Abstract
While low-cost airlines have become popular in the world, Asia, including South Korea, is the excepted area because of the different situation of the airline industry from the USA and the EU, such as strict regulations and a small domestic market. However, recently, Low-cost airlines have now started to emerge in Asia, with some of them showing great success. Nowadays, many other airlines are considering the low-cost airline concept regarding domestic routes in Asia. South Korea also launched low-cost airlines on domestic routes in 2005. However, the key market that brings the greatest benefits is usually pointed out as being the international routes. Therefore, this paper attempts to determine the potential and feasibility of operating low-cost airlines in South Korea, particularly regarding international short-haul routes. This paper reviews the literature regarding the background and the situation of the airline industry using macroscopic (PESTE Analysis). The characteristics of the airline industry in Korea are also explained. The low-cost airlines look like getting a higher position in competition market against the traditional airlines because they have the power to create new markets. They usually focus more on flight fares and schedules based services rather than on comfortable-based services; they can reduce prices up to 30-70%. Additionally, the results showed the unique characteristics of the potential low-cost airline market: lower income, mainly Korean nationality, and selecting tickets by themselves. The results of this research concluded that the customers' tendencies bring benefits to low-cost airlines in Korea. For recommendations, if they launch, they need to try (i) to reduce prices as much as possible, (ii) to develop new routes to China and, (iii) focus on the Korean market. Also, they are formed from the existing airlines rather than establishing new one. Finally, securing the trust concerning safety is critical.