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(LEAD) Virus-hit budget carriers call for support

All News 11:14 February 28, 2020

(ATTN: RECASTS throughout with details)

SEOUL, Feb. 28 (Yonhap) -- South Korea's low-cost carriers called Friday for government support to keep them afloat amid a sharp decline in air travel demand over the outbreak of the new coronavirus.

Six domestic budget carriers -- Jeju Air Co., Jin Air Co., Air Busan Co., Air Seoul Inc., Eastar Jet and T'way Air Co. -- have asked for long-term unsecured loans with low rates and exemptions on airport usage fees, property taxes for planes and import duties for jet fuel.

"Low-cost carriers are getting into a desperately dangerous situation as the new coronavirus impact is dealing a further blow to their business already hit by local anti-Japan campaigns (following Japan's restrictions on exports to Korea)," they said in a joint statement

This photo taken on Feb. 5, 2020, shows airline counters of low-cost carriers with few passengers checking in for flights at Incheon International Airport. (Yonhap)

This photo taken on Feb. 5, 2020, shows airline counters of low-cost carriers with few passengers checking in for flights at Incheon International Airport. (Yonhap)

Faced with a sharp decline in travel demand, they have suspended most of their flights on international routes in recent weeks and asked their employees to take partially paid or unpaid leave until the end of March.

"With no end in sight to the coronavirus outbreak, there seems to be no retreat for low-cost carriers, which employ about 15,000 workers, despite self-rescue measures," it said.

Jeju Air, the country's biggest low-cost carrier, entered an emergency management system last week to cut costs and stay afloat.

Out of its 17 routes to mainland China, Jeju Air currently only operates the Incheon-Weihai route. Its flights to Hong Kong, Macao and Taiwan are not in service.

All executives at Air Seoul returned a portion of their salaries -- as much as 30 percent -- this month and won't accept salaries in March. Its employees will take paid leave for the whole of next month and receive salaries worth 70 percent of their regular wages.

Jin Air, a low-cost carrier unit of Korean Air Lines Co., and Air Busan have suspended all of their flights to China until the end of March. Jin Air asked its cabin crew members to take one-month paid leave at salaries worth 70 percent of regular pay from March to May.

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

South Korea has two full-service carriers -- Korean Air and Asiana Airlines Inc. -- and seven low-cost carriers that also include Fly Gangwon.

Korean Air and Asiana, the country's two biggest airlines, are also desperate in efforts to stay afloat.

They have suspended or reduced some of their flights on international routes since early this month to minimize the impact of COVID-19 on their earnings.

Korean Air plans to use smaller planes on routes to Atlanta, Los Angeles and New York next month to reflect declining travel demand. The national flag carrier said it may reorganize further flight schedules depending on coronavirus developments.

Asiana said it will halt more flights on Asian routes until mid-April. It asked all 10,500 employees to take turns going on 10 days of unpaid leave starting Feb. 19.

South Korea has reported a total of 2,022 confirmed cases of COVID-19 infection and 13 deaths as of Friday.


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