Korean Air and Asiana Airlines flights on some routes, such as Gimpo to Jeju and Busan to Qingdao, China, are being sold at prices lower than those of low-cost carriers (LCC). This is due to the Fair Trade Commission's requirement that a certain level of supply be maintained on routes that are concerning for monopolies after approving the merger of Korean Air and Asiana Airlines. Consumers can purchase tickets at lower prices, but LCCs are worried about deteriorating profitability.
According to the travel price comparison platform Skyscanner on the 29th, the Korean Air flight departing from Busan to Qingdao, China, at 11:05 a.m. on October 18 is the cheapest at 128,203 won. Korean Air temporarily suspended operations on this route for about a month from the end of March and operated four times a week from the end of April to the end of May. It is currently operating seven times a week.
On September 13, looking at the Gimpo to Jeju route around 6 p.m., Asiana Airlines offers tickets for 38,700 won, which is cheaper than LCCs T'way Air (40,529 won) or Eastar Jet (40,600 won).
The Fair Trade Commission approved the merger of Korean Air and Asiana Airlines last year, conditionally requiring that the total supply of seats on 40 routes, including 26 international routes and 14 domestic routes, operated by five companies (Korean Air, Asiana Airlines, Jin Air, AIR SEOUL, and AIR BUSAN) be maintained at over 90% of the 2019 levels.
The seat supply for the Incheon to Guam route in 2019 was 878,000 seats, including Korean Air (423,000 seats), Jin Air (300,000 seats), and AIR SEOUL (155,000 seats). As of last month, the number of available seats on this route this year has been 296,000, significantly falling short of 90% (about 790,000 seats). As a result, AIR SEOUL, which suspended operations on this route in November 2022 due to the impact of the COVID-19 pandemic, plans to resume operations seven times a week starting October 26. An industry insider said, "Not only on the Incheon to Guam route, but significant capacity expansions are occurring on other routes as well."
Korean Air has increased its operations on the Incheon to Guam route from once daily to twice daily starting June and is currently operating three times a day. Jin Air operated once daily until June and will increase to twice daily from July and then to three times daily starting next month. With the increase in supply, ticket prices for the Incheon to Guam route have decreased, and as a result, Jeju Air plans to suspend operations on this route starting in October. T'way Air will also discontinue the Incheon to Guam route between October and November.
From the consumers' perspective, this results in increased options for flight times and reduced prices. However, the LCC industry, which has to compete with these airlines, believes that the structure is not sustainable. An LCC insider noted, "Given that our financial situation is already poor, the situation is continuing where the more we operate aircraft, the more losses we incur. It is difficult to sustain as we do not know how long the condition to maintain the number of supplied seats set by the Fair Trade Commission will last."