Jeju Air’s Problems Mount After Crash That Killed 179 People

When Jeju Air’s status as South Korea’s biggest low-cost carrier seemed under threat from the merger of the country’s two biggest airlines last year, the company’s chief executive assured employees that it would “actively respond,” possibly by acquiring smaller rivals.

Now, a week after a crash that killed 179 people on Dec. 29, Jeju Air’s future is clouded by even deeper questions.

South Korean officials on Thursday raided the company’s offices and imposed a travel ban on Kim E-bae, the chief executive, as part of the investigation into the country’s worst air disaster in almost three decades. Passengers are canceling bookings, adding further strain to a balance sheet heavy with debt. And Jeju Air’s stock price, already trading near record lows, has fallen 10 percent since the disaster.

Earlier in the week, Mr. Kim said that Jeju Air would cut 15 percent of its flights until March to “enhance operational stability.”

As investigators look into what caused Jeju Air Flight 7C2216 to crash, the airline has come under intense government and public scrutiny for how it operates. Some of its operational practices are being challenged, including how it flew its planes more frequently than competitors and how it outsourced its maintenance overseas.

At a news conference at Muan International Airport on the day of the crash, Mr. Kim said that maintenance checks had found no problems with the plane, which he said had no history of accidents. In a public statement, Jeju Air said it was “committed” to helping anyone affected by the crash and was “fully cooperating” with investigations into its cause. It did not immediately respond to a phone call seeking comment.