[People人] 30-Year Construction Veteran Behind Eastar Jet... Chairman Hyung Nam-soon "I Will Build a Small but Strong Company"

Proposed Acquisition Fund of 110 Billion KRW
Acquired Right of First Refusal, Final Acquisition
Domestic Flights in March, International Flights in Second Half
Priority Reinstatement for 370 Employees

Hyeong Nam-sun, Chairman of Seongjeong

"If we can launch routes to China, Japan, or Southeast Asia in April, we plan to increase the total number of aircraft to 12 this year. By the end of June, we will fill all 24 Jeju route slots held by Eastar Jet, and in July, we will complete the reinstatement of the remaining approximately 370 employees."

This is the blueprint for Eastar Jet this year, revealed by Chairman Hyung Nam-soon of Seongjeong on the 5th through Asia Economy. His voice, explaining the concrete operational plans of Eastar Jet standing at a crossroads between life and death, was gentle yet firm. Chairman Hyung’s goal for this year is the ‘stable resumption of Eastar Jet’s operations.’ Amid the prolonged COVID-19 pandemic and changes in the global aviation industry preparing for the post-COVID era, he aspires to lay the foundation for Eastar Jet to establish itself as a major airline. His daily routine begins with monitoring international affairs. With preparations for the AOC (Air Operator Certificate) in full swing aiming to resume domestic flights as early as March, he devises the optimal management environment daily to leap forward as a ‘small but strong’ airline that will not fall behind in global competition.

From Excavator Operator to Comprehensive Construction Company
Negotiation Power with Creditors through 'Threat to Cancel Acquisition'

Chairman Hyung was born in 1957 in Namwon, Jeonbuk. While attending Namwon Agricultural High School, he obtained an excavator operator license and after graduating in 1976, he took his first step into society as a forklift operator. Recognized for his skills in his twenties, Chairman Hyung was already a well-known figure in the construction industry in Daejeon at that time. He gathered capital and established Daeguk Construction Industry in 1994, becoming CEO and officially entering the construction business. In 1997, he acquired civil engineering and architectural construction licenses, followed by electrical and landscaping business licenses in 2007, growing into a bona fide comprehensive construction company. The following year, in 2008, he expanded his business scope by opening Baekje Country Club, a 27-hole golf course in Buyeo County, Chungcheongnam-do, which he continues to manage to this day. Recognized for his achievements, he received the Industrial Medal of the Republic of Korea in 2017 and served as the Ethics Committee Chairman of the Korea Construction Association from 2017 to 2020.

Although Chairman Hyung has been steadily active in the construction industry for nearly 30 years, the acquisition process of Eastar Jet was not smooth. Seongjeong, which participated in the acquisition of Eastar Jet, was not well known externally. He was even told it was a reckless challenge of a lifetime. Seongjeong is a golf course management and real estate rental specialized company owned by the Hyung family, with his son, CEO Hyung Dong-hoon, directly leading the company. As of the end of 2020, Seongjeong recorded sales of 5.9 billion KRW, Baekje Country Club 17.8 billion KRW, and Daeguk Construction Business 14.6 billion KRW. Although recognized as a sound company with low debt in the region, there were significant concerns in the aviation industry about how to raise the acquisition funds exceeding 70 billion KRW for Eastar Jet. In fact, as of the end of 2020, Seongjeong’s asset size was only about one-sixth of Eastar Jet’s, and its sales were merely one-ninety-third.

Chairman Hyung made a bold move. In June last year, he proposed approximately 110 billion KRW for the acquisition funds, winning the right of first refusal over Ssangbangwool Group’s Kwangrim Consortium, dispelling concerns. He also paid a contract deposit of 10 billion KRW at once. Chairman Hyung’s determination was revealed ahead of the final creditors’ meeting, the last hurdle in acquiring Eastar Jet. He led the negotiations by taking a firm stance of ‘considering cancellation of acquisition’ in the final tug-of-war with the creditors, successfully completing the final acquisition of Eastar Jet.

Securing Up to 12 Aircraft for International Flights
Approximately 370 Employees to be Reinstated by July

At the end of last month, Eastar Jet reissued its air transport business license under the name of the current CEO Kim Yu-sang, replacing the former CEO Choi Jong-gu, accelerating the resumption of flights. The issuance of the AOC, an essential element for resuming operations, is also expected to be completed sooner than anticipated. The Ministry of Land, Infrastructure and Transport’s AOC review usually takes about three months, but in Eastar Jet’s case, with over 10 years of past flight experience, some parts of the review can be omitted except for key items such as facilities, specialized personnel, equipment, and safety operation inspections. Chairman Hyung plans to operate the Gimpo-Jeju route with a total of three aircraft, including the two Boeing 737-800s currently owned and one additional aircraft to be introduced this month. From the second half of the year, international flights are under consideration, taking external conditions into account.

The hiring scale will also increase in line with the normalization schedule. Chairman Hyung has set a plan to prioritize the reinstatement of approximately 370 employees still affiliated with Eastar Jet by July. The company will prioritize taking care of employees who endured the difficult times together and then proceed with new hires considering the management situation. Chairman Hyung is also considering increasing the total number of aircraft by two more if international flights commence, beyond the original plan of securing 10 aircraft this year. This would result in the hiring of approximately 200 new employees.

Chairman Hyung said, "I sincerely thank the Eastar Jet Labor Solidarity and employees who silently endured pain and sacrifice for over two years during difficult times. I am pleased to be able to contribute even a little through the normalization of Eastar Jet, and I will do my best to repay the material and mental hardships that the employees have endured."