Korea’s Jeju Air to downsize fleet, explore cargo business

Ex-CEO of Korea’s Eastar Jet charged with embezzlement

Korea's Air Busan defers A321neo deliveries, moots cargo ops

Relative of Eastar Jet founder arrested for embezzlement

A nephew of Sang Jik Lee, the founder of grounded and indebted Eastar Jet (ESR, Seoul Gimpo), has been arrested on charges of embezzlement and breach of trust, district prosecutors in the city of Jeonju, central South Korea, told journalists on January 24.

The prosecutors arrested the man, who has not been named but referred to as Mr A, for allegedly embezzling KRW10 billion won (USD9 million) from company funds to buy stakes in holdco Eastar Holdings and for other business dealings going back to 2017 that allegedly harmed the company’s financial stability.

He had been an executive at Eastar Jet himself. In charge of its financial affairs, he was deeply involved in work related to Jeju Air’s planned acquisition of the troubled carrier until the bigger LCC backed out of the deal in July 2020.

Investigators believe that he may have conspired in the alleged embezzlement with Lee, an independent politician who left the ruling Democratic Party in September 2020 over the scale of the company’s layoffs. An ongoing probe into the activities...

Korea’s Eastar Jet to file for receivership

Eastar Jet (ESR, Seoul Gimpo) plans to file for court receivership by the end of January in a last-ditch effort to find a new investor, an airline representative revealed to MTN News and Yonhap News Agency on January 13.

One step short of bankruptcy in South Korea, receivership means that a court decides whether a company can be saved and, if so, how.

The financially challenged low-cost carrier, still without an AOC, has so far not succeeded in hooking a strategic investor since July 2020, when Jeju Air (7C, Jeju) scrapped a plan to acquire its smaller competitor.

Earlier in January 2021, it claimed to be in the final stages of negotiations with an unnamed construction company in Korea’s southwestern region of Honam, but these talks have now ended.

“Eastar aims to find a new investor through a court-led rehabilitation scheme,” the representative of the airline said, adding that there was a possibility for rehabilitation rather than liquidation.

The goal is to cancel some of Eastar Jet’s debt during the...