Turbulent Air Premia gets a needed license

The government conditionally approved Air Premia’s license for international flights, putting an end to some uncertainties at the budding low-cost carrier (LCC) as a result of allegations of mismanagement by its former CEO.

The Ministry of Land, Infrastructure and Transport said Monday that the carrier qualified for international commercial flight operations and did not find a reason to revoke its license originally given last March.

Air Premia had applied to maintain its license in June after it replaced its CEO. After allegations surfaced of embezzlement by the former CEO and a group of investors agitating against the current management, concerns arose that Air Premia would lose its license as a result.

The Transport Ministry explained that the company’s current financial records were sound but that it would heighten its own monitoring of the company.

Air Premia has share capital of 19.4 billion won ($16.4 million) and has been promised 200 billion won from potential investors in the future, up from 165 billion won in promises of investment in March, according to the Transport Ministry.

The ministry said it would consider canceling the low-cost carrier’s license if it fails to maintain financial stability or does not meet operation license standards such as operating flights within two years of receiving the license.

It added that Air Premia will also have to report changes to shareholders with a stake higher than 5 percent and that it will monitor whether the company follows through with its future investment plans.

Air Premia currently plans to operate flights to the United States, Canada and Vietnam in the second half of next year and introduce a fleet of seven Boeing 787 planes by 2022.

BY CHAE YUN-HWAN [chae.yunhwan@joongang.co.kr]