This photo taken on Feb. 26, 2020, shows Incheon International Airport with foreign tourists in masks resting on seats amid the spreading coronavirus outbreak. (Yonhap)
SEOUL, Feb. 26 (Korea Bizwire) — South Korean airlines are suspending more flights on international routes as people opt not to travel amid growing fears over the fast-spreading coronavirus outbreak, industry officials said Wednesday.
With no end in sight to the COVID-19 outbreak, local airlines began to reduce the number of flights — or stop them altogether — on some mid- and long-haul routes in late January to minimize the impact of the virus on their earnings.
Korean Air Lines Co., the country’s biggest airline by sales, now plans to use smaller planes on routes to Atlanta, Los Angeles and New York next month to reflect declining travel demand.
“The company may reorganize further flight schedules depending on coronavirus developments and its impact on the airline business,” a company spokesman said over the phone.
Korean Air said Tuesday it will extend flight suspensions to China by one month through April 25.
It served 204 flights a week on 30 routes to China before the new coronavirus hit. The numbers have plunged to 57 flights on 10 routes and look set to fall further unless the virus is contained.
Adding to the national flag carrier’s woes, one of its flight attendants was diagnosed with the potentially deadly virus on Tuesday after serving on some international routes.
“We are closely cooperating with the Korea Centers for Disease Prevention and Control (KCDC) to keep the virus from spreading further,” the company said without elaborating on what steps will be taken following the first confirmed case among its employees.
South Korea has reported a total of 1,261 confirmed coronavirus cases and 12 deaths as of Wednesday.
Asiana Airlines Inc., the country’s second-biggest carrier, said it will halt more flights on Asian routes until mid-April. Its flights to China fell to 53 on 14 routes from 204 on 26 routes.
In self-help measures to weather the fallout from the virus, Asiana has asked all 10,500 employees to take turns going on 10 days of unpaid leave starting Feb. 19 so the company can cut costs and avoid snowballing losses.
The company also plans to cut the wages of executives and managers by up to 40 percent on a monthly basis until the virus outbreak slows down.
Its bigger rival, Korean Air, also came up with a plan to improve its financial status. The company said it will sell non-core assets, such as an idle property in central Seoul and its 100 percent stake in a leisure affiliate.
Korean Air’s net losses deepened to 624.87 billion won (US$529 million) in 2019 from 185.65 billion won a year earlier. Asiana’s net losses widened to 837.79 billion won from 195.86 billion won during the same period.
This photo taken on Feb. 24, 2020, shows Daegu International Airport amid the spreading coronavirus outbreak. (Yonhap)
Among low-cost carriers, all executives at Air Seoul Inc. on Tuesday expressed their intention to resign in a show of their commitment to overcoming difficulties sparked by the coronavirus.
They also returned a portion of their salaries — as much as 30 percent — this month and won’t accept salaries in March.
“Employees will take paid leave for the whole of next month with a salary worth 70 percent of their regular wages,” a company spokeswoman said.
Air Seoul, a budget carrier unit of Asiana, said it will suspend all the flights on its 10 international routes from March 1-15, while continuing to serve on the Incheon-Takamatsu route, the only such route operated by a local airline.
Air Busan Co., another Asiana budget carrier unit, on Friday asked all employees to take unpaid leave for at least 15 days or up to 30 days in March.
Jeju Air Co., the country’s biggest low-cost carrier, entered an emergency management system last week to cut costs and stay afloat. It swung to a net loss of 34.1 billion won last year from a net profit of 70.88 billion won a year ago.
Out of its 17 routes to mainland China, Jeju Air currently only operates the Incheon-Weihai route. Its flights to Hong Kong and Macao are not in service, and flights to Taiwan were suspended on Wednesday.
Jin Air Co., a low-cost carrier unit of Korean Air, and Air Busan Co., another Asiana budget carrier unit, 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 a salary worth 70 percent of regular pay from March to May. It previously proposed unpaid leave for up to 12 months to all employees.
Eastar Jet has 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 — and seven low-cost carriers — Jeju Air, Jin Air, Air Busan, Air Seoul, Eastar Jet, T’way and Fly Gangwon.
As multinational airlines have begun to take steps to avoid any impact from the operation of flights to South Korea on their bottom line, local airlines are expected to suffer a bigger blow to their earnings in the first half.
United Airlines on Tuesday extended its window for travelers wishing to change their South Korea-bound flights without paying a fee, as the number of coronavirus cases in the country continued to climb.
Lao Airlines, the national airline of Laos, said Wednesday it will suspend all of its flights to South Korea from March until the virus outbreak dies down.
Korean Air rose 2.2 percent to 22,950 won, and Jeju Air gained 2 percent to 20,500 won, while Asiana fell 1.6 percent to 4,340 won and Air Busan declined 0.7 percent to 4,350 won. The broader KOSPI shed 1.3 percent.
(Yonhap)
