Low-cost flights considered
South Korean flag carrier Korean Air said yesterday it may set up a low-cost carrier for short-distance international routes amid an expected raise in competition over short-haul travel within the region. "We will consider establishing a separate low-cost carrier, if needed for short-distance overseas services. We have already studied it and preparations are under way," Korean Air chairman Cho Yang-ho told reporters. Cho said the low-cost carrier could operate independently from Korean Air, in a move which may prompt carriers in Japan and other Asian countries to intensify competition. Korean Air is the world's third largest air cargo carrier and the 15th largest in terms of passenger numbers. The carrier posted a net profit of 472 billion won (US$467 million) last year with sales rising 16.7 percent year-on-year to 7.21 trillion won, thanks to increased demand for air travel and cargo transportation.
Consumer price index up
Hot on the heels of the Federal Reserve's tough new line on inflation came alarming news Wednesday that US consumer prices posted their biggest gain in four months in February. Surging energy prices fuelled a 0.4 percent rise in the consumer price index (CPI) last month, the US Labor Department reported. The core CPI rate, which excludes volatile food and energy costs, rose 0.3 percent. The markets had been expecting the headline figure to go up 0.3 percent and the core rate to rise by 0.2 percent. The figures came a day after the Federal Reserve's Open Market Committee (FOMC) shocked Wall Street with strong language on inflation as it raised interest rates by 25 basis points to 2.75 percent.