SEOUL, March 27 (Yonhap) -- The International Air Transport Association (IATA) has called on South Korea to offer a comprehensive rescue package to support local airlines "in grave and immediate danger of insolvency," according to Korean Air Lines Co. on Friday.
In a letter sent to President Moon Jae-in this week, IATA, a global trade association for the airline industry, asked the Seoul government to urgently extend direct financial support, loan guarantees by the government, support for corporate bond issuance and tax relief.
"The COVID-19 pandemic is challenging the viability of the global air transport system as never before in history. The current industry crisis is much worse and more widespread than 9/11, SARS (severe acute respiratory syndrome) or the 2008 global financial crisis," IATA said in the letter.
IATA estimated the Korean air transport industry's contribution to the economy reaches US$47.6 billion, supporting 838,000 jobs and contributing 3.4 percent of the gross domestic product in Asia's fourth-biggest economy.
COVID-19 could result in a 22 percent drop in passenger volume and a $4.4 billion loss in passenger base revenue for the Korean air transport market this year. It could also lead to the loss of about 160,000 jobs and $9 billion in GDP, IATA said.
Unless government action is taken now, post-pandemic recovery in Korea will be seriously impeded, the association said.
The country's nine airlines -- two full-service and seven low-cost carriers -- have suspended most of their flights on international routes, as an increasing number of countries have closed their borders and imposed stricter entry restrictions on inbound passengers.
To help airlines weather the fallout of the coronavirus outbreak, the government said last month it would extend loans worth a total of 300 billion won ($250 million) to airlines, mostly low-cost carriers, and allow them to delay payment of airport usage fees.
Full-service carriers such as Korean Air Lines Co. and Asiana Airlines Inc. have yet to receive financial help from the government to cope with the crisis.