[Photo by Kim Jae-hoon]
South Korean budget carrier Eastar Jet Co. is letting go of more than half of its employees after its sale flopped, setting the stage of massive restructuring in the airline industry grappling with global virus crisis.
The airliner on Monday sent out redundancy notices to 605 out of its total 1,100 employees, according to industry sources. The employees will be dismissed by Oct. 14. Another 90 had already left by opting for early retirement last month.
It will be left with less than 500, or the essential crew for flight and maintenance of six aircrafts. It hopes the streamlining will help entice new investors to keep afloat until the virus storm dies down.
Those let go had been promised of being invited back when conditions improve, according to the company.
This would the first massive downsizing by a Korean airline after the virus outbreak. Industry insiders worried that this would trigger a collective restructuring and layoffs in the country’s aviation industry. All budget carriers are surviving on state reliefs and bargain tickets for local flights.
Full-service airliner Asiana Airlines Co. with two budget carriers under its arm could be next to face restructuring after it goes under creditor management as its planned sale also is on the brink of collapse.
Eastar Jet is embarked on new search for investors. Its sale advisors sent out invites to some-30 candidates, of which about 10 are said to be interested in the carrier.
Eastar Jet hopes to name a preferred bidder by the end of this month. Jeju Air, the country’s biggest low-cost carrier, walked away from its offer to buy Eastar Jet in late July as global air traffic has come to a virtual standstill by the coronavirus pandemic.
By Song Gwang-sup, Choi Keun-do and Lee Ha-yeon
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]