Asiana Airlines decided to establish a second budget airline, which it tentatively named Seoul Air, now that it has established Air Busan.
According to the resolution of Asiana Airlines’ board of directors, the size of the low cost airline Seoul Air’s capital will be more than 15 billion won (US$13.61 million), which is the base requirement for international air transport operators, and the first investment will be 500 million won (US$453,721).
The company’s first budget airline, Air Busan based out of Gimhae International Airport in Busan, will continue to focus on domestic flights. Seoul Air will fill in the gap of long distance routes that fly out of Incheon International Airport, strengthening its network.
Asiana Airlines is planning to make Seoul Air operate mostly long-distance routes and some money-losing routes, such as Japan and South East Asia, to improve the company’s profit-and-loss structure.
Once Seoul Air is established within this year as Asiana Airlines plans, the number of airlines will increase to eight.
Meanwhile, three budget carriers -- Jeju Air, Eastar and T’Way -- are opposing the establishment of Seoul Air.
The three carriers filed a complaint last week to the Transportation Ministry asking it not to approve Asiana’s expansion.
An official from a budget carrier said, “We are concerned about excessive competition among national airlines. It will lower competitiveness due to shortages of airline personnel, including pilots and maintenance technicians, and increase international air traffic.”