40,000 Passengers Use Europe's 4 Major Routes
Positive Signs Despite EC Approval of Korean Air and Asiana Merger
T'way Air's average load factor on four major European routes has exceeded 80%, indicating that it has at least surpassed the break-even point. Since the European Commission (EC) set the successful transfer of major European routes as a condition for approving the merger of Korean Air and Asiana Airlines, this is seen as a positive sign for the merger of the two airlines.
According to the Ministry of Land, Infrastructure and Transport's Aviation Information Portal on the 1st, T'way Air's load factor on European routes was recorded at 84.5%. From August 8 to the 24th of this month, the total available seats on T'way Air's Rome, Barcelona, Paris, and Frankfurt routes amounted to 46,494, with 39,287 passengers boarding. The industry generally considers the break-even point to be 80%. Based on the average load factor, it appears to be cruising beyond the break-even point.
There are some differences by route. The Incheon-Rome route, which started service on August 8, had the highest load factor at 92.5%. The Incheon-Paris route, which began operations on August 28, barely surpassed the break-even point with a load factor of 81.9%. However, the Incheon-Barcelona and Incheon-Frankfurt routes recorded load factors of 79.9% and 76.9%, respectively.
Industry insiders expect the load factors to stabilize over time. An industry official explained, "Customers seemed somewhat concerned as it is the first time an LCC operates long-haul routes. As time goes by and price competitiveness becomes more prominent, the routes should settle."
The Rome, Barcelona, Paris, and Frankfurt routes are also key conditions for the merger of Korean Air and Asiana Airlines. When the EC expressed concerns about Korean Air's monopoly on European routes, Korean Air agreed to transfer these routes and provide crew and aircraft support in this context. It is anticipated that the EC will also monitor T'way Air's establishment on European routes when giving final approval for the merger. Since the U.S. Department of Justice (DOJ) has not raised objections to Korean Air, effectively approving the merger, this could be the final puzzle piece in the four-year merger process.
An aviation industry official said, "Korean Air has fulfilled most of the preconditions, including selling Asiana Airlines' cargo division. Once T'way Air's operation of European routes stabilizes, there will be no reason to delay approval any further."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
