Korean Air considers low-cost airline business

Airline Industry Information, March 25, 2005

AIRLINE INDUSTRY INFORMATION-(C)1997-2005 M2 COMMUNICATIONS LTD

South Korean carrier Korean Air Co may enter the low-cost airline business if the government allows budget airlines to fly overseas, its president said on Wednesday (23 March).

The carrier is considering establishing a low-cost carrier unit, separate from Korean Air, said the president.

Two low-cost airlines are to begin operations in 2005, flying domestic routes, but since Korean Air is losing money from its domestic flights, the new airlines are expected to have little negative impact on the carrier. However, if budget carriers are allowed to fly to neighboring countries like Japan and China, this may be a blow to Korean Air, forecast industry watchers. Hansung Airlines Co, Korea's first low-fare airline, said on Wednesday (23 March) it wants to fly to Japan, China, Taiwan and Southeast Asia in 2006.

((Comments on this story may be sent to aii.feedback@m2.com))