Korea’s Eastar Jet to slash staff numbers to lure investor

Eastar Jet (ZE, Seoul Gimpo) revealed on October 13 that it would have to lay off more than half of its workforce this week as it tries to attract an investor. Senior Vice President Kim You-sang told the Yonhap News Agency that Eastar planned to make 605 of its 1,200 employees redundant to become a more attractive investment. Four strategic investors have reportedly shown serious interest in acquiring the controlling stake of 51.17% currently on offer. “Our lead managers and two private equity funds [that have shown an interest] want the company to reduce our fleet and workforce, among other things,” he said. Eastar Jet’s current fleet of eleven B737-800s and two B737-900(ER)(ER)s have been inactive since its Air Operator’s Certificate (AOC) was suspended in June. It also has two B737-8 MAX aircraft. In March, as the coronavirus outbreak took hold, the carrier had 18 aircraft – including three more B737-800s – and 1,680 employees. It now plans to cut the fleet to just six aircraft, which Kim said required no more than 590 employees including cabin crew. However, this figure is expected to slip further, to around 400, following additional restructuring measures, industry sources told local media. “It is an inevitable decision in order to keep the business afloat and give the promise of later rehiring staff,” one Eastar Jet official said, according to the Korea Herald. Unions have slammed the job cuts and criticised the airline for allegedly “failing to pay staff for eight months.”