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Korean Aviation Faces a Critical Moment Amid the Virus Outbreak
After three months of the Coronavirus outbreak, South Korea became one of the most affected countries outside China. According to the Korea Civil Aviation Association, the international passenger volume dropped 65 percent in the last week of February.
The figure showed the passenger volume to China dropped by 85 percent, meanwhile, the Japanese and Southeast Asian markets also recorded a big fall in volume by 70 and 62 percent respectively. The airline industry assumes that total losses may reach $4.2 billion by June.
In addition, airlines are facing another setback. As a result of a rise in the number of confirmed cases in the country, Koreans are being forced to self-isolate for 14 days after arriving in Japan since Monday. In response to the new policy, Asiana Airlines will stop flying to Japan until Mar. 31. Also, T’Way Air, a low-cost carrier also suspended the services to Japan.
In the meantime, Korean Air, the national carrier has seen a 38 percent drop on international services in February. Also, a huge number of refund applications were filed with the airline, almost 30 times higher than usual. Following this, the airline is now fighting for ‘survival.’
According to Reuters, Korean Air is facing a critical moment and the situation is more difficult than the Asian financial crisis in 1997.
Kee-Hong Woo, the president of Korean Air said the carrier has already suspended more than 80 percent of its capacity, compared with an 18 percent deduction amid the Asian financial crisis.
“We can easily imagine the severity of the crisis we are facing in comparison. And what is more daunting is that the situation can get worse at any time and we cannot even predict how long it will last,” a memo to airline staff revealed.
“But if the situation continues for a longer period, we may reach the threshold where we cannot guarantee the company’s survival,” the president of the airline said.
Woo has demanded that Korean Air employees take voluntary leave. Also, the airline has cut down its operational cost and suspended new investments.
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