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South Korean Airlines on the Edge of a Precipice
International Flight Passengers Plunge by 92%
South Korean Airlines on the Edge of a Precipice
  • By Jung Min-hee
  • March 31, 2020, 09:33
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Unionized Asiana Airlines workers held a press conference on March 30 and urged the South Korean government to provide more employment and livelihood support for aviation and airport workers stricken by the COVID-19 pandemic.

In the wake of the pandemic, the number of South Korean airlines’ passengers to China and international flight passengers plunged by 91.4 percent and 91.7 percent year on year, respectively. Their sales are estimated to fall by at least 6.3 trillion won if the current situation continues until June this year.

Under the circumstances, the South Korean government announced on March 18 that it would exempt them from parking fees until June, postpone the imposition of safety facility fees by three months, and indefinitely postpone the collection of unused slots and traffic rights. According to airlines, however, these measures are not effective in that the aviation industry entails huge fixed costs, the financial support itself is insufficient and it will take at least months until the actual aid.

The United States, in the meantime, passed an emergency bill on March 25 to prop up its aviation industry. According to the bill, passenger airlines will be given US$25 billion in subsidies and those allocated for freight airlines and partner firms in the industry amount to US$4 billion and US$3 billion, respectively. In addition, the funds are going to be actually provided within 10 days. Loans and payment guarantees will be available to the same extent as the subsidies and taxation on air transport and aviation fuel will be deferred until Jan. 1, 2021. The German government has launched unlimited financial support for German airlines and the Taiwanese government will provide local airlines with government loans worth a total of 1.1 trillion won.

South Korean airlines are demanding more effective and prompt assistance comparable to those of the United States, Germany and Taiwan. Their demands include government guarantee for corporate bond issuance and financial support expansion based on less strict criteria such as credit rating and debt ratio.