Written by Jihoon Lee and Youn Ah Moon
SEOUL (Reuters) – South Korean budget carrier Jeju Air saw a significant drop in its shares on Monday, hitting a record low following the tragic air crash that claimed the lives of 179 people.
Jeju Air’s shares plummeted by 8.5% to 6,920 won as of 0312 GMT, marking the lowest point since the company’s listing in 2015. This decline resulted in a loss of approximately 95.7 billion won ($65.2 million) in market capitalization.
Shares of AK Holdings, the holding company of Jeju Air, also experienced a decline of up to 12%, reaching their lowest level in 16 years.
The fatal crash at Muan International Airport on Sunday was a tragic first for Jeju Air, a low-cost airline established in 2005 and the third-largest carrier in South Korea based on passenger numbers.
Acting President Choi Sang-mok issued an order for an emergency safety inspection of the entire airline operation system in South Korea once the recovery efforts for the Jeju Air crash are completed.
Meanwhile, other budget carriers like Air Busan saw a rise of more than 15%, while Jin Air and T’way Air experienced fluctuations in their stock prices.
Major airlines in South Korea, Korean Air Lines and Asiana Airlines, also faced declines in their share prices following the tragic incident.
Analyst Yang Seung-yoon from Eugene Investment Securities mentioned that while it may take time to determine the cause of the accident, consumer confidence in budget carriers could be affected due to the importance of credibility in the industry.
Despite potential short-term cancellations, the overall travel demand is not expected to weaken substantially, according to Yang Seung-yoon.
Travel agencies have taken a hit as well, with Hanatour Service and Very Good Tour witnessing declines in their stocks.
As investigations continue, the nation mourns the loss of those onboard the ill-fated flight, many of whom were returning from holiday vacations.
($1 = 1,467.9500 won)