Enter 2021-03-03 14:35 | Revision 2021-03-03 14:35
▲ The sleek Incheon International Airport departure hall.ⓒ Yonhap News
The government plans to provide additional liquidity of 200 billion won to low-cost airlines (LCCs) to overcome the crisis in the airline industry hit by Corona 19 (Wuhan pneumonia) and to make a leap forward.
In order to recover the route, we will promote a travel bubble that allows free travel between excellent quarantine areas. However, there are voices of concern that Korea’s COVID-19 vaccination is at the last level in the world, and that the travel bubble with developed countries that has hurried to vaccination may not be sufficient.
On the 3rd, the government announced a plan to overcome the corona crisis in the aviation industry and take a leap forward at the 31st Emergency Economic Central Countermeasure Headquarters Meeting held at the Seoul Government Complex on the 3rd. The framework is to make efforts to extend the existing support measures and restore the route in stages.
◇Reduction of airport facility usage fee and extension until June
First, the government decided to give employment maintenance subsidies for up to 180 days this year to stabilize employment. Employment maintenance subsidies are also given to workers who have earned daily income to maintain their livelihood during the period of leave. It was decided to actively review the extension of the special employment support sector, which will end at the end of this month.
In order to prevent the career disruption of prospective pilots, training courses are established at Uljin Flight Training Center and Sky Dream Foundation, and the number of instructors is increased. The duty-free shop plans to take over some of the duty-free shops whose business rights are terminated to businesses that maintain business rights and operate them as temporary stores so that employment can be succeeded.
The airport facility fee, which is evaluated as an effective support, will be extended until June and reviewed whether or not to extend it while looking at the recovery of air demand.
In order to normalize operations after Corona 19, the collection of unused slots (aircraft takeoff and landing possible time) and transport tickets this year will also be postponed. In addition, slots in domestic airports that are not in use by foreign airlines will be allocated to Korean airlines’ domestic flights for a limited time to expand business opportunities. In order to strengthen competitiveness in air freight transportation, the license for cargo-loading items, which took about three days, will be converted into a post-report system to support transfer of cargo on the same day.
▲ Korean Air-Asiana Airlines.ⓒ Yonhap News
◇ Integrated support for Korean Air and Asiana Airlines
In relation to the integration of Korean Air and Asiana Airlines, we will support overseas business combination screening, and improve regulations so that transportation rights and slots can be shared between airlines. Instead of reducing the number of overlapping routes, diversifying the operating time range also broadens consumers’ choices.
LCC Jeju Air, T-Way Air, and Jin Air plan to provide additional liquidity. By the third quarter of this year, it is reported that there will be a shortage of funds of about 200 billion won, and it is a policy to review the availability and scale of support through due diligence. Asiana Airlines subsidiaries Air Busan and Air Seoul will also provide support through parent companies if necessary. AirPremier Aero-K, a new LCC, has delayed the time of service, which was a condition for issuing licenses, until the end of this year.
Aviation experts advised that the speed and scale of support were key. Hee-young Heo, a professor at Korea Aviation University, said, “The range of financial support should be wide because the financing of airlines is blocked.” “I’m drifting away and I have to get it out quickly. It shouldn’t take months to pay for the related procedures like last year. I need to omit it like in a foreign country,” he emphasized.
▲ Airliner.ⓒ Yonhap News
◇Expansion of non-landing tourism flights from Incheon to local airports
Regarding the recovery of operations, the number of non-landing tourist flights limited to departures from Incheon International Airport will be expanded to local airports. It is also considering ways to provide incentives for tourists to airlines and travel agencies.
In preparation for the prolonged suspension of international flights, we are also promoting a travel bubble within the year. The travel bubble refers to an agreement that permits travel by forming a safety net between countries with excellent quarantine. After selecting a route in consideration of air demand and the level of quarantine, it plans to conclude an agreement first, and then decide when to ease the quarantine exemption and operate direct flights through consultation with related organizations (diplomacy and quarantine). In addition, it plans to preemptively promote aviation negotiations with countries that are expected to expand operations in the future.
However, some people are delaying vaccinations in Korea, raising the possibility that the travel bubble will only end in vain relief. According to the international statistics website’Hour World in Data’ and foreign media, Korea is the 105th in the world to start vaccinating Corona 19. It is the last among 37 member states of the Organization for Economic Cooperation and Development (OECD). If developed countries sign an agreement with countries that have been vaccinated, the possibility of Korea being excluded from the target country is raised.
Prof. Heo said, “The slow vaccination rate (in our country) is disadvantageous to the travel bubble,” he said. “However, Korea is still classified as an excellent quarantine country, and the travel market is only 51~52% before Corona 19 by the end of this year. As recovery is expected to be slow, it is necessary to prepare for a new leap forward in the aviation industry by convincing the disease authorities by creating a task force at the central government level like the UK. The Ministry of Land, Infrastructure and Transport, the Ministry of Foreign Affairs, the Ministry of Justice, and the Ministry of Culture, Sports and Tourism should form a control tower (command post) instead of making a separate voice to move in unison.
◇Examination of additional reduction or exemption of aircraft acquisition tax and property tax
We will also review additional reductions in aircraft acquisition tax and property tax, which have been continuously requested by the industry. Aircraft acquisition tax will be reduced by 60% by this year, and property tax will be reduced by only LCC by 50%. Major competitors often do not have the tax burden involved.
It will also strengthen the competitiveness of the aviation maintenance business (MRO), promoted as a new high-value-added industry. It promotes the trade-off of military aircraft, tax cuts, and inducement of domestic airlines to convert overseas maintenance quantities to Korea.
In order to reinforce the mid- to long-term competitiveness of the industry, the establishment of an aviation association, innovation of the aviation safety supervision system, and establishment of a specialized aviation training institution are also in progress in the second half of this year.
In addition, it is also planning to secure the growth engine of the future aviation industry by promoting pilot projects linking airport and urban development, winning orders for overseas airport projects, and introducing passenger identification systems using biometric information.
