Court: "Asiana Airlines Must Pay LSG 18.2 Billion KRW for In-flight Meal Charges"

LSG Sky Chefs Korea Wins Lawsuit Against Asiana Airlines
Asiana Airlines' Counterclaim of 74.2 Billion Won Dismissed

Asiana Airlines and LSG Sky Chefs Korea won the first trial in a lawsuit over hundreds of billions of won in in-flight meal supply payments. Concerns are emerging that Asiana Airlines' financial condition could worsen further amid delays in the merger with Korean Air.

On the morning of the 17th, the Civil Division 41 of the Seoul Central District Court (Presiding Judge Jeong Hoe-il) ruled in the first trial of LSG's claim against Asiana Airlines for approximately 18.2 billion won in in-flight meal supply payments and related delayed interest, ordering "Asiana Airlines to pay LSG 1,827,614,000 won and related delayed interest." The counterclaim (reclaim lawsuit) filed by Asiana Airlines for about 74.2 billion won was dismissed. Asiana Airlines was also ordered to bear the litigation costs.

Previously, LSG supplied in-flight meals to Asiana Airlines from 2003 to 2018, but in 2018, Asiana Airlines changed its in-flight meal supplier to Gate Gourmet Korea (GGK), a joint venture with Gate Group. Subsequently, Gate Group acquired 160 billion won worth of zero-interest convertible bonds (BW) issued by Kumho Express (formerly Kumho Holdings), a company founded by former Kumho Asiana Group Chairman Park Sam-gu. However, during the forced transition of the contract company from LSG to GGK, a so-called 'in-flight meal crisis' occurred, where a large number of in-flight meals were not supplied by Asiana Airlines.

LSG, which lost the business rights to GGK, claimed that "the in-flight meal supply contract was unfairly terminated." They argued that Asiana Airlines forced the BW investment and, after LSG refused, signed a contract with GGK instead. LSG then claimed about 18.2 billion won in May 2018 for unpaid in-flight meal supply payments over more than three years since 2015. On the other hand, Asiana Airlines filed a counterclaim lawsuit in January of the following year, demanding the return of approximately 74 billion won in in-flight meal supply payments, arguing that "LSG excessively charged for in-flight meal costs."

LSG also separately filed a 10 billion won damages lawsuit citing Asiana Airlines' unfair contract termination, which partially succeeded in November 2021. The first trial dismissed LSG's claim, stating, "It is difficult to see that LSG was granted legal trust or expectancy rights for contract extension by Asiana Airlines, or that Asiana Airlines violated the Fair Trade Act." However, the second trial recognized partial liability and ruled that Asiana Airlines must pay LSG 1 billion won. The Supreme Court also upheld the second trial's judgment.

Meanwhile, former Chairman Park was criminally prosecuted for embezzling about 300 billion won of company funds by unfairly supporting his personal company Kumho Express through Asiana Airlines and other affiliates, and was sentenced to 10 years in prison in the first trial. Released on bail in January, he is currently undergoing an appeal trial.