Jin Air's normalization hits snag on Cho's return

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Jin Air's normalization hits snag on Cho's return

A Jin Air aircraft / Courtesy of Jin Air

By Nam Hyun-woo

Hanjin KAL Senior Vice President Cho Hyun-min
Hanjin Group heiress Cho Hyun-min's return to management will likely deal a blow to Jin Air which has been reeling from a range of administrative sanctions, according to industry analysts Wednesday.

Union workers at Jin Air stressed that Cho must not come back to the management of Hanjin's holding firm as her return will likely negatively affect the transport ministry's stance on whether to lift administrative sanctions placed on Korea's second-largest budget carrier.

She stepped down from her position as Jin Air executive vice president 14 months ago after she was found to have abused employees and those of partner firms. Her foreign nationality was also grounds for government penalties as the law bars non-Koreans from becoming board members at air carriers. Over the past year, the low-cost carrier has been unable to receive new routes and purchase new planes.

According to the Ministry of Land, Infrastructure and Transport, it was reviewing the appropriateness of lifting the 10-month long punishments on Jin Air, but is now monitoring the situation again as Cho returned to the management of Hanjin KAL, the holding firm with a 60 percent stake in the low-cost carrier.

"When the ministry imposed the punishment, it said it would lift the ban when improvements in the managing philosophy of Jin Air are observed," a ministry official said. "With Cho's return, there seem to be questions lingering on such efforts, and we are closely monitoring the situation because she returned to Hanjin KAL, a holding firm of Jin Air."

In August last year, Jin Air was slapped with the aviation authority's ban on new routes, new planes and the operation of non-scheduled flights, because Hyun-min, a U.S. citizen, served on the company's board of directors for six years from 2010 to 2016, which is a violation of the Transport Law.

Back then, the ministry considered canceling the carrier's license, but reduced the punishment, saying it would lift the bans when the company improves transparency in management and comes up with measures to prevent the owner family from misbehaving.

Cho stood trial for allegedly throwing a cup of water during a business meeting with a partner company last year, but was acquitted.

Under the bans, Jin Air was exempted from the ministry's license allocation for new air routes between Incheon and Ulaanbaatar as well as Busan and Singapore in February, and again from bidding for a new route linking Incheon and China last month.

During the period, not only Jin Air management but also its union members appealed to the ministry saying that canceling the license was punishing them and that it has made enough efforts to meet the ministry's requirements.

As Cho returned to the group's management this week as a senior vice president of Hanjin KAL, the union said "this has dashed our hopes for normalization."

"Her return as the senior vice president of Hanjin KAL means that she is attempting to control the company from the outside," the union said. "The reason Jin Air employees are suffering from the bans is her foreign nationality and the misbehavior of the owner family members."

"The ministry is requiring the eradication of power abuse by the owner family, and improvements in managing culture, but the family has made no efforts to meet the requirements and adversely dashed our hopes for normalization," the statement read.

Along with Cho, her older sister Hyun-ah caused a nationwide uproar for the so-called "nut rage" incident.




A Jin Air aircraft / Courtesy of Jin Air

By Nam Hyun-woo

Hanjin KAL Senior Vice President Cho Hyun-min
Hanjin Group heiress Cho Hyun-min's return to management will likely deal a blow to Jin Air which has been reeling from a range of administrative sanctions, according to industry analysts Wednesday.

Union workers at Jin Air stressed that Cho must not come back to the management of Hanjin's holding firm as her return will likely negatively affect the transport ministry's stance on whether to lift administrative sanctions placed on Korea's second-largest budget carrier.

She stepped down from her position as Jin Air executive vice president 14 months ago after she was found to have abused employees and those of partner firms. Her foreign nationality was also grounds for government penalties as the law bars non-Koreans from becoming board members at air carriers. Over the past year, the low-cost carrier has been unable to receive new routes and purchase new planes.

According to the Ministry of Land, Infrastructure and Transport, it was reviewing the appropriateness of lifting the 10-month long punishments on Jin Air, but is now monitoring the situation again as Cho returned to the management of Hanjin KAL, the holding firm with a 60 percent stake in the low-cost carrier.

"When the ministry imposed the punishment, it said it would lift the ban when improvements in the managing philosophy of Jin Air are observed," a ministry official said. "With Cho's return, there seem to be questions lingering on such efforts, and we are closely monitoring the situation because she returned to Hanjin KAL, a holding firm of Jin Air."

In August last year, Jin Air was slapped with the aviation authority's ban on new routes, new planes and the operation of non-scheduled flights, because Hyun-min, a U.S. citizen, served on the company's board of directors for six years from 2010 to 2016, which is a violation of the Transport Law.

Back then, the ministry considered canceling the carrier's license, but reduced the punishment, saying it would lift the bans when the company improves transparency in management and comes up with measures to prevent the owner family from misbehaving.

Cho stood trial for allegedly throwing a cup of water during a business meeting with a partner company last year, but was acquitted.

Under the bans, Jin Air was exempted from the ministry's license allocation for new air routes between Incheon and Ulaanbaatar as well as Busan and Singapore in February, and again from bidding for a new route linking Incheon and China last month.

During the period, not only Jin Air management but also its union members appealed to the ministry saying that canceling the license was punishing them and that it has made enough efforts to meet the ministry's requirements.

As Cho returned to the group's management this week as a senior vice president of Hanjin KAL, the union said "this has dashed our hopes for normalization."

"Her return as the senior vice president of Hanjin KAL means that she is attempting to control the company from the outside," the union said. "The reason Jin Air employees are suffering from the bans is her foreign nationality and the misbehavior of the owner family members."

"The ministry is requiring the eradication of power abuse by the owner family, and improvements in managing culture, but the family has made no efforts to meet the requirements and adversely dashed our hopes for normalization," the statement read.

Along with Cho, her older sister Hyun-ah caused a nationwide uproar for the so-called "nut rage" incident.




Nam Hyun-woo namhw@koreatimes.co.kr


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