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Korea's Jin Air reports soaring profits for Q1
Publication Date : 18-07-2012
Jin Air, a low-cost carrier, said Tuesday that its operating profit in the first half of this year had more than doubled, dismissing initial concerns that Korea is a deathbed for discount airlines.
The subsidiary of Korean Air increased its year-on-year sales by 65 per cent, to 119.5 billion won (US$110 million). The carrier’s operating profit in the same period also increased by 256 per cent, to about 7.8 billion won.
The four-year-old low-cost carrier attributed its performance to its “extraordinary flight routes”, which depart from Jeju Island to domestic and foreign cities. Expanding operating time through special flights also contributed to the boost in profit, the company said.
"We stuck strictly to the ‘blue ocean (territory not yet pioneered)’ such as Biantian in Vietnam, Macau and Taipei, where other (major) carriers don’t fly,” said Jin Air CEO and president Kim Jae-kun.
The CEO said that the company’s operating profit in the second half will likely be about half as much as in the first half, as he attended a press conference on Jeju Island to celebrate Jin Air’s fourth anniversary.
“The lifespan of the blue ocean is getting shorter and shorter, but we will never stop coming up with (new unfrequented routes) … the market will in fact be the status quo for the second half.”
The Jin Air CEO said that the company will wait and see about raising domestic fares. Korean Air and Asiana Airlines, the nation’s two largest airlines, are to increase domestic fares by about 9.9 per cent, from July 18 and August 3, respectively.
To promote sales in the second half, Jin Air adopted a new mileage system, the Navi Point Programme. Customers of Jin Air can save 10 to 40 points according to destinations and earn free flights.
A free one-way flight costs 100 points for weekdays and 150 points for weekends. A free round-trip flight requires 200 points for weekdays and 300 points for weekends.
“The Navi Point system may appear similar to previous flight mileage programs, but it is simpler and easier for customers to understand and benefit from” said Emily Cho, senior vice president of the marketing and public relations department.
Cho, the youngest daughter of Korean Air head Cho Yang-ho, served beverages on a Gimpo- Jeju flight to enhance customers’ in-flight experience Tuesday.