The airliner said it secured the funds by selling 273 million new common shares starting Aug. 26. This paid-in capital increase will be used to boost the company's facility budget, it added.
AK Holdings, Jeju Air’s largest stakeholder, issued 130 billion won-worth of exchangeable bonds to partake in the paid-in capital increase.
The stakeholder had initially planned on issuing only 100 billion won-worth of EBs. However, it expanded its scale when 26 additional institutional investors decided to participate.
The stakeholder attributed this increased investment to positive market prospects for the aviation industry. Ministry of Transport data showed that international travelers on flag carrier aircrafts recorded 1.35 million in August, a 708 percent increase from January 2022.
Jeju Air’s own data showed it had transported 37 times more travelers when comparing the same two months.
Under the new road map, the airline plans to add 40 new Boeing B737-8 aircrafts to its fleet starting next year by expanding its facilities budget.
The B737-8 is Boeing’s next-generation aircraft which can fly a maximum of 2,993 kilometers and cruise at a speed of 836 kilometers per hour. Compared to Jeju Air's current B737-800 model, the new aircraft can fly 1,000 kilometers longer and save more than 15 percent of fuel. It can also decrease flight costs by 12 percent per seat.
Jeju Air said it hopes to develop new long-haul routes to Central Asia and Indonesia with the new aircraft’s longer range.
“The paid-in capital increase plan announced recently is different in nature than previous plans,” said a Jeju Air official. “Unlike previous increases done to overcome financial difficulties, this plan acts as a foundation to strengthen business competitiveness as it is an investment to expand capital to solidify our position as a leading airline in the post-COVID-19 era,” the official added.