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(LEAD) Korean Air to reopen dozens of int'l routes in June

All News 16:35 May 07, 2020

(ATTN: ADDS stock prices, consulting service in last 4 paras)

SEOUL, May 7 (Yonhap) -- Korean Air Lines Co., South Korea's biggest carrier by sales, said Thursday it will reopen dozens of its international routes next month amid signs the coronavirus epidemic may have passed its peak.

Korean Air plans to resume flights on 19 international routes on June 1 as the country's top flag carrier strives to offset a sharp decline in passenger travel demand with an increased demand for cargo deliveries, the company said in a statement.

The reopening routes include Washington, D.C., Seattle, Vancouver, Toronto, Frankfurt, Singapore, Beijing and Kuala Lumpur, the statement said.

The move is aimed at preparing for increased travel demand after countries ease their entry restrictions on incoming passengers to stem the spread of the COVID-19 virus, it said.

This undated file photo shows planes of Korean Air and Asiana Airlines at Incheon International Airport, west of Seoul. (Yonhap)

Korean Air currently offers 55 flights a week on 13 international routes, sharply down from more than 900 flights on 110 long-haul routes before the airline industry was hit by the coronavirus. Starting in June, 146 flights on 32 international routes will be available.

It has suspended more than 90 percent of flights on international routes since late March, as an increasing number of countries have closed their borders or have taken other measures related to incoming passengers.

As part of self-rescue efforts, Korean Air had 70 percent of its 20,000-strong workforce take paid leave for six months beginning Thursday and is in the process of selling non-core assets to secure operating costs.

Korean Air's net losses widened to 624.87 billion won in 2019 from 185.65 billion won a year earlier due to a weak won and lower demand. Its first-quarter results are set to be released next week.

Also on Thursday, Korean Air asked Credit Suisse (CS) to deliver consulting services on the reorganization of its business units in return for a planned capital injection of 1.2 trillion won (US$972 million) from two state lenders -- the Korea Development Bank and the Export-Import Bank of Korea.

But the company denied that it has selected CS as the lead manager for the sale of certain business units to raise capital.

Korean Air has reportedly been considering selling core business units involving in-flight meals and maintenance, repair and operation (MRO), as well as property assets, as the creditor banks want the airline to submit its self-rescue measures within this month.

On Thursday, the news sent Korean Air 2.1 percent higher at 19,150 won, and its parent Hanjin KAL Corp. 4.3 percent higher at 86,500 won. The broader KOSPI remained unchanged at 1,928.61.


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