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[Alpha Biz= Kim Jisun] On December 29th, the tragic incident involving Jeju Air at Muan Airport has led to a growing financial fallout. 

 

According to the Financial Supervisory Service's electronic disclosure system on Wednesday, Jeju Air's ticket prepayments amount to approximately 260.6 billion KRW. Prepayments are funds that customers pay in advance for goods or services, and in the case of airlines, they represent the price of tickets booked for future travel.

While prepayments are considered liabilities due to the service obligation, they are recognized as revenue when the service is provided.

Following the tragedy on December 29, Jeju Air saw over 68,000 ticket cancellations within just a day by 1 p.m. on December 30. Additionally, Jeju Air has decided to waive cancellation fees for all domestic and international routes departing before March 29, leading to an anticipated increase in cash outflows.

Jeju Air's ticket prepayments are the largest among domestic low-cost carriers (LCCs), with T'way Air holding 184.3 billion KRW in prepayments.

 

 

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