South Korea’s VIG Partners buys budget carrier Eastar Jet

[Sources : VIG Partners, Eastar Jet]

South Korean private equity firm VIG Partners said Friday it acquired budget carrier Eastar Jet Co., which emerged from a court-led restructuring last year after it collapsed as the pandemic in 2020 grounded thousands of planes and travel demand vanished.

VIG Partners will inject more than 100 billion won ($79.36 million) into Eastar Jet through a rights offering later this month and will likely introduce new flights and advanced management systems to get the low-cost carrier back in business.

Following the acquisition, Cho Jung-seok, a former executive at Asiana Airlines, will be appointed as the new chief executive officer of Easter Air. Cho, a professional with considerable experience in the aviation industry, served as the director of Asiana’s Korean regional office. He has expertise in various sectors, from sales to marketing and financing.

Eastar Jet, established in 2007, began operating domestic flights in January 2009 and international services in December that year. Since then, the airline had continued to grow its market share, carrying 10 million passengers in 2014. However, the Covid-19 pandemic has led the airline to crises, such as the suspension of its flight license and rehabilitation. Even though the rehabilitation was completed in March last year, more investments were required to reorganize the airline‘s financial structure and stabilize the business.

Changhoon Shin, a partner at VIG, said that “the year 2023 will be a turning point for Eastar Jet, which surely has growth potential.”