South Korean airline filed for bankruptcy protection

Created on 29.01.2021 10:04

South Korean low-cost airline Eastar Jet has launched a bankruptcy court remediation process to improve its financial situation. Before going to court, the airline tried to find investors, but is currently seeking new owners through a restructuring process under a court order, during which the company will be protected from creditors, Reuters writes.

Eastar Jet suspended flights in March 2020 and reduced the most of its staff. From the existing fleet of 18 narrow-body aircrafts, only five or seven aircrafts will be operated, the rest will be returned to lessors. The airline's attempts to find new owners have been continuing since July last year, when a deal fell through, according to which another South Korean competitor Jeju Air was supposed to acquire a controlling stake in Eastar.

Over the past few years, the low-fare market in South Korea has grown significantly and has become highly competitive. At least six airlines are operating low-cost flights and three companies are awaiting approval to launch. Probably, the crisis is stimulating the consolidation processes: since the national carrier Korean Air acquired Asiana, the low-cost divisions of these carriers can be united.

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