Air Busan’s operations at Incheon airport to create new opportunities
Air Busan is scheduled to launch flights from Incheon International Airport starting November and will look to use this to increase its presence among the country’s low-cost carriers (LCC), the airline’s CEO said Wednesday.
Based in the port city, so far all the airline’s international flights have connected Busan with overseas destinations, except for two that operated out of Daegu.
“With Air Busan’s proven safety and differentiated services, we will also become popular with users of Incheon airport,” CEO Han Taekeun said during a press conference at the Plaza Hotel in Seoul. “We will fully prepare so Air Busan can gain competitiveness in a bigger market.”
Air Busan will launch flights on the Incheon-Ningbo route, Nov. 12, its first from Incheon. The following day the airline will start operations between Incheon and Shenzhen.
The carrier has also been given slots on five more international routes this year including to Chengdu, Gaoxiong and Cebu.
Han expressed optimism over the soon-to-be-launched Chinese routes.
“There are many locals in Ningbo who visit Korea. Among passengers, around 70 percent are from Ningbo visiting Korea and 30 percent, from Korea visiting Ningbo. Similar to services to Gaoxiong we expect more Chinese to visit Korea,” Han said. “In the case of Shenzhen, there are around 1,200 mid- to large-sized Korean companies. Only local full-service carriers have operated there so far, so many companies will come to us to reduce costs.”
The airline plans to apply marketing strategies that best suit each destination.
“The Ningbo route is popular from the start, but for the Shenzhen route we will focus on price marketing, while for other routes, we will appeal with the airline’s coziness and larger legroom compared to other LCCs,” he said.
To differentiate from other budget airlines, Air Busan will add two Airbus A321neos to its fleet early next year, which will make the airline the first to use the jets in Asia.
The A321neo is more fuel efficient than Boeing’s 737 MAX 8 and can fly up to 1,000 kilometers further. It can therefore reach Jakarta, Singapore and New Delhi, creating more opportunities, the airline said.
The carrier is set to operate eight A321neos by 2021 for a total fleet of 31.
Air Busan saw a 21.8 billion won deficit ($18.6 million) for the second quarter, and expects to see more red ink for the third and fourth quarters as there has been a drastic reduction in Koreans traveling to Japanese destinations, due to the “Boycott Japan” movement. Han said that even with operations from Incheon, it will be difficult to move into profit for the time being as budget carriers rely heavily on Japanese routes for profitability.
“If the Japan issue is not resolved, there is no alternative to counter it. Due to the Korea-Japan trade dispute, the demand for Japanese destinations has shrunk and airlines have been diverting their flights to Southeast Asia. But Taiwan, Danang and most destinations in Southeast Asia are oversupplied, which in turn reduces profit,” he said.
The CEO said many Koreans favored traveling to Japan as it could be visited over the weekend, whereas Southeast Asian countries need at least three to four days.
Air Busan CEO Han Tae-keun talks about the airline’s vision in line with the start of operations at Incheon International Airport, during a press conference at the Plaza hotel in Seoul, Wednesday.
Air Busan currently serves on six domestic and 32 international routes.