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Korean Air started serving the Incheon-Sao Paulo
route via Los Angeles back in 2008 and says that
since then it's seen steadily increasing the number
of passengers every year. "Between 2008 and 2011,
the number of passengers carried on this route has
doubled," says the carrier.
"Looking forward, we will further develop our
operations in the South American region by
expanding our network and utilizing Sao Paulo as a
hub destination. Also, as exchanges between South
America and Asia keeps increasing, we will continue
to develop more business travel demand between
the regions. By utilizing our 5th traffic right, we will
steadily carry more passengers who will travel to and
from Los Angeles and Sao Paulo."
Korean Air also launched a three times a week
service to Kenyan capital Nairobi this summer, served
by an A330-200. This is the first East African route
served by an Asian carrier.
"As Kenya is the centre of East Africa where
hundreds of renowned international companies and
organizations are based, we expect more business
travellers will travel to and from Kenya with Korean Air
in the future," says the carrier. "Also, our new service
to Nairobi is expected to carry more leisure travellers
between Africa and Asia. With close cooperation
with [Skyteam Alliance partner] Kenya Airways,
Korean Air will continue to expand its network in the
central and southern African markets."
The carrier says: "As we seek new growth engines
so that we are prepared for the future, we see vast
opportunities in Central and South America, Africa
and Central Asia. In order to develop these markets,
we will fortify our SkyTeam alliance and strengthen
our integrated services with other logistics operations
such as trucks, shipping and rail."
Rival Asiana Airlines, meanwhile, reported a non-
consolidated net loss of KRW47.3 billion (US$41.7
million) for the second quarter, down for KRW17.7
billion profit for the same period last year. This was
put down to "the continuous high fuel cost and the
increment of operating cost as the operation expands."
The Star Alliance carrier is on something of a
growth push, planning to expand its long-haul routes,
grow its fleet to 83 aircraft in 2013 and 88 in 2015
(from 74 at the end of the second quarter), and
increase capacity by 14% in 2013 and 25% in 2015
Revenues for the second quarter increased 4.6%
to KRW1.37 trillion while operating income fell 56%
to KRW27 billion. Fuel costs were up by 11%, partly
due to exchange rates, while wage costs were up
12.8% to KRW1.55 trillion, reflecting an increase
International passenger traffic increased to 7.45
million revenue passenger kilometres, up 6.8% and
outstripping capacity which was up 4% to 9.49 million
available seat kilometres. Load factor was up 2.1
points to 78.5%. Like Korean Air, Asiana sees signs
of a stronger third quarter profitability and also expects
to benefit from new aircraft coming into service.
As mentioned, both carriers have low-cost
offshoots as they follow the Asian trend for a portfolio
of different offerings. Korean's Jin Air currently
operates eight Boeing 737-800s, with a ninth
expected by the end of the year.
In 2011, Jin Air increased its year-on-year sales
by 147 percent, to 170 billion won (around US$150
million). The carrier's operating profit in the same
period also increased by 265 percent, to about 6.9
Jin Air started operating domestic flights in
summer of 2008 and international flights in 2009, It
now operates to 11 international destinations from
Seoul/Incheon to Bangkok, Guam, Clark, Macau,
Sapporo, Cebu, Hong Kong, Vientiane and Yantai
and from Jeju to Shanghai and Taipei.
"The reason why Jin Air has had outstanding
growth between 2011 and 2012 was because it has
vigorously expanded its international network to blue
ocean markets where other LCCs did not fly to and
from," says the carrier.
Jin air says that while most of its international
flights are mainly made up of Koreans, for services
from Jeju to Shanghai and Taipei, foreign demand
accounts for more than 90% of the total passenger
For domestic flights, sales generated on the web
are 40% of the total sales with the remaining 60%
coming through travel agents. "For International
flights, a relatively higher percentage of the total
sales are generated through travel agencies," says
Jin Air. "We will continue to strengthen our online
sales for international flights to boost demand."
Looking forward, Jin Air notes: "The most important
point for an LCC is to keep costs down. Therefore,
we are internally researching for an optimal solution
to cut down costs."
The carrier is clearly a big fan of the budget
terminal concept. "In Japan and China, they have built
specialized LCC Terminals. With the LCC exclusive
terminal, LCCs can reduce expenses spent on airport
facility charges, which would lead to the lowering of
air fares and allow LCCs to compete on a better cost
scale with other domestic and international LCCs."
In terms of international expansion, Jin Air is
targetting The Philippines and China later this year.
Air Busan, Asiana's low-cost offering, also has
eight aircraft - two A321-200, three Boeing 737-
400s, and three 737-500s. An A320-200 is expected
to arrive in October.
The carrier now has eight regular international
routes focusing on China, Japan, and southeast Asia.
It's first international route, Busan-Qingdao, China,
was launched in March this year.
"LCCs have been 'Koreanized' to adapt
themselves to the unique Korean
culture" Jin Air
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