Advertising
  • News
  • Airlines
  • Business strategy
  • ​Jeju Air touts nimble decision making as key to success

​Jeju Air touts nimble decision making as key to success

Korean low-cost carrier Jeju Air has touted its independence and ability to make quick decisions is a key ingredient in its success.

"We try to do business differently from other LCCs and full cost carriers," says Jeju Air chief executive Ken Choi.

"Obviously scale does not always work to our advantage, and the associated relationships with the airport authorities or government agencies are not always helpful. Our opportunity is that we are an independent carrier, and can make decisions a lot quicker. This includes partnerships and alliances, as well as network decisions."

It helps also that Jeju Air is does not have to consider the interests of a legacy airline parent, unlike rivals Jin Air and Air Seoul. Choi also stressed the company's willingness to work with airlines outside of South Korea, such as its fellow members of the Value Alliance.

FlightGlobal recently met with Choi and his colleague Hyuk Park, head of business development and fleet planning, at Jeju Air's Seoul Gimpo International Airport

Both executives come from non-airline backgrounds. Prior to Jeju, Choi's background was mainly in finance, while Park worked in consulting.

Choi also touched on geopolitics, which has made South Korea a challenging travel market recently. North Korean nuclear tests and missile launches have set the region on edge. South Korea's deployment of US anti-ballistic missile systems has also infuriated Beijing, denting tourism from China.

"Under current diplomatic relationships, we are prepared for the status quo," says Choi.

"We don't have and immediate action plan on how to deal with the Chinese diplomatic issues, but eventually this will offer another growth opportunity for Korean LCCs, especially since the Chinese government hasn't really fostered strong LCCs yet. Major Chinese airlines are busy just building domestic businesses and cross border to US or other more profitable routes."

Park notes that Jeju Air has been consistently profitable for years. In its most recent results, for the second quarter of 2017, the carrier posted an operating profit of W16.2 billion ($14.4 million), a more than 16-fold increase from a year earlier.

Revenue for the three months ended 30 June came in 41% higher at W228 billion, as RPKs rose 32.6% and ASKs by 28.2%. Load factor was up 3.3 percentage points to 90.4%.

Related Content
Advertising

Advertising
What's Happening Around "Jeju Air"