After a 14 year absence, British Airways has announced the first new Asian destination in many years. They plan to operate 6 flights per week to Seoul Incheon from December using their four class Boeing 777s.

The choice of Seoul is interesting given it is not a traditional English-speaking Asian market like India, Singapore, Hong Kong, or even Kuala Lumpur. Certainly traffic between London and Seoul has been rising. In 2011 the onboard numbers from Heathrow to Seoul totalled 311,000 two-way passengers (IATA BSP Data). This represented a 5.65% growth over the 2010 figures. 2010 also managed to grow by 5%. This growth coupled with the imminent Olympic Games motivated Korean Air to expand into London with a new Gatwick operation.

Looking at the market, it is perhaps a shrewd move from BA, ostensibly moving into a highly competitive SkyTeam hub with supporting Star Alliance network. The route appears to be heavily point-to-point. Local traffic indicates mid-80% local carriage with the incumbent carriers. Despite a quality hub and extensive network, Seoul provides the Korea carriers with enough local traffic to support a daily Korean Air and five-weekly Asiana programme. The table below shows the existing weekly frequencies by Korean Air and Asiana into Europe and the additional three weekly operation into Gatwick by Korean Air. Interestingly the second table shows the capacity into Incheon from the European carriers and only Lufthansa has increased capacity to the market, although Finnair started services in June 2008. No doubt there will be some impact of the BA service on its fellow oneworld partner.

Sitting behind this operation is a 45,000 South Korean population in the UK. This population has quadrupled since 2001 and is now the largest Korean population in Europe, overtaking the oldest Korean population centre based in Germany. Conveniently for British Airways, this Korean population is centred in London, with 20,000 of this diaspora residing in and around the London suburb of New Malden – all of 9 miles from Heathrow Airport.

Korean Ministry of Information figures show that the market was considerably out of balance, with only 1,800 UK citizens taking up various forms of residence in South Korea. There were an additional 10,000 UK visitors to Korea, representing just 1.1% of all foreign visitors to South Korea (and almost exactly the same number as from Germany).

VisitBritain estimates that there were 45,000 Korean visitors to the UK in 2009. So the challenge for BA in the economy cabin is to attract the various Korean diaspora to the route, as well as the Korean tour operators who bring over the group tours.

The UK is the largest investor in South Korea, notably headed by UK financial institutions. However, the establishment of a London base for the Korean pension investment agency may have incentivised BA’s move. It is worth remembering that the same agency invested in 12% of London’s Gatwick Airport two years ago. That should take care of the front cabins.

Asian Carrier Weekly Frequency and Capacity from Europe to ICN

European Carrier Weekly Frequency and Capacity from Europe to ICN

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