Coronavirus: South Korea plans $828 million assistance for Korean Air, media reports

Korean Air’s planes sit on tarmac at Incheon International Airport, Incheon, South Korea. (File photo: Reuters)

South Korea’s financial authorities will provide one trillion won ($828 million) in liquidity to Korean Air Lines Co. by issuing government-guaranteed bonds as early as the end of this month, Yonhap News reported.

The cash-strapped flag carrier needs the funds to stay afloat as the aftermath of the COVID-19 outbreak is likely to continue to hinder its operations into the second half of 2020, according to the report, which cited an unidentified government official.

Earlier this year, the airliner received 1.2 trillion won of aid from the state-run Korea Development Bank and the Export-Import Bank of Korea for its financial needs in the first half, Yonhap said.

For all the latest headlines follow our Google News channel online or via the app

Korean Air has 3.3 trillion won in debt coming due this year alone, and the amount could swell to 4 trillion won if investors of its hybrid bonds exercise their rights for early redemption, it said.

Announcing the creation of a 40 trillion won fund to help seven key industries including airlines and shipbuilders weather the aftermath of the coronavirus outbreak, the financial regulator said the fund will be raised by issuing bonds guaranteed by the government, a decision subject to parliament’s approval.

The move to aid Korean Air follows the government’s recent meeting on how to run the five-year fund and issue bonds, Yonhap said.

Read more:

American airlines, United add flights as demand recovers from coronavirus shutdowns

Coronavirus: Emirates says too early to decide on airline’s size to serve travelers

EasyJet, American Airlines plan dramatic headcount cuts amid coronavirus

SHOW MORE
Last Update: Sunday, 07 June 2020 KSA 10:59 - GMT 07:59
Top