Overseas Trips in a Row... Korean Air Employees to Receive 500% Performance Bonus

LCCs Also Plan to Pay Performance Bonuses
Asiana Airlines Lacks Capacity... Performance Bonus Payment Uncertain

Korean Air plans to pay its employees more than 500% of their base salary, including performance bonuses, following record-breaking results. Other low-cost carriers (LCCs) benefiting from the recovery in travel demand have also decided to distribute performance bonuses one after another. On the other hand, Asiana Airlines, which is set to merge with Korean Air, faces uncertainty over whether it will pay performance bonuses despite strong earnings due to cost management concerns.

According to industry sources on the 19th, Korean Air recently announced through its company newsletter that it will pay employees an average performance bonus equivalent to 407% of their base salary. This will be finalized and paid after approval at the shareholders' meeting next month. Including the 100% safety incentive paid at the end of last month, employees will receive more than 500% in total.

This is a reward for achieving record-breaking performance last year. Korean Air recorded KRW 14.5751 trillion in revenue and KRW 1.5869 trillion in operating profit on a separate basis last year. Revenue increased by 8.7% compared to the previous year, marking an all-time high. Although operating profit decreased by about 45% year-on-year, this was due to a base effect from the COVID-19 cargo boom. It is more than five times higher than KRW 290.9 billion recorded just before the COVID-19 outbreak in 2019.

LCCs, whose performance improved as suppressed travel demand exploded, also plan to pay performance bonuses. Jin Air, a subsidiary of Korean Air, is considering paying a 200% performance bonus. T'way Air, which surpassed KRW 1 trillion in revenue for the first time, and Jeju Air, the number one LCC, are also reviewing performance bonus payments.

On the other hand, it is uncertain whether Asiana Airlines will pay performance bonuses. Since most of the money earned is spent on interest, the company lacks the capacity to pay bonuses. Asiana Airlines recorded KRW 6.5321 trillion in revenue and KRW 400.7 billion in operating profit last year. Revenue increased by 16.0% year-on-year, setting a record high. However, operating profit decreased by 45.4% during the same period. Although short-term borrowings decreased by about KRW 750 billion as of the third quarter last year, approximately KRW 1.8 trillion still remains.

Korean Air Maintenance Headquarters technicians Jeongtae Lee and Donggeun Yoo are inspecting a Boeing 777-300ER aircraft on the 26th at the Korean Air aircraft maintenance hangar in Jung-gu, Incheon, to achieve the important value of safe aircraft operation. Photo by Jinhyung Kang aymsdream@