KAL offers third straight voluntary retirementKorean Air Lines will run a voluntary retirement program for the third consecutive year in an effort to cut operating costs.
According to the company and local media, KAL will offer the program to its employees starting this month. Previously, employees with at least 15 years of service or age 40 and older were eligible, and this time the requirements have been lowered to 12 years of experience or age 40 and older.
Those who apply for the program will reportedly receive two years of salary and four-year scholarships for their children. Flight attendants and overseas employees are not eligible.
Industry insiders said the company is not only trying to reduce its workforce, but also such costs as electric and water bills, office equipment purchases and overtime.
KAL, the core affiliate of Hanjin Group, reported an operating loss of 123.4 billion won ($106 million) in the first quarter, up 24.7 percent from a year ago. Its net loss was 300.6 billion won in the January-March period, a whopping 368 percent year-on-year increase.
Experts said KAL has been hit particularly hard by a slowdown in its cargo business. According to the company, outbound shipments from January through May fell 8.6 percent compared to a year ago.
In order to cope with decreased cargo volume, the company is considering cutting flights that use a large amount of fuel, such as those to Europe and America.
BY JOO KYUNG-DON [firstname.lastname@example.org]