Korean Air Lines is stuck in serious trouble amid the ongoing Coronavirus crisis, that has caused demand to reach record lows in the country.
The South Korean flag-carrier has cancelled the majority of its flights and reportedly grounded more than two thirds of its 146-aircraft strong passenger fleet.
Its President, Woo Kee-hong told employees in an internal memo, published by Reuters on Monday, that the airline has cut 80 percent of its total capacity. That is compared to a reduction of 18 percent during the Asian financial crisis in 1997. He warned that the situation could get worse at any time and depending on how long it will last, he cannot not guarantee the survival of the airline.
Korean Air is taking steps to try and reduce operating expenses. These include asking all employees to take voluntary unpaid leave and holding off on investments.
Furthermore, the airline will use smaller aircraft on its routes, as the low passenger numbers are not sufficient to fill larger aircraft. This has resulted in a grounding of Korean Air’s entire Airbus A380 fleet.
Demand has not only dropped for new bookings to and from South Korea, but many travelers have also cancelled their existing plans as more and more countries introduce entry restrictions for passengers coming from South Korea.
US American Delta Air Lines, a shareholder and alliance partner of Korean Air, has suspended its route from Minneapolis to Seoul and reduced frequencies on its other connections to the South Korean capital.
Competitor American Airlines, as well as Hawaiian Airlines have entirely suspended their flights to South Korea until late-April and early-May respectively.
In late-January and February, most international airlines had already started halting flights to mainland China, where the Coronavirus (Covid-19) originated. The virus then spread to South Korea, whose aviation industry is now in a similar situation. In Europe, Italy is the most affected by the virus, which has led airlines across the continent to reduce capacities.