Shares of Jeju Air fell nearly 25% in morning trading on December 30, after an accident that killed 179 people at Muan airport and an incident that forced another plane from the same airline to make an emergency landing.
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| The December 29 crash at Muan International Airport was Jeju Air's first major fatal accident. (Source: Reuters) |
Jeju Air shares fell 8.5 percent on Dec. 30, after falling 15.7 percent earlier in the session to 6,920 won per share. The drop of nearly a quarter of its value is the lowest since the airline went public in 2015. The slide wiped out 95.7 billion won ($65.3 million) in market capitalization.
Also in trading, shares of Jeju Air's parent company, AK Holdings, fell 12%, hitting a 16-year low for the company.
The December 29 crash at Muan International Airport was the first major fatality for Jeju Air, a low-cost carrier founded in 2005 and headquartered in Jeju City and with its largest hub at the international airport of the same name. Jeju Air is South Korea's third-largest carrier by passenger numbers.
After the accident, early in the morning of December 30, there was another landing gear failure incident on flight number 7C101 of the same airline, forcing the plane to make an emergency landing. Immediately after that, Acting President of South Korea Choi Sang-mok ordered an emergency safety inspection of the national aviation operation system after the accident recovery work at Muan airport was completed.
Also in the trading session on December 30, other airline stocks also recorded significant changes. Specifically, Air Busan stocks increased by more than 15%, Jin Air and T'way Air stocks decreased slightly after increasing by 5.4% and 7.3%, respectively. In addition, two other major Korean airlines, Korean Air Lines and Asiana Airlines, decreased by 1.3% and 0.8%, respectively.
Explaining the change in stock prices after the accident, analyst Yang Seung-yoon of Eugene Investment Securities said that although authorities need more time to investigate the cause of the accident, one thing is certain: customer sentiment has been affected.
This analyst further explained that when the service and seats of the airlines are not much different, customer trust is especially important.
After the incidents, travel agencies in Korea stopped running advertisements and promotional events. According to calculations, the number of cancellations of travel packages doubled, while the number of bookings decreased by nearly half.
Source: https://baoquocte.vn/them-mot-su-co-may-bay-co-phieu-jeju-air-cham-muc-thap-ky-luc-299137.html
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