Jeju Air to Introduce B737-8 from Next Year..."Seizing Travel Demand Post-COVID"

[Asia Economy Reporter Yoo Hyun-seok] Jeju Air recently announced a capital increase plan worth 320 billion KRW to raise funds for facility investments, including the introduction of next-generation aircraft, and is preparing to introduce the new B737-8 model. The largest shareholder, AK Holdings, has also secured sufficient funds to participate in the paid-in capital increase by issuing exchangeable bonds (EB) worth 130 billion KRW, providing support.

On the 12th, Jeju Air stated, starting next year, it will sequentially introduce 40 units of Boeing's next-generation model, the B737-8. The introduction of the B737-8 is part of the strategy to upgrade the current fleet, focusing on the existing business model to achieve a higher level of competitiveness on medium- and short-haul routes.

The B737-8 has a flight range more than 1,000 km longer than the currently operated B737-800. It can also operate routes to Central Asia and Indonesia, creating new opportunities such as developing new routes. Additionally, it can save more than 15% in fuel compared to existing aircraft of the same class, and reduce operating costs per seat by 12%, which is expected to improve profitability through cost reduction. In particular, Jeju Air, the only domestic LCC that owns its aircraft, will replace leased aircraft through this fleet modernization, reducing fixed costs such as lease expenses.

Jeju Air plans to further advance its core LCC business model with a focus on the recovery of international flights to establish itself as a leading post-COVID airline. As countries worldwide enter the 'endemic' phase, the skies that were closed due to COVID-19 are gradually recovering. The easing of various regulations domestically, such as the abolition of mandatory pre-entry PCR tests, is also encouraging for the recovery of the aviation industry.

Jeju Air aims to solidify its low-cost business structure through high efficiency to minimize the costs required for aircraft operation and provide air services at more affordable prices, thereby capturing travel demand in the post-pandemic era.

By securing operational efficiency through a single aircraft type and fleet modernization, Jeju Air plans to gain a higher level of competitiveness in the LCC business model and establish its status as a leading company in the recovering air travel market. A Jeju Air official said, “The recently announced paid-in capital increase plan is completely different in nature from previous capital increases,” adding, “Unlike previous capital increases aimed at overcoming financial difficulties, this capital increase plan is for investment purposes to further solidify the position as a leading airline in the post-COVID era, and will serve as a foundation for strengthening business competitiveness.”

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