Asiana Airlines is considering introducing a new budget carrier aimed at reclaiming lost business from its rapidly growing discount rivals.

According to company officials Wednesday, the new operation is expected to be a wholly-owned subsidiary, unlike the no-frills Air Busan, which is a joint venture between Asiana and the Busan Chamber of Commerce & Industry.

In terms of location, it is likely to be based near Seoul to cover the nation’s two largest international airports in Incheon and Gimpo.

“A task force has been discussing diverse ideas to restore profits,” said an Asiana spokesperson. “But more details, including the timing of the launch and flying routes, have not yet confirmed.”

The plans come as a total of five budget carriers are increasing their market share here.

Their combined market share on international routes jumped from 1.7 percent in 2010 to 12.5 percent in February this year, and they claim almost 50 percent of the market for domestic flights.

The increased presence hit Asiana particularly hard, as it operates more short-haul routes to Japan and China than its rival Korean Air, which has run its own budget carrier Jin Air since 2008.

Asiana’s idea of offering its own no-frills service also gained fresh momentum this year when Kim Soo-cheon, the former CEO of Air Busan, took office as the airline’s new chief on Jan. 1.

“We can make cheaper pricing a selling point,” Kim said of the company’s future business plan in a recent press conference. “We will take a more flexible strategy on the short- and middle-haul routes in response to the soaring budget rivals.”

Asiana posted an 11.2 billion won ($10.7 million) operating loss in 2013, swinging into the red for the first time in four years. This year, the company hopes to achieve 6 trillion won in sales and 18 billion won in operating profit.

By Lee Ji-yoon (jylee@heraldcorp.com)