Korean LCCs baffled as Korea-Indonesia aviation talks stall

South Korea’s low-cost carriers (LCCs) may have to shelve plans to launch service to Indonesia after the two countries failed to reach an agreement on aviation transportation, including assigning new routes to domestic budget airlines.

They are scheduled to resume bilateral aviation talks later this year. But industry observers see little chance of the two governments signing a deal by the end of this year.

Domestic budget carriers are pinning high hopes on new routes to Indonesia to expand beyond short- and medium-distance routes amid the post-pandemic travel boom.

They have aggressively expanded their fleet of aircraft to launch full-service carriers for longer distances, including South Korea-Indonesia routes.

Indonesia is not only a popular tourist destination but also a manufacturing base for Korean companies, including Hyundai Motor Co. It is also used for transit to and from Australia.

In May this year, Jeju Air Co., the country’s No. 1 LCC, launched one-off flights on two South Korea-Indonesia routes: Manado and Batam Island in Indonesia. The charter flights marked its first flight service from and to the country.

Earlier this year, Jeju signed a separate agreement with the Indonesian authorities to develop new routes with its new aircraft, the B737-8. But it has not yet been assigned routes to the Southeast Asian country.

Another budget carrier Air Busan was mulling whether to apply for transportation rights for Indonesian routes 

T'way Air has steadily explored long-distance routes. Last year, it secured three A330-300s and Boeing's next-generation B737-8 aircraft for mid-to-long routes.

But they are now being deployed to existing routes such as Bangkok, Singapore and Osaka.

T'way Air also suffered a setback in its plan to launch flights to Croatia after it obtained the right to fly to the Balkan nation as South Korea’s first LCC.

But it was never able to fly any planes to the country because the Russia-Ukraine war forced it to fly longer distances, which made it unaffordable.

Now Korean LCCs are seeking to diversify routes with their new aircraft.

Write to Mi-Sun Kang at misunny@hankyung.com
 

Yeonhee Kim edited this article.