MIAMI – Following a ₩1.2tr injection into Korean Air (KE) by the Export-Import Bank of Korea and the Korea Development Bank, the carrier is expected to submit a self-rescue plan in return for further aid.
The self-rescue plan will total ₩1.5tr, with ₩1tr being part of a stock offering, according to Yonhap News.
Other self-rescue measures will include the sale of assets beyond what is already being considered.
Since April 16, 70% of KE’s workforce has been put on paid leave for 6 months.
2020 First Quarter Results
According to its Q1 financial results, KE suffered a 29.5% reduction in Revenue Passenger Kilometers (RPK) compared to Q1 of 2019. January and February were impacted by COVID-19 in China and Southeast Asia, and March by its worldwide effects.
However, the Cargo arm of KE did not suffer even though there was a 4.7% reduction in available Freight Tonne Kilometers (FTK). Even with this reduction, mainly attributed to passenger aircraft suspension, there was a 3.1% increase in FTK.
Korean Air expects there will still be an impact in Q2 2020 even though domestic flights are expected to pick up and some cross-border flights will take place.
In June, KE plans to start a scheduled recovery, offerings charters to businesses and returning ex-pats.
Finally, while the passenger numbers are still low, KE plans to maximize cargo operations, including using its passenger aircraft for freight.