South Korea will inject 32.1 billion won (US$29 million) into the virus-hit budget carrier Jeju Air Co. to help it stay afloat amid the prolonged COVID-19 pandemic, a state lender said Thursday.

The Key Industry Stabilization Fund will extend 25.7 billion won in loans to Jeju Air and invest 6.4 billion won in the carrier's convertible bonds, the state-run Korea Development Bank, which operates the fund, said in a statement.

Jeju Air, the country's biggest low-cost carrier, is required to take steps, such as maintaining its current workforce, making efforts to improve its financial status, suspending payments of dividends to shareholders, the statement said.

In the January-September period, Jeju Air's net losses deepened to 268.81 billion won from 17.5 billion won a year earlier as travel demand dried up amid virus fears. (Yonhap)