Jeju Airport

LCC penetration in domestic South Korean market reaches new highs but at what cost?

South Korea’s five major LCCs held an aggregate domestic market share of 42.3% in 3Q2011 in the third quarter of 2011, up from the 40.3% in the six months to Jun-2011 (1H2011), which itself was a new record for LCC penetration in the North Asian nation. This penetration, as confirmed by South Korea’s Ministry of Land, Transport and Maritime Affairs, marks a significant rise from a combined market share of just 9.7% three years ago.

However, profitable growth remains a continued challenge for South Korea’s LCCs. In 2008, two LCCs in the market, namely Hansung Airline and Yeongnam Air, collapsed amid challenges economic conditions, high fuel costs, a weakened Korean won and funding challenges amid the global economic financial crisis. Among those left standing, losses were heavy, with the nation’s four LCCs in 2009 – EastarJet, Jeju Air, Jin Air and Air Busan, reporting combined losses in excess of USD55 million in 2009.

Tiger Airways & business recovery propels Australia’s golden triangle up rankings of world’s busiest

Passenger numbers on the Melbourne-Sydney route (Australia’s busiest and now the world’s fourth busiest) surged 18.5% year-on-year in May-2010, reflecting a recovery in business travel and Tiger Airways’ expansion on the route since Jul-2009. The increase was well ahead of the 5.3% increase in Australian domestic airline passengers for the month and signals the revitalisation of the route after several years of stagnation under the former Qantas-Virgin Blue duopoly.

LCCs in Japan, Korea and China. Massive growth potential to be realised in the next decade

The second decade of the 21st century will see low cost airlines arrive on a massive scale in North Asia. The region has not seen significant low cost airline entry to date – one of the few parts of the world to have missed the phenomenon. It is a major anomaly in this respect, because the geography, economy and demography of the three neighbouring countries of Japan, South Korea and China offer near-ideal conditions for LCC growth.