Airline Industry Prays for a Safe Chuseok Holiday Break

Fly Gangwon, Wage Delay This Month Due to Level 2.5 Restrictions Impact

[Asia Economy Reporter Yu Je-hoon] The aviation industry, pushed to the brink of collapse by the novel coronavirus disease (COVID-19) crisis, is on edge over the planned gatherings by some groups scheduled for October 3, during the Chuseok holiday. The nationwide cluster infections that occurred after the Gwanghwamun rally on August 15 led to the temporary implementation of the 'enhanced social distancing level 2 (level 2.5),' causing significant damage, and there are concerns that such a situation could recur.

According to the aviation industry on the 27th, Fly Gangwon failed to pay its employees' wages on the 10th. Fly Gangwon is a newly established low-cost carrier (LCC) that launched its first flight in November last year, and it is the second domestic airline to experience wage arrears after Eastar Jet.

The company stated that the wage arrears occurred due to sudden liquidity problems caused by the second wave of COVID-19. Until early August, the reservation rate for the newly launched Yangyang-Gimpo route exceeded 90%, showing signs of improvement, but after the August 15 rally, the adjustment of social distancing levels led to a series of reservation cancellations, sharply worsening cash flow, according to the company.

In fact, the number of domestic passengers dropped again to about 780,000 from July 30 to August 13, the lowest level since May, due to the application of social distancing level 2.5. This was compounded by various restrictions and typhoon damage. The company plans to pay the overdue wages as soon as liquidity is secured and resume negotiations with financial institutions delayed by the impact of level 2.5, aiming to normalize the situation starting next month.

However, the industry is tense as some groups have expressed their intention to proceed with rallies ahead of October 3. A Fly Gangwon official said, "If the rallies resume and another cluster infection occurs, a significant shock is inevitable," adding, "We only hope that a large-scale infection outbreak does not repeat."

The authorities have also emphasized a tough response daily. Kim Chang-ryong, Commissioner of the National Police Agency, recently stated at a press briefing, "If a prohibited rally is carried out, police will be pre-deployed at the rally site, and police lines and metal fences will be installed to block gatherings at the source," adding, "If participants do not disperse, they will be arrested on-site, or if arrest is difficult, they will be prosecuted without exception through evidence collection."