S. Korea To Provide $250 Mln In Loans To Lowcosters Suffering Losses Over COVID-19 - Gov't

SEOUL (Pakistan Point News / Sputnik - 17th February, 2020) South Korean authorities will provide 300 billion won (about $250 million) in emergency loans to low cost airline companies, which have been suffering financial losses due to the falling demand and cancellation of flights to China caused by the novel coronavirus disease (COVID-19) outbreak, the country's Ministry of Land, Infrastructure and Transport said on Monday.

According to the ministry, the number of South Korean airlines' flights on routes to China decreased by 77 percent due to the coronavirus outbreak, while the amount of airlines' funds spent on returning money for tickets in the past three weeks is about 300 billion won.

"The decline rate in the number of air passengers caused by the coronavirus outbreak is much faster than the decline caused by the severe acute respiratory syndrome SARS in 2003 and the middle East respiratory syndrome MERS in 2015. Low-cost airlines will be provided with the missing liquidity in the amount of 300 billion won," the statement said.

The South Korean government also plans to give airlines at least a three-month deferral of payments for the use of airports and other facilities, as well as to introduce lower operating fees, depending on the level of impact of the coronavirus on the activities of each particular company. Payment of fines will also be postponed for one year.

If the demand for flights to China does not recover in the first half of 2020, then starting from June the government may introduce a 10-percent discount for landing fees.

In February, South Korean airlines began to reduce the number of flights to China due to the virus outbreak. The country's main airline, Korean Air, announced that it would suspend flights on eight of its 31 routes to China and reduce the number of flights on the remaining 23 routes. The local low-cost airline, Eastar Jet also stopped operating flights on six of its 11 routes to China until further notice.

The new strain of coronavirus was first detected in China's Wuhan, located in the province of Hubei, in December and has since spread to more than 25 countries. In mainland China, the virus has already resulted in 1,770 fatalities, with 70,548 people having been infected. Outside of China, nearly 800 people were infected with the virus, including two cases in Russia and dozens in South Korea.