Asiana mulls launch of new LCC

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Asiana Airlines says is considering whether to set up a new low-cost carrier in South Korea, a move that could see it enter a market already crowded with budget operators.

The Korean carrier, in a three-line disclosure on the Korea Exchange, says it is reviewing the possibilities of establishing an LCC, but that no details or decisions have been made.

When contacted, an Asiana spokeswoman says discussions are in the early stages, and that no applications have been made with the country's transport ministry.

Though Asiana already has a 46% stake in budget operator Air Busan, it largely plays the role of a shareholder and has little decision making power, she says.

“Probably if we launch an LCC, it will be in Seoul. The bases can be in Incheon and Gimpo. But at this point, we haven’t decided yet,” says the spokeswoman.

She adds that the airline is aware of the crowded budget market in South Korea, which is why studies are still ongoing to determine whether it is viable to add to that space.

Asiana adds that is it also not uncommon for carriers to have various budget arms as part of a multi-brand strategy. Singapore Airlines and All Nippon Airways are prime examples, adds the spokeswoman.

Homegrown LCCs in South Korea include Air Busan, Eastar Jet, Jeju Air, T'way Airlines and Jin Air, which is wholly owned by flag carrier Korean Air.

FlightMap Analytics shows that foreign LCCs such as AirAsia X, Cebu Pacific, Juneyao Airlines, Peach, Scoot and Star Flyer also have services out of South Korea.

The top three routes served by the LCCs, according to seat capacity, are Seoul-Jeju, Busan-Jeju and Seoul-Osaka.