On Dec. 28, South Korean budget domestic carrier Jeju Air said it would sign a contract with Boeing to buy five 737-800 planes for US$363 million, as part of plans to expand internationally.

The US aircraft maker will deliver its 189-seat planes from 2011, said Yang Sung-Jin, spokesman for the airline based on the southern resort island.

Jeju Air will also lease two Boeing 737-800s in April next year and eight more by 2013, he said, adding the deal would help the domestic carrier expand internationally.

Jeju Air, which was launched in 2006, currently operates four Canada-made Bombardier Q400 turboprop planes for domestic operations only.

It is one of the country's two budget domestic carriers along with Cheongju-based Hansung Airlines.

Top carrier Korean Air in June announced plans for a budget unit within three years. And Incheon city forged a joint venture with Singapore's Tiger Airways last month to jump into Asia's booming budget aviation market.

Discount carriers now make up 20 percent of the US and European air travel market and are expanding quickly in China and Southeast Asia.