The Korea Development Bank (KDB) is in a growing dilemma over how to “ensure fairness” when distributing its 40 trillion won ($32.56 billion) in coronavirus relief funds to sagging companies here.

Starting as early as the end of May, the fund will be allocated to companies primarily in the aviation and shipbuilding sectors ― deemed as the biggest victims of the global pandemic.

The Financial Services Commission (FSC) and the Ministry of Economy and Finance ― the two key authorities involved in fund management ― said they would widen the number of industries for more virus-hit firms to receive the financial aid for their survival.

But the state-run lender and the two government authorities are faced with a conundrum over how to maintain fairness in terms of the capital supply.

Chances are that Korean Air and Asiana Airlines will become the first beneficiaries receiving the financial support from the state-run lender. In April alone, the government announced its plan to offer liquidity worth 3 trillion won to the nation’s two-largest airlines suffering serious business setbacks.

The government also decided to provide 300 billion won to low-cost carriers (LCC) whose financial status is even worse than the major airlines after global fear of the pandemic ended up in the suspension of their cash-cow international flights.

But a controversy was sparked after KDB Vice President Choi Dae-hyun said the state-run lender “is not considering any plans to provide additional financial support for LCCs here.” Against the backdrop of this recent comment, chances appear very slim for the small airlines to become beneficiaries of the financial aid from the relief fund.

This is also raising concern that the state-run lender is not being fair when it comes to offering the aid packages to companies with serious financial difficulties.

For now, the government authorities are holding internal discussions over how to handle the issue of fairness in managing the fund, but for now, no specific and objective standard on distributing money has been fixed.

“Even if we are a state-run lender, the KDB is a financial organization, so we have to judge the qualifications of companies before providing loans, even if their financial status worsen in the aftermath of the virus shock,” a spokesman for the bank said.

“Regarding the LCC relief fund, we have executed 130 billion won out of the 300 billion won fund to five sagging airlines, and the rest will be provided for financing Jeju Airlines’ planned acquisition of Eastar Jet,” the official said. “But the remaining money is not being spent as overseas anti-trust authorities are delaying their review on the merger and acquisition.”

Some critics argue that it is impossible for the government to salvage all the sagging airlines due to budget limitations.

They said the government needs to “pick and choose” certain companies qualified for support under strict standards.

“For instance, there are nine LCCs operating in Korea,” an industry source said. “Doubts can be raised over whether it is really important for the government to save all of them at a time when calls are growing for the need to cut the number of airlines here.”

The number of LCCs in Korea surpasses that of Japan, even though the former has smaller population and land area.