Jeju Air cuts costs by direct purchasing aircraft

CEO Kim E-Bae [Courtesy of Jeju Air]

In commemoration of its 19th anniversary, South Korean low-cost carrier (LCC)Jeju Air Co. shared insights from its CEO Kim E-Bae, who highlighted the success of the airline’s strategy of directly purchasing aircraft over leasing them as well as the substantial cost savings.

Jeju Air stands out as the only Korean budget carrier that owns its fleet of aircraft.

Jeju Air commemorated its 19th anniversary with an event held on January 24th, 2024, as disclosed on Thursday. During the celebration, Kim outlined key strategies, including modernizing the fleet and enhancing cost competitiveness via the introduction of next-generation aircraft, developing strategies to respond to the restructuring of the aviation industry and focusing on company-wide capabilities, highlighting the tangible effects of investments for management efficiency, and establishing a healthy organizational ecosystem.

He emphasized the need for agility and dynamic responses during uncertainty, saying, “In times of significant uncertainty, we must respond with agility and dynamism, and we will enhance Jeju Air’s core competitiveness to build the foundation for a greater step forward.”

Kim also highlighted that the fuel efficiency of next-generation aircraft demonstrates an 18 percent reduction compared to the existing fleet, leading to significant savings.

“The introduction of next-generation aircraft led to a revolutionary improvement in the cost structure compared to the conventional leasing method. Despite the initial financial burden, the analysis suggests a 12 percent cost reduction, proving the effectiveness of our purchasing strategy,” he added.