* Korean airline industry scrambles for budget supremacy

Korean Air will purchase about 50 new aircraft, including 10 next-generation B787s, eight A380s, and seven B737-800?900s, in preparation for projected market growth. Asiana Airlines will also buy new aircraft and reschedule its routes.

Competition among budget airlines has also become fierce. Given that most routes in Northeast Asia are medium or short-range, taking less than five hours per flight, some predict low-cost airlines are set to take up 20 to 30 percent of the entire market.

Jin Air was launched last month with 100 percent investment from Korean Air. Asiana Airlines is also expected to launch Air Busan around October.

Jeju Air plans to open four to five regular routes between South Korea and Japan this year, and to launch as many routes to China next year. Jeju Air will increase its fleet of aircraft to 15 by 2013 by buying two to three new B737-800s each year.

* Controversy over foreign airlines' advance into NE Asia

Japanese and Chinese airlines look set to launch flights to South Korea. Three Chinese budget airlines, including Oasis Hong Kong Airlines, and four Japanese low-cost airlines, such as Hokkaido International Airlines, are reportedly considering launching services to Korea.

Singapore Airlines, the world's fourth most popular airline, has launched a low-cost airline, Incheon-Tiger Airways, in cooperation with the city of Incheon, incurring opposition from the Korean aviation industry. Although routes between South Korea, China and Japan are restricted to airlines from these three countries, Singapore Airlines could advance into Northeast Asian airspace by using Incheon International Airport as its base.

Some 20 low-cost airlines in Malaysia, Indonesia, Thailand, Vietnam, Australia, and India, including Malaysian airline AirAsia, are also seeking to advance into the Northeast Asian market via Korea.

Officials of Korean Air and Asiana Airlines said Incheon-Tiger Airways is "a joint venture airline in name only. It will be controlled by Singapore Airlines.

"We should not let foreign airlines advance into the Northeast Asian aviation market, which we've opened with much difficulty."