SEOUL • Korean Air Lines has warned that the coronavirus outbreak could threaten its survival, after more than half of the world restricted passengers entering from South Korea.
Korean Air president Woo Kee-hong said more than 80 per cent of South Korea's biggest carrier's international capacity has been cut as a result of global travel restrictions, compared with an 18 per cent cut during the 1997-1998 Asian financial crisis.
"We can easily imagine the severity of the crisis we are facing in comparison. And what is more daunting is that the situation can get worse at any time and we cannot even predict how long it will last," Mr Woo said in a memo to employees on Monday. He added that Korean Air had grounded about 100 of its 145 passenger aircraft.
Self-help measures included deferring investments, cutting down on operational expenses and encouraging employees to take voluntary leave, Mr Woo said.
"But if the situation continues for a longer period, we may reach the threshold where we cannot guarantee the company's survival," he said in the memo seen by Reuters.
But he said the firm was "strong and resilient", adding: "We will keep this basic principle of minimising the sacrifice of our employees."
Korean Air said yesterday it is encouraging foreign pilots to take leave from next month.
Japan joined a number of countries to impose curbs on travellers from South Korea last Thursday, adding to the woes of its airlines, which have been among the hardest-hit by flight cancellations. South Korea's Asiana Airlines and budget carriers Jin Air, Air Busan and T'way Air suspended all routes between Japan and South Korea on Monday.
The Transport Ministry, financial regulator and state-run Korea Development Bank announced last month that they would extend up to 300 billion won (S$350 million) of liquidity to domestic budget carriers because of the crisis.
The Korea Centres for Disease Control and Prevention yesterday reported 35 new coronavirus cases, bringing the national tally to 7,513 in one of the most severely affected countries outside mainland China.