed by the “strong economic growth, growing middle classes and increasing consumer spending on services,” according to Boeing.
BY JIN MIN-JI [firstname.lastname@example.org]