Kumho Asiana Group, parent of Asiana Airlines and Air Busan, has reportedly met with leading creditors on ways to restructure debt at two of its 48 companies, Kumho Industrial and Kumho Tire (CNBC, 29-Dec-2009). As part of this, the company has also agreed to sell a controlling stake in Daewoo Engineering & Construction Co for KRW2.9 trillion (USD2.5 billion) to its main creditor, Korea Development Bank, while Asiana Airlines and Korea Kumho Petrochemical Co will also discuss ways of improving their finances with creditors (Bloomberg, 30-Dec-2009).
Asiana parent, Kumho Asiana Group, meets with creditors on debt restructure options
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Korean LCCs: fleet surpasses 100 aircraft but market faces growth constraints; China the latest
Korea's LCC sector ended 2016 with 103 aircraft – the first time the collective fleet had crossed the 100 mark for what, until recently, was Northeast Asia's most dynamic market. Korea has six LCCs, with Jeju Air regaining a strong lead as the largest LCC. Half of Korea's LCC fleet has been added in the last three years. It is Northeast Asia's largest LCC market after China and, surprisingly, well ahead of Japan.
But overall Northeast Asia's LCC sector is pale in comparison to Southeast Asia, whose LCCs operate 74% more aircraft. Lion Air alone has more aircraft than all of Korea, while the AirAsia Group has more than all of China. Only three of East Asia's ten largest LCCs are in Northeast Asia.
And it is unclear how much further Korea's LCCs can grow in the short term. They have mostly flown domestically, and slots are now constrained. International opportunities are also challenging, and further complicated by the Jan-2017 decision of China to reject charter applications during the popular – and very profitable – Chinese New Year. Korea's LCCs needed liberalisation, not antagonism.
AirAsia X to become the ninth Asia Pacific low cost airline serving the US, and the third in Hawaii
Malaysia’s AirAsia X is launching services from Osaka to Honolulu in Jun-2017, making it the second LCC to operate from North Asia to Hawaii and the third LCC from Asia-Pacific. The route is made possible by a combination of liberal air service agreements, providing fifth freedom rights to the Malaysian airline. The Korean Air LCC subsidiary Jin Air and Qantas subsidiary Jetstar Airways are currently the only LCCs from Asia Pacific with service to Hawaii – or any of the 50 US states.
AirAsia X secured US FAA approval in Feb-2017, ending a tedious two year process. AirAsia X ibecomes the ninth Asia Pacific LCC to secure US FAA approval and the second from Southeast Asia, after Cebu Pacific. Six Asian LCCs currently serve Guam and five serve Saipan.
Asian LCCs will inevitably also serve the mainland US. Both AirAsia X and Cebu Pacific, along with new Chinese LCCs, have the US west coast in their business plans. Cebu Pacific is the only likely low cost operator of nonstop flights from Southeast Asia to the continental US.