By Jihoon Lee and Youn Ah Moon
SEOUL (Reuters) – Shares in South Korean airline Jeju Air hit their lowest level on record on Monday after the country's deadliest plane crash killed 179 people.
Jeju Air shares were trading down 8.5% at 0312 GMT, after falling as much as 15.7% earlier in the session to 6,920 won, the lowest level since it went public in 2015. The drop Monday's shares wiped out up to 95.7 billion won ($65.2 million) in market capitalization.
Shares of AK Holdings, Jeju Air's holding company, fell as much as 12% and hit their lowest level in 16 years.
Sunday's crash at Muan International Airport was the first fatal flight for Jeju Air, a low-cost airline founded in 2005 and the country's third-largest airline by passenger numbers.
South Korea's acting president Choi Sang-mok on Monday ordered an emergency safety inspection of the country's entire airline operating system once recovery work from the Jeju Air crash is completed.
Among other low-cost airlines, Air Busan rose more than 15%. Jin Air (KS:) and T'way Air fell after rising as much as 5.4% and 7.3%, respectively.
South Korea's two major airlines, Korean Air Lines, fell 1.3% and Asiana Airlines fell 0.8%.
“It will take time to evaluate the cause of the accident, but consumer confidence will inevitably be affected, as credibility is important for budget airlines whose seats and services are not much different from each other,” said Yang Seung-yoon, an analyst. of Eugene Investment Securities.
“In terms of overall travel demand, there could be some cancellations in the short term, but it is unlikely to weaken structurally.”
Travel agencies closed their advertising and promotional events, tour package cancellations doubled and bookings halved for one operator, Yonhap news agency reported.
Many victims of the plane crash, the worst in the country's history, appeared to be returning from vacation for the Christmas season, authorities said.
Travel agency shares also weakened, with Hanatour Service falling as much as 7% and Very Good Tour down as much as 11%.
(1 dollar = 1,467.9500 won)
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