|A rendered image of an Air Premia aircraft / Courtesy of Air Premia|
By Nam Hyun-woo
Investors are betting high on companies seeking new low-cost carrier (LCC) licenses, which the government is expected to grant in the first half of the year.
Air Premia, which wants a license as a mid-to long-haul route carrier, said Friday it secured a combined 40 billion won ($35.83 million) investment from private equity funds (PEFs) Neoplux and Yuanta Investment.
Neoplux, an investment company under Doosan Group, will invest 30 billion won, and Yuanta Investment, 10 billion won.
In a previous round of funding, Air Premia secured 125 billion won from other PEFs including SkyLake Investment, IMM Investment, JKL Partners, Mirae Asset Venture Investment and Daishin Private Equity.
"Adding paid-in capital and funds secured in other rounds of investment, the company has raised over 200 billion won, and the amount will likely increase in the future," an Air Premia official said.
Air Innovation Korea (AIK), which plans to run Cheongju-based Aero K Airlines, also recently received an 11.8 billion won investment from Atinum Investment, as the venture capital firm joined AIK's recapitalization.
Fly Gangwon, which seeks to become a Gangwon Province-based LCC, also secured investments from more than 20 groups, including duty free shop operator Shinsegae DF and cosmetics firm Tonymoly.
The moves come amid high expectations that the government may open multiple LCC slots in the first half of the year.
The Ministry of Land, Infrastructure and Transport is currently reviewing the eligibility of five companies, after scrapping excessive competition from its reviewing criteria.
Another factor spurring investment in LCCs is their increasing market share in the aviation industry. Last month, LCC accounted for 60.6 percent of all domestic flights.