Korea’s Eastar Jet exits restructuring, to resume ops
Eastar Jet (ESR, Seoul Gimpo) has emerged from its court-supervised restructuring process more than a year after it secured creditor protection, the low-cost carrier confirmed to the Yonhap News Agency on March 22.
Seoul Rehabilitation Court had declared on the same day that, as quoted by the Chosun Ilbo newspaper, “Eastar Jet has started repayments according to its restructuring plan and it is not recognised that there is any impediment to the implementation of the plan in the future.”
The court said the company had so far repaid about KRW15.3 billion won (USD12.5 million) in debts and a further KRW44.5 billion (USD36.5 million) in unpaid wages and severance pay and added: “The easing of quarantine guidelines for overseas travellers is expected to improve the debtor’s business and sales.”
Eastar Jet sought receivership in January 2021, having failed to find a strategic investor since July 2020 when its bigger rival Jeju Air (7C, Jeju) opted to scrap a plan to acquire it amid the raging Covid-19 pandemic. However, last November, property developer Sungjeong completed its KRW112 billion (USD53 million) acquisition of the indebted carrier and shortly afterwards secured creditor and judicial consent for its restructuring plan.
Sungjeong still has ample cash to help the airline ride out South Korea’s prolonged pandemic-related travel restrictions, Eastar’s chief executive Kim You-sang told Yonhap last month.
Eastar Jet is still in the process of re-acquiring its air operator’s certificate (AOC) from the Ministry of Land, Infrastructure and Transport. But it hopes to resume domestic flights this summer using its fleet of three B737-800s, all of which are leased from World Star Aviation according to the ch-aviation fleets advanced module, initially between Seoul Gimpo and Jeju in April or May.
The airline operated 23 aircraft in pre-pandemic times, serving 38 domestic and international routes. It now plans to expand to six or seven aircraft by June, ten by December, and 17 or 18 by the end of 2023. Most of the leased jets will be -800s or the B737-8 MAX, the company told the news agency.