Singapore and Korea liberalise third/fourth freedoms
Singapore-Seoul had been bottleneck in liberalising environment. Read More »
Although East Asia has progressed towards liberalisation and even open skies, one major obstacle has been constrained traffic rights between Singapore and Seoul that limited each country to 28 flights a week. This restriction was lifted during a recent meeting in Seoul between Singapore’s prime minister, Lee Hsien Loong, and South Korea’s president, Moon Jae-in.
The new agreement allows an unlimited number of passenger and cargo flights between Singapore and any destination in Korea. Fifth freedom rights are extended from 10 to 14 a week. The agreement goes further than previous attempts to increase capacity on the Seoul-Singapore route.
The status quo favoured Singapore Airlines (SIA), which used all 28 flights each week allocated to the Singapore side. This gave it a larger presence in seats and frequency than its Korean peers, Asiana Airlines and Korean Air (KAL). The two Korean carriers each had 14 flights a week.
Asiana and KAL wanted to increase local Singapore-Seoul flights. SIA was content with its local Singapore-Seoul allotment, but wanted more fifth freedom flights beyond Seoul. Korea rejected this out of concern an expanded SIA fifth freedom network from Seoul to the U.S. would cut into the bread and butter trans-Pacific networks of Asiana and KAL.
In the recent past, SIA had served Singapore-Seoul-Los Angeles, but the carrier has now ended fifth freedom flights beyond Seoul. This allowed it to expand the local Singapore-Seoul market because capacity was no longer set aside for onward travel to Los Angeles. Seoul-Los Angeles was discontinued in favour of additional non-stop capacity from Singapore to Los Angeles.
The Korean side is the biggest beneficiary of the agreement because Asiana and KAL want to grow. Korea’s LCCs also could consider Singapore, although it is not an easy calculation given the distance between the two countries. SIA LCC, Scoot, also could look to increasing its presence in the market. The caveat would be slot availability at Seoul Incheon and Singapore Changi.