News
Korean visitors to Japan decline 58%, prompting Eastar Jet sale speculation
October 18th 2019
Shareholders of Korea’s smallest major airline look for capital injection or sale. Read More »
Korean visitors to Japan declined 58% in September, according to recently disclosed tourism statistics. Korea accounted for 24% of Japan’s visitors in 2018. Growth in other markets, namely China, more than offset the decline in traffic from Korea.
Japan was a major market for Korean LCCs. The decline in visitors, the won’s appreciation and Korea’s slowing economy are putting pressure on Korean aviation.
Eastar Jet has 20 aircraft, making it the smallest of the major airlines. It is looking to increase its capital to fund sustainability and growth. If it cannot do so, the shareholders will sell the company, a spokesperson said. Korea Economy reported Eastar wanted to raise KRW200 billion (US$170 million) and would offer 80% ownership of the company. One Eastar investor sold its 40% equity for KRW96 billion.
Eastar posted profits from 2016 to 2018, but has been unable to counter 2019’s changes. At the end of 2018, its debt ratio had climbed to 486%, which must discourage investors. The estimated third quarter loss of Korea’s five listed airlines - Korean Air, Jeju Air, Jin Air, Air Busan, T-way - is KRW100 billion.
