With a new terminal for its operations in Seoul and final approval nearing for its joint venture with Delta, Korean Air hopes to win a significant new chunk of U.S. corporate business travel share this year.
In January, South Korea’s Incheon International Airport began service out of its new 7.4 million square-foot Terminal 2, which is serving Korean Air and SkyTeam partners Delta and Air France-KLM exclusively.
The terminal design is based on the concept of Bonghwang (Korean Phoenix), a Korean mythological beast symbolizing authority, longevity, strength and balance, and incorporates Korean design patterns representing local culture and traditions. Locally quarried granite and traditional Korean wood has been used for the flooring of the terminal, and the roof is fitted with solar photovoltaic panels, to reduce energy consumption. There are sculpture and exhibition areas, gardens featuring waterfalls, indoor streams, koi ponds and expansive indoor gardens. The flora and fauna help reduce air-conditioning and ventilation costs.
The T2 features VIP lounges, concession and retail outlets, a transfer hotel, an aircraft observation deck, a ticketing hall and automatic boarding systems to facilitate passengers. It also features 222 check-in counters, 20 screening machines, 48 immigration departure machines, 62 immigration arrival machines and ten baggage claim areas.
Improved Flight Connections
Transfers with Delta can be much tighter, Korean Air EVP Keehong Woo said. The airline previously operated out of Terminal 1, and Delta was in the concourse, requiring a minimum of 90 minutes for connecting flights. Now that both carriers are in the same terminal, that time is cut in half. “With [Tokyo] Narita, China, Taipei or Hong Kong, we can compete more effectively,” he said.
Terminal 2 also centralizes security and immigration checks in two sections with high-tech screening devices. Airport officials estimate that will cut transit time from check-in by about 20 minutes compared with Terminal 1.
Focus on Corporate Travel
Korean Air’s focus is on growing premium class travel, as its economy class demand growth is solid, Woo said. Demand in terms of number of passengers to Korea last year rose by between 9 percent and 10 percent, but that was mostly leisure growth, he said. Business travel was flat.
While Korean Air’s share of Korean corporate travel is “very high,” the JV with Delta will add much needed sales muscle to boost international premium business, he said.
“We have a very extensive network but with limited sales capabilities in the United States compared with our network, our product and sales capacity,” Woo said. “With the help of Delta, we can capture a lot of that [corporate] segment, and Delta can compete in the transpacific markets.”
The U.S. approved the JV in November, and Woo hopes the Korean government will approve it in the first quarter of this year. It’s taken a little longer on the Korean side because it is the nation’s first time dealing with an airline JV, he said.
Korean Air has been fielding discussions about other JVs that would increase connectivity out of Seoul, including Air France-KLM, Malaysia Airlines, Garuda Indonesia and some Chinese carriers, according to Woo. Finalizing the Delta JV is the top priority, however, so any other JVs would come after that is done, he said.