On the night of 28th at Gimhae International Airport in Busan, the fire incident involving an AIR BUSAN aircraft raises questions about its potential impact on Korean Air's plans to launch a mega low-cost carrier (LCC). Korean Air is preparing to integrate its LCC subsidiary JIN AIR with AIR BUSAN and AIR SEOUL, which are under Asiana Airlines. With the cause of the fire still unknown, there are concerns that if investigations reveal it was due to maintenance or structural issues, it could weigh on the LCC integration efforts.
According to the aviation industry on the 31st, following the fire incident involving an AIR BUSAN passenger aircraft, Korean Air dispatched personnel for safety, security, and maintenance support to the scene, led by Vice President Choi Jeong-ho. Since AIR BUSAN is now integrated into the group, a system for accident response and investigation support has been initiated at the group level. Coincidentally, just after Korean Air established a safety health division overseeing aircraft safety and maintenance for the merged Asiana Airlines, a fire incident occurred at one of Asiana's subsidiaries.
With the recent completion of the merger with Asiana Airlines, Korean Air incorporated AIR BUSAN and AIR SEOUL, which are subsidiaries of Asiana, as grandchild subsidiaries. Korean Air plans to integrate the three companies—JIN AIR, AIR BUSAN, and AIR SEOUL—with JIN AIR at the center. In total, the number of aircraft owned by the three companies equates to 58 as of the end of last year, surpassing the current leader Jeju Air (41 aircraft) to become the largest LCC in the country. Particularly, AIR BUSAN has many profitable international routes from Busan, including those to China, leading Korean Air to expect synergies from expanded networks and economies of scale.
Korean Air has recently initiated integration efforts by replacing AIR BUSAN's management with its own executives. Following an extraordinary general meeting on the 16th, the board of directors appointed Jeong Byeong-seob, managing director responsible for passenger sales at Korean Air, as the new CEO of AIR BUSAN. Managing Director Song Myeong-ik, head of the corporate merger task force at Korean Air, has been appointed as an in-house director (head of sales), while Managing Director Seo Sang-hun, the financial controller at Korean Air, was appointed as an external non-executive director.
The aviation industry believes the impact on the LCC integration efforts may vary depending on the results of the fire cause investigation. The Ministry of Land, Infrastructure and Transport has decided to conduct an investigation of the aircraft on the 3rd of next month. Concerns have been raised that the approximately 16 tons of aviation fuel on the aircraft's wings could lead to an explosion during the investigation, but the ministry has decided to proceed with the examination while leaving the fuel in place after a risk management assessment.
Based on passenger eyewitness testimonies, a lithium-ion auxiliary battery or an electronic device equipped with a lithium-ion battery that was located on the overhead bin is being discussed as a likely ignition point.
However, the Ministry of Land, Infrastructure and Transport and firefighting authorities are not ruling out the possibility of in-flight electrical wiring short circuits, structural defects, or maintenance negligence. According to the flight tracking website FlightAware, the aircraft operated a total of 17 flights in the 48 hours prior to the incident. Consequently, there are concerns regarding excessive flight scheduling and maintenance deficiencies. The ministry stated that it would investigate all possibilities regarding the cause of the ignition, and Airbus, the aircraft's design and manufacturing company, along with the French Bureau of Enquiry and Analysis for Civil Aviation Safety (BEA), will also participate in the investigation.
Some in the industry speculate that if the fire is found to be due to structural defects or maintenance issues, it could place a burden on Korean Air's integration efforts involving the three LCCs. This is because the airline's liability could be significantly greater than if it was related to items brought onboard.
There are also forecasts that the costs needed for aircraft standardization and maintenance infrastructure during the integration of the three companies could increase. Currently, JIN AIR operates Boeing aircraft, while AIR BUSAN and AIR SEOUL operate Airbus aircraft. To enhance competitiveness as an LCC, it is essential to standardize models or minimize different types to increase maintenance efficiency.
An aviation industry official noted, “As the safety incidents involving low-cost carriers have consecutively occurred with Jeju Air and now AIR BUSAN, there is growing concern; therefore, more investment in maintenance personnel, training, and infrastructure will be necessary to alleviate such concerns.”
Acquiring new aircraft or changing models incurs substantial expenses. In preparation for the merger with Asiana Airlines, which operates Airbus aircraft, Korean Air introduced its first Airbus A350 on the 27th. To operate the A-350, Korean Air has selected flight crew separately and formed a dedicated maintenance team.