Received Contract Deposit... Fly Gangwon Fails Again to Find New Owner

Acquiring Company Fails to Submit Financing Plan

Fly Gangwon, a low-cost carrier (LCC) based at Yangyang International Airport, has once again failed to find a new owner. Despite a bidder expressing intent to acquire the airline and even submitting a contract deposit, the bid was canceled as the bidder failed to submit the funding plan required by the court.

According to industry sources on the 6th, Fly Gangwon's second public competitive bidding was canceled the day before. Although the bidding company paid the contract deposit, the transaction fell through because they did not submit the funding plan requested by the Seoul Bankruptcy Court by the deadline of the 31st of last month. Originally, the second bidding was expected to conclude with a final acquisition contract by the end of last year. However, the Seoul Bankruptcy Court, which is overseeing Fly Gangwon's rehabilitation process, requested additional financial documents such as proof of funding from the final acquisition candidate, delaying the schedule and ultimately causing the deal to collapse.

The Seoul Bankruptcy Court plans to terminate the rehabilitation process if Fly Gangwon fails to find a merger and acquisition through a private contract or an equivalent self-rescue plan within this month. In response, Fly Gangwon intends to submit a request to postpone the submission of its rehabilitation plan to the court. Additionally, although some companies did not participate in the second bidding, Fly Gangwon believes there are interested parties, and plans to discuss future sale procedures with the court.

With Fly Gangwon's public sale repeatedly failing, the goal of resuming flights as early as the first half of this year has become difficult. Since the airline's Air Operator Certificate (AOC), obtained at its launch, has been suspended and must be reissued, there are also forecasts that recovery within this year will be challenging.

Fly Gangwon, which began operations in March 2019, had raised expectations of revitalizing the neglected Yangyang Airport. Gangwon Province also supported the airline with over 14 billion KRW in tax subsidies. Although it expanded international routes to Japan, Vietnam, and the Philippines following its Jeju route, demand at Yangyang Airport did not increase significantly. The impact of the COVID-19 pandemic further compounded difficulties, leading to a suspension of flights in May last year and the initiation of corporate rehabilitation procedures in June of the same year.

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