Korean Air’s consolidation of three low-cost carriers is reshaping South Korea’s aviation market, creating a dominant budget airline that will control nearly half of the domestic market. The integration will combine Jin Air with Asiana Airlines’ units Air Seoul and Air Busan, following Korean Air’s acquisition of Asiana.
The merged entity will operate 58 aircraft and generate annual revenue of 2.47 trillion won ($1.9 billion), surpassing current market leader Jeju Air’s fleet of 42 planes and revenue of 1.72 trillion won ($1.3 billion).
The move is facing resistance from Busan civic groups concerned about Air Busan potentially relocating its base to Incheon International Airport from Gimhae. Local organizations argue this could undermine the development of the planned Gadeokdo New Airport.
The consolidation is spurring defensive moves by rivals. Daemyung Sono Group has invested 230 billion won ($176 million) to acquire stakes in T’way Air and Air Premia, positioning itself as a key player in the budget airline sector. The company holds a 26.77% stake in T’way Air and 11.6% in Air Premia.
Jeju Air, owned by Aekyung Group, is exploring potential mergers with carriers owned by private equity firms, including Eastar Jet and Air Premia, according to industry analysts.
Korean Air plans to operate Asiana as a subsidiary for two years before full integration.
