Court Returns Eastar Jet Rehabilitation Plan

Submitting a Draft Plan Before Applying for Leave

Eastar Jet notified 605 employees of layoffs, raising concerns about mass unemployment in the aviation industry. On the 9th, officials entered the temporary shareholders' meeting hall at Eastar Jet headquarters in Gangseo-gu, Seoul. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Dongwoo Lee] Eastar Jet, which applied for an extension of the deadline to submit its rehabilitation plan, initially submitted a draft rehabilitation plan, but it was returned by the Seoul Bankruptcy Court. The reason was that it was difficult to accurately grasp the scale of the claims.

According to the aviation industry on the 16th, Eastar Jet recently submitted a draft plan to the court before applying for an extension of the deadline to submit the rehabilitation plan, but it was not accepted due to insufficient data. In this process, it is known that the Seoul Bankruptcy Court first suggested the extension of the submission deadline to Eastar Jet.

The rehabilitation plan must specify how to utilize the acquisition funds and the scale of debt repayment, and for this, the amount of claims must be confirmed. However, the draft submitted by Eastar Jet did not specify concrete details related to this.

A senior official in the aviation industry explained, "Eastar Jet submitted a draft rehabilitation plan to the court but was notified that it would be difficult to pass," adding, "They plan to restore the computer system, review the specific details of the claims, and then prepare and submit a more detailed rehabilitation plan."

However, some in the industry expressed concerns about Eastar Jet's poor preparation process for the rehabilitation plan. The delay in confirming claims could delay the reacquisition of the Air Operator Certificate (AOC) and the resumption of flights scheduled for November this year. Meanwhile, there are also opinions that negotiations with creditors regarding repayment are not proceeding smoothly.

The Eastar Jet Pilots Union sharply criticized, saying, "The delay in a concrete plan for public claims amounting to 80 billion KRW, including unpaid wages and severance pay, and rehabilitation claims amounting to 180 billion KRW raises doubts about whether there is the intention or ability to acquire the company."

An Eastar Jet official said, "Once the computer system is opened and the server installation is completed soon, the specific amount of claims can be calculated, so there is no cause for concern," adding, "The application for an extension of the rehabilitation plan deadline is unrelated to the financial capability of the prospective acquirer, Sungjeong, and we are doing our best to negotiate with the creditors."

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