[Click eStock] "LCC, Market Restructuring in Focus"

Published 15 Jul.2024 08:35(KST)

Research Alom analyzed on the 15th that the increase in passengers in the first half of this year was driven by low-cost carriers (LCCs) focusing on short- and medium-haul routes such as Japan and Southeast Asia.

Choi Seonghwan, a researcher at Research Alom, explained, "The international sales ratio of Jin Air and T'way Air grew up to 85% of total passenger sales," adding, "Jeju Air's international passengers reached 4.33 million, a 29.4% increase compared to the same period last year."

He continued, "Jin Air and T'way Air increased by 37.3% and 30.3%, respectively," and added, "the third quarter of this year is the peak season for LCCs, with summer vacations in July and August and the Chuseok holidays in September."

He analyzed, "As the merger of Korean Air and Asiana Airlines becomes visible, the integration of three companies?Jin Air, a subsidiary of Korean Air; Air Busan, a subsidiary of Asiana Airlines; and Air Seoul, an unlisted LCC?is also expected." Furthermore, "there will likely be initial cost burdens during the integration process," he emphasized, "but operationally, leverage effects and integration synergies are anticipated."

Additionally, he predicted, "If the integrated LCC under the Korean Air-Asiana Airlines group is launched, there is a possibility of restructuring overlapping routes within the LCC industry," and added, "Jeju Air, the number one LCC in Korea, is expected to benefit." He also expressed expectations that "to comply with the EU conditional approval, T'way Air, which received some traffic rights for Paris, Rome, Barcelona, and Frankfurt transferred from Korean Air's existing operations, will add long-haul routes and evolve into a hybrid carrier (HSC)."