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Eastar Jet enters receivership
South Korea’s cash-strapped Eastar Jet has been approved for court receivership as it continues to look for an interested buyer to stay in business.
The court decision gives the airline protection and time to negotiate with creditors and restructure the business.
It is the first South Korean budget airline to apply for receivership as the local market is set for further consolidation.
According to Yonhap News, there are four entities interested in acquiring the airline, which include an investment fund and a construction company.
Rival airline Jeju Air agreed to buy Eastar Jet in early 2020 but eventually pulled out of the deal due to the continuing slump in air travel due to the pandemic.
It has been seeking investment or a buyer for several months while struggling to service its debts.
"Eastar aims to find a new investor through a court-led rehabilitation scheme," the airline said.
"We plan to make a bid proposal again for companies that have previously shown an intention to take over the company, after reducing its size through legal management."
The South Korean air market is a competitive one but is set for significant consolidation.
Subject to anti-trust issues, the countries two biggest airlines ae set to merge with Korean Air’s decision to acquire Asiana Airlines.
Written by Ray Montgomery, Asia Editor
TravelMole Editorial Team
Editor for TravelMole North America and Asia pacific regions. Ray is a highly experienced (15+ years) skilled journalist and editor predominantly in travel, hospitality and lifestyle working with a huge number of major market-leading brands. He has also cover in-depth news, interviews and features in general business, finance, tech and geopolitical issues for a select few major news outlets and publishers.
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