As far as warnings go, this is about as stark as you can get. For Korean Air Lines, its very survival really depends on how long the coronavirus crisis lasts.
Korean Air Lines warned on Monday that the coronavirus outbreak could threaten its survival after more than half of the world restricted passengers entering from South Korea.
Woo Kee-hong, Korean Air’s president, said more than 80% of South Korea’s biggest carrier’s international capacity had been cut as a result of travel restrictions globally, compared with a 18% cut made during the 1997-1998 Asian financial crisis.
“We can easily imagine the severity of the crisis we are facing in comparison. And what is more daunting is that the situation can get worse at any time and we cannot even predict how long it will last,” he said in a memo to employees.
Woo said Korean Air had grounded about 100 of 145 its passenger aircraft, adding that its self-help measures so far included deferring investments, cutting down on operational expenses and encouraging employees to take voluntary leave.
“But if the situation continues for a longer period, we may reach the threshold where we cannot guarantee the company’s survival,” he said in the memo, which was seen by Reuters.
Japan joined a number of countries to impose curbs on travelers from South Korea on Thursday, adding to the woes of Korean airlines, which have been among the hit hardest by flight cancellations worldwide.
The Korea Centers for Disease Control and Prevention on Monday reported 165 new coronavirus cases, bringing the national tally to 7,478 in one of the most severely affected countries outside mainland China.
The Daily Newsletter
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Photo credit: A Korean Air aircraft. The airline's very survival is at risk. airbus777 / Flickr