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Airlines extend flght suspensions, halt more amid virus fears

(Yonhap)
(Yonhap)

South Korean airlines said Tuesday they will extend flight suspensions to China and halt more flights on international routes due to the growing impact of the fast-spreading coronavirus outbreak.

With no end in sight for the COVID-19 outbreak in the country, Korean Air Lines Co., South Korea's biggest airline by sales, on Tuesday extended flight suspensions to China by one month through April 25.

Korean Air served 204 flights per week on 30 routes to China before the new coronavirus hit the airline industry. The numbers have plunged to 57 flights on 10 routes and look set to fall further unless the virus is contained.

Early this month, the national flag carrier began to suspend or reduce flights on Chinese and other international routes to minimize the virus' impact on its earnings for the January-March quarter.

As one of its flight attendants was diagnosed with the coronavirus on Tuesday, Korean Airlines is set to take a bigger hit from the virus outbreak.

"We are closely cooperating with the health authorities to keep the virus from spreading further," a company spokeswoman said without elaborating on what steps will be taken following the first confirmed case among its employees.

South Korea has reported a total of 977 confirmed coronavirus cases and 10 deaths as of Tuesday.

Asiana Airlines Inc., the country's second-biggest carrier, said Tuesday it will halt or reduce more flights on Asian routes by mid-April. Its flights to China fell to 53 on 14 routes from 204 on 26 routes.

In its latest measure to weather the fallout from the virus, Asiana has asked all 10,500 employees to take turns going on 10 days of unpaid leave so the company can cut costs and avoid snowballing losses.

The company said it will also cut the wages of executives and managers by up to 40 percent on a monthly basis until the virus outbreak slows down. 

Korean Air recently announced a plan to sell non-core assets, such as an idling property in central Seoul and its 100-percent stake of its leisure affiliate.    

Korean Air's net losses deepened to 624.87 billion won ($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.

Among low-cost carriers, all executives at Air Seoul Inc. on Tuesday offered 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 next month.

Air Seoul said it will suspend some of its flights on Southeast Asian routes from next month amid a lack of operating capital. It already stopped services to China in late January. Air Seoul is a budget carrier unit of Asiana.

"The company has stopped selling tickets for some flights for the first two weeks of next month. It plans to announce countermeasures to minimize the impact of the virus outbreak on its business this week," a company spokeswoman said.

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 operates the Incheon-Weihai route only. Its flights to Hong Kong and Macao are not in service, and flights to Taiwan are set to be suspended from 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.

Other low-cost carriers are taking similar steps to survive the repercussions of the virus outbreak.

For instance, Eastar Jet has paid 40 percent of salaries to its 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.  

Airline stocks rose helped by institutional and individual buying on bargain hunting.

On Tuesday, Korean Air rose 1.6 percent to 22,450 won, Jin Air climbed 1.2 percent to 12,800 won, Asiana jumped 4 percent to 4,410 won, Air Busan climbed 3.8 percent to 4,380 won and Jeju Air gained 4.2 percent to 20,100 won. The broader KOSPI gained 1.2 percent.

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