Seoul to probe Eastar Jet over “false documents”

The government of South Korea has said it will investigate Eastar Jet (ZE, Seoul Gimpo) over possible violations in the documentation it submitted to obtain approval for its Air Operator’s Certificate (AOC), further hampering the carrier’s relaunch plans.

Eastar Jet had already postponed its AOC application to the Korean Ministry of Land, Infrastructure and Transport (MOLIT) last year as it sought backing from creditors following a lengthy bout of restructuring. After paying off some of these claims, it submitted accounting documents supporting its certification application to MOLIT in December.

But despite exiting restructuring in March and preparing to resume flight operations, it passed the demonstration and inspection phase of the AOC process only in early June. By the end of June, the ministry said there were still issues to be reviewed before granting certification but declined to disclose details, the Dong-A Ilbo newspaper reported at the time.

Eastar Jet said it had completed over 3,000 detailed inspections in 80 fields, including finance, staffing, facilities, safety evaluations, cabin crew testing, regulations, and organisational evaluation, in order to secure its AOC reissuance, it told the daily. More than 50 hours of test flights had been conducted and the ministry had not raised any issues, it said.

Now the ministry has said in a brief statement to local media that it will subject the low-cost carrier to a thorough investigation and audit, claiming it submitted false accounting documentation. It will “then take strict measures according to the results.”

The airline explained in its own statement that the documents submitted to the ministry last November had been based on financial data correct as of the end of May 2020, the most recent figures available at that time. But further unexpected losses were found in its finances for 2021 when its accounting system was recovered in February 2022 following the system’s months-long suspension.

“We will fully explain to the ministry what brought about the differences in the annual financial figures,” a company spokesperson assured.