Incheon Airport celebrates its 10-year anniversary on March 29 and the gateway certainly has plenty of reasons to mark the occasion.
Sandwiched between the world’s second and third largest economies of China and Japan, and itself forecast to be the world’s fourth richest country by 2040, South Korea is in an enviable position. This is something on which its main gateway has sought to capitalise over the past decade in its efforts to become a key North East Asia hub.
By all indications, it seems as if the gateway is well on its way to achieving its goal. More than a third of Incheon’s routes are to its two big neighbours, with 34 connections to cities in China, including economically important destinations like Beijing, Guangzhou and Shanghai. Its network also stretches to less well-known destinations, such as Shenyang, Harbin in the north and Hainan, known as ‘China’s Hawaii’.
A further 28 routes serve Japanese cities, including Tokyo, Osaka, Nagoya, the island of Okinawa, Hakodate and Miyazaki. Other Asian markets such as Vietnam, the Philippines, Malaysia and, more recently, Hawaii, are also growing.
Despite the fragile state of the global economy, the airport handled 33.4 million passengers in 2010, a 17.3% increase on 2009. Of these, only 500,000 passengers were domestic travellers and the airport’s share of transit traffic has increased from 11.5% in 2002 to 18% today.
The A380 made its debut at Incheon in December 2009 with the launch of Emirates services to Dubai. The aircraft is set to become a much more familiar sight at the airport from June this year, when Korean Air launches A380 services to Hong Kong and Tokyo and to Bangkok in July. Additional A380 aircraft deliveries later in the year will be utilised on long-haul US routes – New York from August and Los Angeles from October.
Network strategy
In a highly competitive regional market that includes some of the world’s biggest airports, how is Incheon managing to do so well? According to the airport’s head of route development there are many reasons, but the key one has been the drive to make Incheon one of the most convenient, welcoming and best-connected gateways in Asia.
“Through our flag carriers, Asiana Airlines and Korean Air, we are trying to create a short-haul route network that spans the major cities in China and Japan. We want to offer passengers more ease than a domestic airport would, as well as more connections,” says Alex Lee, director of Incheon Airport’s aviation marketing group.
Award-winning service
While connectivity is important, Lee is quick to emphasis that Incheon is also an attractive place for carriers and international transit passengers.
For a decade it has been honing its customer service levels to a world-leading standard, an achievement that has been recognised by it winning ACI’s Airport Service Quality (ASQ) award for being the best airport on the planet six years in a row.
A wide selection of shops, restaurants and several amenities that are specifically designed for international and transit passengers, including a cinema, museum and art gallery offer some welcome, quality distraction during transit times.
“Incheon is not only trying to become the best airport in the world, there are also efforts underway to make it a cultural and business port,” says Lee.
Open Skies agreements
While the airport’s customer offerings and facilities are important, more importantly for Incheon is South Korea’s signing of some 20 Open Skies agreements since the 1990s.
Recently, South Korea signed a new Open Skies agreement with Japan in December 2010. When this takes effect in 2013, it will offer more opportunities for airlines to operate more passenger and cargo routes, as well as opening up more access to Tokyo’s Narita and Haneda airports.
However, bilateral negotiations are always tricky things and last year talks to extend an existing Memorandum of Understanding (MoU) on routes between South Korea and China’s Shandong and Hainan provinces into a wider Open Skies agreement stalled. However, there are hopes they will soon be renewed.
Korean Air
Of course, Incheon could not have achieved this without the support of its resident airlines, not least of all its hub carriers Korean Air and Asiana Airlines.
Korean Air says it sees Incheon as a ‘strategic partner’ and since 2009 has provided a number of incentive schemes for transit passengers, cooperated with the airport on shared global advertising initiatives and regularly attends management level meetings.
Korean Air operates flights to 89 cities in 34 countries, with its most popular destinations including Beijing, Shanghai, Hong Kong, Los Angeles and New York.
This year the carrier is looking to open up new routes to Huangshan in China, Irkutsk in Russia and Abu Dhabi in the UAE, although these have not been officially confirmed.
Korean Air is currently experiencing growing demand on China–US and East Asia–US routes, with the carrier planning to increase frequencies to Los Angeles and Chicago as well as introducing the A380 on key US routes later this year.
Closer to home, capacity will also be increased to major cities in China and Singapore and Ho Chi Minh City.
Korean Air and Incheon also regularly cooperate on major projects. In 2001, Incheon became a SkyTeam hub thanks to its relationship with Korean Air, a founding alliance member.
By the end of 2011 Korean Air would have taken delivery of 10 A380s, and will receive a further five in 2014. As part of preparations to operate these aircraft from the hub, Incheon has built five widebody gates to handle them from Concourse A and the third runway is capable of handling large aircraft, such as the A380 and B787.
Incheon is also an important part of Korean Air’s impressive global cargo network, with the carrier processing some 304,437 tonnes of cargo through the airport in 2010. Volumes have steadily increased from 2001 and today key markets include Vienna, London and Frankfurt in Europe; Shanghai, Hong Kong and Tianjin in China; and smaller operations in Japan, Oceania and other South East Asia destinations.
Korean Air’s major freight products include cell phones, electronic parts and LCD/LED auto components, which are processed through the carrier’s 65,600sqm cargo facility. This has 70 truck docks, a dedicated cold storage area and 16 bays for B747F loading and unloading.
Asiana Airlines
Incheon’s other major home carrier is Asiana Airlines. Established in 1988, Asiana operates 67 of its 85 destinations from Incheon and its top destinations include Tokyo, Osaka, Fukuoka, Beijing, Shanghai and Los Angeles.
To coincide with Incheon’s tenth anniversary, Asiana plans to launch a route between Incheon and Istanbul’s Sabiha Gökçen International Airport on March 29, and will launch a service to Mongolia’s Ulaanbaatar in 2012.
According to Taek-Kyu Sun, manager of Asiana’s network planning team, basing operations at Incheon provides international carriers with a number of advantages.
“With a Free Trade Agreement recently signed with the US and South Korea’s admission into its Visa Waiver Program in 2008, along with the development of Open Skies agreements with China and Japan, Incheon International Airport has the potential to become one of the world’s premier hubs,” he says.
Sun believes that Incheon’s efforts to maximise passenger convenience and improve infrastructure have been important; including the third runway, which will be able to handle Next Generation aircraft, and the inclusion of art and cultural items, which make the airport a ‘living and breathing’ complex of interconnected facilities.
“In terms of operational costs, Incheon Airport is more conservative than other airports in the region. This allows it to keep down its airport fees, which is another strong point for its competitiveness,” adds Sun.
In a move that will dramatically increase the scope of Asiana’s operations, the airline has ordered six A380s. Once delivered in 2014, these aircraft will be deployed on routes to Los Angeles and New York and other Asian and European destinations that have yet to be decided.
From 2016, Asiana is scheduled to begin receiving the first of 30 A350XWB’s to help it launch several super long-haul services and connect Incheon to new markets.
Asiana is also a major cargo carrier at Incheon. In 2010, it processed 679,909 tonnes and among its top cargo destinations were Los Angeles, New York and Hong Kong.
The 54,000sqm Asiana Incheon Cargo Terminal includes 19 large truck docks, 14 flat docks and six special storage facilities, as well as cold storage and a valuable goods area. Annually the terminal can process up to 1.1 million tonnes.
“Our future plans for developing our cargo operations at Incheon include expanding the frequency of freight flights to the US market. We plan to increase the frequency of freighters to the US to twice a week from June 1 this year, followed by an additional two times a week from August,” says Hyun-Jung Sung, manager of Asian’s cargo marketing team.
With Korean Air’s and Asiana’s efforts, the future for Incheon, and South Korea’s, air service connectivity looks bright.
This issue appears in Routes News 2011 Issue 2
