Asiana Airlines Sues Gate Group... "In-flight Meal Monopoly Rights Sold Cheaply"

[Image source=Yonhap News]

[Asia Economy Reporter Yoo Hyun-seok] Asiana Airlines has filed a lawsuit against the management of the Swiss Gate Group, which signed an in-flight meal supply contract with former Kumho Asia Group Chairman Park Sam-gu.

According to investment banking (IB) and the aviation industry on the 1st, Asiana Airlines filed a complaint with the Seoul Central District Prosecutors' Office in March against the Gate Group and its former management on charges of breach of trust.

Former Chairman Park is under investigation for signing an in-flight meal supply contract with the Gate Group under terms that were unilaterally disadvantageous to Asiana Airlines, including guaranteeing a minimum net profit for 30 years. He is also accused of having the Gate Group acquire convertible bonds of insolvent affiliates as payment for selling the in-flight meal business rights.

Asiana Airlines believes that the Gate Group conspired with former Chairman Park regarding the breach of trust charges. It is also reported that Asiana has filed a civil lawsuit in court to nullify the in-flight meal supply contract.

Former Chairman Park is currently on trial, charged with breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes, for selling Asiana Airlines' 30-year exclusive in-flight meal business rights to a subsidiary of the Swiss Gate Group at a low price of 133.3 billion KRW.

An Asiana Airlines official stated, "It is true that we filed a complaint against the Gate Gourmet Group management in March. However, since the case is currently ongoing, it is difficult to make an official statement."

The industry expects that unless the contract is invalidated, Korean Air will have to guarantee the Gate Group's net profit from the in-flight meal business even after completing the integration with Asiana Airlines.