Jeju Air Shares Plummet 13% as Deadly Crash Shakes Investor Confidence; Kospi Slips on Weak Industrial Data

Shares of Jeju Air, South Korea's biggest budget airline, plummeted by 13% on Monday following a deadly plane crash that killed 179 people, the deadliest air disaster in the country's history. The crash, which occurred at Muan International Airport, has raised serious concerns about the airline's safety record and its potential impact on the broader aviation industry. Meanwhile, the Kospi index slipped on downbeat industrial data, reflecting broader investor sentiment.

The Boeing 737-800 aircraft, operated by Jeju Air, overshot the runway during landing and burst into flames, with the pilot issuing a "mayday" warning shortly before the crash. The incident has led to intense scrutiny of the airline's management and safety measures, as well as the broader South Korean aviation industry.

Jeju Air shares traded down 10.6% as of 0019 GMT, after falling as much as 15.7% to 6,920 won earlier in the session. The decline reflects investor concerns about the company's safety record and potential liabilities following the crash. Jeju Air's president, Kim E-bae, apologized to bereaved families and took full responsibility for the incident, which may help mitigate some of the damage to the company's reputation.

The crash may also erode passenger confidence in Jeju Air, leading to a decrease in bookings and potential revenue loss. The company may face significant compensation claims from the families of the victims, as well as potential legal costs related to the investigation and any lawsuits that may follow. These expenses could negatively impact the company's financial performance.

The incident comes at a time when South Korea is already grappling with a political crisis, with President Yoon Suk Yeol's stunning imposition of martial law and ensuing impeachment. This could exacerbate public concerns about the government's ability to ensure the safety and security of its citizens.

The crash may also prompt increased regulatory scrutiny of South Korean airlines, potentially leading to additional costs and operational challenges for the industry as a whole. Other airlines in the region may attempt to capitalize on the incident by offering promotions or improving their safety messaging to attract passengers away from South Korean airlines.

In addition to the Jeju Air crash, the Kospi index slipped on downbeat industrial data. The U.S. manufacturing purchasing managers index (PMI) came in at 49.9, below expectations, indicating a contraction in the sector. This, combined with the negative news from Jeju Air, contributed to a broader negative market sentiment, affecting the performance of other sectors and the overall economy.

The Kospi index fell by 1.9% on the day following the crash, reflecting investor concerns about the aviation industry and the broader economy. The iShares Korea ETF (EWY) also fell by 1.7%, indicating a broader decline in investor confidence in South Korean stocks.

In conclusion, the deadly crash of Jeju Air flight 7C2216 has had a significant impact on investor sentiment towards the airline and the broader South Korean aviation industry. The crash has raised serious concerns about the airline's safety record and its potential impact on the broader aviation industry. Meanwhile, the Kospi index slipped on downbeat industrial data, reflecting broader investor sentiment. As the investigation into the crash continues, investors will be closely watching the developments and their potential impact on the airline and the broader aviation industry.