Airline News
Air Seoul applies for AOC
October 23rd 2015
Asiana Airlines, South Korea's second-largest carrier, on Monday said it had submitted an official request to the government to launch Air Seoul, its second budget offshoot, following Air Busan, to be based at Incheon International Airport, Yonhap News Agency reported. Read More » It is expected to get its first aircraft, most likely from the A320 family, airborne in mid-2016, with pilots to be borrowed from Asiana initially, before gradually training its own flight crews, which in itself could be a challenge, given the growing exodus of Korean pilots abroad, especially China, where they receive better pay and benefits.
Asiana set up a formal task force to launch Air Seoul in March, with original plans to apply for an air operator’s certificate in May. However, this was delayed due to a number of factors, including the Asiana A320 crash landing in Hiroshima in April, the sharp drop in passenger numbers after the outbreak of Middle East Respiratory Syndrome in May, and strong opposition from other budget carriers.
Air Seoul is expected to compete fiercely with other no-frills airlines on popular leisure routes to China, Japan and Southeast Asia, going head-to-head with local rival Jeju Air, Eastar Air and T’Way Airlines.
In August, Singapore Airlines (SIA) ended talks to buy a stake in Jeju Air, five months after it announced it was considering an investment in the budget carrier. “Discussions have now ceased,” SIA said in a statement. “The parties will not be proceeding with a transaction.”
SIA has been expanding in Australia, Thailand and India in response to competition from budget airlines growing their market share in Southeast Asia. An investment in Jeju Air would have given it more access in North Asia, including China.
The SIA statement did not specify why the deal fell through. In a regulatory filing in Seoul, Jeju Air parent AK Holdings Inc., part of the Aekyung Group, said Jeju Air had decided not to consider SIA’s equity investment proposal.
