Financial Times FT.com

Korean Air hit by state ruling

By Anna Fifield in Seoul

Published: November 28 2007 16:49 | Last updated: November 28 2007 16:49

The South Korean government delivered an embarrassing blow to Korean Air on Wednesday, bringing in a rule stipulating that all budget airlines must operate domestic routes for two years before they are allowed rights to fly abroad.

The news comes days after Korean Air, the country’s flag-carrier, detailed plans to launch a low-cost carrier in May. Air Korea, the new carrier, plans cheap flights to Japan, China, Thailand and Malaysia.

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