Reeling from huge losses, airlines look for gov’t relief

Home > Business > Industry

print dictionary print

Reeling from huge losses, airlines look for gov’t relief

Korea’s budget airlines are asking the government to throw them a lifeline as they attempt to navigate massive losses amid the worsening coronavirus outbreak.

Six local budget carriers - Jeju Air, Jin Air, Air Busan, Air Seoul, Eastar Jet and T’way Air - said in a joint statement Friday that they are in desperate need of long-term, unsecured loans with low interest rates.

They are also requesting relief in the form of exemptions on airport usage fees, property taxes and jet fuel import duties.

“Right now, low-cost carriers are on the brink of destruction from the coronavirus outbreak following last year’s boycott against Japanese goods,” the joint statement said.

“None of our individual measures seem to work, and there’s certainly no way to go back [to earlier profitability].”

The six carriers emphasized that they have contributed to Korea’s economic growth by directly and indirectly creating more than 15,000 jobs, and by providing the starting point of an economic chain for related industries.

Korea has reported the second most confirmed infections in the world thus far, with more than 2,000 confirmed cases and 13 deaths as of noon Friday.

Due to the outbreak, local demand for air travel plummeted and airlines have had to suspend or reduce the number of flights to China and Southeast Asian countries.

Those countries account for an especially large portion of the low-cost carriers’ business.

The budget airlines had already weathered massive business losses since last summer, when Koreans started avoiding flights to Japan as a means to boycott Japanese goods.

In the statement, the airlines said that they did everything possible to overcome the losses but have hit a dead end.

Since the novel coronavirus reached Korea, the low-cost carriers have started cutting salaries, sending employees on unpaid leave and implementing emergency management to reduce losses.

Air Seoul started its emergency management mode earlier this week, with all executives accepting salary cuts of up to 30 percent for February and zero compensation during the month of March.

All employees are being ordered to take unpaid leave for more than a month starting in March.

Jeju Air also entered emergency management mode and was cutting executive salaries by more than 30 percent while demanding unpaid leave from employees.

Jin Air has suspended all of its flights to Chinese cities until the end of next month and has asked its cabin crew members to take a month off during the March-to-May period, during which they’ll be compensated 70 percent of their normal pay.

Eastar Jet paid only 40 percent of its normal salaries to executives and employees this month.

Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)