The Global Competitiveness Strategies of Korean Aviation Industry

Abstract

Domestic air traffic in China will become the world’s busiest within 10 years and it is foreseen that China will overtake the United States of America in 2023 in terms of the number of passengers and in 2027, in terms of RPK (Revenue Passenger Kilometer). In the next 20 years, the estimated average annual growth rate for the Chinese domestic market is 7.1 percent but this will grow even faster over the next 10 years to 8.3 percent on average per year. As for the incumbent mega carriers having grandfather rights on the existing routes between Korea and China, Korean full service carriers (FSC) might be afraid of expanding in current open skies stage with the neighboring country having a huge aviation market. In the long run, however, it will help Korean flag carriers be more competitive and also, this is a strategic step they should take in advance of the future Korea-China-Japan open skies agreements as well as the expected ASEAN Single Aviation Market in 2015 . Like the trans-Tasman routes between Australia and New Zealand or the trans-Atlantic routes between EU and the U.S., we should aggressively develop the trans-Yellow route between Korea and China.