"Korean Air Fully Implements Self-Help Measures to Overcome the COVID-19 Crisis"

Cho Won-tae "Will Make Painstaking Self-Help Efforts" Promotes Sale of Idle Assets
Business Community "Difficult to Overcome at Single Company or Industry Level... Urges Government for Swift and Bold Support"

On the 9th, the Korean Air ticketing counter at Terminal 2 of Incheon International Airport is quiet. Photo by Moon Honam munonam@

[Asia Economy Reporter Yoo Je-hoon] Korean Air, having concluded the first round of its management rights dispute, is now embarking on a full-scale self-help effort to respond to the novel coronavirus disease (COVID-19). Amid Chairman Cho Won-tae of Hanjin Group's declaration that he will "undertake bone-cutting self-help efforts," the business community unanimously agrees that bold and swift government-level support is necessary for the survival of national airlines led by Korean Air.

According to the aviation industry on the 30th, Chairman Cho released a statement the day before, saying, "The aviation industry is facing an unprecedented major crisis due to COVID-19," and added, "To overcome this wave of crisis, we plan to concentrate all capabilities together with all employees."

Although overshadowed by the management rights dispute and not prominent until now, Korean Air's management environment is also deteriorating to the worst level, similar to Asiana Airlines and low-cost carriers (LCCs). According to Hanjin Group, out of the 145 passenger aircraft currently owned by Korean Air, about 100 are parked at the apron, and flight routes have been reduced by 80 to 90%.

Accordingly, Chairman Cho is expected to accelerate securing liquidity through the sale of idle assets (such as the Songhyeon-dong site in Jongno-gu, the Hotel Paradise Jeju site, and Wangsang Leisure Development Co., Ltd.) as declared at the recent board meeting. Among these, the Songhyeon-dong site in Jongno-gu has completed document submissions for selecting a sales agent. In addition, Hanjin Group is reportedly continuing to pursue small-scale asset sales.

Review of the hotel business's viability is also expected to be intensified. Hanjin Group previously decided to finalize restructuring directions after reviewing the business viability of other hotel operations, such as the loss-making Grand Hyatt Incheon Hotel (Incheon) and Wilshire Grand Center (Los Angeles, USA).

The business community agrees that government-level support is necessary as survival is impossible with these self-help plans alone in this crisis situation. Chairman Cho also appealed, "Considering that this crisis is difficult to overcome by the efforts of a single company or industry alone, I hope the government will actively support beyond the company's self-help efforts."