Cho Won-tae Advocates 'Win-Win'... Pays 3% of Japan Route Sales to 800 Travel Agencies

Total Amount Estimated at About 1 Billion KRW... Cho Won-tae: "Serious Difficulties" Need to Seek Win-Win Solutions with Travel Agencies Facing Crisis

[Asia Economy Reporter Yoo Je-hoon]

Cho Won-tae, Chairman of Hanjin Group, will share a portion of Korean Air's profits to help the domestic travel industry, which is currently facing difficulties due to internal and external adverse factors. Korean Air announced on the 23rd that from February 28 to March 31, it will pay 3% of the sales amount from Japan routes monthly to about 800 travel agencies nationwide that have contracts with the airline.

According to this decision, Korean Air will pay 3% of the related sales revenue from Japan route tickets sold by travel agencies over three months, from January (February 28?31) to March. Korean Air expects the total payment amount under this win-win plan to be approximately 1 billion KRW.

This is the first time Korean Air has directly supported travel agencies with a portion of sales revenue. Although Korean Air's operating profit in the third quarter of last year, the peak season, decreased by 70% compared to the previous year, the company appears to have judged that the management stability of travel agencies, its business sub-partners, is essential.

In particular, this measure is said to reflect Chairman Cho's will. According to Korean Air, Chairman Cho recently assessed the severe difficulties faced by the travel industry and proposed the idea that coexistence with travel agencies should be sought.

In fact, the domestic travel industry has been struggling since last year due to the boycott of travel to Japan caused by Korea-Japan conflicts, political instability in Hong Kong, and the Wuhan pneumonia (novel coronavirus) in China. To make matters worse, with a recent decline in package tour sales, some travel agencies have reduced their travel product sales departments or even carried out restructuring.

A Korean Air official said, "Even though the company is facing difficulties, this measure is more meaningful because it is based on the principle of living together with small and medium-sized enterprises," adding, "Korean Air plans to continuously contribute to the joint growth of large and small businesses through active win-win support across all departments of the company."