SEOUL, March 24 (Yonhap) — South Korean low-cost carriers (LCCs) are struggling with high indebtedness stemming from huge deficits due to the coronavirus pandemic, data showed Wednesday.

The debt-to-equity ratio of three major LCCs — Jeju Air Co., Jin Air Co. and T’way Air Co. — ranged from 430 percent to 517 percent as of the end of 2020, according to their business reports.

A key barometer of financial soundness, the ratio is calculated by dividing a company’s total liabilities by its stockholders’ equity.

Jeju Air Co., South Korea’s biggest budget carrier by sales, had 218.4 billion won (US$193 million) in equity capital versus 938.3 billion won in debt with its debt ratio coming to 430 percent, up from 353 percent a year earlier.

Jin Air Co., the budget carrier unit of top full-service air carrier Korean Air Lines Co., reported a debt-equity ratio of 467 percent as of end-December, up from 267 percent the previous year.

T’way Air Co.’s debt ratio rose to 517.6 percent last year from 331.2 percent a year earlier, raising concerns over its viability.

Other budget carriers are also burdened with high debt. The debt ratio of Air Busan Co., the LCC unit of No. 2 carrier Asiana Airlines Inc., swelled to 838.2 percent last year from 811.8 percent a year earlier.

Industry sources said those LCCs are ramping up efforts to raise capital in an effort to stem potential liquidity crises due to the prolonged fallout from the coronavirus outbreak.

T’way Air plans to carry out a rights issue worth 80 billion won in April, the first such financing among local LCCs and its second capital increase in five months.

Jeju Air and Jin Air are also expected to unveil plans to bolster their capital next month, which may be bond sales or requests for state support.

Industry watchers said local budget carriers are in urgent need of state financial aid as they are unlikely to service their debts with profits this year due to the pandemic.

The COVID-19 outbreak has brought local airlines’ international flights to a near halt since early last year, forcing them incur large losses.