Korean Air Offers Unpaid Leave
Jay Yim, Oct. 15, 2019, 10:55 a.m.
Korean Air on Monday said it is offering unpaid leave to staff for the first time since its establishment.
Employees who have worked for the company for more than two years can apply by Oct. 25 for a three-month unpaid leave between November and May next year, extendable by up to another three months.
Korean Air said the scheme is part of its efforts to help its staff to balance work and family, but insiders say the scandal-ridden airline wants to cut costs.
Korean Air posted an operating loss of W101.5 billion in the second quarter of this year and is expected to record a 30 percent drop in operating profit in the third quarter due to Korean boycott of Japan (US$1=W1,186).
"Fuel costs account for 25.6 percent or the largest of the fixed costs at Korean Air and labor costs are the second largest with 20.9 percent, so the airline will be able to save substantial amounts of money with the leave scheme," an industry insider said.
Low-cost carrier Eastar Jet, which launched an emergency cost-cutting plan last month, is also accepting unpaid leave applications from staff. In April, Asiana Airlines, which is up for sale, began encouraging staff to take unpaid leave of between 15 days and three years.