Jeju Air to enhance competitiveness via cargo, new routes

Figure 1Kim E-bae, Jeju Air's CEO, speaks during a press conference held at the Mayfield Hotel in Seoul, Tuesday. / Courtesy of Jeju Air

By Kim Hyun-bin

Jeju Air, the country's largest low-cost carrier (LCC) by sales, will enhance its competitiveness by entering the cargo business and launching new international routes, the company CEO said Tuesday. He said that these changes, together with the countries' moves to ease quarantine measures, which bring hope for increased domestic and foreign air demand, should create a business turnaround next year.

"We have entered an era of hope from the perspective of the airline industry in the post-coronavirus era. As the LCC leader, we are at a point of making important changes," Kim E-bae, Jeju Air CEO said during a press conference held at the Mayfield Hotel in Seoul.

"We will prepare for a leap forward by making full use of our core competencies, such as cost competitiveness, and advance into new fields such as short and medium-distance routes and cargo transportation," he said.

Jeju Air will operate a total of 246 flights on 19 international routes, including Incheon-Bangkok, Bohol, Nha Trang and Kota Kinabalu, during the month of June. Compared to last month, the number of routes increased by 138 percent from 8 to 19, and the number of flights increased by about 62 percent from 152 to 246.

"There is a need for more openness to Japan and China in the future," Kim said. "However, I believe most international routes will be normalized by the second half of next year."

In order to expand mid- and short-distance routes to Central Asia, Indonesia, and Mongolia, the airline's current aircraft is scheduled to be switched out with Boeing's next-generation B737-8 model starting next year.

Compared to the currently operating B737-800, the operating distance will increase by more than 1000 km, fuel use can be cut down by more than 14 percent, and the operating cost per seat can also be reduced by 12 percent, which is expected to improve profitability.

Kim also expressed his will to improve the business structure, 97 percent of which relies on the passenger business.

"We will focus on express cargo or e-commerce volume," he said. "It will help profitability because the cargo plane has continuity with the existing fleet and maintenance."

Jeju Air is planning to start a full-fledged cargo transportation business by introducing the B737-800BCF ― a cargo aircraft ― from this month, which has been remodeled from its existing B737-800 passenger fleet.

Regarding the timing of the business turnaround, he said, "This year is uncertain but we should be able to make a turnaround next year depending on the market situation."

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