Abstract

The purpose of this study is to analyze and evaluate the growth trend of passenger demand in accordance with the national LCCs’ market penetration, and as a result, to present the necessity and basis for expanding the Korea-China Open Skies. This paper undertakes a case-building analysis approach and examines changes of passenger demand growth rates in the market after the Korean national LCCs entered the Open Skies zone, taking advantage of the strategic window created by the Open Skies Agreements between Korea and the other contracting parties. The case-building analysis conducted on Japan, China, Thailand and Vietnam is based on the air passenger traffic results performed on the above destinations over a period of time, which therefore is fundamentally “outcome evaluation”(Stake. 1995) and this study has what might be termed ‘face-value credibility’ as it provides evidence and data tables with which readers can easily identify, nonetheless, interviews also took place with experts from three(3) different Korean flag carriers to not only add perspective but also validate the findings. In the findings, the relation of additional demand growth with the LCCs’ entry into the open skies zone such as Japan, Thailand and Vietnam, with the exception of China having high barriers to entry of Korean LCCs, was found to be very positive, and was also confirmed by the expert survey. Accordingly, it is reasonable to assume that such additional demand growth will occur even if LCCs expand their entry into the Korea-China routes.

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