Yangyang airport faces uncertain future as sole airline files for receivership

The check-in counters for domestic flights at Yangyang International Airport remain empty on May 20, after Fly Gangwon, which is based at the airport, suspended all its flights from that day. [YONHAP]

A state-funded airport in Gangwon is at risk of being left vacant after Fly Gangwon, the sole airline that operates from the location, revealed its plans to file for court receivership on Tuesday.

Yangyang International Airport, located in Yangyang County in Gangwon, opened on April 2, 2002.

The construction of Yangyang International Airport began in 1997 to address the need for a central airport in the northeastern area of Korea. After five years of construction, the airport opened with a runway measuring 2,500 meters long and 45 meters wide.

However, it has encountered challenges since its early days, with multiple airlines gradually ceasing their operations from the airport.

With the introduction of Fly Gangwon, which was founded in 2016 and made its maiden flight from the airport in 2019, Yangyang International Airport experienced positive development, recording its highest number of passengers in 2022 with 384,642 individuals.

But Fly Gangwon has faced significant challenges due to the Covid-19 outbreak, leading the low-cost carrier to suspend all flights and file for court receivership. The airline is 46 billion won ($34.62 million) in debt and owes approximately 5.2 billion won in wages.

According to Fly Gangwon, the company will submit its application for court receivership on Tuesday following the suspension of flight operations last week. The flight suspensions will remain in effect until June 30.

Fly Gangwon's decision to suspend its flight operations until the end of June is intended to avoid the risk of losing its air operator certificate, which could happen if the airline exceeds the 60-day limit for operational suspension. Should the court receivership application be approved within June, Fly Gangwon may have the opportunity to resume its operations as early as July.

To prevent Yangyang International Airport from being left abandoned, the province of Gangwon has provided Fly Gangwon a total of 14.5 billion won in financial assistance.

Additionally, the province allocated 39.1 billion won for the expansion of Yangyang International Airport's infrastructure.

In efforts to attract foreign tourists to Korea through the airport, the provincial government has been in discussions with related ministries to designate Yangyang International Airport as a pilot airport for inbound tourism, and extend a visa-free entry program for an additional year until May next year.

"The news about Fly Gangwon's suspension of flights was abrupt to us, as we also learned about it through the media," an official from Gangwon Provincial Government told the Korea JoongAng Daily on Monday.

"Ensuring the minimum impact on customers with pre-booked flights is our top priority," the official said. "In order to prevent Yangyang International Airport becoming deserted, we will engage in close discussions with Korea Airports Corporation and the Ministry of Land, Infrastructure and Transport to explore viable solutions, including arranging alternative flights with other budget airlines at the airport."

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]