News
Eastar joins U-FLY and Asiana Airlines back in the black
August 12th 2016
South Korean budget carrier Eastar Jet has joined the U-Fly Alliance, becoming the fifth member alongside HK Express, Lucky Air, Urumqi Air and West Air. Read More »
Seoul Gimpo-based Eastar is the first non-Chinese airline to join the group, and the first not affiliated with Mainland conglomerate HNA Group.
Launched in 2009, Eastar is an independent low-cost operator without a parent company – a fact that its CEO, Jung Shik Kim, believes is a significant advantage over rival carriers such as Air Busan (Asiana Airlines) and Jin Air (Korean Air).
“We do not have any other businesses aside from Eastar Jet, which means that we are able to focus entirely on delivering the best low-cost fares and quality standards to our customers,” said Kim.
Eastar has a fleet of 17 B737-800s, with a further two due by end-2017.
At Asiana Airlines, the country’s second largest carrier after Korean Air, the second financial quarter showed significant improvements.
In the April-June period, the Kumho Group full-service carrier posted a net loss of 26.7 billion won ($24 million), down 68% from a net loss of 85.4 billion won in the year-ago quarter. However, Asiana achieved a 28.8 billion quarterly operating profit through to June 30, reversing a 67.1 billion won loss the previous year.
"The company's profitability improved on a sharp increase in the number of local residents going abroad, while demand in China, Japan and Southeast Asian countries for flights to South Korea also jumped from a year earlier," Asiana said. Meanwhile, the company has successfully sold several assets during the quarter as part of debt reduction efforts, including a 50% stake in Kumho Asiana Plaza Saigon.
In an effort to further reduce losses, Asiana last month launched Air Seoul, its second budget offshoot following Air Busan. Currently operating on domestic routes only, Air Seoul this week started selling tickets for its international services beginning October 7. The LCC will serve the Japanese cities of Takamatsu, Shizuoka, Toyama, Nagasaki, Hiroshima and Yonago from Seoul’s Incheon International Airport, in addition to flights to Siem Reap, Kota Kinabalu and Macau.
All but Nagasaki and Macau are unprofitable routes currently served by full-service Asiana.
Air Seoul plans to expand to Ube and other destinations in Southeast Asia next year.
Meanwhile, Aekyung Group-owned LCC Jeju Air is also continuing its rapid growth. The carrier recently added budget services from its Incheon base to Sapporo, Phuket and Kota Kinabalu, in addition to peak season flights between Busan and Hanoi and Saipan.
Jeju Air now operates 22 B737-800s, with a further two due before year-end.
In the interim, controversy continues to bubble away at Korean Air. The flag carrier’s unionized pilots on Tuesday accused the airline’s management of tax evasion, calling for a probe by the national tax office.
"As change from within seems impossible now, we hope to correct the immoral managerial behaviours of the company through a strict probe by state authorities," the pilots said, accusing the company and its top executives of evading taxes and stashing away company assets for personal gains.
The accusations follow almost eight months of failed pay rise negotiations.
