[Asia Economy Reporter Yu Je-hoon] Eastar Jet has decided to pay only 40% of this month's salaries to its executives and employees due to the worsening business environment. This is interpreted as a result of the management situation deteriorating to the worst due to the novel coronavirus disease (COVID-19) outbreak.
According to the aviation industry on the 25th, Choi Jong-gu, CEO of Eastar Jet, stated in a message titled 'A Letter to All Executives and Employees' posted on the company bulletin board that "As an unavoidable choice to maintain minimum company operations, only 40% of the February salaries scheduled to be paid today will be paid, and the remainder will be paid later."
CEO Choi said, "The COVID-19 outbreak, which rapidly spread since the end of January this year, is pushing the company, which was striving for normal recovery, into the worst crisis once again," adding, "Although we are exploring various self-help measures such as emergency government support and assistance through financial institutions, the reality is that time and capacity are severely insufficient to resolve this urgent situation."
He continued, "The unpaid salaries will be prioritized to be paid as soon as possible, and we will take all measures to normalize the company," emphasizing, "Since this crisis is having a tremendous impact not only on the aviation industry but also on the domestic and international economy as a whole, the company will not neglect any efforts, including emergency route adjustments and flight reductions."
CEO Choi also requested the cooperation of employees. He said, "This is impossible without the active cooperation and participation of all executives and employees," and "I ask for the active understanding of all executives and employees to wisely overcome the current crisis."
Meanwhile, Eastar Jet faced difficulties as the Boeing 737 Max 8, which was ambitiously introduced last year, was grounded for a long period due to issues with the aircraft model itself. Soon after, with the boycott of travel to Japan last year and the sharp decline in passenger demand due to the COVID-19 outbreak at the beginning of the year, the company prepared self-help measures including a 30% pay cut for executives and shortening of employees' working days and hours.
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