South Korea's Eastar Jet has filed for court receivership, a Seoul court has said, as the pandemic-hit budget airline fights for its survival, considering options such as a merger and acquisition among strategies to stay in business.
The airline laid off approximately 700 of approximately 1,600 employees last April due to the impact of the COVID-19 pandemic and has struggled to find a strategic investor since July, when budget carrier Jeju Air Co Ltd scrapped a plan to acquire it.
"The Seoul bankruptcy court plans to find a way for the debtor to continue to utilise its expertise and know-how related to the domestic and international air transport industry through M&A," the court said in a statement.
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It ordered preservation measures to keep creditors from seizing or selling Eastar Jet's assets and freeze bonds before its rehabilitation effort begins, paving the way for the financially troubled carrier to find an investor.
Routes, Planes And Employees
Eastar Jet flew 35 routes with 19 planes, including two Boeing 737 MAX aircraft as of March, a regulatory filing shows. It has approximately 550 employees since January, the court said.