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(LEAD) Air Seoul to focus on Asian routes for growth

All News 17:03 June 22, 2017

(ATTN: ADDS second photo, details throughout)
By Choi Kyong-ae

INCHEON, South Korea, June 22 (Yonhap) -- Air Seoul Inc., a South Korean budget carrier, said Thursday it will focus its business on foreign destinations and has no plan to fly on domestic routes.

The move is part of parent company Asiana Airlines Inc.'s broader strategy to have the budget carrier absorb customers who prefer to travel economically on short-haul flights within Asia. Asiana aims to focus more on profitable medium to long routes.

"We will take over some of short-and mid-range routes from Asiana to help it not suffer from losses on the routes any longer. And we aim to make profits from the operation of the routes," Air Seoul President & Chief Executive Ryu Kwang-hee said in a press conference.

Air Seoul will expand flight services to Asian cities with differentiated services through cost-cutting efforts, he said without elaborating.

Air Seoul President & CEO Ryu Kwang-hee announces the budget carrier's plans to expand routes and increase its fleet in a press conference held onboard a A321-200 jet, one of its three passenger jets, at Incheon International Airport on June 22, 2017. (Yonhap)

In October, Air Seoul joined the country's five low-cost carriers -- Jin Air Co., Jeju Air Co., Air Busan Co., Eastar Jet and T'way Air Co. -- to take advantage of the rapidly growing low-cost travel demand.

Currently, Air Seoul serves eight routes to Japan and three to Southeast Asian cities -- Macau in the Philippines, Siem Reap in Cambodia and Malaysia's Kota Kinabalu.

The company plans to add four routes to Osaka, Narita, Guam and Hong Kong from September to October. It also is moving to start new routes to China, Vietnam and Thailand next year, Ryu said.

To serve the routes, Air Seoul said it will lease two more 195-seat A321-200 jets this year to its fleet now composed of three airplanes, he said. It pays 400 million won (US$350,352) per plane each month to Airbus.

It plans to increase its fleet to 15 by 2020 by adding two planes each year, with a goal of making a turnaround in 2018.

"We are trying to achieve 130 billion won in sales," the president said. There is no comparative sales figure as it began operations eight months ago. At present Air Seoul is losing money because of initial costs needed for early stages of setting things up.

In 2016, the country's six budget carriers transported 56.8 percent of the passengers on domestic routes and 19.6 percent of the passengers traveling abroad. The figures were up from 54.6 percent and 14.6 percent a year earlier, respectively, according to the transport ministry.

Last year, passengers on domestic routes jumped 11 percent on-year to 30.91 million and passengers on international routes climbed 19 percent to 73 million, the ministry said.

Air Seoul is a wholly owned unit of Asiana Airlines Inc., the country's second-biggest carrier after Korean Air Lines Co. Air Busan, a regional carrier based in the southern port city of Busan, is another budget carrier unit of Asiana.

In this photo taken on June 22, 2017, Air Seoul President & CEO Ryu Kwang-hee and crew members pose for a photo before a press conference on the company's business strategy held at Incheon International Airport. (Photo courtesy of Air Seoul) (Yonhap)


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