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JIN-2013-01 - OVER 3 MILLION PASSENGERS
JIN-2013-01 - TOP 6 SEOUL TO JEJU
JIN-2013-01 - TOP 8 JIN MARKETS
JIN-2014-10 - JEJU TO SILK ROAD
JIN-2015-12 - Seoul to Hanoi.jpg
JIN-AIRPORTS IN S KOREA - 2013-03
Formed and started operations in 2008. Subsidiary of Korean Air (KAL). Low Cost Carrier (LCC), operating domestic, regional, & international, scheduled & charter, passenger & cargo, jet airplane services.
3F Korean Air Training Center
Seoul 157-031, Korea
THE REPUBLIC OF KOREA (TAEHAN MIN-GUK) WAS ESTABLISHED IN 1948, IT COVERS AN AREA OF 99,016 SQ KM, ITS POPULATION IS 46 MILLION, ITS CAPITAL CITY IS SEOUL, AND ITS OFFICIAL LANGUAGE IS KOREAN.
April 2008: Asiana Airlines (AAR) has bought into planned new airline Busan International Air (BIA), in another sign that South Korea may emerge as a major market for low cost carrier (LCC) operations. (AAR) paid 23 billion won/$24 million for a 46% stake. (BIA) is one of several new carriers planned in South Korea. Korean Air (KAL) plans to establish late this year Jin Air (JIN) as a new low cost carrier (LCC) subsidiary, while Singapore-based Tiger Airways (TGR) plans to launch next year, an associate airline in South Korea in partnership with the Incheon government.
May 2008: Korean Air (KAL) appointed Jae Kun Kim as CEO of its new low-cost carrier "Jin Air (JIN)" which plans to launch in July with services on the Seoul - Gimpo route using 737-800s. A (KAL) spokesman in Seoul said Kim previously “was in the sales department of (KAL) and was also a team leader for Southeast Asia route development”. He says the airline is on track to launch in July as planned and its first scheduled service will be from Seoul Gimpo to the South Korean island of Cheju. This is the country’s busiest domestic route and ChJeju is a popular tourist destination for South Koreans. (JIN) this year will have a fleet of two 737-800s and two A300-600s and all these airplanes will be leased from (KAL).
Early next month, (JIN) will have recruited a total of 70 employees, the number required for launch, and by year-end, it will have launched services to more destinations and increased its workforce to 120. (JIN) already has offices at Seoul Gimpo, Pusan, and Cheju airports. (JIN) plans to also launch services on the Seoul Gimpo - Busan route. Pusan is South Korea’s second largest city.
(JIN), the premium short-haul carrier subsidiary of (KAL), is smoothly cruising towards inauguration this coming July. Looking to create a new splash in the Korean aviation industry, the airline is preparing for an orderly operation by acquiring the necessary licenses, systems, airplanes and facilities, as well as human resources needs. Jae Kun Kim, (CEO) of (JIN), said: “(JIN) is not the average low-cost carrier (LCC). It is a carrier focused on short-haul routes with simple but sophisticated services at affordable prices while maintaining essential operating procedures at premium levels. For example, our safety-related work is outsourced to (KAL), which has 40 years of experience from its own global operation.” (JIN) was established in January this year, following five years of market watch by (KAL). After obtaining Scheduled Air Transportation Business license from the Korean government in April, (JIN) is currently under way to acquire its Air Operator Certificate (AOC).
(JIN)’s inaugural flight will be from Seoul to Cheju, using a 737-800 airplane with 189 seats. (JIN) will acquire two more 737-800 airplanes this year and two A300-600 airplanes with 292 seats next year. (JIN) has already secured an office and operational space in Gimpo (GMP), Cheju (CJU) and Pusan (PUS) airports.
In April this year, (JIN) started recruiting 20 employees, for which more than >3,000 applicants submitted their resumes, showing a competition rate of over 150 to 1. (JIN) plans to complete the employment of nearly 70 staff members by early June to get ready for its inaugural flight, and increase the number to 120 by the end of the year.
Entering the market as a young and innovative airline, (JIN) will present a new model of airline operation, balancing practical services and premium operating standards to provide affordable flight services to meet all passengers’ needs.
(JIN) will use state-of-the-art 737-800 airplanes for its inaugural flight in July. This will be the first time a jet-engine airplane is used by a Korean premium short-haul carrier. (JIN) expects to improve passengers’ flying experience through the use of the newest airplanes possible. Presently in Korea, only (KAL) operates 16 737-800 airplanes for domestic and short-haul international flights.
For the first time among Korean airlines, (JIN) will establish a 100% Internet-based reservation system, which will open in mid-June. Eliminating the need for a call-center, this is expected to lower operational costs considerably.
To reduce the time at airport check-in counters, (JIN) will not assign seat numbers for each individual passenger. Instead, (JIN) will divide the 737-800 cabin into three zones, and simply designate which zone, passengers should be seated, according to their time of arrival at the airport.
June 2008: Korean Air (KAL) changed the name of its short-haul domestic Low Cost Carrier (LCC), slated to start operations next month, from "Air Korea" to "Jin Air (JIN)." (KAL) said the name change is intended to signal the carrier's "practical" approach, also to be signified by employee uniforms comprising jeans, t-shirts and jackets. (JIN)'s livery will feature a butterfly with blue and purple wings on a bright green background emblazoned on the tails of its 737-800s and A300-600s. The bodies of the airplanes will be painted silver. (JIN) employees will be called Jini, "reminiscent of Aladdin's magical genie," (KAL) said.
July 2007: Jin Air (JIN) launched operations with Seoul Gimpo to the island of Cheju. Launching (JIN) is a defensive ploy by Korean Air (KAL) to prevent other start-ups like Asiana (AAR)'s Busan International Airways, Jeju Air (JJA), Eastar Jet (EJS) and Tiger Airways (TGR) from stealing its short-haul traffic.
October 2008: 737-86N (30230, HL7555), AirCastle (CSL) leased.
November 2008: 2 737-86Ns (28625, HL7558; 28638, HL7564), Pembroke (PEB) leased.
March 2009: Jin Air (JIN) will exit the Seoul Gimpo (GMP) - Pusan route.
April 2009: Jin Air (JIN), will launch its international service in October with flights to Bangkok and Macau, CEO, Kim Jae Kun told reporters in Seoul. It currently operates four 737-800s and plans to add three destinations and one airplane this year. According to "The Korea Times," Kim said the carrier reported KRW10 billion/$7.3 million in sales this year and is aiming for KRW90 billion in 2009, with break-even targeted for 2010.
October 2009: Jin Air (JIN) launches daily service between Seoul Incheon and Bangkok as well as four times a week link to Macau. Two months later it is planning to start daily flights from Seoul to Osaka, Japan, followed by daily flights to Guam from January 2010.
June 2010: Jin Air (JIN) operates low-cost domestic services from Seoul and Pusan to Cheju Island. Plans to introduce regional services to destinations in China and Malaysia.
(IATA) Code: LJ. (ICAO) Code: JNA - (Callsign - JIN AIR).
May 2011: Jin Air (JIN) will increase thrice-weekly, Seoul Incheon - Clark service to five-times-weekly between July 21 to August 28.
April 2012: Jeju Air has applied for traffic rights to operate from both Busan Gimhae airport (PUS) (as of July) and Seoul Incheon International airport (ICN) (as of October) to Guam International airport (GUM). Korean Air (KAL) already operates on both routes and its low-cost carrier (LCC) Jin Air (JIN) also operates between Incheon and Guam.
September 2012: Korean authorities have designated four carriers from the Republic of Korea: (Asiana Airlines (AAR), Jin Air (JIN), Eastar Jet (EJS) and T’way Airlines (TWY)) to operate on the Seoul (ICN) - Vladivostok, Russia (VVO) route after the two countries agreed to remove restrictions.
Korean authorities have set frequencies to 36 weekly flights from the 2012/2013 winter season. (AAR) will launch daily, A321 (ICN) - (VVO) service in November. Other carriers have not announced their plans.
November 2012: Jin Air (JIN) will start Seoul Incheon service to Naha in Okinawa, Japan. (JIN) also flies internationally to Bangkok, Guam, Hong Kong, and Macau.
December 2012: Jin Air (JIN) launched its second, after Shanghai Pudong (PVG), international route from its Jeju (CJU) base on 6 December. Flights to Taipei Taoyuan (TPE) are now operated with twice-weekly departures using 737-800s. Transasia Airways (FSH) provides competition with four weekly services.
January 2013: Jin Air (JIN) the wholly owned low-cost carrier (LCC) subsidiary of national flag carrier, Korean Air (KAL), broke through the three million annual passenger mark for the first time in 2012 — quite an achievement for a carrier which celebrates its fifth birthday in July. Much of (JIN)’s growth in the last 12 months has been driven by its divergence from the standard low-cost model into charter services — or ‘casual’ flights as they are referred to on the Korea Airports Corporation website. In 2012, over >600,000 or >20% of Jin Air (JIN)’s passengers were flown on these ‘casual’ routes, representing a significant surge from the 100,000 or 4% totals of 2011. Indeed, (JIN) had never carried more than >4% of its annual passengers on charter operations before 2012. This diversification of its flying program is similar to the morphing of business models increasingly followed by many of the world’s low-cost airlines in order to spread revenue streams and decrease reliance on the direct selling of seats to the public. SEE ATTACHED - - "JIN-2013-01 - 2012 OVER 3 MILLION PASSENGERS."
Jin Air (JIN) fulfils two key strategic priorities for its parent, offering a low-cost alternative to the parent flag carrier (KAL) and the four other low-cost carriers (LCC)s in South Korea, while also allowing the group to expand into routes where there is perhaps significant leisure demand but little or no business traffic to justify a service from Korean Air (KAL) itself. Despite competing on nearly 40% of its routes directly against (KAL), this dual-headed strategy is reflected in its network, as Jin Air (JIN) flies routes like Jeju to Shanghai Pudong and Taipei, as well as Seoul Incheon to Macau, Yantai in China and Vientiane in Laos – none of which are flown by the mother carrier. Route turnover is relatively low at Jin Air (JIN) with only two of the 15 routes launched since its start-up being cancelled, namely from Busan to Seoul Gimpo and Jeju.
If one studies the attached - - "JIN-2013-01 - TOP 8 JIN MARKETS" it
demonstrates a little known virtue of a single airplane, single configuration fleet — your weekly frequency share is always equal to your weekly capacity share. Japan tops the table along with China, but only as a direct result of the launch of (JIN)’s latest daily new route from Seoul Incheon to Okinawa on 24 December — its fourth new route in 2012. Capacity to Thailand will briefly pull away from that flown to the Philippines and United States (Guam) between 26 December and 2 March as its Seoul Incheon to Bangkok operation will increase from daily to nine weekly. In addition, Laos will have jumped over Hong Kong into sixth spot during 22 December and 6 March, while operations from Seoul Incheon to Vientiane increase from four to six weekly flights.
With over 10 million annual passengers, Seoul Gimpo to Jeju looks set to hold its title of the world’s busiest air route in 2012. SEE ATTACHED - - "JIN-2013-01 - TOP 6 SEOUL TO JEJU." Looking at January 2013, its closest competitor, São Paulo Congonhas to Rio de Janeiro Santos Dumont, lags -30% behind the Korean route monster in terms of weekly seats and frequencies. It is therefore no surprise that 60% of Jin Air (JIN)’s weekly flights and seats are dedicated to serving this route, enabling it to become the number three carrier on this truly mega route pair. Bizarrely, for a domestic service, the route does not even link the country’s two biggest cities – indeed Jeju is not even in the top 20 largest cities in Korea. Jeju Island is a holiday hot-spot with no peers for Koreans and this is the reason for the huge quantities of weekly operations by the route’s six serving airlines.
While Asiana Airlines (AAR) leads the pack as a single entity, a combined Korean Air (KAL) and Jin Air (JIN) delivers close to 40% of this critical market, but this is a far cry from the 60% of frequencies and 70% of seats that the flag carrier (KAL) had in January 2008 prior to Jin Air (JIN)’s launch and the merciless encroachment of low-cost competition. Even this route pair has not been immune to (JIN)’s shift to more ‘casual’ flying. Total charter traffic between Seoul Gimpo and Jeju has nearly doubled between 2011 and 2012, from 4% to 8% of total passengers, however (JIN)’s ‘casual’ traffic on the route has increased by over >800% in the last 12 months to nearly 300,000 annual passengers.
(JIN) launched its second Japanese route on 24 December following services to Sapporo. From its base at Seoul Incheon (ICN), (JIN) now operates daily flights on the 1,300 km route to Naha (OKA), which is located in the Okinawa prefecture in southern-western Japan. Operating the route with 189-seat 737-800s, (JIN) competes with another South Korean carrier, Asiana Airlines (AAR), which it matches in terms of weekly frequencies.
July 2013: Jin Air (JIN) grew its coverage of the Japanese market, as it launched services from Seoul Incheon (ICN) to Nagasaki (NGS) on July 24. Thrice-weekly flights are operated on the 600 km route using 737-800s. Initially, there is no competition on the route, although Korean Air (KAL) plans to launch a weekly service on August 10. (JIN) already offers daily flights to Okinawa and Sapporo Chitose from Seoul Incheon.
November 2013: Jin Air (JIN), the low-cost carrier (LCC) subsidiary of Korean Air (KAL), has introduced flights between Seoul Incheon (ICN) and Chiang Mai (CNX) in Thailand. On October 30th, (JIN) commenced four times weekly flights on the 3,410 km route, which is also served daily by Korean Air (KAL). This winter, Jin Air (JIN) will serve 11 destinations from its Seoul Incheon base: three in Japan (Nagasaki, Okinawa and Sapporo/Chitose); two in Thailand (Bangkok and Chiang Mai); two in the Philippines (Cebu and Clark; plus Guam, Hong Kong, Macau, and Vientiane (Laos). (JIN) currently has a fleet of 10 737-800s.
June 2014: Korean domestic low-cost carriers (LCC)s are looking expand their long-haul operations in the coming months. In response to increasing tourism figures and a relatively crowded local market, carriers such as Jin Air (JIN), Asiana Airlines (AAR) subsidiary, Air Busan (ABN) and Jeju Air (JJA) are all said to be eyeing the possibility of expanding into long-haul routes.
According to figures from the Ministry of Land, Infrastructure & Transport (MLIT), (LCC)s now account for nearly 40% of total domestic air traffic in Korea. This points to a significant slowdown in potential expansion from original rates of some 10% a year, when (LCC)s first launched in Korea.
Jin Air (JIN) (CEO), Ma Won confirmed (JIN) is planning to expand flights “beyond its current boundary of Phuket” in Thailand, and will look to other long-haul destinations including Hawaii, Australia, and possibly Europe. “The only way to achieve a breakthrough in growth is to offer long range flights that go beyond Phuket,” he said.
Air Busan (ABN) is already extending its reach with a deal offered through AirAsia (ASW), with flights from Kuala Lumpur to Jeju, using Air Busan (ABN) for the final Busan - Jeju leg.
Reports also indicate Jin Air (JIN) wants to add Airbus A330s or Boeing 777s to its fleet, to serve new long-haul destinations. Air Busan (ABN) is also investigating flying deeper into Asia, to Australia and possibly Turkey, where its links with Turkish Airlines (THY) via the Star (SAL) Alliance network would be an advantage.
July 2014: Jin Air ((IATA) Code: LJ, based at Seoul Gimpo) (JIN) (CEO), Ma Won has unveiled (JIN)'s ambitious long term growth strategy which will see it almost double its current fleet from 11 airplanes to 20 by the end of 2015.
Speaking during a press conference at the Lotte Hotel in Seoul, Ma said the airplanes will include six 737-800s as well as three 777-200ERs to be used in launching the Korean Air ((IATA) Code: KE, based at Seoul Incheon) (KAL) subsidiary's first long-haul flights to Europe and the United States.
"As the first local low-cost carrier (LCC) to take over wide-body jets, Jin Air (JIN) will obtain the competitive edge in the market and lay the groundwork for sustainable growth," he told the "Korean Times."
The first of the 777 wide bodies is expected in December with the other two due next year.
Ma said market saturation both at home and regionally had forced his airline to move into the international sector. As a result, Jin Air (JIN) will add four new routes next year to China, Japan, and Malaysia.
Rival Air Busan ((IATA) Code: BX, based at Busan) (ABN) is also said to be considering taking an initial two or three A330s for use in serving Australia, Hawaii, Turkey, and Western Europe.
Jin Air (JIN) currently operates 10 airplanes, and serves 9 countries, 15 destinations, 13 routes and 53 daily flights.
September 2014: Korean low-cost carrier (LCC) Jin Air (JIN) has solidified plans to begin long-haul daily operations to the Pacific Island destination of Guam, following a spate of summer-only schedules to China.
The new schedule, which will start in December, will use the first of three Boeing 777-200ERs due for final delivery by mid-2015 and solidifies (JIN)’s claims earlier this year to stretch its boundaries beyond Phuket, Thailand. Jeju Air (JJA) plans to open the Korea - Guam route early 2015, to expand its tally to seven international destinations.
(JIN) originally planned to open the route earlier this year, but was unable to secure approval from Guam until recently. Guam airport authorities estimate the new route will add some +55,000 incoming tourists to the island’s economy.
Jin Air (JIN) (CEO), Ma Won said (JIN) would look at other long-haul destinations, including Honolulu, Australia, and possibly Europe. “The only way to achieve a breakthrough in growth is to offer long-range flights that go beyond Phuket,” he said.
The move comes as the domestic Korean market becomes increasingly saturated, forcing local (LCC)s to look elsewhere for growth. A recent report from the Korean Ministry of Land, Infrastructure & Transport (MLIT) said (LCC)s now account for nearly 40% of total domestic air traffic in Korea (moving beyond 50% is unlikely in the short term).
(JIN) is not the only Korean (LCC) looking outward. Air Busan (ABN) has indicated it is investigating long-haul routes to Australia, Hawaii, Turkey and Western Europe within three years; currently it has Cambodia and the Philippines in Southeast Asia as its long-haul destinations. Jeju Air (JJA), which saw a jump in sales of over >50% this year, is opening new routes to Shijiazhuang, China, and Bangkok. It is also looking to introduce new routes to Hanoi and Okinawa later this year.
October 2014: Jin Air (JIN), a subsidiary of Korean Air (KAL), has introduced two routes to China from its base at Jeju (CJU). On September 30th it began twice-weekly flights (Tuesdays and Saturdays) on the 1,225 km route to Quanzhou (JJN), followed on October 2nd by twice-weekly flights (Thursdays and Sundays) on the 1,635 km route to Xi’an (XIY). Both routes will be operated by (JIN)’s 737-800s. Competition is only provided on the Quanzhou route by Xiamen Airlines (XIA)’s thrice-weekly flights. These are Jin Air’s second and third routes to China from Jeju, as it has been operating flights to Shanghai since 2011. SEE ATTACHED - - "JIN-2014-10 - JEJU TO SILK ROAD."
December 2014: Jin Air (JIN), the low cost carrier (LCC) operated by Korean Air (KAL), has launched its fourth route to Japan. On December 1st, (JIN) began daily flights on the 552 km route between Seoul Incheon (ICN) and Fukuoka (FUK) using its 737-800s. The route is already served by Asiana Airlines (AAR) and (KAL) (each with thrice-daily flights), and Jeju Air (JJW) and t’way Air (TWY) (each with daily flights). (JIN) already serves Nagasaki, Okinawa and Sapporo/Chitose from Seoul.
January 2015: South Korean low-cost carriers (LCCs) are ramping up international services to Guam, with two airlines launching routes from the southern city of Busan.
Jeju Air (JJA) introduced Busan - Guam flights January 8, while rival Air Busan (ABN) has asked the USA Department of Transportation for permission to operate the same route from June 30. The pair will be the only Korean (LCC)s to fly this route, although there is already a (LCC) service to Guam from South Korea’s largest gateway Seoul.
The Jeju Air (JJA) Busan - Guam flight will be 2x-weekly using Boeing 737-800s. This will complement the airline’s twice-daily flights between Seoul Incheon and Guam. The (JJA) received approval to fly to USA destinations in 2012, at which time it expressed its intention to fly to Guam from both Busan and Seoul starting that year.
Air Busan (ABN) filed its application to serve USA destinations in December. (ABN) intends to offer 4x-weekly flights to Guam, using either Airbus A320s or A321s. Air Busan (ABN) said it may introduce service to Hawaii or even USA mainland destinations, and also asked for permission to operate charter flights to USA airports. So far, no comments have been filed regarding the application.
Air Busan (ABN) is a subsidiary of major Korean carrier, Asiana Airlines (AAR). It serves international destinations in Japan, greater China, including Hong Kong and Macau — Taiwan, the Philippines, and Cambodia.
Korean Air (KAL) also has a subsidiary (LCC), Jin Air (JIN). The (LCC) has flights from Seoul Incheon to Guam, and the parent airline serves Guam from both Incheon and Busan.
May 2015: News Item A-1: "Korean Transport Ministry is Pushing for Aircraft Age Limit" by Jeremy Torr, Air Transport World (ATW), May 22, 2015.
Korea’s Ministry of Land, Infrastructure, & Transport (MLIT) is urging all Korean airplane operators to replace or mothball all airplanes that are more than two decades old.
The (MLIT) said that eight of the country’s carriers had signed a Memo of Understanding (MOU) in which they “voluntarily agreed to replace all their airplanes that are 20 years old or older.”
The move comes following a spate of airplane maintenance issues in the region.
In April, Japan and Korea suspended charter flights from Thailand following an (ICAO) inspection, and two air operator’s certificates (AOCs) in the Philippines were withdrawn recently following a European Aviation Safety Agency (EASA) audit.
To date, Korean Air (KAL), Asiana Airlines (AAR), Air Busan (ABN), Jeju Air (JJA), Jin Air (JIN), Air Incheon (ICH), Eastar Jet (EJS), and T’way Air (TWY) have all agreed to the 20-year ruling.
The (MLIT) said the agreement was part of Korea’s “ongoing efforts to improve on airline safety.” The (MLIT) said records indicate that of 264 airplanes in service this month, some 14 are (MLIT)’s new voluntary age limit. These are four Korean Air (KAL) Boeing 747-400s, Air Incheon (ICH) 737-400Fs, and Asiana (AAR) 767-300 and 747-400F cargo airplanes.
Korean Air (KAL)’s average airplane age is 9.89 years; No 2 carrier, Asiana Airlines (AAR), has an average airplane age of 8.47 years, according to the Ministry.
Compared to the USA, Korean fleets are mere toddlers, the (MLIT) said, citing Delta Air Lines (DAL)’s fleet that has 234 airplanes 20+ years old, and American Airlines (AAL)’s fleet, which has 233+ airplanes of that age or more.
Although the (MLIT) noted that “there currently is no limit on the age or lifespan of an airplane,” it said the move would help improve both overall safety and efficiency.
July 2015: News Item A-1: Jin Air ((IATA) Code: LJ, based at Seoul Gimpo) (JIN) has fixed a tentative December date for the launch of its maiden long haul services to the USA. Using its sole wide body airplane (a 777-2B5ER leased from parent Korean Air (KAL), (JIN) will offer a 5x-weekly, Seoul Incheon to Honolulu return service beginning December 19.
At present, 777-2B5ER (34208, HL7743) is used on flights from Seoul Incheon to Sapporo Chitose in Japan.
News Item A-2: Boeing (TBC) and Jin Air (JIN) on July 27 celebrated (JIN)'s first direct-delivered Next-Generation 737-800 in Seattle.
(JIN) is the low-cost affiliated company of Korean Air (KAL). This delivery marks the 13th Boeing 737-800 to join (JIN)'s all-Boeing fleet. (JIN) currently serves 16 routes in Asia and operates a total of 15 airplanes, including two 777-200ERs.
August 2015: Jin Air (JIN) will open a new base in Busan next month. (JIN) plans to base at least one 737-800 out of the south-eastern port city to serve Cebu and Osaka Kansai effective September 25.
Busan is already home to fellow budget rival, Air Busan ((IATA) Code: BX, based at Busan) (BSN).
Jin Air (JIN) currently operates 15 airplanes, to 10 countries, to 18 destinations, on 18 routes and 53 daily flights.
December 2015: News Item A-1: Jin Air (JIN) has expanded its network from Seoul Incheon (ICN) by three destinations. On December 1, (JIN) launched daily flights on the 2,683 km route to Hanoi (HAN) in Vietnam and on the 2,894 km route to Kalibo (KLO) in the Philippines. The following day it added a 6x-weekly service on the 4,319 km route to Phuket (HKT) in Thailand. All three routes are already served by at least two other carriers.
Routes as follows:
Seoul Incheon (ICN) to Hanoi (HAN), 737-800 7x weekly, vs Asiana Airlines (AAR) 14x, Jorean Air (KAL) 14x, Vietnam Airlines (VIE) 14x, Jeju Air (JJA) 7x, & VietJet Air (VJE);
(ICN) to Kalibo (KLO), 737-800 7x, vs Philippine Airlines 14x & AirAsia Zest (RIT) 7x;
(ICN) to Phuket (HKT), 777-200ER 6x, vs (AAR) 7x, Eastar Jet (EJS) 7x, & (KAL) 7x.
News Item A-2: Jin Air (JIN) has launched its first flight to the USA. On December 19, the South Korean carrier began operating 5x-weekly on the 7,350 km route between Seoul Incheon (ICN) and Honolulu (HNL), the main gateway to Hawaii. (JIN) will utilize 777-200s on the route. (JIN) has two of the type at its disposal complementing (JIN)’s 16 737-800s which form the backbone of the fleet. Competition on the new USA route comes from Korean Air (KAL) (with double daily flights), Asiana Airlines (AAR) and Hawaiian Airlines (HWL), which both operate the route 5x-weekly. Until now, Jin Air (JIN)’s longest route was the 4,319 km sector to Phuket in Thailand.
February 2016: "Korea to Overhaul (LCC) Safety Guidelines" by (ATW) Jeremy Torr, February 2, 2016.
The South Korean Ministry of Land, Infrastructure & Transport (MLIT) has outlined a set of new safety guidelines requiring all low-cost carriers (LCCs) to employ six sets of pilots (FC) and 12 type-certified mechanics (MT) for each of the aircraft in its fleet.
Additionally, all Korean (LCC)s will be required to have one fully operational aircraft available for use as a substitute in the event of mechanical issues prejudicing safety on a scheduled service.
Korean Yonhap news agency has reported the new guidelines follow two recent safety-related incidents involving Korean (LCC) aircraft: In December 2015, a Jeju Air (JJA) pilot (FC) failed to turn on the cabin air supply, and in January 2016 a Jin Air (JIN) flight took off with an improperly closed door.
The (MLIT) said the new rules are designed to “fundamentally overhaul the way low-cost carriers (LCCs) run their operations” and would be enforced with penalties for noncompliance. The move comes as part of a wider safety push by Korean aviation authorities, including a plan to mothball old aircraft for safety reasons. Although the new rules would not be legally enforceable, the (MLIT) said it would impose permit restrictions on offending carriers. It noted that contraventions of the new regulations could result in flight schedule suspensions, cuts in designated routes, and a loss of priority in future slot allocations at relevant airports.
April 2016: "Jin Air Signs Interline Deal with the Jetstar Group" by
(ATW) Jeremy Torr, April 15, 2016.
Low-cost carrier (LCC) Jin Air (JIN) has signed a code share agreement with the Australian-based Jetstar (IMU) Group to offer combined route bookings across both carrier’s networks.
The two (LCC)s will offer what they call “seamless travel packages” across both networks that include Jin Air (JIN)’s existing Korea-based network and the services of Jetstar Airways (IMU), Jetstar Asia (JSA), Jetstar Japan (JJP), and Jetstar Pacific (PAH).
Both carriers are offshoots of major full-fare carriers (Jin Air (JIN) out of Korean Air (KAL), and Jetstar (IMU) out of Australian flag carrier, Qantas (QAN).
This will be the first interline agreement that (JIN) has entered into with any other carrier, and will allow Korean passengers significantly easier access into the Southeast Asian destination market. Jin Air (JIN) has been expanding its route offerings across the Asia-Pacific region including to Guam, Hawaii, Okinawa, and Saipan.
“By acknowledging Jin Air’s potential, the Jetstar Group will be able to bring in more Korean customers to its airlines,” the company said.
Both carriers have begun work on combining booking and systems interlocks, and aim to launch the full code share program in (3Q) 2016.
Jin Air (JIN) said that although this is the first code share agreement it has signed, it expects to introduce more in coming years. “Following this collaboration, (JIN) will continue to explore further interline cooperation with other airlines,” it said.
June 2016: "Value Alliance: the Hubs, Focus Airports and Routes Where Alliance Members Might Gain Synergies", by (CAPA), June 20,2016.
Since the Value Alliance was announced in May 2016 as the second low cost carrier (LCC) alliance, there has been industry interest about how and where the alliance can deliver synergies. The nine initial members of the Value Alliance include Cebu Pacific (CEB), Cebgo (SRQ), Jeju Air (JJA), Nok Air (NKA), NokScoot (NSC), Scoot (SCT), Tigerair Singapore (TGR), Tigerair Australia (TAU) and Vanilla Air (VNL).
Tokyo Narita is the alliance hub with more service from Value members (five) than any other. But Asia's most popular airports for Value members are not where the alliance has a local member: Taipei and Hong Kong.
In terms of frequency, Manila and Bangkok Don Mueang have the most Value flights, reflecting their local membership there. The local Value member based at an airport typically dominates the hub, accounting for over >90% of Value flights. That creates a strong feed network for other members but also (potentially) competition that may be too strong. Members overlap on only six routes so far and their combined frequency gives them a scale advantage against non-Value (LCC)s. Although it is premature to evaluate the effectiveness of the alliance (new members will join and existing members will grow) this analysis looks at where there are network opportunities for cooperation.
* Airports most frequented by Value Alliance are not member hubs.
There are services from three or more members of the Value Alliance at 15 airports in Asia. This includes Tigerair (TGR) and Scoot (SCT), which have the same ownership, but excludes Cebu (CEB) and Cebgo (SRQ), since (CEB) owns (SRQ). (TGR) and (SCT) are expected to merge, with only one brand surviving.
Five airports have services from four or more alliance members. The two most popular airports (Taipei Taoyuan (6) and Hong Kong (5)) are not local hubs for the Value Alliance. Three airports have services from four Value members: Hanoi, Osaka Kansai, and Tokyo Narita. Only Tokyo Narita is a Value hub (served by Vanilla Air (VNL)), although Osaka Kansai is a growing focal point for (VNL) and in time, will likely become a hub.
Taipei is home to two (LCC)s – Tigerair Taiwan (TTW) and V Air (VAX) (but neither is a member of Value (or of U-FLY)). Tigerair Taiwan (TTW) is 10% owned by the Tigerair Holdings but is not a member, and is expected to be wholly under control of the China Airlines (BEJ) Group, once the expected Tigerair (TGR)/Scoot (SCT) merger occurs. V Air (VAX) is owned by TransAsia (FSH) and has no partnership affiliations. TransAsia (FSH), a full service regional airline, is not a member of a global alliance.
It is not without coincidence that the most commonly served airports are in Northeast Asia. Taipei and Hong Kong are accessible from both Southeast Asia and northern Northeast Asia with narrow body aircraft, making the two airports accessible for all members. Only Jin Air (JIN) (not an alliance member) is a Northeast Asian wide body (LCC) operator, so Northeast Asia’s (LCC)s are restricted from flying deep into Southeast Asia.
In contrast, Southeast Asia has three wide body (LCC) operators that are belong to an alliance: Scoot (SCT), NokScoot (NSC) and Cebu (CEB). Cebu (CEB) can access Northeast Asia with narrow body aircraft, although it sometimes uses wide body aircraft on trunk/congested routes. There are services from three Value members at 10 airports, and all but three are Value member hubs.
* Measured by frequency, most services are at Value alliance member hubs.
This analysis next looks at the largest airports in the Value Alliance based on weekly frequencies. This analysis comprises the 21 largest airports (the 20th and 21st largest have the same number of frequencies). The six largest airports are all member hubs.
The four largest (Manila, Bangkok (DMK), Singapore, and Cebu) are significantly larger than the rest. Of the 10 largest airports based on member frequency, only two (Hong Kong and Taipei Taoyuan) are not member hubs.
* Largest Value Alliance airports are dominated by their members.
13 of the region's largest airports have more than >7 daily flights from alliance members. Each is dominated by its local alliance member. At the two largest (Manila and Bangkok (DMK)) the local alliance hub member operates 98% and 94% of all flights by the alliance. In other words, of all Value flights at Manila, Cebu (CEB) operates 98% at Manila, while NokScoot (NSC) and Nok (NKA) operate 94% of all Value flights at Bangkok (DMK).
A Value Alliance Member typically accounts for over 90% of alliance flights at its home. Four airports are around the 80% mark, while there is no Value Alliance member operating flights at Bangkok (BKK) (they instead operate out of Bangkok (DMK)).
* Value Alliance members overlap on six routes.
There is a possibility that the Value Alliance could help (LCC)s gain scale on routes, especially where due to infrastructure constraints ( slots, air traffic, bilaterals) organic growth may not be an option.
In the week commencing Jun12, 2016 the Value Alliance members overlap on only six routes. This excludes overlap only between Scoot (SCT)/Tigerair (TGR) (owned by the same company and expected to be merged) and Cebu (CEB)/Cebgo (SRQ) (Cebu (CEB) owns Cebgo (SRQ)). (CEB) has the most overlap (four routes) followed by Jeju (JJA) (three), Tigerair (TGR) and Scoot (SCT) (two) and then Vanilla Air (VNL) (one).
No route has more than >2 operators. The frequency split varies between relatively even and lopsided. As this analysis is focused on the opportunity to offer more flights, frequency (not seats) is considered. The use of wide bodies at Scoot (SCT), and sometimes Cebu (CEB), would alter a capacity share analysis.
* Value Alliance opportunity to link Northeast Asia with Southeast Asia.
The geography of east Asia means that (LCC)s cannot serve the entire region with existing narrow body technology, although (LCC)s in some markets can come close. The final analysis in this report considers the ability of the Value Alliance to link Northeast Asia with Southeast Asia, and vice versa.
Six of the members have routes between Northeast and Southeast Asia. Vanilla Air (VNL) operates wholly within Northeast Asia but is examining a Taipei base to use fifth freedom rights to fly to Southeast Asia. Cebu Pacific (CEB) has the greatest number of flights between Northeast and Southeast Asia. This is probably unsurprising given the Philippines' geographical position, which is more between the regions. Tigerair (TGR) and Scoot (SCT) have approximately 10 routes between the regions.
Evaluating the opportunity is complex: routes are often to points where there is no service from another Value member, or there is limited frequency, and it may not enable a same-day connection, or a connection within reason. Some connections would be circuitous. But as noted earlier, it is too soon to evaluate the opportunity for the alliance.
* Outlook: long haul operator, member with central geography, could bring opportunity but also competition.
The Value Alliance faces the same conundrum as full service alliances: adding members brings opportunities but also competition. A member that is more central between the regions (such as in Hong Kong or Taiwan) could enable more links and connection opportunities.
Alternatively, that member may prefer to serve points on its own. (As (CAPA) has previously recorded, some Value members are expected to work with HK Express outside the (LCC) alliance organizations). More long haul operations could mean that an airline gains access to the strong regional hub of a partner in a different part of Asia. Alternatively, this could preclude cooperation between other members.
The opportunities for the Value members today are varied, but they do exist. With time, the synergies within the alliance should become greater. Most critically, this is all being developed with minimal cost, unlike the high joining and membership fees of full service alliances. While the gains may not seem as significant, neither are the costs.
Conclusion: As (CAPA) has previously concluded of the alliance:
* Joining the Value Alliance should be an appealing option for Asia’s independent (LCC)s since the cost and risk of membership are small. At the May 16, 2016 launch event, executives representing the founding members stressed that the concept is to add incremental passengers without incurring additional cost or adding any complexities. The members said that they would not have joined, if they had not been able to retain their business models.
* The main objective is for each member to increase their brand awareness across Asia-Pacific. The main objective is for each member to increase their brand awareness across Asia-Pacific and augment their distribution network through cross-selling. The alliance members pointed out that most of their brands are not well known outside their respective home markets.
* The members expect that the alliance will only generate a small increase in their interline traffic volumes (at least in the initial phase).
* Interline traffic for most members is a very small part of their overall business (for some it has even been non-existent) and most members do not expect that interline traffic will ever account for a large share of their overall traffic.
* The Value Alliance essentially offers its members a nothing-to-lose alternative for attempting to increase transit traffic and attract passengers in new markets who are now flying with other airlines. Even if the alliance only brings each member a +1% incremental gain in passenger traffic, it can be deemed a success, given the limited cost and the simplicity of the new offering.
* Asia’s independent (LCC)s need to evolve and embrace new alternatives if they are to maintain their growth trajectory and succeed in an increasingly competitive marketplace.