Korean Air to launch LCC for international operations by May 2008

Korean Air will launch a low cost carrier (LCC), tentatively branded Air Korea, for international operations by May 2008, subject to regulatory approvals.

The announcement comes on the heels of an announcement by Tiger Airways to introduce a LCC, Incheon Tiger Airways, in a joint venture (JV) with the Incheon City Government, by August 2008.

The announcement assumes significance as Korean Air had stated earlier this year that it would launch an LCC arm within three years, as it could '' no longer remain indifferent to the invasion of Chinese and South-East Asian LCCs in the Korean market''.

The Incheon Tiger Airways will offer international services from a base at Incheon Airport to China (Shandong and Hainan provinces), Japan (except Tokyo), Thailand and Malaysia with three A300s and two B737s.

The airline will gradually add short or mid-haul destinations.

The Korean domestic air market has been in decline, following the launch of high-speed rail services connecting Seoul and Busan. Capacity has dropped by a quarter since 2003, as airlines refocus on more profitable international routes.

The country''s international capacity has almost doubled over the past seven years and it has one of the highest per capita propensities for international travel in Asia.