T'way Air to Enter Medium- and Long-Haul Markets Within the Year... Accelerating LCC Route Differentiation Competition

Air Busan and Jeju Air Also Explore Medium-Haul Routes with New Aircraft and Codeshare
Competition to Differentiate Routes Accelerates Amid 'Saturation of Short-Haul Market'

[Image source=Yonhap News]

[Asia Economy Reporter Yu Je-hoon] T'way Air will enter medium- and long-haul routes within this year. This is interpreted as a desperate measure due to the sharp decline in profitability of low-cost carriers (LCCs) caused by oversupply in short-haul markets such as Japan and Southeast Asia accumulated over the past few years. Industry insiders expect that as there are no signs of improvement in the business environment, competition among LCCs will accelerate further through differentiation strategies such as entering medium- and long-haul routes and diversifying services.

T'way Air recently launched a company-wide task force (TF) team involving operations, cabin, maintenance, and procurement departments, and announced on the 6th that it is proceeding with procedures related to launching new medium- and long-haul routes and introducing medium-sized aircraft, targeting the first half of this year. Currently, among domestic LCCs, Jin Air, affiliated with the Hanjin Group, is the only one operating medium-sized aircraft.

The medium- and long-haul routes that T'way Air will operate have not yet been decided, but regions with solid passenger demand such as Australia, Central Asia, and Hawaii are being considered. These areas have been difficult to operate with the B737NG model, which is the main aircraft for existing T'way Air and major LCCs, and have thus been dominated by full-service carriers (FSCs) until now.

To this end, T'way Air plans to introduce medium-sized aircraft within this year. Inside and outside the industry expect T'way Air to introduce the Airbus A330-200, a representative medium-sized aircraft from Airbus.

T'way Air is not the only airline attempting to enter medium- and long-haul routes. Air Busan also announced plans to introduce two A321neoLR aircraft this year and enter medium-haul routes such as Singapore and Delhi. Jeju Air started a codeshare operation on the Incheon?Australia Gold Coast route with Australian LCC Jetstar Airways a month ago.

The reason airlines are seeking route diversification by entering medium- and long-haul routes is that the short-haul routes, which are the mainstay of LCCs, have reached saturation. To make matters worse, the boycott of travel to Japan due to Korea-Japan conflicts continued, causing six domestic LCCs to record losses consecutively in the second and third quarters of last year.

An industry official said, "Since it is difficult to discover new destinations with the aircraft types currently owned by existing LCCs, the introduction of medium-sized aircraft and entry into medium- and long-haul routes is, in a way, a natural step," adding, "However, since this differs from the existing LCC business model of increasing turnover with low prices on short-haul routes, they must demonstrate operational finesse."

This content was produced with the assistance of AI translation services.