[비즈한국] It has been confirmed that Air Premia, a hybrid service carrier (HSC) positioned between full-service carriers and low-cost carriers, has established branches in the United States. Bizhankook’s reporting revealed that Air Premia opened branches at Honolulu International Airport and Washington Dulles International Airport this July. Air Premia already began operating its Incheon-Hawaii route last year and has been operating regular Incheon-Washington flights since April of this year.
It is not unusual for an airline to establish local branches to manage operations, sales, and regulatory affairs. However, unlike previous cases, the Hawaii and Washington branches were opened several months after flights had already commenced. Air Premia began flights between Incheon and Los Angeles (LA) in October 2022, but the LA branch was established earlier in July 2022. Similarly, it began flights between Incheon and Tokyo in December 2022, with the Tokyo branch opened beforehand in October 2022. This suggests that branches were previously set up to handle preparatory work ahead of launching regular routes.
Of course, it is not mandatory for an airline to establish a branch in every region it serves. Many airlines outsource these tasks to local companies. There is no issue with observing trends after a route launch before setting up a branch. An Air Premia official stated regarding the branch establishments, "It should be seen as an indication of our intent to expand (the US market)."
Regardless of the timing of the branch openings, the aviation industry is closely watching Air Premia's US routes. Air Premia is targeting demand from transit passengers traveling between Asia and the United States, providing services for passengers who find it difficult to board direct flights from Asia to the US.
Excluding the US, Air Premia only operates international routes to four destinations: Tokyo, Bangkok, Da Nang, and Hong Kong. Instead, it has entered into interline agreements with several airlines. Jeju Air, T'way Air, and Thai Airways all lack direct flights to the US. However, T'way Air does operate a route to Vancouver, Canada, despite having no direct US flights.
- Interline
- A partnership between two or more airlines allowing them to connect and sell flights operated by each airline under a single ticket.
Air Premia has also signed interline agreements with US carriers Southwest Airlines and Amazon Air. Since these two airlines have relatively few international routes, utilizing interlines with Air Premia allows them to tap into the Asian market more easily.
Considering Air Premia's strategy to target transit passengers and leverage interlines, the establishment of US branches is significant, as the airline needs to handle its own sales within the US market. Experts suggest that the role of these US branches will have a substantial impact on Air Premia's performance.
In fact, Air Premia stated that it has recently begun to see the effects of its interline strategy. In an August 12 press release, the company explained, "The number of transit passengers in the first half of this year was 39,110, an increase of 454.2% compared to the same period last year," adding, "We are strengthening our network competitiveness by connecting our own Asian routes—such as Narita (Tokyo), Bangkok, and Hong Kong—with our US routes, while also using interlines to reach regions in Asia, such as China, where Air Premia does not fly directly, and various local US locations."
Air Premia was acquired by AP Holdings last September. AP Holdings is a company 100% owned by the family of Kim Jung-kyu, chairman of Tirebank. However, after recording an operating profit of 40.7 billion KRW in 2024, Air Premia turned into a deficit with an operating loss of 31.9 billion KRW following the acquisition. This has led to speculation that Chairman Kim Jung-kyu's family might be suffering from the "winner's curse."
Air Premia commented, "We recorded an operating loss of 32.1 billion KRW due to global supply chain instability, which caused setbacks in aircraft engine procurement and introduction schedules, as well as increased investment costs for aircraft operations and maintenance," adding, "A slowdown in demand for major US routes also had an impact." The aviation industry is watching closely to see if Air Premia can overcome these concerns and succeed in improving its performance by targeting transit passengers.