Korean Air still shrinking work force

Korean Air Lines said yesterday it is offering a voluntary retirement program to its employees, raising concerns about the company’s financial health.

The nation’s largest air carrier said employees who are 40 years or older and have worked for the company at least 10 years are eligible to apply to the program.

The affiliate of Hanjin Group will accept applicants from Monday to Dec.17 and will start cutting its staff at the end of next month.

This is the second time this year that the company has offered such a program to shrink its work force. It offered the same program in June.

KAL said employees who apply for voluntary retirement will get compensation worth two years of their salaries, while the company will support scholarships for children and offer discounted tickets even after employees retire.

The Korean flag carrier emphasized that the program isn’t compulsory.

KAL has been offering voluntary retirement programs since 2011. So far, some 200 employees have left the company through the programs. At first, staffers who worked at the company for 15 years were eligible, but the standard has been lowered, making more employees eligible.

KAL has been struggling with the economic slowdown. From the fourth quarter of last year to this year’s second quarter, the company’s operating profit was in the red. It did swing into black in this year’s third quarter with 160.1 billion won ($151 million) of operating profit, but the figure was 43.2 percent down from a year earlier.

BY JOO KYUNG-DON [kjoo@joongang.co.kr]