S.Korea's T'way Air sees 'golden opportunity' from new EU routes

Trinity Airways Co

07/03/2024 05:56

By Lisa Barrington and Joyce Lee
       SEOUL, March 7 (Reuters) - European routes awarded to
South Korea's second-largest low-cost carrier T'way Air from the
merger of Korean Air-Asiana are a golden opportunity to
differentiate T'way as a long-haul carrier in Korea's crowded
budget space, senior executives told Reuters. 
    EU competition authorities last month said South Korea's
biggest carrier Korean Air  003490.KS  must surrender routes to
four European cities to T'Way  091810.KS  as a condition of its
approval of Korean's pending merger with Asiana Airlines
 020560.KS .   
    "To get this kind of a profitable route and slot from Korean
Air is a very rare opportunity," said Hyung-Yi Kim, T'way senior
vice president.
    T'way will begin flying to Paris in June, Rome in August,
Barcelona in September, and Frankfurt in October, Kim said. 
        Only one other Asia-Pacific low cost carrier (LCC)
currently operates direct flights to western Europe -
Singapore's Scoot.  
  
    South Korea is heavily reliant on air travel as its only
land border is with North Korea with which it is technically at
war. It has seven low-cost carriers and one hybrid carrier which
fly domestically, within Asia and some routes to north America
and Australia. 
    Under the EU deal, Korean Air has to provide T'way with
slots, traffic rights and access to suitable aircraft.  
    T'way CEO Hong-Geun Jeong said Korean Air will lease five
wide-body A330-200 planes to T'way, and provide 100 pilots and
maintenance support. 
    These cannot carry as many passengers as T'way's existing
three long-haul wide-body A330-300 planes, but the A330-300s 
cannot fly the extended distance to Europe needed to avoid
currently restricted Russian air space. 
    Long term, T'way intends to source its own pilots and larger
capacity planes, Jeong said. 
    Jeong expects T'way to grow 30-40% this year with the start
of the European routes. 
    Further change is likely coming to Korea's low cost segment.
Analysts and industry players expect Korean Air to merge its Jin
Air LCC with Asiana's Air Busan and Air Seoul into one budget
carrier. 
    Jeong said he foresees three major LCCs in Korea's market in
the future: Jeju Air  089590.KS , currently the largest, T'way,
and the merged Korean Air LCC. 
    "We want to become the number one low-cost carrier, and
we've been working hard to do so," he said.
($1 = 1,331.4200 won)

 (Reporting by Joyce Lee and Lisa Barrington; Editing by Lincoln
Feast.)
 ((lisa.barrington@thomsonreuters.com;))