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슈카월드
7 Mar 202420:55

TLDRThe transcript discusses the rise and impact of Low Cost Carriers (LCCs) in South Korea, highlighting how these airlines have revolutionized the travel industry by making international travel more affordable. The script traces the history of LCCs from their inception in 2003 with Hanjin Airlines to the current market leaders like T'way Airlines. It emphasizes the growth in international travel, especially to Japan and Southeast Asia, and the potential for LCCs to expand into long-haul routes, which could further reduce travel costs and open up new destinations for South Korean travelers. The script also touches on the challenges faced by LCCs, such as the COVID-19 pandemic, and the opportunities presented by the merger of Korean Air and Asiana Airlines, which has led to new market entrants and increased competition. The discussion concludes with a hopeful outlook for the future of travel, with LCCs playing a key role in making international trips more accessible and enjoyable for the South Korean public.

Takeaways

  • 🌐 The rise of Low Cost Carriers (LCCs) has significantly impacted the aviation industry, making international travel more accessible and affordable for many.
  • 📈 LCCs in South Korea have seen rapid growth since the first LCC, Hansung Airlines (now T'way Airlines), started operations in 2003, with the number of LCCs increasing to nine.
  • 🚀 The expansion of LCCs has coincided with a surge in international travel, with South Korea experiencing a 300% increase in outbound travelers over 15 years.
  • 💸 The success of LCCs is evident in their financial performance, with leading LCCs in South Korea recording sales exceeding 1 trillion won and operating profits reaching unprecedented levels.
  • 🌍 LCCs have been primarily focusing on short to medium-haul routes, but recent developments have seen them expanding into long-haul flights, offering new opportunities for international travel.
  • 🛫 T'way Airlines, a leading LCC, has started operating long-haul flights to Europe, signaling a shift in the market and potentially reducing the cost of long-haul travel.
  • 🔄 The merger between Korean Air and Asiana Airlines has raised antitrust concerns, leading to conditions that allow new airlines, including LCCs, to enter the market and maintain competition.
  • 📊 The European Union's conditional approval of the merger includes requirements for the divestment of cargo operations and the allocation of slots on certain routes to new airlines, ensuring continued competition.
  • 🍽 Despite being an LCC, T'way Airlines assures that meals will be provided on long-haul flights, maintaining a level of service that is expected by passengers.
  • 💺 LCCs use similar or identical aircraft models to Full Service Carriers (FSCs), ensuring that seat comfort and size are comparable, even for long-haul flights.
  • 🛬 The entry of LCCs into long-haul routes is expected to drive down prices, potentially leading to a new era of international travel for South Koreans, with an emphasis on affordability and accessibility.

Q & A

  • What does LCC stand for in the context of the script?

    -LCC stands for Low Cost Carrier, referring to budget airlines that offer cheaper flights compared to full-service carriers.

  • How has the emergence of LCCs impacted overseas travel for Koreans?

    -The emergence of LCCs has significantly reduced the cost of overseas travel, leading to a boom in international travel among Koreans and the opening of an era where more people can afford to travel abroad.

  • What was the first LCC in South Korea, and when did it start?

    -The first LCC in South Korea was Hanseong Airlines, which started in 2003 and is considered the predecessor of T'way Airlines.

  • What was the situation with overseas travel for Koreans before the 1990s?

    -Before the 1990s, overseas travel for Koreans was extremely limited due to high costs and restrictions. It was not until 1989 that South Korea liberalized overseas travel for its citizens.

  • How has the number of international passengers on LCCs compared to FSCs in South Korea changed recently?

    -In 2023, for the first time, the number of international passengers on LCCs surpassed that of FSCs, indicating a shift in consumer preference towards budget airlines for international travel.

  • What are some of the challenges that LCCs face when expanding to long-haul routes?

    -LCCs face challenges such as acquiring suitable aircraft for long-haul flights, ensuring sufficient crew and maintenance personnel, and competing with established FSCs that have more experience in long-haul operations.

  • What was the significant event that led to the expansion of LCCs into long-haul routes?

    -The significant event was the merger of Korean Air and Asiana Airlines, which was conditional on allowing new airlines to enter certain routes, thus opening opportunities for LCCs to expand into long-haul markets.

  • How does the script address concerns about LCCs not providing meals on long-haul flights?

    -The script reassures that T'way Airlines, a LCC, will provide meals on their long-haul flights, including two complimentary meals for economy class passengers on outbound flights to Europe.

  • What is the impact of the merger between Korean Air and Asiana Airlines on the aviation industry in South Korea?

    -The merger could lead to a monopoly if not properly regulated. To prevent this, the Korean Fair Trade Commission and other international regulatory bodies have imposed conditions, such as allowing new airlines to enter certain routes, to ensure continued competition and consumer benefits.

  • What are the expectations for the future of LCCs in South Korea?

    -The expectations are that LCCs will continue to grow, offering more competitive prices and services, and expanding into long-haul routes, making international travel more accessible and affordable for South Korean consumers.

Outlines

00:00

🌟 The Rise of Low-Cost Carriers (LCCs) in South Korea

This paragraph discusses the growth and impact of LCCs in South Korea. It highlights the increase in international travel due to affordable airfares offered by LCCs, leading to a boom in overseas travel for South Koreans. The script mentions the evolution of LCCs from the first one, Hanseong Airlines, to the current nine, and how this has changed the landscape of international travel, making it more accessible and affordable. The speaker also reflects on the past when overseas travel was a luxury due to high costs and restrictions, contrasting it with the present where LCCs have made international travel a common experience.

05:02

🌐 LCCs Surpassing Full Service Carriers (FSCs) in International Routes

The second paragraph focuses on how LCCs have surpassed FSCs in terms of international routes. It provides statistics showing that LCCs carried more international passengers than FSCs in the previous year. The script also discusses the popularity of travel to Japan and Southeast Asia, with a significant increase in passengers using LCCs for these routes. The success of LCCs is exemplified by their record sales and profits, indicating a new era of international travel for South Koreans. The paragraph also touches on the global phenomenon of LCCs and the issue of overtourism, suggesting that the impact of LCCs is not limited to South Korea but is a worldwide trend.

10:03

🛫 Expansion of LCCs into Long-Haul Flights

This paragraph delves into the expansion of LCCs into long-haul flights, which is a recent development. It explains how T'way Airlines, a representative LCC, has started operating flights to Europe, marking a shift in the LCC business model. The script discusses the potential for LCCs to make long-haul travel more affordable, which could lead to an increase in international travel and a new era of travel experiences for South Koreans. The paragraph also mentions the challenges and opportunities this expansion presents for LCCs and the aviation industry as a whole.

15:05

📈 The Impact of Airline Mergers on Competition and LCCs

The fourth paragraph discusses the merger between Korean Air and Asiana Airlines, two major FSCs in South Korea, and its implications for competition and LCCs. It explains the conditions set by regulatory authorities, such as the Korean Fair Trade Commission and the European Union, to prevent monopolies and ensure market competition. The script highlights the requirement for the merged airline to allow new entrants into certain routes, which could create opportunities for LCCs to expand their services. The paragraph also touches on the potential benefits for consumers, such as lower prices and improved services, as a result of increased competition.

20:08

🌈 The Future of International Travel with LCCs

The final paragraph expresses optimism for the future of international travel with LCCs. It suggests that as LCCs continue to expand their reach, including long-haul flights, more South Koreans will be able to afford international travel, potentially leading to a new era of travel experiences. The script reassures potential concerns about LCCs, such as in-flight services and safety, and emphasizes the competitive nature of the industry, which is expected to benefit consumers with better prices and services. The paragraph ends with a hopeful note, encouraging everyone to look forward to enjoyable international travel experiences.

Mindmap

Keywords

💡LCC

LCC stands for Low Cost Carrier, which is a type of airline that offers no-frills flights at lower prices compared to traditional full-service carriers. In the context of the video, LCCs have significantly influenced the accessibility and affordability of international travel for the general public. The emergence of LCCs has led to a dramatic increase in overseas travel, making it more affordable for a wider range of people. The video discusses how LCCs, such as T'way, Jeju Air, and Jin Air, have changed the landscape of air travel by providing cheaper alternatives.

💡Overseas travel

Overseas travel refers to traveling to countries outside one's own. The script highlights the boom in overseas travel among South Koreans, facilitated by the availability of LCCs, which made international trips more financially accessible. The increased ease of overseas travel has led to a surge in the number of travelers, underscoring a cultural shift towards global exploration and the desire for international experiences.

💡Travel liberalization

Travel liberalization refers to the removal of restrictions on travel, allowing people more freedom to travel internationally. In the video, it's mentioned that South Korea underwent travel liberalization in 1989, marking a significant turning point that enabled citizens to travel abroad for tourism purposes more freely. This policy change, coupled with the growth of LCCs, opened the door to the era of mass overseas travel for South Koreans.

💡Bukhansan Hawaii

Bukhansan Hawaii, mentioned as a humorous example, represents how domestic travel destinations were marketed as exotic alternatives to international travel destinations that were unaffordable or inaccessible to the average South Korean prior to travel liberalization and the rise of LCCs. It reflects the longing for overseas experiences among people when international travel was less feasible.

💡Market transformation

Market transformation in the context of the video refers to the significant changes within the airline industry due to the introduction and expansion of LCCs. This transformation has led to reduced airfares, increased competition, and greater accessibility to international travel. The script discusses how this transformation has reshaped consumer behavior, with more people traveling internationally than ever before.

💡International route expansion

International route expansion by LCCs, as discussed in the video, refers to LCCs beginning to serve long-haul international flights, including to destinations in Europe. This strategic shift allows travelers to access distant international destinations at lower costs, potentially transforming long-haul travel by making it as accessible and affordable as short-haul flights to destinations like Japan and Southeast Asia.

💡Financial crisis

The financial crisis mentioned in the script refers to the global economic downturn triggered by the collapse of Lehman Brothers in 2008, which had profound effects on businesses worldwide, including the aviation sector. This crisis played a critical role in the narrative by affecting the financial stability of major airlines, leading to significant shifts in ownership and strategies within the industry.

💡Antimonopoly concerns

Antimonopoly concerns refer to the issues raised by the potential monopoly situation that could result from the merger of two major airlines, Korean Air and Asiana Airlines. The video explains how regulatory bodies imposed conditions to ensure that competition remains in the airline market by requiring the merged entity to support the entrance of LCCs into certain routes, illustrating the balance between consolidation and maintaining a competitive market.

💡Regulatory approval

Regulatory approval in this context involves the process by which governmental and international regulatory bodies assess and approve significant business transactions, like airline mergers, based on various conditions including competition laws. The video outlines how such approvals are crucial for major industry changes and how they can influence the strategies of airlines, including supporting LCCs' expansion into new markets.

💡Consumer benefit

Consumer benefit, as discussed in the video, refers to the advantages consumers gain from the competitive dynamics of the airline industry, particularly through the services offered by LCCs. These benefits include lower airfares, more flight options, and the opening of new routes. The narrative emphasizes that increased competition, prompted by regulatory conditions and the rise of LCCs, ultimately leads to better prices and services for travelers.

Highlights

LCC (Low Cost Carrier) industry has seen a significant increase in performance due to the rise in international travel.

The number of LCCs in Korea has increased from the first LCC, Hanjin Air, in 2003 to a total of 9.

The advent of LCCs has led to a decrease in international travel costs, making it more accessible to the public.

Korea's LCC industry began in 2003, with the first LCC being Hanjin Air, now known as T'way Air.

The increase in LCCs has coincided with a surge in international travel, with the number of outbound travelers increasing from 7 million in 2003 to nearly 30 million.

The rise of LCCs has been driven by a long-suppressed national demand for international travel, which was not freely available until 1989.

The Kimpo-Jeju route has become the top domestic route in the world in terms of passenger traffic.

In 2023, LCCs' international passenger numbers surpassed those of Full Service Carriers (FSCs) for the first time.

The three major LCCs in Korea have all recorded sales exceeding 1 trillion won, with operating profits reaching historical highs.

LCCs are expanding their reach to long-haul flights, with T'way Air starting services to Europe, including Croatia.

The expansion of LCCs into long-haul flights could lead to a decrease in the cost of traveling to Europe and the US, making it more affordable.

The merger of Korean Air and Asiana Airlines has been approved with conditions to prevent monopoly, including allowing new airlines to enter certain routes.

The EU has conditionally approved the merger, requiring the separation of Asiana's cargo business and the transfer of some slots to new airlines.

T'way Air has been chosen to operate on four重叠 routes to Europe, with Korean Air providing support to enable this.

LCCs are not limited to short-haul flights and can operate long-haul routes by adjusting their cost-saving strategies.

The opening of long-haul routes by LCCs presents an opportunity for domestic LCCs and could lead to more affordable international travel options for consumers.

T'way Air has confirmed that meals will be provided on long-haul flights, and the seat sizes are comparable to those of FSCs.

The safety of LCCs on long-haul flights is assured, with experienced crew and aircraft from major manufacturers.

The expansion of LCCs into long-haul flights is expected to increase the number of international travelers and open up a new era of international travel for Koreans.

The speaker expresses optimism for the future of international travel, with more competitive pricing and better services due to the growth of LCCs.