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The government of South Korea may increase its 300 billion won liquidity support for low-cost carriers (LCCs) due to the latter's massive decline in international flights.
The coronavirus outbreak pulled down the number of LCCs' international flights by 98.1 percent, thereby contributing to losses of over 6 trillion won in the first quarter.
The government had announced in February that the Export-Import Bank of Korea and Korea Development Bank would provide liquidity support of 300 billion won to LCCs.
However, it is expected to take some time before the additional liquidity supply would be carried out as the initial support budget is yet to be completed.
The current liquidity support allocates 40 billion won for Jeju Air, 30 billion won each for Air Busan and Jin Air, 20 billion won for Air Seoul, and six billion won for T'way Air.
But with the South Korean LCC industry being in oversupply compared with those of Japan, China, and the United States, some industry observers pointed out that the additional liquidity supply may not be appropriate.
