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Seoul Incheon airport: terminal was maxed but terminal two open; an LCC terminal is needed

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Seoul Incheon is rare in Asia for being a major airport that has built infrastructure ahead of demand. Incheon's terminal space was reaching its maximum, but the Jan-2018 opening of terminal two allows growth for existing runway capacity.
Incheon should perhaps consider a terminal dedicated for low cost airlines. LCCs account for 31% of Incheon's movements – an achievement more by circumstance than by design. Unlike neighbouring Japan, Korea's LCC sector flourished without explicit government policy or encouragement. While LCCs may want a terminal suitable to their needs, Incheon would need to consider diminished duty free revenue – a significant earner for the airports.
IATA urges caution on LCC terminals
IATA DG Alexandre de Juniac, in a Mar-2017 speech in Japan, cautioned about airports building low cost terminals. In his speech he said:
So our thinking of the future should not just be about new construction—we also need to look carefully at maximizing current capacity. I have some concerns.
First is the trend to build dedicated “low cost” terminals. Kansai and Narita have one each. And I understand that Chubu is considering building one as well. I think that it is fair to say that all airlines want the lowest costs possible for their operations—of course while keeping up quality standards. So before building dedicated infrastructure for low cost airlines, it is prudent to make sure that the existing terminal infrastructure is used to its fullest. And to make sure there is a long term commitment from the users of these terminals before you spend money to build them!
What is unusual in his remarks is that most would say Kansai and Narita did not have the space – let alone cost environment – to accommodate the size of low cost operations that they have today. Narita's LCCT was saturated ahead of schedule, and some airlines could not operate out of the LCCT. Some LCCs, such as HK Express and Peach, actively chose not to operate out of the LCCT.
Some airlines give little weight to IATA's view on LCCTs, believing IATA – as an association that mostly, but not exclusively, represents full service airlines – is biased towards the needs of full service airlines and is holding back developments that would benefit LCCs.
LCC passengers' expectations, compared with full service passengers
There is no shortage of examples to hold up as the success stories of LCC terminals. Yet most are in Europe. While some airports and developers in Asia believe that eventually there will be a need for LCCTs under certain circumstances, they are concerned that in the current environment LCC passengers have largely the same expectations as full service airlines, and thus would not respond well to an LCC terminal.
The counterargument is that passengers need conditioning, and to have their expectations managed.
Partnerships with Korea's LCCS are small in number, but growing. These partnerships are among other LCCs (such as in Value and U-FLY alliances) and also between LCCs and full service airlines, either as independent relations (Jeju Air interlines with United) or because of common shareholding (Jin Air/Korean Air, Air Seoul/Asiana). A benefit of the LCCTs is that they can facilitate connections.
Read full analysis here:

 

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