Saturday, August 12, 2017

South Korea - Jeju Air’s off-season becomes highly lucrative

Jeju Air posted its 12 consecutive profitable quarterly results on Thursday, announcing 16.2 billion won in operating profit in the April-June quarter, a whopping 2,448 percent increase year on year.

It is a record second quarter performance for Korea’s largest low cost carrier.

Second quarters are considered off-seasons in the airline industry.

Second quarter revenue increased 40.7 percent year on year to 228 billion won while net profit jumped 229.6 percent to 15.1 billion won.

The carrier said its efforts to diversify sources of profit had paid off.

For the off-season, the airline had lowered ticket prices and introduced products and services that could create additional earnings such as food and souvenir sales on board and charging fees for choosing seats before boarding.

“We minimized profit fluctuation by focusing on expanding earnings from additional sources in off seasons like the second and fourth quarter while focusing on our main passenger travel business in the high-seasons like the first and third quarter,” the company said in a statement.

The company also enhanced efficiencies by operating a single type of plane, which saves energy and maintenance costs.

While the company is currently operating 29 planes, it plans to expand its fleet to 32 by the end of this year.

“We plan to add more than six planes a year to our fleet until 2020 with the aim of carrying over 10 million passengers annually,” a spokesperson from Jeju Air said.

The carrier also been aggressively expanding its international services after the domestic market became crowded with competitors.

Most recently, Jeju Air partnered with the Philippine’s Cebu Pacific Air for a joint service. Both companies are part of Value Alliance, the world’s largest alliance among low cost carriers, which was set up last year.

While Jeju Air operates two routes between Incheon and the Philippines, to Manila and Cebu, passengers can connect to 37 domestic flights and 29 international flights offered by Cebu Pacific.

As the alliance consists of eight members including Jeju Air, the carrier said it will explore further cooperative services with other foreign airlines.



BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]

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