Korean Air Lines Co., South Korea's biggest carrier, said Wednesday it will have 70 percent of its employees go on unpaid leave until December due to the prolonged coronavirus impact on the airline industry.
In April, the national flag carrier had 70 percent of its 18,000-strong workforce take paid leave for six months through Oct. 15 as part of self-help measures to overcome the unprecedented virus crisis.
With no end in sight for the COVID-19 pandemic, Korean Air has decided to extend the unpaid leave program, with government subsidies of up to 1.89 million won ($1,600) per person, the company said in a statement.
Korean Air has suspended most of its flights on international routes since March, dealing a blow to its first-half bottom line.
From January to June, its net losses widened to 619.49 billion won from 482.01 billion won in the same period of last year.
In February, Korean Air's parent company, Hanjin KAL Corp., came up with self-help measures, which include the sale of low-profit, non-core assets to focus on the mainstay airline and logistics business.
In August, the carrier signed a deal to sell its mainstay in-flight catering and duty-free business to local private equity fund Hahn & Company for 990.6 billion won to secure operating capital.
To offset a sharp decline in travel demand, Korean Air began in June to carry cargo in cargo seat bags, which attach to the seats of passenger jets.
The move is in line with global airlines, which are now using their passenger planes for cargo flights, either by using cargo seat bags or removing seats.
Last month, the carrier added two converted B777-300ER planes on US routes to transport cargo.
Faced with growing uncertainties involving the virus, Korean Air said it will apply for financial support from the state-run Key Industry Stabilization Fund within this year.
The government has said airlines, shippers and others hit hard by the pandemic are eligible for the state fund's support if they have more than 500 billion won in debt and more than 300 employees each.
In early September, the fund approved a capital injection of 2.4 trillion won into Asiana Airlines Inc., the country's second-biggest carrier, to help the debt-laden carrier stay afloat. (Yonhap)