Korean Airlines and the COVID-19 Pandemic
The spread of COVID-19 in South Korea and then across the globe in the first months of 2020 heavily impacted domestic airlines. As countries went into lockdown and imposed restrictions on not only the entry of foreigners but even transits in some cases, a flurry of flight cancellations, ticket refunds, and even the complete suspension of flights erupted throughout the world. Subsequently, domestic airlines reported year-on-year revenue drops of 84.4 percent in the 3rd week of February 2020. In March, both international arrivals and departures dropped by over 94 percent compared to the previous year. Air cargo traffic was less affected, only recording a five percent drop. Industry insiders predicted that the ongoing COVID-19 pandemic could dampen demand for global air travel for the rest of the year.
Airlines’ Financial Woes
The government decided to financially support these private companies after deliberation as the airlines’ financial woes were not entirely the result of the pandemic. Thus, there were concerns of public criticism for using taxpayers’ money to fund the airlines. Korea’s largest carrier, Korean Air, and others have promised to improve their financial status, cut dividends, and not lay off their employees as they receive public financial aid.