Partly (25%) owned by Jeju Provincial Government - Jeju island Korea, this new LOC (Low Cost Carrier) is very interesting business model in the Far-East aviation industry. Jeju island has been developed mainly its tourism industry and today more tourists prefer to fly economic, in other words, the cheaper option attracts more tourists in general. Jeju air owns mainly small airliners such as Bombardier Dash 8 (de Havilland Canada) turboprop airliners and Boeing B737-800.
As high speed railways network is expected to be installed between major cities throughout Asia soon or later, aviation industry is in need of maintaining customers. Jeju Air is one example and another is Jin Air.
Jin Air is a subsidiary owned by Korean Air. Why the Korean national flag - Korean Air entered into the LOC is because there are three main reasons (in my opinion)
1: KTX (Korea Train Express) - TGV (France) bullet train which was expected to steal customers.
2: New airlines were expected to be LOCs such as Jeju Air (as mentioned before) and Hansung Airlines based in Chungcheong.
3: Any huge national flag aviation giants are in need of connecting passengers for their main long haul routes which generally LOCs cannot deal as it is rare for LOCs to have bigger airliners. Under the massive competition from LOCs, even bigger airlines are in need of adjusting to low fare.
This whole of the battles in the Korean market will be soon brought to other Asian nations. Japan or China should deregulate the market more flexibly, otherwise neither customers nor the airlines will not be able to get the benefit as long as the entire airlines and the authority are afraid of possible changes (even the results of the deregulation will be positive to all).
PS: ANA (All Nippon Airways) plans to install own LOC.
