Aviation Industry to Receive Additional COVID-19 Support Including 385.1 Billion KRW Payment Deferrals

[Asia Economy Reporter Yoo In-ho] The Ministry of Land, Infrastructure and Transport will provide additional support to the aviation industry struggling due to the novel coronavirus infection (COVID-19), including approximately 20.7 billion KRW in additional fee reductions and about 385.1 billion KRW in payment deferrals.

On the 18th, at the Crisis Management Meeting held at the Government Seoul Office, the Ministry of Land, Infrastructure and Transport presented additional support measures for the aviation industry, which is suffering severe damage such as large-scale flight suspensions due to overseas entry restrictions (150 countries) amid the spread of COVID-19.

This additional support plan was prepared considering the rapidly deteriorating industry situation due to the spread of COVID-19 cases after the establishment of emergency support measures for the aviation industry on February 17, aiming to reduce the burden on the aviation industry and guarantee business rights.

First, to alleviate the burden on airlines, the recall of unused traffic rights and slots (aircraft arrival and departure times) due to flight suspensions caused by overseas entry restrictions will be fully suspended. Traffic rights, which are the rights to operate routes between countries, are normally recalled the following year if not used for more than 20 weeks annually according to regulations. In the first support plan on February 17, the recall of Korea-China route traffic rights was suspended for one year due to the sharp reduction in flights to China at that time.

Through this full suspension of traffic rights recall, the traffic rights for all routes held by airlines will be maintained in 2021 despite route suspensions caused by entry restrictions and demand decreases, allowing for the resumption of flights.

Slots, which determine the profitability of airline routes, will also be fully exempted from recall for the unused 2019 winter season (late October 2019 to late March 2020) affected by COVID-19. The Ministry plans to actively negotiate with aviation authorities to mutually maintain slots at overseas airports in about 30 countries.

Airport facility usage fees will also be reduced. Parking fees, which are burdensome to airlines due to the increase in aircraft parked at airports, will be fully exempted for three months starting from the March payment period. Navigation safety facility usage fees, charged to aircraft operating within Korean airspace, will be deferred (interest-free) for three months starting in April. The landing fee charged per jet aircraft is approximately 230,000 KRW.

Landing fees, which were scheduled to be reduced from June, will be immediately reduced for two months starting from the March payment period, with the reduction rate expanded up to 20%. The major fees such as landing fees, parking fees, lighting fees, apron usage fees, baggage handling fees, and boarding bridge usage fees announced in the emergency support plan for the aviation sector on February 17 are currently applied to 24 airlines including Korean Air and Asiana Airlines upon application.

Ground handling companies will receive a three-month interest-free payment deferral and a 20% reduction on apron usage fees starting from the March payment period. Commercial facilities within airports will also receive a three-month interest-free payment deferral starting in March, considering the decrease in passengers and sales.

In particular, small and medium-sized enterprises and small business owners will receive a 25% rent reduction for six months starting in March. For SMEs and small business owners at international routes where operations have been completely suspended, such as Jeju, Daegu, Cheongju, and Muan, and domestic routes such as Sacheon, Pohang, Wonju, and Muan, commercial facility rents will be fully exempted until operations resume.

As a result of this support plan, additional support of 19.3 billion KRW is expected for airlines, about 4.15 billion KRW for ground handling companies, and approximately 382.4 billion KRW for commercial facilities. Combined with existing support measures, the total reaches 566.1 billion KRW (66 billion KRW in fee reductions and 500.5 billion KRW in payment deferrals).

The air passenger transport industry, which is experiencing an employment crisis due to flight suspensions, has been designated as a ‘special employment support sector’ and will receive employment retention subsidies covering up to 90% of leave allowances. Support such as deferral of the four major social insurance payments will also be possible.

Kim Sang-do, Director of the Aviation Policy Office at the Ministry of Land, Infrastructure and Transport, said, “The aviation industry is facing unprecedented difficulties, so we have strived to provide maximum support at the ministry level, including various fee reductions and traffic rights suspensions to guarantee business rights.” He added, “Along with the smooth implementation of previously announced measures, we will promptly implement this additional support plan to help the aviation industry overcome the crisis.”

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