Seoul: Shares of South Korea’s budget carrier Jeju Air (089590.KS) plummeted to their lowest on record Monday, following the country’s deadliest air disaster that claimed 179 lives.
As of 0312 GMT, Jeju Air’s shares were down 8.5%, after initially dropping by as much as 15.7% to 6,920 won. This marked the lowest price since the airline’s listing in 2015, erasing approximately 95.7 billion won ($65.2 million) in market capitalization.
Shares of Jeju Air’s parent company, AK Holdings (006840.KS), also took a significant hit, falling up to 12%, reaching their lowest point in 16 years.
The crash, which occurred on Sunday at Muan International Airport, marked the first fatal accident for Jeju Air, a low-cost carrier founded in 2005 and the third-largest airline in South Korea by passenger numbers.
In response to the tragedy, South Korea’s acting President, Choi Sang-mok, ordered an emergency safety inspection of the country’s entire airline system once recovery efforts from the crash are concluded.
Among other budget carriers, Air Busan (298690.KS) saw a rise of more than 15%, while Jin Air (272450.KS) and T’way Air (091810.KS) saw slight declines after earlier gains.
Meanwhile, South Korea’s major airlines, Korean Air Lines (003490.KS) and Asiana Airlines (020560.KS), saw smaller declines of 1.3% and 0.8%, respectively.
Yang Seung-yoon, an analyst at Eugene Investment Securities, noted that while it would take time to determine the cause of the accident, the crash would likely hurt consumer sentiment. He added, “Credibility is crucial for budget carriers, whose services and seating aren’t much different from each other. In the short term, there may be cancellations, but it is unlikely to have a long-term impact.”
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Travel agencies have already seen the effects of the crash, with cancellations of tour packages doubling, and bookings halving for some operators, according to Yonhap news agency.
Many of the crash victims, who were mostly local residents returning from vacation, were caught up in the disaster during the holiday season.
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Travel agency stocks also experienced a dip, with Hanatour Service (039130.KS) falling up to 7% and Very Good Tour (094850.KQ) dropping 11%.
