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Eastar Jet’s labor union blames Jeju Air, govt. for failed M&A deal

(Yonhap)
(Yonhap)

South Korean low-cost carrier Eastar Jet’s unionized workers on Friday blamed Jeju Air and the government for the botched acquisition plan of its rival.

The workers’ union argued that the government “neglected” the situation for three months, until the aviation industry’s economic situation severely deteriorated.

“The government should actively step up, since the Moon Jae-in government and the ruling party cannot escape responsibility for the economic impact due to COVID-19,” the labor union said.

According to the International Air Transport Association, the industry could lose up to $113 billion globally this year as a result of the pandemic.

Regarding Jeju Air’s official statement, released Thursday, saying it may walk away from a controversial 54.5 billion won ($45 million) merger deal after Eastar Jet failed to meet the deadline to fulfill its prerequisites, the Eastar Jet workers called Jeju Air “conscienceless and irresponsible.”

“They will only strengthen their monopoly in the market by bankrupting Eastar Jet, even if the deal falls apart. If not, they will threaten the government to get more subsidies, making the excuse that they need them to employ some 1,600 Eastar Jet workers,” said the labor union.

The planned merger between Jeju Air and Eastar Jet was viewed by market watchers as an attempt by Korea’s first and largest budget carrier to solidify its position as one of the three major airlines in the country, along with Korean Air and Asiana Airlines. Together, Jeju Air and Eastar Jet would have had a combined fleet of 68 aircraft.

But the high-profile deal soon plunged into controversy and finger-pointing over issues such as “corporate restructuring” and wages going unpaid for months.

By Kim Da-sol (ddd@heraldcorp.com)
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