South Korea's biggest low-cost carrier Jeju Air said on Thursday it will scrap a deal to take over competing low-cost carrier Eastar Jet amid the COVID-19 pandemic.

Jeju Air announced the decision in a regulatory filing, saying that Eastar failed to meet demands required to seal the deal.

Jeju Air explained that despite the government's mediation efforts and willingness to provide active support, the uncertainties surrounding the takeover were too large to push for the deal under the circumstances. 

It also cited concerns about possible losses that could be incurred on its shareholders and other parties concerned. 

In March, Jeju Air agreed to buy Eastar Jet in a 54-point-five billion won deal with Eastar Holdings. But the two sides have been making little progress in talks over debt payments amid losses incurred by the virus outbreak.