The Case of South Korean Airlines-Within-Airlines Model: Helping Full-Service Carriers Challenge Low-Cost Carriers

Abstract

The South Korean aviation market has grown rapidly since the emergence of Low-Cost Carriers (LCCs), and in response to this emergence, the two Full-Service Carriers (FSCs) of South Korea adopted the airline-within-airline (AWA) model and introduced their LCCs to compete with independent LCCs (ILCCs). A few years back, ILCCs filed a petition against Asiana Airlines, one of the two FSCs in South Korea, as Asiana Air was launching another subsidiary on the model of AWA. This, interestingly, indicates that AWA are doing well in the South Korean aviation market. However, a detailed study is required to evaluate the performance of this model, as in the global market the success of AWA is blurred. This study attempts to shed light on the performance of South Korean AWA, which may provide fruitful insights considering the post-COVID-19 dynamics of the aviation market.