Jin Air to return to Australia as South Korean visitor traffic surges

Korean Air LCC subsidiary Jin Air is resuming seasonal flights to Cairns in late 2017 and could eventually serve Cairns year-round as well as launch services to other Australian gateways. More flights to Australia from Jin would stimulate demand in the Australia-Korea market, which has been growing fast but is underserved.

Jin became the first long haul low cost airline to serve Cairns in Dec-2016, when it launched a seasonal twice weekly flight from Seoul. Cairns was previously only served by foreign airlines following full service models, including Air New Zealand, Air Niugini, Cathay Pacific Airways, Hong Kong Airlines Philippine Airlines and SilkAir. Jetstar operates the only year-round international LCC service from Cairns, with flights to Bali, Osaka and Tokyo.

The Cairns-Seoul route proved to be highly successful in the initial three months it operated, generating an average load factor of 97%. Since the last Jin Cairns-Seoul flight operated in Feb-2017, Cairns Airport has been working to attract Jin back for the next summer season. Cairns Airport recently announced that Jin will again serve Cairns with two seasonal weekly frequencies in Dec-2017 and Jan-2018.

While based on the current schedule the flights next summer will operate four fewer weeks than this past summer, Jin could later add more Cairns flights. The airport is hopeful that Jin will eventually serve Cairns route year-round.

Other Australian airports are also keen to woo Jin. The initial success of the Cairns service bodes well for Jin’s expansion not only in the Cairns market but Australia overall.

Jin’s long haul operation is currently limited to four 777s, which are used to serve Bangkok, Guam and Honolulu although Seoul-Honolulu is the only true long-haul route. The airline has a much bigger short-haul operation, which was launched in 2008 while the long-haul operation was added in late 2014. As the widebody fleet is expanded, Jin should be able to expand its long-haul network including in Australia.

Jin is the fifth foreign long haul low cost airline to serve Australia along with AirAsia X, Beijing Capital Airlines, Cebu Pacific Air and Scoot. Previously there were no low-cost services between Australia and South Korea.

With Jin operating only two seasonal weekly flights, the Australia-South Korea market is underserved from an LCC perspective compared to most other Australia-Asia markets. For example, LCCs will account for more than 40% of total Australia-Japan seat capacity in Aug-2017. LCCs also have a more than 30% share of the much larger Australia-Southeast Asia market.

The Australia-South Korea market is currently served with 18 weekly flights, including 12 from Korean Air and six from Asiana. Both airlines add capacity to Australia during peak periods.

Australia to South Korea one way weekly seat capacity by airline: Sep-2011 to Dec-2017

Source: CAPA – Centre for Aviation & OAG

Korean Air serves both Sydney and Brisbane while Asiana only serves Sydney. There have not been any non-stop services between Melbourne and Seoul since early 2013, when Korean Air suspended services to Melbourne.

Melbourne-Seoul could emerge as a potential route for Jin or Jetstar. Gold Coast Airport would also obviously be keen to attract an LCC service from Korea given its success with long haul LCC routes to Southeast Asia and Japan.

South Korea is the eighth largest source market for Australia’s tourism industry. South Korean visitor numbers to Australia increased by 24% in 2016 to 285,000 and were up another 7% in the first four months of 2017. More long-haul low-cost services between the two countries would stimulate demand and lead to even faster growth.

Jin is just scratching the surface with its two seasonal frequencies to Cairns. Inevitably the Australia-Korea market will attract significantly more LCC capacity.