Gov't Workers to Stop Flying Flag Carriers
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The government plans to scrap a 38-year-old law requiring civil servants to use flag carriers Korean Air and Asiana Airlines on official business.
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The move follows the latest revelations of alleged corruption and abuse of authority by the family that owns Korean Air.
Korean Air stands to lose W30-40 billion in revenues that has been generated each year by government workers (US$1=W1,083).
The government said Thursday it will end its contracts with Korean Air and Asiana Airlines at the end of October. The government signed the contract with Korean Air in 1980 and with Asiana in 1990.
The contracts are in fact a veiled subsidy whereby the flag carriers sell tickets above market rates to civil servants traveling on official duties but charge them no penalties for cancellation or changes.
The government's mileage benefits expire in late October. Afterwards it will hire travel agencies to handle purchases of tickets at market rates. The Ministry of Strategy expects the changes to save taxpayers around W8 billion annually.