By Jihoon Lee and Youn Ah Moon
SEOUL (Reuters) – Shares of South Korean budget airline Jeju Air hit all-time lows on Monday after the country’s deadliest plane crash killed 179 people.
Jeju Air shares fell 8.5% as of 0312 GMT, after falling as much as 15.7% earlier in the session to 6,920 won, the lowest since they listed in 2015. Monday’s stock plunge wiped out as much as 95.7 billion won ($65.2 million) in market capitalization.
Shares of AK Holdings, Jeju Air’s holding company, fell as much as 12%, hitting a 16-year low.
Sunday’s crash at Muan International Airport was the first fatal flight for Jeju Air, a low-cost airline founded in 2005 and the country’s third-largest airline by passenger numbers.
South Korea’s acting President Choi Sang-mok on Monday ordered an emergency safety inspection of the country’s entire aviation system once recovery work following the Jeju Air crash is completed.
Of the other budget airlines, Air Busan rose by more than 15%. Jin Air (KS:) and T’way Air fell after rising 5.4% and 7.3% respectively.
South Korea’s two largest airlines, Korean Air Lines, fell 1.3% and Asiana Airlines fell 0.8%.
“It will take time to determine the cause of the accident, but consumer confidence will inevitably be damaged because credibility is important for budget airlines whose seats and services are not much different,” said Yang Seung-yoon, an analyst at Eugene investment securities.
“In terms of overall travel demand, there may be some cancellations in the near term, but it is unlikely to weaken structurally.”
Travel agencies have halted their advertising and promotional events, with travel package cancellations doubling and bookings for one operator halving, Yonhap news agency reported.
Many victims of the plane crash, the worst in the country’s history, appeared to be returning from vacation for the holidays, officials said.
Travel agency shares also weakened, with Hanatour Service down as much as 7% and Very Good Tour down as much as 11%.
($1 = 1,467,9500 won)
