Financial Support for LCCs Limited to 300 Bil. Won
Restructuring of low-cost carriers (LCCs) is looming large after the South Korean government recently announced that most of its financial support for the aviation industry, 3.2 trillion won in total, would go to Korean Air and Asiana Airlines.
The two full-service carriers are scheduled to receive 90 percent of the money. Specifically, Korea Development Bank and the Export-Import Bank of Korea decided on April 21 to provide 1.7 trillion won for Asiana Airlines and 1.2 trillion won for Korean Air. The financial support for LCCs is limited to 300 billion won, which was announced two months ago.
At present, a total of nine LCCs are doing business in South Korea. Fly Gangwon, Aero K Airlines and Air Premia, the three youngest in the LCC industry of South Korea, have been excluded from the financial support of the government.
In the meantime, the possibility of resale of Air Busan and Air Seoul is being continuously mentioned as Asiana Airlines is scheduled to be sold in whole. With the aviation industry extremely uncertain, however, it remains to be seen whether the LCCs under Asiana Airlines will succeed in drawing attention after being put on the market.