As air traffic plummets, more support is offeredAirlines, shippers, tour agencies and restaurants struggling from the loss of business as a result of the coronavirus outbreak will be receiving 420 billion won ($355 million) of government support, it was announced Monday.
The air carriers alone are set to receive 300 billion won in loans as traffic to China plummets. Budget airlines will be given priority, as they are highly dependent on travel to China.
Carriers that have been forced to cancel services as a result of the outbreak will not have to pay airport fees for three months from March.
Air traffic rights to European destination such as Paris and Lisbon are to be distributed later this month and will be granted to airlines that have lost China business.
The number of flights by Korean airlines between China and Korea have plummeted 77 percent following the coronavirus outbreak since the beginning of this year, according to the government.
In the first week of the year, 546 flights were run by Korean carriers between the two countries every week. The total is now 126 each week.
The government noted that the drop in the number of air travelers has been faster than during the severe acute respiratory syndrome (SARS) outbreak in 2003 and Middle East respiratory syndrome outbreak in 2015.
In the case of SARS, the number of passengers dropped 8.4 percent in March 2003 compared to November 2002, when the first domestic case was confirmed. In June 2015, air travelers declined 12 percent compared to May when the first local case was confirmed.
The number of air travelers was down 32 percent in the first 10 days of this month compared to January, when the first case of the Wuhan coronavirus was reported in Korea.
Over the last three weeks, airliners had to refund a total of 300 billion won for unused tickets. The fallout is not only being felt by the passenger business. The coronavirus outbreak has also affected the cargo business.
The measures for the airlines come after President Moon Jae-in on Thursday ordered support for the Korean tourism industry.
He said at a time when foreign tourists visiting Korea has hit 20 million annually, there’s a strong need for plans that will draw tourists to local airports in other parts of the country.
The shipping industry is getting 60 billion won of support.
The cruise business will get a maximum 30 billion won in loans, with each company eligible for up to 2 billion won in credit. The one-year loans will be offered at rates in the 2 percent range. As with the airlines, port fees will be suspended while the operations of the ships are on hold because of the outbreak.
For the tourism industry, the government plans to provide unsecured loans of 50 billion won, especially for small tour agencies, with interest rates in the 1 percent range. It is also looking into lowering property taxes for lodging companies as well as suspending the license fees for duty-free businesses for a year. For restaurants, the government said it will expand funding for the businesses from the current 10 billion won while lowering the interest rates to half a percent.
The latest measures are a follow-up to existing financial support measures, including the 250 billion won in funding for smaller companies affected by the Wuhan coronavirus, named Covid-19 by the World Health Organization.
“We are at a very important point where we need to be strict in our management and countermeasures against various internal and external risk factors, including the recent Covid-19 crisis and its impact on the global economy, the U.S. Commerce Department’s countervailing duties and the unresolved trade restrictions by Japan,” Finance Minister Hong Nam-ki said during the minister-level meeting on exports issues. “I ask [everyone] to help normal economic activities, including investment, consumption and exports in the private sector while minimizing the impact of Covid-19.”
BY LEE HO-JEONG [firstname.lastname@example.org]
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