"LCC Presidents Plead for Extension of Employment Support Funds Amid Worsening Job Insecurity"

Kim I-bae of Jeju Air, Han Tae-geun of Air Busan, Jo Gyu-young of Air Seoul, Choi Jong-gu of Eastar Jet, Choi Jeong-ho of Jin Air, and Jeong Hong-geun of T'way Air, presidents of low-cost carriers (LCCs), visited the National Assembly on the 22nd and held a meeting with Song Ok-joo, Chairperson of the National Assembly's Environment and Labor Committee. The LCC presidents requested an extension of the employment retention subsidy. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Yoo Je-hoon] Low-cost carriers (LCCs) pushed to the brink of collapse due to the novel coronavirus disease (COVID-19) crisis have pleaded with the government and ruling party to extend the employment retention subsidy support. With over 90% of international flights halted and cutthroat competition ongoing in domestic routes, the industry warns that if government support for leave and furlough allowances is discontinued, a "September employment crisis" will be inevitable.

According to the aviation industry on the 22nd, Kim E-bae, CEO of Jeju Air; Choi Jung-ho, CEO of Jin Air; Jung Hong-geun, CEO of T'way Air; Han Tae-geun, CEO of Air Busan; and Cho Kyu-young, CEO of Air Seoul, met at 11 a.m. at the National Assembly in Yeouido, Seoul, with Song Ok-joo, Chairperson of the National Assembly Environment and Labor Committee (Democratic Party), and delivered a "Proposal to Overcome the Crisis in the Air Transport Industry."

The reason why LCC CEOs are speaking with one voice is that the government's employment retention subsidy payment period of 180 days (6 months) will mostly end by the end of August. Especially for LCCs, which heavily depend on passenger business, this system?where the government covers up to 90% of leave and furlough allowances (70% for large corporations)?has been used to maintain total employment.

In fact, among eight domestic airlines (excluding Eastar Jet), the number of unpaid and paid leave/furlough employees reached a total of 24,620: ▲6,336 unpaid furloughs ▲17,905 paid leave/furloughs ▲379 others including wage reductions. This accounts for 65% of the total workforce of 37,796 employees.

However, as the payment period will sequentially end starting next month, rumors of a September employment crisis are sweeping the industry. The LCC representatives stated, "Despite concerns over the collapse of the aviation industry due to COVID-19, we have actively utilized the employment retention subsidy system and are making every effort to maintain employment. However, as the support termination deadline approaches despite these strenuous efforts, employment instability such as mass layoffs is intensifying."

Accordingly, the LCC representatives proposed two measures. First, they urged an extension of the employment retention subsidy payment period for paid furloughs, which is currently limited to 180 days. An LCC official emphasized, "Although the financial burden is greater for paid furloughs than unpaid ones for airlines, this reflects a willingness to share the pain to ensure workers' livelihoods."

They also requested that if extending the paid furlough subsidy is difficult, the government consider additionally recognizing the application requirements for unpaid furloughs as an alternative. Currently, applying for unpaid furlough employment retention subsidies requires a one-month paid leave measure, but due to the nature of the industry, many cases do not meet this condition. Therefore, they asked for paid furloughs to be included in the application requirements.

The LCC representatives conveyed, "We request the Environment and Labor Committee's active interest and support so that through the government's proactive employment measures, companies' self-help efforts, and employees' shared sacrifices, a K-employment system that overcomes the crisis without a single layoff can be established as a global model."

Within the industry, since the COVID-19 crisis is considered a force majeure event, it is expected that the government and ruling party will respond positively to extending the special employment support sector designation and employment retention subsidy support. Extending these two systems requires revising the respective notifications and the Enforcement Decree of the Employment Insurance Act. An industry official said, "Extending the special employment support sector can be resolved through notification, but extending the employment retention subsidy requires revising the Enforcement Decree, so the authorities are reportedly considering measures."

Meanwhile, stakeholders related to the aviation industry are also actively pushing for support extension. The Korea Air Transport Association submitted a proposal to the Ministry of Employment and Labor on the 15th regarding the extension of employment retention subsidies, and the Korean Public Service and Transport Workers' Union of the Korean Confederation of Trade Unions is conducting a signature campaign demanding the extension and expansion of special employment support sector assistance.

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