BUSAN — Politicians in Busan from both the ruling and opposition parties are demanding that the headquarters of a merged low-cost carrier be located in the port city, ahead of the combination of Jin Air, Air Busan and Air Seoul. With Air Busan's dissolution as a separate corporate entity shaking Busan's status as a hub for airlines, concern is mounting that moving the merged carrier's headquarters and core functions to the capital region would simultaneously weaken the competitiveness of Gadeokdo New Airport, set to open next year, and the city's aviation industry ecosystem.
The Democratic Party of Korea's Busan chapter held a news conference at the Busan Metropolitan Council briefing room on the 3rd, attended by about 30 people including Senior Vice Chairman Choi Hyung-wook, district committee chairs and metropolitan and district council members, urging that "the merged LCC headquarters must be established in Busan." The move follows an identical demand from People Power Party members of the Busan Metropolitan Council on the 26th of last month, making the headquarters issue a shared priority across party lines.
The Democratic Party's Busan chapter argued in particular that placing the base of a carrier operating out of Gadeokdo New Airport in the capital region runs counter to the goal of balanced regional development. "It is unthinkable to spend tens of trillions of won in state funds building Gadeokdo New Airport while placing the headquarters of a merged LCC — which will hold the routes based at that airport and generate synergy with the aviation industry — in the capital region," the group said. "This is not simply a local demand to attract a company," it added. "We hope Korean Air plays a leading role in the national task of balanced development."
Local officials argue that basing the merged carrier in Busan is directly tied to establishing Gadeokdo New Airport as a "second hub." Jin Air, Air Busan and Air Seoul each held board meetings on the 21st of last month to approve the merger, and the combined carrier is scheduled to launch as "integrated Jin Air" on March 17 next year. Air Busan, created with joint investment from the Busan city government and the local business community, will end roughly two decades of history as a separate corporate entity.
What worries Busan is less the dissolution of Air Busan as a legal entity than the prospect that its accumulated Busan-based international route network, flight operations experience, workforce and aviation industry ecosystem will all be absorbed into the capital region. The location of a headquarters goes beyond a corporate address, potentially affecting decisions across the aviation business, including international route allocation, flight planning, new investment, staffing, maintenance and logistics.
Air Busan has expanded its international network out of Gimhae International Airport and has long held the largest share of traffic there. Many in the region say the merged carrier should inherit that route network and operating capacity and use it to secure early routes for Gadeokdo New Airport and develop it into an international hub.
Busan politicians are also calling for the government and the Korea Development Bank to take responsibility. Because the government and the state-run bank proposed combining the three low-cost carriers to build a "second hub" based at a regional airport during the merger of Korean Air and Asiana Airlines, they argue the headquarters decision should not be left solely to the private sector.
People Power Party members of the Busan Metropolitan Council urged the government, the Korea Development Bank and Korean Air last month to establish the headquarters in Busan. The Democratic Party's Busan chapter likewise called for authorities to "actively consider placing the merged LCC headquarters in Busan and locating major organizational units, staff and routes there as a genuine base of operations."
Calls are growing in Busan for a joint front involving both parties, the city government, the business community and civic groups. The reasoning is that securing the merged carrier's headquarters goes beyond attracting a single company and could serve as a starting point for landing a hub carrier for Gadeokdo New Airport and building a multimodal logistics hub linking the Port of Busan, rail lines and the airport.
Choi Hyung-wook, senior vice chairman of the Democratic Party's Busan chapter, said the move is "an essential step to realize the region-based second hub the government proposed and to operate Gadeokdo New Airport successfully." He added, "Working together with both parties and civic society, we will mobilize the full strength of the party to bring the merged LCC headquarters to Busan."
