Jeju Air Introduces Cargo-Only Aircraft... Diversifying Revenue Structure

Contract Signed with Leasing Company for Introduction of Cargo-Only Aircraft

[Asia Economy Reporter Kiho Sung] Jeju Air announced on the 13th that it has completed a contract with a leasing company for the introduction of a dedicated cargo aircraft and will embark on a full-scale air cargo transportation business.

Jeju Air has begun preparations to introduce a dedicated cargo aircraft with the goal of expanding its air cargo transportation business by bringing in a dedicated cargo plane during the first half of this year. The introduction of a dedicated cargo aircraft is the first among domestic LCCs.

Jeju Air plans to start the cargo aircraft modification work from mid-this month and complete the modification by around June. To ensure the safe operation of the dedicated cargo aircraft, the company will maintain close cooperation with the Ministry of Land, Infrastructure and Transport, the relevant authority, from the initial stages of aircraft modification and introduction.

The dedicated cargo aircraft Jeju Air plans to introduce is the B737-800BCF, the same model as the aircraft currently operated by Jeju Air. It is an aircraft that was used as a passenger plane and has been converted into a dedicated cargo aircraft.

By introducing a dedicated cargo aircraft of the same model as its passenger planes, Jeju Air will be able to reduce the costs required for cargo aircraft operation and improve fleet operation efficiency. Additionally, it will be able to increase the cargo transport volume per flight and transport various types and forms of cargo, enabling it to engage in high value-added cargo transportation.

Jeju Air obtained an international cargo transportation license in 2012 and started its cargo transportation business. In September 2018, it began domestic cargo operations with the Jeju-Gimpo route, and in October 2020, it became the first domestic LCC to operate cargo transportation using seats inside passenger aircraft.

According to the recent Aviation Market Trends report issued by the Ministry of Land, Infrastructure and Transport, from January to October last year, the Korean air cargo market was dominated by two existing airlines (69%) and foreign airlines (29.8%), accounting for 98.8% of the market share.

During the same period, Jeju Air's cargo transportation market share was only 0.1%, but since starting cargo operations using passenger aircraft seats in October 2020, it has shown rapid growth. With the introduction of a dedicated cargo aircraft, it is expected to achieve better performance.

A Jeju Air official said, “We plan to diversify our revenue structure by expanding the cargo transportation business with the introduction of a dedicated cargo aircraft,” adding, “This will help Jeju Air solidify its position as a leading airline in the post-COVID-19 era.”

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