South Korea’s largest low-cost carrier (LCC) Jeju Air Co. on Wednesday reported poorer-than-expected results in the second quarter to paint a dismal picture for the entire LCC community whose players survive barely on lifeline from their majority shareholders and dirt-cheap domestic tickets.

The carrier said Wednesday it incurred an operating loss of 84.7 billion won ($71.5 million) in the April-June period, widening from the loss of 65.7 billion won a quarter ago and 27.4 billion won a year earlier.

Net loss contracted 18 percent on quarter but expanded 182.1 percent on year to 83.2 billion won, while sales plunged 84.3 percent and 88.5 percent, respectively, to total 36 billion won in the period.

Jeju Air shares rose 0.32 percent to close at 15,500 won on Thursday.

The result was worse than the market consensus of 81.9 billion in operating loss amid virus-driven hiatus in air travel. Jeju Air currently operates only four routes to overseas out of all 76 international routes, with eight domestic routes.

For the first six months, the company logged an operating loss of 150.5 billion won, reversing from a profit of 29.5 billion won a year ago. It swung to a net loss of 184.6 billion won, and sales shriveled 62.4 percent to 265.3 billion won.

“Most of long-haul jets have been grounded for months due to the pandemic while the competition over domestic travel demand now is fiercer than ever. It seems to take time for the aviation industry to normalize the business,” said a Jeju Air official.

With anticipation for such gloomy business prospect, Jeju Air last month formally abandoned its offer to buy Eastar Jet Co.

Jin Air Co., a budget unit of No. 1 full-service carrier Korean Air Lines Co., is issuing new shares worth 109.2 billion won to its parent and employee union.

Its board on Wednesday okayed a plan to offer 15 million new shares at 7,280 won apiece on Oct. 26-27. Of the total, 20 percent will be assigned to the employee union. The forfeited shares will be offered to the general public at the same price on Oct. 29-30.

The new shares will be listed on Nov. 16, increasing the equity capital of the airliner by 109.2 billion won. The proceeds will be used to raise working capitals to ease concerns over its financial health amid liquidity crisis of the overall aviation industry. Mirae Asset Daewoo, KB Securities, and Samsung Securities are co-underwriters.

Jin Air shares finished Thursday 3.21 percent lower at 9,660 won in Seoul.

Its largest stakeholder Hanjin KAL has to inject around 52.4 billion won for the purchase of rights offering from the airliner according to its 60 percent stakeholding in Jin Air.

By Kim Jung-beom and Lee Ha-yeon

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