Korean budget carrier sees room for air-fare reduction

Bloomberg

A new South Korean budget carrier says it can help push air fares down by as much as 30 percent and still stay profitable in a market already crowded with six rivals.
Aero K Airlines Co., backed by venture capital funds, plans to use new, fuel-efficient aircraft and a base where airport levies are at least 60 percent cheaper than the nation’s main hub in Seoul, Chairman Kang Byung-ho said in an interview. The operator expects to get a permit this month and start services as early as April as nation’s the seventh low-cost airline, he said.
“We see Northeast Asia as the biggest opportunity,” Kang, 41, said in an interview in Seoul. “If we do everything correctly, we think we can bring the cost structure down.”
Rising wealth is encouraging more South Koreans to explore Japanese resorts and splurge at luxury shopping in Hong Kong, spawning the budget airlines that some times charge as little as $49 for a flight from Seoul to Tokyo. Investors in Aero K include Hanwha Techwin Co. and Hanwha Investment, units of Hanwha Group, Atinum Investment, SparkLabs, Bubang etc.