Airline News. July/ Aug 2010

South Korea’s air transport authorities will not issue any more air operating certificates (AOC) for new domestic low-cost carriers (LCCs)

1st Jul 2010

Korea calls halt to new low-cost carriers

South Korea’s air transport authorities will not issue any more air operating certificates (AOC) for new domestic low-cost carriers (LCCs).
The move toughens up the government’s decision, adopted early this year, that no AOCs for new budget airlines would be issued for the next two years. The authorities say the domestic market is already crowded, with four such carriers operating. The four are Jeju Air, Jin Air, Busan Air and Eastar Jet.
Kostar Airlines and Purple Jet, which had planned to start operations in February 2009 then postponed the launch to July, have now lost the right to secure an AOC. A third, unidentified company has withdrawn its application.
Kim Moon Soo, a spokesman for the Ministry of Land, Transport and Maritime Affairs in Seoul, says some of the routes operated by LCCs offer too many daily flights, resulting in service cancellations a day before departure. Another reason for the new ruling is that the government does not want smaller airlines to be forced out of the market by an intensified fare war with big carriers, which have deep pockets and larger fleets.
Kim notes that Hansung Airlines, the first LCC in Korea, and Yeongnam Air both went bust because they could not handle the competition from bigger players. Adding to its financial problems, Hansung also had management and safety issues, while Yeongnam operated with an old fleet of Fokker 100 jets that did not appeal to the market.
The government has relaxed its previous rule that airlines have to operate scheduled domestic flights for two years before approval is given for international flights. The change followed appeals from Eastar Jet and Jeju Air that the two carriers should not be treated differently from Jin Air and Busan Air, which were exempted as wholly-owned subsidiaries of Korean Air and Asiana Airlines, respectively.
Eastar Jet, which started operations in January 2009, has taken advantage of the change in policy. The Seoul-based airline is already operating flights to Kuching and Miri in the east Malaysian state of Sarawak, Shanghai and Shenyang in China, and Sapporo in Japan, using Boeing 737-700 aircraft.
South Korea has open skies agreements with Japan and China, paving the way for LCCs to operate to any point in China – except Shanghai Pudong International Airport and Beijing Capital International Airport – and any point in Japan with no restriction on capacity or frequency.
The Civil Aviation Administration of China does not allow LCCs to operate to Pudong and Beijing Capital. LCCs are allowed at Shanghai’s second international facility, Hongqiao Airport. For Beijing services, LCCs have to operate to Tianjin International Airport, 80km outside the Chinese capital.

Thai Airways to order 15 widebody aircraft

Thai Airways International has firmed up plans to order 15 wide-body jetliners. The order, comprising seven Airbus A330-300s and eight Boeing 777-300ERs is expected to be placed imminently.
Two A330-300s are to be delivered in the third quarter of 2011, three in 2012 and the remaining two in 2013. The 777-300ERs will be delivered at a rate of four per year in 2012 and 2013.
The A330-300 was chosen over the rival 777-200, which did not meet Thai Airways’ requirements for utilisation on regional routes. Regarding the decision to acquire 777-300ERs, Thai Airways Executive Vice-President Chokchai Panyayong says the twinjet is more fuel-efficient than the four-engine Airbus A340-600 which the airline is now operating.
The 777-300ERs will be deployed on Thai Airways’ European routes, currently served by 747-400s. The carrier has yet to make a decision on engines for both aircraft types.
The 15 aircraft are part of a batch of 70 that Thai Airways will acquire over the next 12 years under the airline’s fleet-modernisation programme. This excludes the five A330-300s ordered in 2008 and scheduled for delivery later this year, and six Airbus A380s, to be delivered from October 2012 through to 2013.
Over the next five years, Thai Airways will retire 25 aircraft: 12 Airbus A300-600s and 13 older A330-300s and 747-400s.
The A300-600s, which are about 20 years old, were decommissioned in stages in 2008 and 2009 but brought back into service early this year, due to a nine-month delay in Yokohama, Japan-based Koito Industries supplying the economy-class seats for five new A330-300s.
An earlier batch of seats produced for the aircraft by Koito failed a safety audit, carried out by the European Aviation Safety Agency and Japan’s aviation authorities.
Thai Airways currently operates 18 747-400s, 12 777-300/300ERs, nine 777-200/200ERs, six A340-600s, four A340-500s, 12 A330-300s, 12 A300-600s, nine 737-400s and two ATR72-500s which are leased to Bangkok-based low cost carrier Nok Air.

AIRASIA launches flights to Tehran

AIRASIA X will launch five-times weekly flights to Tehran using Airbus A330-300 aircraft. The Iranian capital will be the carrier’s ninth long-haul destination after London-Stansted, Melbourne, Gold Coast, Perth, Taipei, Tainjin, Hangzhou, Mumbai, and Delhi. AirAsia X stopped its four-times weekly Abu Dhabi service in March, one month after launching the route. The airline will be the only carrier from South-East Asia to operate to Teheran.

Asian Aviation at a glance