The government has decided to provide policy financing of up to 200 billion won to low-cost airlines (LCCs) this year for the aviation industry, which is struggling with the prolonged coronavirus outbreak (Corona 19).
In addition, additional support measures will be prepared and implemented, such as reductions in airport facility usage fees for airlines and extension of the period for designating special employment support industries.
On the 3rd, the Ministry of Land, Transport and Maritime Affairs proposed and announced the’Aerospace Corona Crisis Overcome and Re-Leap Plan’ jointly with relevant ministries at the 31st Emergency Economy Central Countermeasure Headquarters Meeting held at the Seoul Government Complex.
The government has prepared and implemented support measures more than 10 times last year to support the aviation industry, which is suffering a great deal from the spread of Corona 19.
As of December last year, international passenger performance is still down 97% compared to the same month last year. According to the International Civil Aviation Organization (ICAO) and the International Air Transport Association (IATA), it will take two to four years for air demand to recover.
◇ Korean Air-Asiana Airlines integrated support… Customized support by airline
First, the government decided to provide policy support so that the merger and acquisition (M&A) of Korean Air and Asiana Airlines, the biggest pending issue in the aviation industry, can be smoothly completed.
This is because it was judged that it was necessary to maximize the synergy effect of the integration of the two major nationalities in a situation where structural changes in the global aviation industry are accelerating due to the pandemic (a global pandemic of infectious diseases).
First, the government decided to increase the competitiveness of the integrated airlines through regulatory improvements, such as supporting the progress of the integration process to facilitate the examination of overseas business combinations through diplomatic channels, and sharing transport rights and slots between airlines.
In addition, instead of reducing the number of overlapping routes through integration, it plans to diversify the operating hours to widen consumers’ choices.
Currently, the main routes for each Incheon-continent are that Korean Air and Asiana Airlines are operating similar times in the morning and afternoon, but are reorganizing routes by diversifying the available boarding times in the future.
In addition, monitoring will be reinforced to stabilize air fares, and in the event of an increase, it plans to actively respond with administrative guidance, etc.
The government is also considering supporting KRW 200 billion in policy financing for LCCs such as Jeju Air, T’way Air, and Jin Air.
According to the Ministry of Land, Infrastructure and Transport, these LCCs are expected to lack funds of about 200 billion won by the third quarter of this year. The government plans to determine the timing and scale of support through due diligence.
Sang-do Kim, head of the aviation policy department of the Ministry of Land, Infrastructure and Transport said, “The third coronavirus epidemic at the end of last year has reduced domestic travel demand and increased employment maintenance costs, and policy subsidies have been exhausted.” It will be supported in a way,” he explained.
In addition, Asiana Airlines’ subsidiaries, Air Busan and Air Seoul, are also planning to provide support through parent companies if necessary.
However, it is reported that it will not review funding for new LCCs such as Air Premiere and Aero K.
◇ Expand employment and financial support to maintain the aviation ecosystem
The government decided to strengthen employment support for airlines and ground handling companies, as it is essential for the aviation industry to maintain its competitiveness even after Corona 19, as it is essential to stabilize the employment of currently working personnel.
Following last year, the government plans to pay employment maintenance subsidies for up to 180 days in case of maintaining employment through paid leave this year.
In addition, it is considering extending the period of designation for the special employment support sector, which was originally scheduled until the end of March, from at least six months to at least one year.
In the case of the special employment support sector, the company plans to provide more support for workers in the aviation industry by extending the employment maintenance subsidy for unpaid leavers for up to 270 days.
In addition, employment maintenance subsidies are also provided to workers who have earned daily income to maintain their livelihood during the leave period, and even if they participate in training to maintain pilot qualifications during the leave, it will be recognized as a period of employment maintenance measures.
This measure also included support plans for prospective pilots.
The government plans to establish new training courses at Uljin Flight Training Center and Sky Dream Foundation to prevent career disruption of prospective pilots.
In addition, the number of instructors hired will be increased and incentive support such as salaries will be reinforced so that prospective pilots can build their careers.
Support measures have also been prepared to stabilize the employment of duty-free workers that make up the airport ecosystem.
In consideration of the employment insecurity situation resulting from the termination of operation rights of major duty-free businesses at Incheon Airport, the government has allowed business owners with business rights to take over some of the duty-free shops where business rights are terminated to expand their business area.
In addition, the benefits of the airport facility fee reduction, which was scheduled to end at the end of last year, will be extended until June of this year, and it will be reviewed whether or not to extend the reduction in consideration of the recovery of air demand in the first half of the year.
In order for airlines to quickly reimagine their business strategy in response to’Post Corona 19′ and to execute the flight plan immediately, the number of unused slots (the number of flights per hour) and the collection of transport tickets will also be postponed this year.
In the case of transportation tickets, if they are not used for more than 20 weeks per year, and in the case of slots, 80% per year if they are not used, they will be collected.In this year, we decided to postpone collection in consideration of the Corona 19 situation.
In addition, slots in Korean airports that are not used by foreign airlines will be temporarily allocated to domestic flights of nationals to increase sales opportunities.
It also contains plans to support freight transport, which is increasing in demand due to Corona 19.
The government decided to switch the pre-approval system to the post-report system for smooth cargo plane operation.
After carrying out their own risk assessment for the cargo on board, the airline was required to attach evidence of the result of risk mitigation measures to report it.
In the past, it took 3 days to permit the cargo-carrying item, but the introduction of the follow-up notification system enables same-day cargo transshipment, which is expected to contribute to strengthening cargo transportation competitiveness.
Minister of Land, Infrastructure and Transport Byun Chang-heum said, “Through this additional support measure, we hope that our aviation industry will be able to maintain employment and increase corporate competitiveness until demand recovers.”