T’Way Airlines, a Little Slow out of the Gate

The Korean economic daily, Gyeongje Today, has a report on the progress of Korean LCC, T’way Airlines. (Formerly Hansung Airlines)

T’way which began operations under its new name in September is struggling. These struggles are leading its primary shareholder, Shinbo Investment Corporation, to consider halting operation. 

From September 16 until early October, TW was only able to manage a 10% load factor (LF) on its one route, GMP-CJU. After intensive marketing efforts they have raised this percentage to 40%, but it is still far off of the 70%~80% LF required to make a flight profitable.

Hansung Airlines was the first LCC in Korea, but was forced under during the economic crisis of 2008. Now it looks as if its successor might be facing the same fate. It seems to me the timing is just off with TW. First the crisis and then trying to inaugurate a tourist route during a non-peak season. Just bad luck and bad decision-making at its finest.

I hope Shinbo gives them at least a year to work out the bugs because Korea needs stronger LCCs and pulling out of an investment after the first 2 months of operation, particularly when you have to know LF is going to be low, is not what I call a smart business decision.

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