Adds background on Jeju, Eastar, S.Korea funds provider market
Adds background on Jeju, Eastar, S.Korea funds provider market
SEOUL, Dec 18 (Reuters) – South Korean funds airline Jeju Air Co Ltd 089590.KS signed a preliminary deal to purchase a 51% stake in unlisted low-cost provider Eastar Jet Co for about 69.5 billion received ($58.93 million), Jeju Air and its mum or dad AK Holdings 006840.KS mentioned on Wednesday.
The deal reveals consolidation is underway in South Korea’s crowded funds provider house as journey demand is falling to the important thing Japan market because of a diplomatic row between the 2 neighboring international locations, hitting profitability of airways.
The information of a majority stake sale in Eastar Jet got here after Eastar requested cabin crew members earlier this 12 months to take unpaid leaves as a part of emergency cost-cutting plans to assist it hold flying. The provider’s losses had risen as demand for journey to Japan fell and as its two Boeing 737 MAX jets have been grounded.
S.Korea presently has six funds carriers working, with three extra anticipated to launch subsequent 12 months.
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