COVID-19 pandemic leads to mass layoffs of third-party contractors serving airline carriers

Arirang News 2020-04-03

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There's no question the aviation industry has been one of the hardest hit sectors by the global coronavirus pandemic.
With planes grounded or flying well under capacity,... there have been mass layoffs of airline staff as well as third-party contractors, such as those who make the in-flight meals and fuel the planes.
Kim Hyo-sun reports.
Korean Air's shelves for in-flight meals are almost bare.
Demand for meals has plummeted as some 90 percent of international commercial flights have been cancelled due to the global coronavirus pandemic.
Fewer than 3-thousand in-flight meals were made daily last month,... a significant drop from the 80-thousand prepared each day during the same month last year.
This has led to nearly 1-thousand employees at this subcontractor being made redundant.
Only around 800 workers remain.
"I joined this company 30 years ago, but this is unprecedented. I could've never imagined this. We've gone through the Asian financial crisis, SARS and the global financial crisis, but this is something else."
The outbreak has also inflicted significant financial losses on the aviation fueling industry.
The Incheon International Airport Corporation entrusted the airport's fueling facility to a private carrier,... which is now experiencing a plunge in demand for aviation fuel.
The company needs to pay 2-point-4 million U.S. dollars for monthly rent,... but its sales in March were just over 800-thousand dollars.
While the government said it will lower rent by 20 percent,... the company says it's not enough.
"The demand for aviation fuel plummeted following the shutdown of many flights, but we are increasingly burdened as our inventory piles up. Our sales have dropped by over 70 percent."
The unanticipated and unprecedented effects of the COVID-19 pandemic has sent the aviation industry into a tailspin,... and the ripple effects are equally painful for the third-party contractors that work hand-in-hand with the airlines.
Kim Hyo-sun, Arirang News.

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