Jeju Air Declares 'Crisis Management System'... Executives Return 30% of Salaries and Expand Unpaid Leave

Due to the impact of the novel coronavirus infection, half of the national airline routes between Korea and China have been suspended, and the suspension is expanding to flights to Hong Kong and Macau. According to the aviation industry, Jeju Air has decided to temporarily suspend its Incheon-Macau route starting from the 7th. Additionally, the Jeju-Hong Kong route will also be suspended from the 19th of this month. Other LCCs such as Jin Air and Air Busan are also expanding the suspension of routes to Chinese-speaking regions outside mainland China. The photo shows the quiet low-cost carrier check-in counters at Incheon International Airport on the 6th. Photo by Kim Hyun-min, Yeongjongdo kimhyun81@

[Asia Economy Reporter Yu Je-hoon] Jeju Air has declared a 'crisis management system' beyond emergency management and decided that the management will first return 30% of their salaries. This comes amid the aviation industry's crisis triggered by last year's boycott of travel to Japan due to Korea-Japan tensions and the COVID-19 outbreak earlier this year.

Jeju Air announced on the 12th that it will enter a crisis management system and prepare self-help measures to overcome the crisis situation.

Lee Seok-joo, CEO of Jeju Air, explained in an internal email on the same day, "Since last year, the aviation industry has been experiencing a crisis due to oversupply and Korea-Japan relations issues, and the COVID-19 issue has severely contracted air travel demand," adding, "It is beyond a decline in profitability; it is at a level where survival must be considered."

Accordingly, Jeju Air decided to return more than 30% of the management's salaries. CEO Lee said, "To respond to the crisis, the management will first return more than 30% of their salaries."

They also proposed a pain-sharing plan to minimize restructuring. CEO Lee requested cooperation, saying, "To overcome this crisis while maintaining employment stability, the unpaid leave system, which was previously applied only to flight attendants, will be expanded to all employees."

Jeju Air judged that this crisis surpasses the tasks it has been pursuing since last year, such as improving profitability, adjusting the fleet, and resetting investment priorities, and plans to do its best to overcome the crisis by preparing self-help measures in the future.

Meanwhile, with the boycott of travel to Japan starting last year, political instability in Hong Kong, and now the COVID-19 crisis, the aviation industry, led by low-cost carriers (LCCs), is forced into a survival game. Jeju Air also recorded an operating loss of 45.1 billion KRW last year, turning to a deficit compared to the previous year, signaling an emergency in management.

This content was produced with the assistance of AI translation services.