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Four new budget air carriers apply for operation license

The Transport Ministry said Monday that four new budget air carriers have applied for business licenses, amid the government’s plans to add new low-cost carriers by the first quarter of next year. 

The applications will be reviewed based on the reinforced entry criteria for LCCs.

According to the Ministry of Land, Infrastructure and Transport, budget air carriers including Fly Gangwon, Aero K, Air Premia and Air Philip have submitted applications. Another air carrier Guardians is set to apply within the week, ministry officials said. The ministry will review the applications within the next 90 days.


The country currently has six budget air carriers -- Jeju Air, Jin Air, Air Busan, Air Seoul, Eastar Jet and T’way Air. Air Seoul was the last airline to receive the ministry’s approval in December 2015. The ministry had since stopped receiving applications, citing excessive competition among budget airlines. 

Industry insiders say that at least two budget air carriers will gain approval for operations next year.

Fly Gangwon, Aero-K and Air Premia have previously attempted to obtain operation licenses.

Fly Gangwon, which has Yangyang Airport-based flight routes, has failed to meet the ministry’s requirements twice since 2016. For its third attempt, the company said it has expanded its capital and strengthened business plans to attract tourists.

Aero-K is considered one of those highly likely to secure a license, considering how its Cheongju Airport-based flight routes will make it easier for passengers to travel around the South and North Chungcheong and Gyeonggi provinces.

Incheon-based Air Premia is also pinning hopes on winning a license with differentiated seat options. It recently scouted former Jeju Air CEO Kim Jong-chul to lead its business.

“We are going to be the first air carrier to introduce premium economy seats. The global flight industry trend has been shifting toward offering PE seats for medium- and long-distance routes as customers seek an affordable but comfortable flight experience,” Air Premia said in a statement. 

Air Philip already runs aviation cargo services and short domestic flight routes with 50-seat planes based in Muan Airport in Jeolla Province. It plans to expand its business by flying a larger 180-seat plane.

According to the ministry, the review of the applications will be based on the ministry’s revised license requirements for LCCs.

Under the revision, companies planning to carry out flight operations are required to have at least 30 billion won ($26 million) in capital and five airplanes to begin operations as budget carriers. The previous requirements were 15 billion won and three planes. 

The review will also go through the ministry’s task force to assess the air carrier’s capacity to secure safety, customer satisfaction, flight routes management and airport operation, the ministry said. 

According to government data, LCCs now make up 55.5 percent of the domestic flight market, up 270 times compared to 13 years ago when the first domestic flight by T’way Air was launched in 2005. 

By Kim Da-sol (ddd@heraldcorp.com)
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