Eastar Jet Soars Again with International Flights After COVID Hiatus

eastar jet soars again with international flights after covid hiatus.jpg Business

In a significant move signaling recovery in the aviation sector, Eastar Jet Co., a South Korean budget airline, has announced the resumption of its international services after a suspension of three and a half years due to the COVID-19 pandemic. The company, which had been grounded since March 2020, has begun offering three flights a week from Gimpo to Songsan in Taiwan, marking the first step in their phased re-entry into the global market.

Eastar Jet’s return to international skies is set to expand from September 20, with flights planned from Incheon to several major cities including Tokyo, Osaka, Bangkok, and Da Nang. The revival comes after the low-cost carrier restarted domestic services in March this year, beginning with the Gimpo-Jeju route, post receiving an air operator certificate (AOC) from the transport ministry. This move is seen as a significant turnaround for the airline, which had to suspend most of its operations and saw its AOC become ineffective in May 2020 due to the pandemic.

Eastar Jet Resumes International Flights After COVID-19 Hiatus

South Korean budget airline, Eastar Jet Co., has announced that it has restarted its services on international routes, ending a 3.5-year pause that was instigated by the COVID-19 pandemic.

Resumption of Flight Services

The low-cost carrier started providing three flights per week from Gimpo to Songsan in Taiwan last Saturday, according to a company statement. Furthermore, Eastar Jet plans to offer flights on routes from Incheon to various international destinations including Tokyo, Osaka, Bangkok, and Da Nang from September 20, and Fukuoka and Nha Trang from October 29.

Eastar had initially recommenced services on domestic routes in March, kicking off with the Gimpo-Jeju route. This followed the receipt of an air operator certificate (AOC) from the transport ministry, a month prior. This was a significant step forward for the carrier, which had suspended most of its flights on domestic and international routes since March 24, 2020, due to the pandemic.

Fleet Expansion Plans

Before the onset of the pandemic, Eastar operated 23 B737-800s across a total of 38 domestic and international routes. The airline has now set a goal to increase the number of its chartered planes to 10 from the current four — three B737-800s and one B737-8 — by the end of this year. The company plans to add three more B737-800s and three B737-8 planes by the end of the year. These aircraft will be deployed on international routes to Japan, China, and Southeast Asian countries in the second half of the year, depending on travel demand.

Financial Struggles and Recovery

The past few years have been financially challenging for Eastar. The carrier applied for court receivership in January 2021, after failing to find a strategic investor since July 2020. This was when Jeju Air Co., the country’s largest budget carrier, abandoned its plan to acquire Eastar amidst the pandemic.

However, in a turn of events, local property developer Sung Jung Co. acquired the entire stake in Eastar in 2021, following the carrier’s overall stock cancellation worth 48.5 billion won (approximately US$36.7 million). Sung Jung injected 112 billion won into Eastar. Later, in January this year, Sung Jung transferred its stake in Eastar to VIG Partners, a local private equity fund, which injected 110 billion won into the carrier.

Eastar now aims to achieve 146 billion won in sales this year, a significant drop from the 551 billion won in sales it reported in 2019, before the pandemic.

My Takeaways

Eastar Jet’s resumption of international flights and planned fleet expansion signify a hopeful rebound for the airline from the impacts of the COVID-19 pandemic. The investments by Sung Jung Co. and VIG Partners have undoubtedly provided the much-needed financial lifeline for the carrier. However, achieving the sales target will be a significant challenge, given the uncertainty in global travel demand. Eastar Jet’s progress will be an interesting case study of a low-cost carrier’s recovery in the post-pandemic era.

Crive - News that matters