Jeju Air (7C, Jeju) has managed to raise KRW320 billion won (USD230 million), as it said it would in late August, with the aim of funding the acquisition of forty B737-8s that will be delivered from next year.
The budget carrier’s majority owner, AK Holdings, holding company for the cosmetics and health conglomerate Aekyung Group, took part in the rights offering after issuing KRW130 billion (USD93.3 million) worth of its own exchangeable bonds. AK had originally projected bonds worth KRW100 billion (USD72 million), with the aim of “strengthening” the carrier’s fleet, but it expanded the scale of the fundraising drive when 26 additional institutional investors opted to participate.
The airline stressed it will wholly own the 40 new Boeing jets, whose range is 1,000 kilometres longer than that of its existing fleet of thirty-seven B737-800s, allowing it to reach destinations in Indonesia and Central Asia. The aircraft will also save 15% of jet-fuel costs compared to the existing fleet, it added.
All but two of the existing fleet are leased, from 15 different lessors, according to the ch-aviation Commercial Aviation Aircraft Ownership Data module. Most of these leases end on December 31, 2023.
“The paid-in capital increase plan announced recently is different in nature to previous plans. Unlike previous increases conducted to overcome financial difficulties, this plan acts as a foundation for strengthening business competitiveness as it is an investment to expand our capital and solidify our position as a leading airline in the post-Covid era,” a Jeju Air official declared, pointing to its rapidly rising stats this year when it carried 37 times more passengers in August than it did in January.
