Eastar Jet Discusses Workforce Supply Including Hiring Essential AOC Personnel

Priority Selection of Personnel Needing Reacquisition of Air Operator Certificate
Review Order: Voluntary Retirees → Layoff Employees → Resigned Employees
Discussion to Intensify Immediately After Completion of Handover Procedures
Passenger Service Normalization Dependent on Reemployment Scale and Timing Variables

On the 23rd, when Jeju Air announced the termination of the stock purchase agreement for acquiring management rights of Eastar Jet, effectively giving up the acquisition, a sense of silence prevailed at Eastar Jet's headquarters in Gangseo-gu, Seoul. Photo by Jang Jin-hyung aymsdream@

[Asia Economy Reporter Dongwoo Lee] As the acquisition process for the rehabilitation of Eastar Jet is underway, discussions on manpower supply for the normalization of flight operations are also expected to become more concrete.

According to the aviation industry on the 22nd, Eastar Jet plans to discuss a detailed manpower supply plan, including the priority hiring of essential personnel for reacquiring the Air Operator Certificate (AOC) in line with the final acquiring company and the future acquisition process. A senior official from Eastar Jet stated, "We are planning to prioritize filling the personnel necessary for obtaining the AOC and proceed with manpower supply in the order of voluntary retirees, laid-off employees, and general resignations."

The AOC is a system that inspects whether an airline has established a safe operation system including organization, personnel, facilities, and equipment, and it is an essential condition for flight operations. Eastar Jet had suspended all routes in March last year and had its AOC qualification suspended in May of the same year.

Eastar Jet formed an AOC task force (TF) last month to enable normal flight operations immediately after completing the acquisition process. Once the final acquiring company is decided, they will begin specific negotiations to prioritize hiring essential personnel for the AOC.

Voluntary retirees and laid-off employees from last year will also be rehired sequentially. However, the exact timing and number of hires are still undecided. Eastar Jet reduced its workforce by about 700 employees last year. The industry estimates that Eastar Jet will need to hire an additional 1,000 personnel to operate a fleet of 25 aircraft normally as in the past.

The issue is that the timing of passenger normalization, such as future international flight operations, is expected to be a major variable in the scale of hiring. Experts estimate that, excluding the cost of reacquiring the AOC, additional costs due to new aircraft leases and reemployment could reach 5 billion KRW per month. Even if reemployment of workers proceeds, it is analyzed that it would be difficult to replenish a large workforce all at once.

An Eastar Jet official said, "We plan to start discussions on priority hiring as soon as the acquisition process is completed," adding, "We are also sharing opinions on reemployment with the remaining executives and employees."

Meanwhile, Seongjeong Co., Ltd. signed a stalking horse agreement with Eastar Jet, which is a conditional acquisition contract based on an intended acquirer and public bidding, and exercised the right of first refusal according to the results of the public competitive bidding. Seongjeong is currently awaiting court approval for the acquisition of Eastar Jet.