Airlines are offered a few breaks as traffic and business collapse

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Airlines are offered a few breaks as traffic and business collapse

With passenger traffic down more than 90 percent, airlines are being given a soft bailout. Authorities are waiving fees and allowing carriers to maintain route rights and slots they should be losing for lack of use.

Under the current law, airlines are required to return their traffic rights if unused for more than 20 weeks a year and return slots if used less than 80 percent of the allotted schedule. Korean airlines are at risk of forfeiting these rights as traffic has plummeted due to the coronavirus outbreak.

The Ministry of Land, Infrastructure and Transport announced in a statement Wednesday that it will not be reclaiming rights that are unused. It will also hold off on pulling slots that are reserved for arriving and departing planes.

“Our aviation industry has been met with unprecedented difficulty, so we are trying to provide as much as we can for support,” said Kim Sang-do, an official from the ministry in charge of aviation policies, in a statement.

“We will ensure that the aviation sector overcomes this crisis by swiftly executing the support measures.”

According to the ministry, the number of airline passengers- arrivals plus departures- in the second week of March plummeted 91.7 percent to 138,000 people from 1.66 million in the same period a year earlier.

The number of visitors at Incheon International Airport reached the lowest daily level since opening in 2001 at 16,000 people Monday, down 91.6 percent from the same day last year.

Demand for travel has significantly decreased after the coronavirus outbreak started affecting a greater number of countries and forced them to implement entry restrictions and quarantine measures. Local airlines have been struggling with a sharp decline in air travel demand since Jan. 20, when Korea reported its first case of Covid-19.

According to the Ministry of Foreign Affairs on Tuesday afternoon, 150 countries and territories are imposing restrictions on travelers from Korea.

The crisis has forced Korea’s airlines to implement their own set of emergency measures, with some cutting wages and asking their employees to take unpaid leave.

Six local budget carriers - Jeju Air, Jin Air, Air Busan, Air Seoul, Eastar Jet and T’way Air - told the government in a joint statement late last month that they are in desperate need of long-term, unsecured loans with low interest rates, along with relief in the form of exemptions on airport usage fees, property taxes and jet fuel import duties.

Also in the emergency support measures, the Transport Ministry said it will provide a 20 percent discount on airport landing charges for two months starting March while exempting airlines from parking fees for three months. Other related usage fees incurred between March and May will also be deferred.

The ministry said the measures will provide local airlines an exemption of 65.6 billion won ($53 million) worth of airport usage fees and allow later payments for 500.5 billion won worth of charges.

Kim added that the ministry will also work with the Foreign Ministry and Korean airlines to arrange flights for Koreans in virus-affected countries struggling to return.

BY KO JUN-TAE [ko.juntae@joongang.co.kr]
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