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Korean Air says 70% of employees must take leave due to coronavirus

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Via Yahoo Finance

SEOUL (Reuters) – Korean Air <003490.KS> said on Tuesday 70% or more of its employees working in South Korea will take a six-month leave of absence as part of the carrier’s efforts to overcome operational difficulties resulting from the coronavirus pandemic.

Korean Air is South Korea’s biggest carrier. For South Korea as a whole, airlines have seen a 96% drop in international passengers and 324 planes out of 374 remain grounded, lobby group Korea Civil Aviation Association said this month.

Korean Air said in a statement the leave of absence between April 16 to October 15 will apply to employees that work in South Korea, and all except essential staff will take leave in principle.

A spokeswoman said the employees on leave will be paid a percentage of their wages, but declined to disclose the level or the exact number of employees affected.

Korean Air also said it will attempt to further strengthen the company’s financial position, including by injecting additional capital.

In March, Korean Air’s chief executive said in a company memo the coronavirus outbreak could threaten its survival if the situation lengthens.

The country’s transport ministry, financial regulator and the state-run Korea Development Bank said in February they would extend up to 300 billion won ($251.55 million) of liquidity to domestic budget carriers because of the crisis.

South Korea’s aviation industry has called for wider government support along the lines of that seen in the United States and other countries, but high-ranking government officials have reiterated that airlines must first try to help themselves through steps such as cost-cutting.

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Countries across the globe have promised bailouts, albeit with conditions, to airlines to help them absorb the shock of drastic restrictions on travel to curb the spread of the coronavirus.

(Reporting by Joyce Lee; editing by Barbara Lewis)

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