Hanjin calls for gov’t support over coronavirus

SEOUL,  Hanjin Group Chairman Cho Won-tae called Sunday for government support as he is pushing to raise funds to tide over difficulties over the spreading coronavirus outbreak.

Korean Air Lines Co., a flagship unit of Hanjin Group, has suspended most of its flights on international routes as an increasing number of countries close their borders to contain the COVID-19 pandemic.

Cho said more than 90 percent of Korean Air’s aircraft are grounded, a situation that company officials said would threaten the company’s survival unless the virus outbreak is contained.

Cho said he will take necessary self-help measures to improve the company’s financial structure, in addition to the previously announced sale of idle assets.

“We will actively seek to raise funds by consulting the board of directors,” Cho said in a message to shareholders of Hanjin KAL Corp., the holding company of logistics-to-airline conglomerate Hanjin Group. “We earnestly ask the government for strong support.”

To help airlines weather the fallout of the coronavirus outbreak, the government said last month it would extend loans worth a total of 300 billion won ($250 million) to airlines, mostly low-cost carriers, and allow them to delay payment of airport usage fees.

Full-service carriers, such as Korean Air Lines Co. and Asiana Airlines Inc., have yet to receive financial help from the government to cope with the crisis.

On Friday, shareholders of Hanjin KAL approved Cho’s reappointment as a member of the company’s board, bringing him a victory in a family feud over the group’s control.

Cho’s current post has been challenged by a coalition led by his elder sister Hyun-ah that has called for ousting him from the position over the control of Hanjin Group.

Local airlines have been struggling with a sharp decline in air travel demand since Jan. 20, when South Korea reported its first case of COVID-19.

Last week, the International Air Transport Association called on South Korea to offer a comprehensive rescue package to support local airlines “in grave and immediate danger of insolvency,” according to Korean Air.

The global trade association for the airline industry sent a letter to President Moon Jae-in and asked the Seoul government to urgently extend direct financial support, loan guarantees by the government, support for corporate bond issuance and tax relief.

South Korea’s eight other airlines have also suspended most of their flights on international routes, as an increasing number of countries have closed their borders and imposed stricter entry restrictions on inbound passengers.

Source: Yonhap News Agency

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