Air Seoul expects to turn profits starting 2018

Low-cost carrier Air Seoul expects to start making profits from next year, according to the airline’s CEO on Thursday.

“We have completed putting in place the basic infrastructure for operations, so the cost of adding new routes will go down,” said Air Seoul’s President and CEO Ryu Kwang-hee at a press conference aboard an Air Seoul airplane at the Asiana Airlines hangar at Incheon Airport.

“We began operations eight years later than other low-cost carriers, and the airline industry has changed significantly since then. There are certain things that were necessary for airlines then but not now. Our strategy is to cut out all unnecessary costs to improve our cost competitiveness.”

 

Air Seoul President & CEO Ryu Kwang-hee (fourth from left) poses with flight attendants promoting Air Seoul‘s new routes in front of an Air Seoul plane at Incheon Airport Thursday. (Air Seoul)

Air Seoul, a subsidiary of Kumho Asiana Group that also operates the full-service carrier Asiana Airlines and low-cost carrier Air Busan, began operations last October amid widespread concerns about its profitability. It began by taking over routes from Asiana Airlines that were no longer profitable.

However, Ryu said the past eight months have shown progress in increasing flight occupancy rates on Air Seoul’s routes, relative to when they were run by Asiana. Ryu expects that revenue this year will reach 130 billion won ($113.9 million).

This year, Air Seoul will be adding two planes and four more routes to its offerings, to Osaka and Guam starting in September, and to Narita and Hong Kong in October.

Next year, the airline will bring in two more planes and begin flights to the Philippines and China, although the destination cities have not yet been decided. Air Seoul says that it will continue to add two planes each year.

Regarding the recent launch of a budget carriers’ alliance by leading LCC Jeju Air, Ryu said that Air Seoul had no plans to join an alliance. Noting that the main purpose of such alliances is to increase marketing and operational efficiency through code-shares, he said that Air Seoul was focusing on code-sharing with Kumho Asiana Group’s other airlines instead.

Currently, Air Seoul has no plans to operate domestic short-haul flights, according to Ryu. 

By Won Ho-jung (hjwon@heraldcorp.com)

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