This study examines effective operational plan of coastal passenger ship for accident prevention, the issues and operational status for its safety management. Considering the Sinking of the MV Sewol and Seohae vessels, normally passenger ship accidents tend to not only damage of human life, property and marine environment but also expanded to disaster, so precautionary measures to prevent accidents are required. The biggest issues in coastal passenger ship safety management are the aging of ships and the poor working conditions of crews, as revealed by the Sewol ferry accident. The government is pursuing policies such as Government Loan Support Project, Ship Modernization Fund, etc., to resolve this problems, but these are not being properly implemented. This is because most companies are small and maritime issues are neglected compared to land-based issues in terms of policy priorities, leading to a vicious cycle of aging of ships, declining passenger demand, worsening finances, decreasing reinvestment, and then worsening conditions again. Therefore, based on the review of previous studies related to coastal passenger ship safety, major advanced country’s cases and domestic cases, the issues and operational status of coastal passenger ship, surveys and interviews, etc.. this study suggest effective operational methods for coastal passenger ship such as implementation of public-financed system, unification of coastal passenger ship safety management centered on the KCG.