Fly Gangwon could not withstand the financial difficulties and applied for corporate rehabilitation procedures along with a declaration to suspend operations. As the recent investment attraction went in vain, it finally raised the white flag after three years of operation.

A lot of pain is expected in this process. This is because the airline did not prepare refund measures and compensation plans for passengers with reservations in advance even though the suspension of flights was expected. The Ministry of Land, Infrastructure and Transport said in a press release, “We urge Fly Gangwon to thoroughly implement consumer protection and compensation.”

70 million won in sales per day… finally broke the wings

According to the industry, Fly Gangwon submitted an application for suspension of flights to the Seoul Regional Aviation Administration on the 18th. On the 22nd, it plans to apply for corporate rehabilitation procedures to the court. Fly Gangwon is a low-cost carrier ( LCC

) established in 2016 . It started commercial operations in 2019, three years after its establishment. However, as soon as the corona occurred the following year, the business situation began to deteriorate rapidly. The company’s financial difficulties are also evident in its financial statements. Fly Gangwon recorded sales of 25.7 billion won based on separate financial statements last year. That’s less than 100 million won in average daily sales. The company recorded a gross loss of 26.5 billion won last year. The loss from gross profit, which is sales minus cost of sales, means that the company does not even have the ability to maintain and operate its own planes. As of the end of last year, Fly Gangwon’s cash holdings reached 4 billion won. Due to the continuous operating deficit, the deficit is also increasing every year. The company’s deficit as of the end of last year was먹튀검증 54.3 billion won, a 110.5% increase from the previous year. The capital is negative (-) 21 billion won, and it is in complete capital erosion. Fly Gangwon seemed to be escaping the crisis when it signed an investment attraction business agreement with private equity fund JK Withers last month. The investment was planned to be carried out by issuing new shares worth 100 billion won. However, the investment was ultimately canceled during the due diligence process. On the 16th, Joo Won-seok, CEO of Fly Gangwon, said, ” JK, a private equity fund manager,

As Withers gave a negative opinion, it was judged that it had failed to attract investment, so we entered the corporate rehabilitation process,” he said.

Angry Ministry of Land, Infrastructure and Transport “urges for compensation measures”

The Ministry of Land, Transport and Maritime Affairs has requested thorough implementation of consumer protection and compensation in connection with the suspension of operations. According to the Ministry of Land, Infrastructure and Transport, as of the end of May, 7,000 passengers on the Yangyang-Jeju route and 38,000 as of the end of October (including international flights) have booked Fly Gangwon flights.

An official from the Ministry of Land, Infrastructure and Transport said, “The biggest problem is not preparing measures in advance in a situation where flight suspension is predicted.”

Currently, Fly Gangwon has partially disclosed the compensation plan through its website. Passengers who have booked domestic flights between the 20th and 24th will be compensated with 100,000 won one-way and 30,000 won for transportation costs when using other airlines. For international flights, compensation is 250,000 won one-way and 50,000 won for transportation.

An official from Fly Gangwon said, “With the suspension of flights, we have put forward a compensation policy on the website.”