최경애
| 2023-05-19 17:55:20
Fly Gangwon-court receivership
Financially-troubled Fly Gangwon to apply for court receivership
SEOUL, May 19 (Yonhap) -- Fly Gangwon Co., a South Korean low-cost carrier, said Friday it is planning to apply for court receivership next week after halting operations Saturday due to snowballed losses.
Fly Gangwon began operations in November 2019 after obtaining a certificate from the Ministry of Land, Infrastructure and Transport.
It offered flights on five international and two domestic routes, but inked heavy losses and failed to make payments for the lease of chartered planes due to the impact of the COVID-19 pandemic in the airline industry in recent years.
"A homegrown private equity fund signed a memorandum of understanding with the company (Fly Gangwon) to inject 100 billion won (US$75 million) but has recently withdrawn its planned investment after conducting due diligence on the company," Fly Gangwon spokesperson Park Jung-hoon said over the phone.
In response to Fly Gangwon's "irresponsible" decision, Transport Minister Won Hee-ryong said the company should have notified reserved customers of its future compensation plans in advance.
A total of 38,000 people have booked flights on the carrier's Yangyang-Jeju Island route and five international routes by the end of October, according to the ministry.
The government will have Fly Gangwon take full responsibility for the damages it caused to customers and make efforts to minimize the inconvenience of local residents who have used the Yangyang airport in Gangwon Province.
Fly Gangwon once operated three chartered planes -- two B737-800 and one A330-200 passenger jets -- but it had a B737-800 aircraft as of Friday. The sole plane will be grounded from Saturday, according to the spokesperson.
The company is currently in a full-scale capital erosion.
Fly Gangwon Chief Executive Joo Won-suk owns a 55 percent stake in the debt-ridden carrier, and the remainder is held by others.
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