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Thursday, October 28, 2010

Budget Carriers to Challenge Larger Rivals on Int'l Routes

Five years after they burst onto the scene, domestic budget carriers are turning up the heat on larger airlines by launching international flights.

Jeju Air, Korea's biggest budget airline, said on Wednesday it plans to start flying between Incheon and Hong Kong, taking on Korean Air currently operating 23 flights and Asiana Airlines 14 on the route. While Jeju Air will offer only three flights per week, it aims to lure passengers with fares at least 30 percent lower than those of its larger rivals.

Jin Air on Tuesday launched service from Incheon to Clark in the Philippines, pushing into a route previously served solely by Asiana. A Jin Air spokesperson said that the flights would run at night and early morning to differentiate from Asiana, which flies during the day. The new service is targeted at tourists, especially those on golf trips.

Jeju Air also plansto launch flights to Manila on Nov. 24 and Macau on Nov. 29. In addition, it will find itself going head-to-head with another budget carrier, Air Busan, when they both debut flights between Busan and the Philippine resort city of Cebu on Nov. 25 and Dec. 23, respectively.

Foreign budget carriers are fueling the competition. Business Air Thailand has already launched Incheon-Bangkok service, while Malaysia's AirAsia, the region's largest low-cost carrier, will start operations connecting Incheon with Kuala Lumpur next month. By the end of the year, larger airlines and budget carriers are expected to be competing on 10 international routes.

In the first nine months of the year, domestic budget carriers transported a combined 632,000 passengers on international routes, accounting for 3.18 percent of the total 19.895 million international passengers. The figure has quadrupled from 0.75 percent last year.

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