Korean Job Discussion Forums

[in_seoul_2003]

Airlines Team up Against New Budget Carrier

By Kim Rahn
Staff Reporter

Four low-cost domestic carriers are trying to block the launch of Incheon-Tiger Airways, a joint venture between the Incheon City and Singapore's Tiger Airways.

They said the airline under Singaporean control will infringe on South Korea's aviation sovereignty and hamper the development of domestic budget carriers.

Air Busan, Yeongnam Air, Jeju Air and Jin Air jointly filed a petition with the Ministry of Land, Transport and Maritime Affairs Monday, asking the Incheon-Tiger not get an operating license.

Incheon-Tiger planned to start service this year. Incheon and its affiliates own 51 percent of the shares ― the city government 2.4 percent, its tourism unit 20 percent and two affiliates the remainder ― and Tiger is the single largest shareholder with 49 percent.

The city says the share distribution does not violate domestic aviation law that bans an aviation business if a foreign government, organization or firm owns more than half of its shares.

But other carriers say Tiger will virtually control the carrier since Incheon has no experience in the airline business. The city will not have effective control over the business and thus the airline is illegal, they said.

``Under the mask of `Korean carrier,' Tiger is attempting to get a free ride in the big Northeast Asian market of Korea, China and Japan, as Singapore's domestic market is very small. Its operation here will attack Korea's aviation sovereignty,'' the airlines said in the petition.

As Tiger has good financing from the Singaporean government, Korean budget carriers that have yet to take root will go bankrupt, they said.

The airlines also said Incheon has a moral problem, quoting the Incheon Citizens' Coalition for Economic Justice. The civic group earlier said the city should not compete with other private airlines since it houses Incheon International Airport, which is tasked to support private airlines.

``If the government permits Incheon-Tiger's business, similar cases will follow. We hope the government will not approve the license and prevent the problem from getting worse,'' the carriers said.

Following the controversy, Incheon decided to suspend its preparations, including the application for the license, saying they need more time to promote the carrier and persuade other companies.

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http://koreatimes.co.kr/www/news/nation/2008/08/117_29957.html

[alinkorea]

It's this attitude that has seen foreign investment in Korea nosedive

[Ginormousaurus]

Would this just be a domestic carrier? Or are we possibly missing out on cheap flights all around Asia?

[Css]

Isnt this a common thing?

Im almost certain that the US has similar laws restricting foreign ownership of domestic airlines.

[Lekker]

[bangbayed]

Corporate cabals. It's pathetic.

[Guri Guy]

Same old crap in South Korea.

[Css]

ah those stupid xenophobic koreans..

[[email protected]]

Coming from Europe,which has a proliferation of bugdet carriers that will take you around the continent for dirt cheap, I was shocked at the price of flights coming in and out of Korea to neighbouring countries. The Industry badly needs a shakeup here

[PeteJB]

If there are for example say, 5 budget airlines introduced over time, would that not effectively increase tourism to Korea in the future? I fail to see the logic of the cowering Korean airlines fearing for their profits.

[shapeshifter]

[Guri Guy]

Meanwhile, prices remain super high in this country to fly anywhere.

Rightly or wrongly, it is expensive to leave this place whether you love it or not.

It'd sure be nice to have a budget airline or some real competition in the industry. Whatever form that took doesn't matter.

[Lekker]

[garykasparov]

[Bigfeet]

If there was true international competition, the airline with the lowest personnel costs would win, hands down. That would mean a developing country would own the US and EU flying markets.