2nd Anniversary of Late Chairman Cho Yang-ho... Cho Won-tae-led 'Hanjin Group Restructuring' Begins

Resolution of Sibling Disputes
Asiana to be Absorbed Within 2 Years
Attempt to Sell Songhyeon-dong Site
Initiatives for Management Structure Efficiency

Hanjin Group 'Chairman Cho Yang-ho 1st Anniversary Memorial Event'

[Asia Economy Reporter Dongwoo Lee] Two years after the passing of Cho Yang-ho, Chairman of Hanjin Group, Chairman Cho Won-tae has begun stabilizing management rights while resolving conflicts among siblings and other internal turmoil. Chairman Cho aims to intensify efforts to overcome the COVID-19 crisis and grow Korean Air into a global mega airline through the acquisition of Asiana Airlines.

According to Hanjin Group on the 8th, Chairman Cho and his family will hold a memorial service for the late Chairman Cho Yang-ho this afternoon at the Singal family burial site located in Hagal-dong, Yongin-si, Gyeonggi-do. Considering the COVID-19 situation, they decided to observe the 2nd anniversary quietly without a large-scale memorial event.

After becoming the head of Hanjin Group in 2003, Cho Yang-ho grew Korean Air into a global airline but faced hardships toward the end of his life, including failing to be reappointed as an inside director. He passed away on April 8, 2019, from pulmonary fibrosis at a hospital in Los Angeles (LA), USA.

Chairman Cho, who inherited management rights, entered into a management dispute with the so-called three-party alliance, including former Vice President Cho Hyun-ah, private equity fund KCGI, and Bando Construction. After successfully defending his management rights at last year’s shareholders’ meeting, Chairman Cho secured a victory over the three-party alliance earlier this month when KCGI terminated the joint holding agreement among the shareholder coalition.

Chairman Cho plans to accelerate the reorganization of Hanjin Group ahead of the second anniversary of his chairmanship on the 24th. According to the ‘Post-Merger Integration (PMI) Strategy’ submitted by Korean Air to KDB Industrial Bank, the plan is to fully absorb and integrate Asiana Airlines into one company within two years after the acquisition. In particular, overlapping ground handling and IT affiliates of both companies will be consolidated into a single company to streamline operations.

To minimize side effects after acquiring Asiana Airlines, efforts are actively underway to improve management efficiency by attempting to sell the Songhyeon-dong site and subsidiaries such as Wangsang Leisure Development. Chairman Cho also demonstrated his management capabilities by directly proposing the use of passenger planes as cargo planes during the COVID-19 crisis last year, which helped Korean Air achieve operating profit in the black.

However, there are concerns that, amid uncertain domestic and international economic conditions such as delayed recovery of international flights, Korean Air must find a performance pillar to overcome sluggish passenger and cargo demand. To address this, Korean Air plans to improve its financial structure by integrating the low-cost carriers of both companies?Jin Air, Air Busan, and Air Seoul?and secure additional international air cargo volume to overcome the crisis.