South Korea's Aviation Industry Faces Uncertainty Amid Government Plans to Scrap New International Airport Project

Strategic Insights -

As the South Korean government considers scrapping its plan to build a new international airport, the country's aviation industry is facing significant uncertainty. The decision to abandon the expensive building program is due to economic concerns, according to sources in the ruling camp. Meanwhile, the defense ministry is seeking to legalize military reforms by the end of June, which could have implications for the country's national security.

The development of a new international airport in the southeastern region has been a contentious issue, with fierce political debates brewing over its location and feasibility. With crucial by-elections approaching, the Lee Myung-bak administration and the ruling Grand National Party (GNP) are under pressure to resolve the issue. In contrast, Garuda Indonesia is expected to see a significant increase in income, with a 40% rise forecasted for the first quarter of 2011.

Key Takeaways:

  • The South Korean government may scrap its plan to build a new international airport in the country's southeastern region due to economic considerations.
  • A special panel reviewing the two candidate sites for the new airport has decided to abandon the expensive building program.
  • The defense ministry is seeking to legalize military reforms by the end of June in response to North Korea's two deadly attacks last year.
  • Streamlining the command structure is one of the top priorities of the military reforms.
  • Garuda Indonesia's income is expected to rise by 40% in the first quarter of 2011, reaching Rp4.5 trillion (US$500 million).
  • Turkish Airlines will launch direct flights to Malaga, Spain, starting April 27.
  • Merpati Nusantara Airlines has opened a new route from Makassar, South Sulawesi, to Mamuju, West Sulawesi, with three flights a week.
  • Garuda Indonesia will evaluate its flights to Japan in light of a 10% drop in load factor after the March 11 earthquake and subsequent tsunami.
  • Indonesia and Russia have signed a Memorandum of Understanding (MoU) on air transportation cooperation.
  • A majority of Philippine Airlines Employees Association (PALEA) members agreed to hold a strike to push for collective bargaining agreement negotiations.

Statistics:

  • A 40% increase in income for Garuda Indonesia is forecasted for the first quarter of 2011, reaching Rp4.5 trillion (US$500 million).
  • The load factor of flights to Japan has dropped by 10% since the March 11 earthquake and subsequent tsunami.
  • The new route from Makassar to Mamuju operated by Merpati Nusantara Airlines will have three flights a week.

Sources:

  • Yonhap News Agency
  • Asia Pulse (http://www.asiapulse.com)
  • Anadolu Agency
  • Ministry of Transportation and Communications (MOTC)
  • Turkish Airlines
  • Merpati Nusantara Airlines
  • Garuda Indonesia
  • Philippine Airlines Employees Association (PALEA)
  • Russian Embassy in Indonesia