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AirAsia said to be in talks to buy Korean carrier

Publication Date : 11-10-2012

 

AirAsia chief executive Tony Fernandes is said to be in talks to buy South Korean low-cost airline T-Way Airlines.

Fernandes, however, denies this.

“At the moment, nothing is going on but we will never say never...Hopefully (there will be something) one day,” he said. “We talk to so many parties all the time.”

T-Way is the latest airline Fernandes has been linked to. Prior to this, he was said to be talking to Zest Air of the Philippines. He is also in the midst of buying Indonesia's Batawia Air.

Growing organically may have been his preferred way for AirAsia but buying up airlines is an option that gives Fernandes access to new markets and setting up AirAsia Korea is what he wants to do pretty soon.

“Buying up means spending more then a new start-up but T-Way is a smallish airline that would not cost too much.

“Having a base in South Korea gives him access to another North Asian market after AirAsia Japan,” said a source.

Apart from Japan, AirAsia has ventured into Thailand, Indonesia and the Philippines. Fernandes is keen to spread AirAsia's wings to India, China, Vietnam and Cambodia.

T-Way has two aircraft and is flying limited routes but it could offer an entry for AirAsia into the South Korean market, which has five low-cost carriers (LCCs) that operate like full-service airlines, offering food and free baggage, unlike AirAsia's model where passengers pay separately for such services.

The five LCCs are Jeju Air, Air Busan, Jin Air, Eastar Jet, and T-Way Air all have a combined market share of 34.68 per cent of the domestic flights, and 3.48 per cent share of international routes as at 2010.

A total of 1.45 million passengers flew on budget airlines in January and February this year, reflecting a 30 per cent increase from the same period last year, said a report.

Yesterday, Fernandes launched the sale of air tickets for the Seoul-Tokyo flight to be operated by AirAsia Japan. This is AirAsia Japan's first international flight and it is offering special fares for a limited period at 2,000 won for one-way fare.

The first flight will take off on October 28 and the next destination that AirAsia Japan will add is Busan.

Fernandes said that over a 24 month period, AirAsia Japan should be flying 10 to 12 international routes from its base in Narita.

AirAsia holds a 49 per cent stake in AirAsia Japan while All Nippon Airways has the remaining 51 per cent.

“Seoul could have one flight every hour as the market is massive. South Korea is not just about Samsung phones or Korean rapper Psy but also K-pop and so many other things.

“When we enter a new market, it is about growing new market share and that is what we will do here,” he said.

He added that AirAsia's sister airline, AirAsia X, now flew daily from Kuala Lumpur to Seoul and would be adding Busan and Jeju Island next.

“We are giving the people of South Korea an amazing opportunity to travel at incredible prices like never before,” he said.

 

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