More than 100 senior Korean Air workers let go

Korean Air said Sunday it had dismissed more than 100 senior employees in its volunteer retirement scheme aimed at cutting costs and streamlining operations.

The country’s largest carrier brought the program back in five years as it combats eroding profitability in the face of soaring fuel prices and currency issues.

The program targets workers who are 40 years old or older and have served for at least 15 years, the company said, but excludes flight attendants and those at overseas units.

Although the number of retirees makes up a mere 0.6 percent of its 18,000 workforce, Korean Air said their decision will “help boost productivity and speed up delayed promotions of existing employees” given their high positions and salaries.

Effective last Friday, the retirees are given monetary compensation equivalent to their salary for up to 24 months and tuition support for their children in addition to retirement pay, officials added.

Korean Air shifted into the red in the third quarter of this year with a net loss of 524.3 billion won ($465.6 million) compared with a stellar net income of 583.8 billion won from a year ago.

Jet fuel costs, which account for more than 40 percent of its budget, shot up nearly 34 percent year-on-year during the three-month period, the company noted, while the Korean won depreciated by around 10 percent against the U.S. dollar to the end of September.

By Shin Hyon-hee (heeshin@heraldcorp.com)