- Carrier is first airline to list in Korea since December 1999
- Jeju earlier this yaer failed to get Singapore Air investment
Jeju Air Co., the first airline to list in South Korea this millennium, gained 60 percent in its Seoul trading debut.
The shares closed at 48,100 won Friday in Seoul, compared with the 30,000 won share price in its initial public offering. The shares climbed as much as 72 percent earlier in the day. The benchmark Kospi index fell 0.4 percent.
Jeju’s listing is the first by a South Korean airline since Asiana Airlines Inc. started trading on the Kosdaq market in December 1999. It comes days before the company that runs India’s IndiGo airline is due to begin trading in Mumbai. The Korean carrier plans to add two more Boeing Co. 737-800 aircraft by the end of this year, boosting its fleet to 22 planes as more services become available to second- and third-tier cities in China, Japan and other countries in the region.
“People have really caught on to traveling on budget carriers,” said Kim Seung Churl, an analyst at Meritz Securities Co. in Seoul. “More and more people are wanting to travel within Asia at affordable prices and budget carrier are making it possible. Growth in this market is just starting to pick up.”
South Korea’s five budget carriers made up 14.5 percent of the market on international flights at the end of September, up from 10.8 percent a year earlier, according to the Ministry of Land, Infrastructure and Transport. Jeju Air’s share among low-fare airlines was 33 percent.
Established in 2005, Jeju Air flies to 18 international and four domestic destinations. Asiana plans to set up a sixth budget carrier in South Korea next year.
The listing comes after Singapore Airlines Ltd. cut off talks to buy a stake in Jeju Air in August, almost five months after it said it was considering investing. Singapore Air didn’t say why the discussions ended.
Jeju Air posted net income of 32.3 billion won in the first half of this year on sales of 286.8 billion won, according to the company. In 2014, the airline saw net income rise 63 percent and revenue climb 18 percent.