A new airline is planning on launching transpacific flights to the United States in October 2022.
In this post:
Air Premia plans LAX flights as of October 2022
Air Premia is a South Korean Airline startup that has just revealed the planned launch date for service to the United States. While the airline initially filed with the United States Department of Transportation (DOT) back in July 2021, the flight will become a reality this fall.
Air Premia intends to launch flights between Seoul Incheon (ICN) and Los Angeles (LAX) as of October 2022. The airline will launch 3x weekly flights as of October 5, 2022, and will then increase frequencies to 5x weekly as of October 21, 2022. The airline intends to operate the route with the following schedule using Boeing 787-9 aircraft:
YP101 Seoul to Los Angeles departing 1:30PM arriving 8:20AM
YP102 Los Angeles to Seoul departing 10:50AM arriving 4:20PM (+1 day)
Suffice it to say that the market between Seoul and Los Angeles is huge, and pre-pandemic, Korean Air and Asiana operated up to five daily Airbus A380s between the two airports.
With Korean Air and Asiana merging, the route will soon enough only be served by one airline, so Air Premia is hoping to give customers a nonstop alternative.
What is Air Premia, anyway?
Air Premia is a new hybrid airline startup in South Korea that launched operations in August 2021. The airline is founded by the former president of Jeju Air, which is Korea’s largest low cost carrier.
Air Premia plans on exclusively operating Boeing 787-9s, primarily on long haul routes. The airline currently operates from Seoul Incheon to Bangkok (BKK), Ho Chi Minh City (SGN), and Singapore (SIN), for cargo and passenger flights, and soon plans on operating its first true long haul route. Air Premia has one Boeing 787-9, with another four jets on order.
In the long run, the airline plans on operating long haul flights to North America, Australia, and Europe. In addition to Los Angeles, Honolulu, San Jose, and Vancouver, have all been named as possible destinations in North America.
Air Premia isn’t a traditional low cost carrier. The carrier’s Boeing 787-9s are in a two cabin configuration, featuring a total of 309 seats:
- There are 56 premium economy seats, featuring 42″ of pitch
- There are 253 economy seats, featuring 35″ of pitch (this is virtually unheard of)
Air Premia even has Wi-Fi on its Boeing 787-9s, which is something that’s otherwise sorely lacking on Korean airlines.
Air Premia claims that economy tickets will be priced at 80-90% of what Korean full service carriers charge in economy, while premium economy tickets would be priced at 140% of what Korean full service carriers charge in economy.
Here’s a video about Air Premia’s Boeing 787-9 cabins (which is odd, and for that matter they can’t even make the actor look like he finds the premium economy seat to be comfortable):
Air Premia’s business model is unique
I’ve gotta be honest, I find Air Premia’s business model to be both refreshing and confusing. First of all, let’s keep in mind that the long haul airline business is really tough, especially for airlines without business class cabins (where most of the profits are made in many markets).
What I can’t make sense of is why Air Premia didn’t just go ultra low cost, and squeeze 375 seats on its planes. The airline would then have a legitimate cost advantage compared to competitors. Instead:
- The airline has 35″ of pitch in economy, which is extremely generous but also not necessary, when you consider that Asiana and Korean Air otherwise have among the best legroom of global airlines (I can’t imagine people would go out of their way to select Air Premia’s 35″ of pitch over Korean Air’s 34″ of pitch)
- The layout simply isn’t efficient — for example, here you have a two cabin layout with 309 seats, while Air Canada manages to squeeze 298 seats into a three cabin layout, with 30 reverse herringbone business class seats, which has much greater revenue potential
- Air Premia won’t be able to compete with the frequencies, connectivity, route networks, or frequent flyer programs, of Asiana and Korean Air
- From a competitive standpoint, airlines like Asiana and Korean Air make most of their money on long haul flights from first & business class passengers, and that’s a market Air Premia isn’t trying to compete in
Don’t get me wrong, I love the idea of an airline “giving” passengers more, since that counters everything else we see in the industry. Air Premia will offer a lovely experience (with Wi-Fi) in both premium economy and economy.
At the same time, that counters just about everything else we see in the industry. “We’ll charge 10% less and give an extra inch or two of legroom” just doesn’t seem like a very compelling business model to me, when customers are sacrificing frequencies, a global route network, a global frequent flyer program, connecting opportunities, etc.
There’s tons of leisure traffic between Seoul and Los Angeles, so the demand is definitely there. But is Air Premia really maximizing revenue here?
Bottom line
Air Premia plans to launch flights between Seoul and Los Angeles as of October 2022. This is a new hybrid South Korean airline that intends to operate 787-9s primarily on long haul routes.
These planes will be in a ridiculously spacious two cabin layout, with economy seats featuring an unheard of 35″ of pitch, plus Wi-Fi, unlike Korean competitors. I’m not sure I get the business case for that, but this sounds great for consumers…
What do you make of Air Premia, and the carrier’s business model?
Given there is a merger of ASIANA and Korean in the near future, any new competition on a major Transpacific route is welcome. The Delta /Korean JV has resulted in higher fares and losing ASIANA will make it worse.
And one more stuff to say.. When it comes to airline business in Korea, you need to know that "non-refundable" ticket is "illegal" in this country, and this rule applies to Korean carriers only.
All Korean carriers must sell refundable tickets only, and this is why they don't have much cash. KE/OZ are not able to invest much in premium service, which explains their lackluster business/first class services.
This "must-be-refundable rule" also makes it...
And one more stuff to say.. When it comes to airline business in Korea, you need to know that "non-refundable" ticket is "illegal" in this country, and this rule applies to Korean carriers only.
All Korean carriers must sell refundable tickets only, and this is why they don't have much cash. KE/OZ are not able to invest much in premium service, which explains their lackluster business/first class services.
This "must-be-refundable rule" also makes it extremely hard to run a LCC in Korea. I think this also is one of the reasons why Air Premia didn't follow the long-haul LCC strategy. They cannot sell their tickets at as low cost as non-Korean carriers because of this rule.
Instead, they made it "boutique in economy/premium economy class" to justify the higher cost.
Air Premia is just a FSC without these two:
1. Lie-flat business class
2. Free alcoholic service in economy class(you have to pay for it)
They offer the longest economy seat pitch in the world, free luggage(same as KE), free meals and inflight wifi.
Their target is VFR traffic, not business travelers. They're also launching flights to Southeast Asia, so they can make connections to the US via ICN.
Their economy...
Air Premia is just a FSC without these two:
1. Lie-flat business class
2. Free alcoholic service in economy class(you have to pay for it)
They offer the longest economy seat pitch in the world, free luggage(same as KE), free meals and inflight wifi.
Their target is VFR traffic, not business travelers. They're also launching flights to Southeast Asia, so they can make connections to the US via ICN.
Their economy class flight experience is superior to KE or OZ(except free alcohol) at a lower cost than them.
Also, KE/OZ are not interested in premium economy class at all because they don't want to canibalize their business class demand, but quite a lot of Koreans are willing to pay for more comfort.
They're targeting exactly the middle of the market. It's VFR travelers who are not rich enough to pay for lie-flat seat, but willing to fly in a more comfortable economy class than KE/OZ at a lower price or to fly in premium economy with some extra cost.
Those who really wanna fly cheap will fly Air Canada or Chinese carriers(no one knows when they'll accept connecting passengers though), but Air Canada is notorious for their poor service. It's hard to find a flight review of Air Canada that doesn't involve schedule changes, cancellations or missed bags.
"Their economy class flight experience is superior to KE or OZ(except free alcohol) at a lower cost than them."
Please explain this.
How superior? just the extra inch of an already generous pitch? If it's 2-4-2 and 35" that's superior.
What saves cost? Especially with the scale of KE.
The way I see it, they will last until KE replace their A380's old prestige seats with the new seats.
1. Air Premia has inflight wi-fi, which Korean Air doesn't have at all, and Asiana has it in their A350 only.
Asiana charges wi-fi for any option, but Air Premia offers it free when you just use messenger apps only. You should pay to use more than that, but it's still cheaper than Asiana.
Flight experience gets totally different when you have connectivity. I'd rather fly Air Premia than Korean Air for this...
1. Air Premia has inflight wi-fi, which Korean Air doesn't have at all, and Asiana has it in their A350 only.
Asiana charges wi-fi for any option, but Air Premia offers it free when you just use messenger apps only. You should pay to use more than that, but it's still cheaper than Asiana.
Flight experience gets totally different when you have connectivity. I'd rather fly Air Premia than Korean Air for this reason.
2. Not just an inch. Korean Air's 787 economy seat pitch is 33"-34", and Asiana's A350 has 32" pitch.
3. Air Premia offers free lounge access when you fly premium economy.
4. Air Premia sells the tickets cheaper than Korean Air and Asiana. The "cost" I meant was from the consumer's perspective, not from the airline.
Air Premia claims they can save the operating cost by the 787-only fleet. The fleet of KE/OZ are really complicated. They operate both Airbus and Boeing, and need the mechanics and pilots for each aircraft type.
Well, we'll see if they'll survive or not, but the merger between KE and OZ will be beneficial to Air Premia.
KE/OZ(+DL by JV) has raised their ticket price a lot during the last couple years. Air Premia will be the only carrier who has the potential to break this monopoly.
1. Valid point. I personally think that free messaging isn't really that beneficial, nice to have but fine without it. DL doesn't seem to be getting extra business from free texting. Free wifi, now that would really make a difference if speeds are sustainable and reliable. But that's different preference.
2. Given KE will the the surviving brand, experience should be aligned. The few years to simplify the fleet and remove the old Prestige seats...
1. Valid point. I personally think that free messaging isn't really that beneficial, nice to have but fine without it. DL doesn't seem to be getting extra business from free texting. Free wifi, now that would really make a difference if speeds are sustainable and reliable. But that's different preference.
2. Given KE will the the surviving brand, experience should be aligned. The few years to simplify the fleet and remove the old Prestige seats is the only few years I believe Air Premia has any chance to stay in the market.
3. Lounge Access alone is overrated without knowing the lounge. But is still a very good sales pitch. Consider that PE is their most premium product and they are not a LCC, lounge should still be expected.
4. How can the airline survive if they offer more for cheaper price. If anything adding Air Premia would only raise prices for KE. Think of Basic Economy fares, are they cheaper or normal Economy got more expensive. It's simple oligopoly. Chances are 90% is the current fare and KE raises another 10%. Not helpful like you think.
I do hope they survive and provide alternate options like you wished for. US-Korea prices are getting too crazy. But the only thing I see is airline sales pitch and not a viable strategy.
Ben writes: "customers are sacrificing frequencies, a global route network, a global frequent flyer program, connecting opportunities, etc."
The customers Premia is targeting don't care about those things. It's VFR traffic. They care about getting between Seoul and the destination as cheaply as possible.
A couple of thoughts -- first of all, premium economy is generally the most profitable cabin, given the revenue premium and footprint. Looking at a comparison with KE's 787 layout, Air Premia has 56 premium economy seats where KE only has 24 business class. Obviously it's hard to tell what renewed competition will do to pricing, but my guess is that the premium economy seats will probably get more revenue out of this space. As...
A couple of thoughts -- first of all, premium economy is generally the most profitable cabin, given the revenue premium and footprint. Looking at a comparison with KE's 787 layout, Air Premia has 56 premium economy seats where KE only has 24 business class. Obviously it's hard to tell what renewed competition will do to pricing, but my guess is that the premium economy seats will probably get more revenue out of this space. As for economy, 9 across in a 787 is pretty tight, so I'm honestly not sure whether I'd rather have an extra inch of pitch on Air Premia or wider seats on the KE 777. However, given the lower operating costs of a 787, my guess is that their business plan is spot-on.
Business class revenue is heavily skewed to corporate accounts. Direct to consumer services are more likely to succeed. They are likely taking a good route and aren't really a low cost carrier but rather competition that will help the KE/OZ merger get final approval.
Business class seats are typically really heavy, so the benefit they have here is that they can carry more cargo on ICN-LAX by having a lighter configuration. They made a smart choice by choosing somewhat guaranteed and consistent cargo revenue over fighting for the business class passengers who would probably never choose to fly them anyways given how often people choose the flag carrier for travel.
There might be some genius in this. Since startup airlines don't fill planes anyway, might as well offer 35" pitch for now, lure the media in for "industry leading seat pitch and great Wi-Fi", and retrofit planes with 31" pitch (and a true business class product?) once the airline wiggles itself into the mainstream market.
Actually, they also have 31" pitch. They brought an ex-Norwegian 787 aircraft as it is—43" premium economy and 31" economy. This is due to the significant delivery delays by Boeing, and they needed a 787 ASAP.
They'll retrofit it to 35" pitch eventually, but they would have to fly the 31" cabin for a year or two.