Town of Cheongju – with its inhabitants of below 1 million individuals – may not come throughout as one befitting of a hub, however for airline head Mike Kang, it varieties a crucial a part of his enterprise technique.
The 44-year-old is the chief govt of South Korean low-cost service start-up Aero Ok, which started operations out of town in April, working home every day flights with a sole Airbus A320 between the central Korean metropolis and the island of Jeju.
Chatting with FlightGlobal, Kang, who based the airline with two companions, says the choice to select Cheongju was easy: a secondary airport allowed Aero Ok to decrease its working prices.
Whereas Kang was coy about how a lot Aero Ok may save by basing itself at Cheongju as an alternative of the bigger main cities, he notes that touchdown charges and airport prices at Cheongju are “about one-third” of Seoul’s two airports.
Basing the airline at such a facility, versus the first cities of Seoul, Busan or Jeju, additionally permits Aero Ok to “higher optimise” its community and schedule.
“If you’re [based at] Seoul Incheon or… Seoul Gimpo, your slots usually are not going to be given to you the way in which you could need to, by way of operations. So your [aircraft] turnaround instances, all of that, are issues that you’re not going to have the ability to have a variety of management over,” Kang tells FlightGlobal.
Whereas Cheongju itself has below 1 million individuals, Kang says the catchment inhabitants grows to about 5 million inside a 50km radius. It takes about an hour and half-hour to get from Seoul to Cheongju by highway or public transport, he provides.
On the coronary heart of Kang’s first foray into the airline trade – he has held positions in fairness corporations and Korean leisure big CJ Leisure & Media – is his technique of creating what he calls a “world greatest apply low-cost airline”.
He hopes to take the “greatest practices” from low-cost giants like Southwest Airways and Ryanair for Aero Ok, together with working out of secondary airports like Cheongju.
Aero Ok, he says, may even be targeted on worldwide flights of three hours and below from Cheongju – one other trait he has tailored from different low-cost carriers like Southwest.
For now, nonetheless, Aero Ok is working just one home route – Cheongju-Jeju – as worldwide journey restrictions make it troublesome to broaden abroad.
The service will function “about 95%” worldwide routes as soon as borders reopen, specializing in three key markets: Japan, Taiwan and China.
Requested if the service may contemplate cities additional afield, like in Southeast Asia, Kang reiterates the purpose that Aero Ok will persist with its enterprise mannequin of flying to factors of three hours and below.
“We’re making an attempt to be a really aggressive airline for the Northeast Asia area. We [have to be] very disciplined to maintain it inside three hours,” he says.
Once more, the airline will take a leaf from the low-cost giants’ books and fly point-to-point.
“Loads of different LCCs are getting away from the mannequin… and I’m positive they’ve their very own technique. However we nonetheless consider [in] a disciplined, world best-practice LCC mannequin,” he tells FlightGlobal.
The underside line: bringing the working prices down – whereas not sacrificing security – by promoting direct, utilising its fleet of A320s as a lot as potential, and naturally, sticking to these secondary airports the place potential.
THE LONG PATH TO TAKE-OFF
The journey to getting Aero Ok off the bottom – a “lengthy journey” that started in 2016 with its inception – was not with out its challenges, as Kang can have you realize.
For one, when the airline utilized for its enterprise licence a while in 2017, it was rejected on the first occasion. Airline start-ups in South Korea have to make two purposes earlier than with the ability to fly: first a enterprise licence, adopted by its air operators’ certificates (AOC).
It was reported in late 2017 that South Korea’s transport ministry had cited considerations over the start-up’s monetary energy, in addition to intensifying competitors out there.
The rejection marked a darkish second for the airline.
Says Kang: “We actually didn’t know the best way to get better out of that, as a result of you realize, we had been prepared with the capital, we had been prepared with every little thing but, we didn’t obtain the licence.
“It was a significant problem for us to get better [from]…as a result of a few of our buyers then needed to depart… a few of the buyers that had are available, [basically] needed their a refund,” he provides.
Fortunately for the airline, its second try in 2019 – Kang admits that the crew was cautious of failing but once more – proved to achieve success, and Seoul granted the airline its enterprise licence.
Then, a yr later, the coronavirus pandemic struck because the airline started finalising its software for an AOC. This time, purposes went easily and it acquired its AOC proper earlier than the yr ended.
The fledgling airline then discovered itself in a conundrum: because the pandemic battered the airline trade, and with borders firmly shut, Aero Ok, with its intentions to fly a largely worldwide community, puzzled if it ought to start flying instantly, or wait out the pandemic.
“We felt that we should always not less than start flights… for the operational security of the airline,” Kang tells FlightGlobal.
“[To] not fly and wait, it additionally means the implications of getting again and able to fly once more, at any time when which may be, could be a threat to operations as properly.”
Beginning operations in the midst of the pandemic might sound counterintuitive for an airline, however Kang is seeing the silver lining in it.
For one, it has allowed Aero Ok to handle its scale of operations. “Once we evaluate ourselves to different airways, we really feel that we will not less than maintain with one plane. As a lot as we’re shedding cash by flying, it additionally helps us prepare for the worldwide flights that will choose up in direction of the top of the yr,” says Kang.
If Aero Ok had launched earlier, Kang reckons that the pandemic would have wrought higher injury on the airline.
“So the delay… within the launch… has really helped us considerably… to start out now and begin small, and steadily, because the trade comes again, we will… develop extra aggressively together with it,” he provides.
Whereas the service presently operates only one A320 now, it is because of obtain two extra jets.
Kang says it’s focusing on to obtain 4 to 5 plane a yr, and if the market recovers strongly, probably 5 to seven jets yearly.
The A320 is an effective match for the airline’s working mannequin, particularly since it could be flying to factors three hours and below. The A320neo, says Kang, may enter the fleet within the medium to long-term, when the trade “strikes in direction of” extra of the sort.
BREAKING THE CORPORATE MOULD
With its putting color scheme of blue and yellow, Aero Ok cuts a youthful, trendy vibe. Certainly, Kang says the airline’s fundamental target market is younger, millennial and Technology Z-type flyers.
One talked-about aspect of its distinctive branding was the introduction of gender-neutral cabin crew uniforms – a primary for a Korean service, says Kang.
However greater than attracting youthful flyers, Kang needed to create an airline “with a greater company tradition” for the youthful technology to work in.
“Korea previously has been recognised as being very conservative, very hierarchical. [With] the youthful technology, whether or not they’re from Korea or another nation on this planet… they’re searching for one thing totally different.
“This implies an open… company tradition the place they’ll communicate their minds. [It is] crucial as a result of you realize, airways [are] all about teamwork and transparency,” he provides.
Kang additionally hopes the journey in getting Aero Ok up and working can be an inspiration for younger, budding entrepreneurs, to indicate that “they’ll begin one thing up in Korea and make it work”.
Says Kang: “I feel hopefully, with the success of this airline, it could actually assist the youthful technology get the braveness to try to construct one thing from scratch.
“For me personally, attending to the place we are actually [and flying] has been a miracle in itself.”