Asiana Air gets nod for 2nd budget carrier

After months of hurdles, Asiana Airlines, the nation’s second-largest flag carrier, has won the government’s permission to operate its second low-cost carrier, moving forward to expand its market presence.

The Ministry of Transport has issued a business license to Air Seoul, the second low-cost carrier launched by Asiana Airlines, the air carrier said Monday evening.

The government said the license was issued in line with a steady growth in air traffic with an annual average of 7.8 percent. Air Seoul’s business plans also met standards required for air carriers, the ministry said.

Asiana’s attempt to expand its market presence has also been facing fierce criticism by other carriers. South Korea has five low-cost carriers including Jin Air Co., operated by Asiana’s rival Korean Air, and independent carriers Jeju Air Co. and Eastar Airlines.

They have raised concerns saying that Air Seoul’s entry to the market could add too much competition to the already saturated market. The number of foreign low-cost carriers has also increased to 20 this year from five in 2009.

Asiana previously planned to submit a registration to operate flights of Air Seoul in May. But the plan was postponed until October due to the Middle East respiratory syndrome that hit Korea this summer, as well as a runway breakaway case in Hiroshima.

With the government giving the green light, Asiana plans to operate international flights to and from major cities in China, Japan and Southeast Asia.

Asiana first entered the low-cost flight business by establishing Air Busan in 2007. Air Busan operates both domestic and international flights out of the southeastern port city.

By Cho Chung-un (christory@heraldcorp.com)