Singapore Airlines looks to diversify its portfolio with possible investment in Korean LCC Jeju Air

Singapore Airlines (SIA) is looking at acquiring a stake in Korean LCC Jeju Air as a potential next step in further expanding and diversifying its portfolio of airlines. Jeju would be SIA's first investment in North Asia, following recent investments in Australia, India and Thailand.

SIA-Jeju is an unusual combination as there would initially at least be limited network synergies, although it would be a relatively inexpensive investment for SIA. Jeju Air is keen to stick with its pure point-to-point short-haul LCC model, resisting the need to establish deep partnerships, pursue transit traffic or launch a long-haul low-cost operation.

Jeju could potentially be persuaded by SIA to make changes and pursue partnerships or joint ventures with SIA's two LCC subsidiaries, Tigerair and Scoot. But most likely SIA's potential stake in Jeju will be primarily an investment - at least in the initial phase - with some opportunities for the airlines to learn from each other without having to rebrand or forge formal partnerships.