Incheon (Seoul) strategic advisor to CPK – rapprochement on Poland(LOT)-Korea line?
Today we received some very interesting information regarding the selection of a consultant for the Central Airport project. Incheon, Korea’s main airport, was chosen for the strategic partnership.
The choice is all the more interesting, as it fits in with the game that is being played in Central Europe, with LOT in the lead role.
Lack of slots in Korea blocked LOT development
In the context of the above choice, the topic of the lack of additional slots in Incheon for LOT is very interesting. Excellent results of flights to Seoul made LOT want to significantly increase its presence in the Korean market. Everything seemed to be favorable – m.In successive realized and announced Korean investments in Poland vide this flagship LGChem. In the long term, information about the location of the Polish electric car factory IZERA in Silesia will also be important, the role of the Koreans in this venture could potentially be very significant.
Favorable market information has not escaped the attention of LOT’s competitors, and for this reason LOT’s expansion plans in Korea have been de facto halted. There were signals from the Korean side that this state of affairs could change if it turned out that the Koreans would play a bigger role in infrastructure investments in Poland. This scenario may just be coming true.
CSA – Korean Air cooperation fiasco and LOT’s potential entry into the Czech Republic as a hub carrier for Prague
Significant in the whole puzzle is the de facto fiasco of cooperation between Czech carrier CSA and Korean Air. Still, it is hard to imagine the Koreans giving up their strategic presence in Prague. Lack of support for Korean carrier’s connections by hub partner also opens up opportunity for LOT. Increasing LOT’s role in the Czech Republic and even the creation of a Central European carrier/Seigniory-Group project with a base in Prague has already been annotated by the trade press. LOT’s entry into Ostrava also looks interesting in this context. This Czech region is a mecca for the automobile industry, both the connections to Prague and Warsaw can serve the Korean business diaspora. As of today, they are the only scheduled flights from this Czech airport.
Korean Air acquires Asiana – remains the only potential partner in Korea
Interestingly, Korean Air just announced plans to acquire local competitor Asiana. Thus, LOT’s speculations about strengthening relations with the latter carrier burned to the ground. This leaves one potential partner. Although Korean Air is part of a rival alliance, this is what may paradoxically be an advantage. The political climate for liberation from “German control “( Star Alliance ) is very favorable.
Asian partner for LOT strengthened by state aid were more than valuable. This is because it would have made it possible to significantly expand the product not only from/to Korea but also from/to Japan. Both markets appear to be LOT’s key business priorities in Asia. It is undoubtedly difficult to find a better potential partner for strategic cooperation in this region of the world.
Synergies in Budapest and the Balkans
Strategic cooperation with Korean Air also offers additional synergies in other regions important to LOT. First and foremost is Budapest where, the Koreans were planning a competitive route for LOT, now transformed into an all cargo flight. Flights to Zagreb also failed to materialize. In both cases, LOT could offer very significant synergies within its Central European route network. Warsaw and in the future CPK are indeed more “on the way” to this part of Europe than the partner hubs of Korean Air’s current partners from Sky Team.
Interestingly, Korean Air has basically no commercial operations in Poland. It doesn’t even have its own representative in the form of a GSA agent. The focus on Prague/Czech Republic shows where the priorities of the Koreans have so far lain. Perhaps, however, LOT’s successes in the business-essential Central European market have not gone unnoticed in Korea.
One does not want to believe that similar divagations have not appeared in the head of the acting president of the Polish Aviation Group, the No. 1 man at LOT, Rafal Milczarski.
We will soon find out if the choice of Incheon / Seoul as an advisor on CPK has a second business bottom. Earlier we may learn LOT’s restructuring plan ?