(ATTN: CHANGES headline; ADDS financial authorities' stance in paras 11-13)
SEOUL, April 3 (Yonhap) -- South Korean airlines pressed the government Friday to take immediate action to help the financially troubled airline industry stay afloat amid the growing coronavirus impact.
The Korea Civil Aviation Association (KCA) asked the government to offer massive low-rate loans, payment guarantees for airlines' corporate bonds and steep tax cuts to airlines as the airlines' self-rescue measures won't be of a big help in the unprecedented crisis.
"The airline industry is collapsing, with 840,000 jobs in airlines, tourism and other related businesses at risk," the association said in a letter sent to the transport ministry, finance ministry and the financial authorities.
The association, which speaks for the airline industry, warned that the airlines could go bankrupt if the COVID-19 pandemic prolongs, though many airline employees are taking turns staying home without pay or at reduced pay, with executives returning some of their wages.
South Korea's nine airlines have suspended most of their flights on international routes as more than 180 countries and territories imposed entry restrictions against passengers from South Korea.
They are two full-service carriers -- Korean Air Lines Co., Asiana Airlines Inc. -- and seven low-cost carriers -- Jeju Air Co., Jin Air Co., Air Busan Co., Air Seoul Inc., Eastar Jet, T'way Air Co. and Fly Gangwon.
The association said a whopping 900 billion won (US$730 million) worth of fixed costs are piling up on a daily basis for airlines, and they face 5.3 trillion won worth of debts maturing by December.
Sydney-based consultancy CAPA Centre for Aviation said in its latest outlook that most global airlines will go belly up at the end of May without their governments' financial support.
"The airline industry is a backbone industry essential for the country's security and economy, taking responsibility for 30 percent of the country's exports in terms of value. That's why it should be protected from an impact of the coronavirus," KCA said.
Once again asking for the government's swift action to help local airlines, the association cited global governments' decisions to help their airlines. The United States and France recently decided to extend 74 trillion won and 60.5 trillion won, respectively, in financial support.
The government has said large conglomerates need to raise funds in the markets first, while utilizing their cash reserves and available assets to ride out this virus crisis.
Last month, the government unveiled an emergency relief package worth 100 trillion won to help smaller companies hit hard by the virus and stabilize financial markets.
The Financial Services Commission said Friday it is closely monitoring the airline industry and is in consultations with the transport ministry over necessary steps.
Last month, the International Air Transport Association (IATA) sent a letter to President Moon Jae-in to ask Seoul to urgently extend direct financial support, loan guarantees by the government, support for corporate bond issuance and tax relief.
"The COVID-19 pandemic is challenging the viability of the global air transport system as never before in history," IATA said in the letter, noting the current industry crisis is much worse and more widespread than the 9/11 terrorist attacks in the U.S., severe acute respiratory syndrome (SARS) or the 2008 global financial crisis.
IATA estimated the Korean air transport industry's contribution to the economy reaches US$47.6 billion, supporting 838,000 jobs and contributing 3.4 percent of the gross domestic product in Asia's fourth-biggest economy.
COVID-19 could result in a 22 percent drop in passenger volume and a $4.4 billion loss in passenger base revenue for the Korean air transport market this year. It could also lead to the loss of about 160,000 jobs and $9 billion in GDP, IATA said.
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