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Photo: Jeju Air |
[Alpha Biz= Kim Jisun] Jeju Air has decided to transfer its hotel-related assets to an affiliate as part of efforts to secure liquidity amid a challenging operating environment driven by high fuel prices.
According to a filing on May 13, Jeju Air will transfer all hotel-related assets, contracts, and rights held by its subsidiary, Pacific No.3 Private Real Estate Investment Company, to Mapo Aekyung Town. The transaction is valued at KRW 54 billion and is scheduled to close on June 30.
The subsidiary was established in December 2016 as part of Jeju Air’s expansion into the hospitality sector. The company currently operates the “Holiday Inn Express Seoul Hongdae” under the brand of InterContinental Hotels Group.
The move is widely seen as an effort to strengthen cash flow as low-cost carriers face mounting pressure from prolonged high oil prices linked to geopolitical tensions in the Middle East. Fuel costs typically account for around 30% of an airline’s operating expenses.
The broader LCC industry has been scaling back international routes, with more than 900 round-trip flights already reduced. Airlines including Jeju Air and T'way Air have also implemented measures such as unpaid leave programs for cabin crew to cope with rising costs.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
