August 03, 2017 12:52
A growing number of budget carriers are starting to offer international flights from regional airports to escape intensifying competition. The move comes because the market for flights from Incheon and Gimpo international airports in the Seoul metropolitan area is saturated.
T'Way Airlines started flying from Gimhae Airport in South Gyeongsang Province to Da Nang, Vietnam and Osaka, Japan on Tuesday.
Just three years ago, budget carrier Air Busan was practically the only airline offering regular international flights from Gimhae Airport, which had long been seen as a white elephant.
But things began to change markedly in 2015. With T'Way just joining the ranks, five out of the country's six low-cost carriers are offering 39 international flights to 10 countries. Destinations include Guam, Saipan, Malaysia's Kota Kinabalu, Mongolia's Ulaanbaatar, and Clark in the Philippines.
Some offers more international flights than the two flag carriers, with Air Busan operating 18 compared to 13 by Korean Air and eight by Asiana Airlines. Jin Air and Jeju Air offer 10 and eight.
Daegu Airport is also drawing more international flights. T'Way flies from Daegu to 10 overseas destinations, including Guam, Japan, Taiwan and Vietnam. Fifteen of the 18 international flights from Daegu are on low-cost carriers.
Budget carriers are flocking to regional airports because competition is less intense and they can tap into demand from customers who live outside of the capital region. It takes 11 hours by bus round trip from Busan to Incheon at a cost of W83,600 and seven hours round trip by KTX at W144,200 (US$1=W1,124).
Regional airports are smiling all the way to the bank. Gimhae Airport has seen passenger traffic rise 44 percent over the last two years from 10.4 million to 15 million, and Daegu Airport 64 percent from 1.5 million to 2.5 million.
Thanks to this trend, both Cheongju and Daegu airports managed to emerge from deficits last year. But some industry watchers say this trend could lead to overheated competition. Some provincial governments are planning to launch their own budget carriers to fly out of their regional airports.
But there are already six budget carriers in Korea, and six provincial governments are awaiting authorizations to launch their own. Huh Hee-young at Korea Aerospace University said, "We will see demand for low-cost carriers rise for the time being, leading to more flights being offered out of airports outside of Seoul, but Chinese budget carriers are also starting to offer more international flights, so the competition will get intense very soon."
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