Asiana is facing stiff opposition

Asiana’s plans to launch Seoul Air during the second half of 2015 (a new LCC) is facing opposition from Eastar Jet, Jeju Air and T'way Air, which have jointly submitted a letter to the South Korean Transport Ministry demanding that Asiana not be permitted ownership of a second LCC, given that it already owns Air Busan, in order to maintain competitiveness in the market.

The three airlines have stated that they are being forced out of business by the monopolization of international flight routes by Korean Airlines and Asiana and the incursion of foreign low cost airlines in the domestic market.

It is likely that Asiana will carry the day and get the green light for Seoul Air and it, along with Busan Air will feed the parent airline’s international routes.

Eastar Jet, Jeju Air and T'way Air are right to be worried. South Korea is by no means an aviation market as large as that of Japan and yet South Korea’s airline market has just as many players in it. So the question is: Can South Korean airlines generate the required additional demand in order to survive? Eastar Jet, Jeju Air and T’way Air are certainly unsure of the answer.

Emirates is due to launch its UKEF-backed sukuk later today but had not done so at the time this was sent. Please watch this space for full details.