Eastar Air "Will Change Name and Rebirth as a New Company"

[Asia Economy Reporter Hyunseok Yoo] Eastar Jet announced on the 26th a management innovation plan to transform itself into a new airline. The plan includes changing the company name and headquarters location, as well as improving the financial structure through the injection of operating funds.

Eastar Jet stated in the document titled "Management Innovation Plan and Position on Recent Issues" that "we will break ties with the past through personnel restructuring while simultaneously strengthening management expertise," and "we will proceed with changing the company name and headquarters location."

Eastar Jet emphasized, "The corporate rehabilitation process was completed in March this year, and the acquirer obtained management rights of the company," adding, "It has become a completely different company from Eastar Jet before rehabilitation." Furthermore, "During the rehabilitation process, all shares related to the former major shareholder and former lawmaker Lee Sang-jik were canceled without compensation, and they do not hold a single share," and explained, "The acquirer, Seongjeong, is a company based in Daejeon and Chungcheong, with no relation or acquaintance with the former major shareholder."

Additionally, Eastar Jet explained, "Seongjeong self-financed the entire acquisition price, and not a single penny was spent related to the former major shareholder," adding, "Under the strict supervision of the rehabilitation court, the funds were primarily used to resolve unpaid wages for about 1,500 employees and severance pay for laid-off workers."

Regarding allegations of recruitment corruption currently under prosecution investigation, Eastar Jet said, "We consider this a very serious matter and are actively cooperating with the investigation," and "We will take decisive action based on the investigation results."

Former lawmaker Lee Sang-jik, the founder of Eastar Jet, and former and current CEOs are under prosecution investigation for recommending specific applicants to the HR team during the 2014-2015 flight attendant recruitment process, resulting in the hiring of applicants who did not meet qualification standards. Eastar Jet apologized, stating, "Although this is a past issue, we deeply apologize for causing concern due to recruitment corruption," and expressed strong agreement with the Ministry of Land, Infrastructure and Transport's concern that "the fraudulent hiring of pilots is a serious matter threatening public safety." They added, "If additional illegal activities are found through internal verification, strict measures will be taken," and "We will work with the Ministry of Land, Infrastructure and Transport to implement measures to dispel safety concerns."

Eastar Jet recently received a non-indictment decision from the police regarding allegations of submitting false documents during the process of obtaining the Ministry of Land, Infrastructure and Transport's international air transport business license. However, they stated they will thoroughly review the licensing procedures and address any deficiencies. Eastar Jet emphasized, "We will objectively review whether unintentional mistakes by the previous management caused misunderstandings or deficiencies with the Ministry of Land, Infrastructure and Transport," and "We will consult with the Ministry to resume the suspended Air Operator Certificate (AOC) issuance process."