[Photo by Kim Jae-hoon]
South Korea’s flag carrier Korean Air Lines Co. is holding off taking up the first relief check from a 40 trillion won ($33.3 billion) state fund devoted to protect the country’s mainstay industries as it deems it has passed the worst from the virus pandemic.
The initial check of around 800 billion won could be immediately handed out as the top carrier has already been chosen as the first recipient.
The airliner was expected to apply for the relief within this month, but is mulling to defer taking up the aid as its business appeared to have bottomed out in the second quarter due to brisk cargo demand.
The airliner was promised of 1.2 trillion won in emergency aid from the government and was planning to issue 1 trillion won worth rights offering to raise capital to survive the virus storm. Since it has to cover monthly fixed cost of 500 billion won to 600 billion won and pay maturing bonds, the airliner inevitably would have to dig into state funds.
But it plans to see the developments in asset sale and market conditions before hastily restoring to state rescue.
Passenger travel remains mostly at standstill, but freight deliveries have kept the full-service carrier busy due to strong demand for Korea-made medical and chip supplies.
In the first three months, Korean Air Lines earned 27 percent of its revenue from freight services, of which 40 percent came from North America, 23 percent from Europe, 17 percent from Southeast Asia, and 13 percent from China.
Air freight rates from Hong Kong to North America averaged $5.7 per kilogram in April, jumping 58.1 percent from a year earlier, according to data from TAC Index.
By Choi Seung-jin, Song Gwang-sup and Lee Ha-yeon
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]