Eastar Jet graduated from court-led debt rescheduling program

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SEOUL, March 22 (Yonhap) — Eastar Jet Co., a South Korean low-cost airline, said Tuesday that it exited the court-directed debt rescheduling program within a year after being placed in receivership amid the COVID-19 pandemic. 19 pandemic.

Eastar filed for receivership in January 2021 because it had failed to find a strategic investor since July 2020, when Jeju Air Co., the country’s largest budget carrier, abandoned plans to acquire Eastar amid the pandemic.

In November, local real estate developer Sung Jung Co. acquired a full stake in Eastar through a rights issue following the global cancellation of shares in the budget carrier worth $48.5 billion. won ($40 million).

Sung Jung has pumped a total of 112 billion won into Eastar and still has enough money to help the carrier weather the protracted pandemic, Eastar Chairman and CEO Kim You said last month. blood, to the Yonhap News Agency.

Eastar has yet to receive Air Operator’s Certificate (AOC) approval from the Department of Transport to resume flights.

After AOC approval, the company aims to initially resume flights on the Gimpo-Jeju route in April or May.

Eastar, a China-focused carrier, currently has three B737-800 charter jets, down sharply from 23 planes before the pandemic hit the airline industry two years ago. The 23 aircraft served a total of 38 domestic and international routes before the pandemic.

It plans to expand the fleet to six or seven by June, 10 by December this year and 17-18 by the end of next year. Most of the new planes chartered will be B737-800s or B737-MAX8s, the company said.

Eastar has suspended most of its flights on domestic and international routes since March 2020, and its AOC became ineffective in May.

South Korea has two full-service carriers — Korean Air and Asiana Airlines — and 10 LCCs — Jeju Air Co., Jin Air Co., Air Busan Co., T’way Air, Air Seoul Inc., Eastar Jet, Fly Gangwon, Air Premia, Aero K Airlines Co. and Air Incheon Co.

Air Incheon is a cargo-oriented carrier, and the other nine low-cost carriers are passenger carriers.

Most LCCs have snowballed losses since 2019 as travel demand has been affected by the pandemic, as well as diplomatic and trade disputes with China and Japan, respectively.

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