Tiger Airways joins Yeongnam Air in plans for challenging Asiana/KAL duopoly in 2008
South Korea's air transport market looks set to undergo a radical shakeup with Singapore-based low-cost carrier Tiger Airways the latest to unveil plans for a new airline there.
Until now South Korea's market has been dominated by Asiana Airlines and Korean Air, although two small turboprop operators have begun operating limited domestic services in recent years. Real competition should come to the market soon, with start-up Yeongnam Air hoping to begin operating in February. Its plans were unveiled earlier this year and it recently secured a business licence from the Transportation ministry.
Tiger signed in November a letter of co-operation to establish a new low-fare airline called Incheon Tiger Airways. It will be established through a joint venture with Incheon Metropolitan City, which is where Seoul's Incheon airport is based, and aims to launch services in the third quarter of next year.
Tiger chief executive Tony Davis says the plans "will help establish Incheon into a leading air transport hub for North East Asia". He has identified China and Japan as target markets for international services.
Fast-growing Tiger is also launching a new domestic airline in Australia and is seeking approval for a franchise arrangement in the Philippines with local carrier Seair. Tiger says that like the Australian operation, Incheon Tiger Airways will start with five Airbus A320s.
Many industry observers see the Korean market taking off in a big way in the coming years. Restrictive air services agreements had been holding things back but Korean authorities have been aggressively pursuing more open bilaterals and the country now has highly liberal air services pacts with both China and Japan.
Busan-based Yeongnam Air will initially only operate domestic services using Fokker 100s. It plans to later launch international services under a low fares with some frills model.
Taiwan's TransAsia has also said it wants to establish a new airline in South Korea in joint-venture partnership. Not to be left out, KAL unveiled plans earlier this year to launch a low-cost subsidiary some time over the next three years, operating Boeing 737s on domestic flights and on short- and medium-haul international routes, such as to China and Japan. It said in announcing its plans that it had decided to "no longer remain indifferent to the invasion of low-cost carriers from China and South-East Asia into the Korean market".
Source: Airline Business
