As a result of global travel restrictions, due to the COVID-19 situation, Korean Air has sent a memo to its employees, stating the airline could collapse if there is no clear time when travel will return to normal.
The 51 year old airline has already grounded 100 out of 145 of their passenger fleet, including all of its Airbus A380s, as countries forbid travel to and from South Korea. With this decision, Korean Air joins Qantas, China Southern Airlines and Lufthansa in grounding the A380.
In the memo, Korean Air President, Woo Kee-hong, said that the airline is concerned about any potential spikes in COVID-19 cases that further decreases travel demand, as well as how long the entire situation will last.
“….if the situation continues for a longer period, we may reach the threshold where we cannot guarantee the company’s survival.”
Korean Air President Woo Kee-hong
Whilst the idea of Korean Air is daunting for many in the industry, specifically the employees within, the aim of the memo was not to inflict fear; more it was to encourage cooperation between everyone working for the airline to survive the crisis together, according a spokesperson in contact with the BBC.
Measures being implemented to reduce the effects of COVID-19 on the airline involve the deferral of investments, cutting down on operational expenses and asking employees to take voluntary leave. Foreign pilots working for the airline have already received details about accepting leave for next month.
This week alone, Korean Air has removed 44 routes from its network and has replaced the A380 on destinations to Paris, New York and Los Angeles with smaller aircraft; such as the Airbus A330 and Boeing 787 Dreamliner.
The deferral or, in a worse case the cancellation, of aircraft is likely at this stage; the airline has a backlog of 90 Airbus and Boeing aircraft, consisting of narrowbodies and widebodies. What was once an attractive figure for growth and fleet renewal, may now be a significant expense that could see an adjustment.
Other airlines based in South Korea, such as Asiana Airlines and budget carriers carriers Jin Air, Air Busan and T’way Air, have all suspended routes between Korea and Japan; they are also receiving an additional $350 million in liquidity from banks to help cope with the COVID-19 crisis.
Korean Air’s announcement from the airlines’ president, as well as the movements from other airlines, highlights the fragile state the aviation industry is in right now, as COVID-19 rages on. However Woo Kee-hong remains resilient, saying that the airline has survived tough times before and will continue to stand strong and do its best in this dark time for the industry.
The problem for Korean Air is that a majority of its customers were Vietnam based customers, and Vietnam Airlines
And I’m sorry. Korean Air has a chip on its shoulder that it has so far failed to address that has not allowed customers to feel at ease.
Korean Air is one who’s paying for all the awards, and failing to make advantage turn into opportunity. Their flights literally was a risk, that travel insurance refuses to pay for it, thanks to too frequent crashes. Worse still, it was the worst airline in the routes they compete on. I thought Delta had turned over a new leaf but apparently no. And who says KAL had a thriving in-flight sales business. Come on, KAL is famous for selling luxury products but purchases the department store version thinking nobody would notice.
Korean Air is actually rated far worse than United and Air France. It’s not uncommon for Korean Air flights landing in Changi to an ambulance in waiting. The problem is passengers see Koreans men and women slapping the stewardesses it almost normalizes the issue and they all become guilty. Apparently China Eastern knew and wanted to report it to the dismissal by AF KLM Delta. That’s why if any Korean can help it, they don’t touch large Korean airlines at all.
This is how China Eastern has managed from being the worst to one of the better airlines to fly. Seatguru paid to lie about CX and KE better seat pitch for eg
Zero chance KAL will fold. No modernized country can afford to not have a national airline. And, Koreans are prideful. Asiana was already struggling last year. Not sure what will happen to them.
I have purchased multi city Korean Air tickets to Paris 1/10/20 and would like to know if I will receive a refund should KA fold.
Government is responsible for whatever happened in Korea . Never tried to block chimes tourist entry in beginning, what Hong Kong did . KR government is failed to maintain good economic situation so , they allowed tourists to visit Korea and people may generate revenue, this made worst . And until it speeded , Mask was exported to China from Korea , and still getting mask is not easy in Korea . Black marketing of mask is a failure of Government too . Sometimes I think this people are deserving this all .
I think we should all embrace China for plunging the world into another crisis,trying to get all the supply chains and factories that produce goods for America out of China ASAP
It’s a Flagship for Korea ? Why can’t it ask for funds from the government to help it survive during this bad time ?
Because Korean Air is a private enterprise. And the South Korean government would probably not be keen on taking even more political backlash this year for using taxpayer money on a failing corporation. Some big investment bank may come in and bail them out in exchange for partial or full ownership of the airline.
As we saw in the UK, the British Government let Flybe (a much smaller regional airline) shut down after they realized it would never be worth using taxpayer money to prop up a mismanaged private airline. That £100 million that would’ve gone to Flybe is probably (hopefully) now being used for COVID-19 responses in the country. And that is much more politically acceptable than a bailout for a private business
Right now all Countries have to focus on fighting the COVID-19, it will take time and a lot of effort
But we need to have hope that a brighter future will come, as our forefathers had before us
Korean Airlines is one of the best airlines in the World