KA to start LC airline
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According to Reuters (Seoul), South Korea’s largest airline said in a statement its low-cost carrier, to operate domestic and short and mid-haul international routes, was aimed at competing with cheaper rivals from China and Southeast Asia and caters to soaring outbound travel demand.
It follows the plan by Japanese rival All Nippon Airways Co. Ltd.’s announcement last week of its intention to start up a low-priced airline in a defensive move to ward off potentially fierce competition from Chinese rivals.
As deregulation decreases the bar lower for new players trying to enter the airline industry, Low-cost carriers make up 20 percent of the entire airline market in the United States and Europe, and are expanding quickly in China and Southeast Asia.
“This is also a display of Korean Air’s will that it shall no longer remain indifferent to the invasion of low cost carriers from China and Southeast Asia into the Korean market,” the statement said.
Korean Air is facing competition on routes to China, which account for about 10 % of its international business. Chinese airlines, heavily subsidised by the government, are selling tickets for more than 50 % less than Korean Air.
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