Korean Air President: "No Restructuring, It's Included in the Contract"

Woo Ki-hong, President of Korean Air, is answering questions from the press after the 22nd Tourism Industry Committee held at Lotte Hotel in Jung-gu, Seoul on the 20th. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Kim Hyewon] Woo Ki-hong, CEO of Korean Air, stated on the 20th regarding Korean Air's acquisition of Asiana Airlines, "There will be no workforce restructuring, so instead of route consolidation, we will rationalize overlapping routes through adjustments in time slots."

After attending the 22nd meeting of the Tourism Industry Committee of the Korea Chamber of Commerce and Industry held at Lotte Hotel in Sogong-dong, Seoul, Woo told reporters, "Specific route plans depend on the recovery situation of COVID-19," adding, "We will create workforce retention plans through time slot adjustments, aircraft adjustments, and adding destinations."

He continued, "Korean Air and Asiana Airlines currently operate overlapping flights to Seattle, USA, but even after the acquisition, Asiana Airlines will not cease operations in Seattle," emphasizing, "We are not currently considering the elimination of overlapping routes."

He also explained, "There will be no workforce restructuring for Asiana Airlines and its subsidiaries after the integration. This has been included in the contract to ensure it does not happen," and added, "We will actively negotiate to clear up any misunderstandings with the labor union."

Korean Air believes there are synergies in the integration with Asiana Airlines despite the COVID-19 crisis. He said, "Integration will reduce costs and improve efficiency," emphasizing, "Cargo business is doing very well, and we expect operating profits this year as well. By strengthening the cargo business, we believe we can maintain all employees."

He added, "Currently, employees of both Korean Air and Asiana Airlines are on paid leave, and until the COVID-19 recovery, (even after the acquisition) they will need to remain on leave." He further noted, "Korean Air has never conducted forced restructuring in its 51 years since its founding, and this policy will continue even after integrating with Asiana Airlines."

Regarding concerns about monopoly after the integration, he emphasized that low-cost carrier (LCC) Jin Air and Korean Air will operate independently, so there will be no monopoly. Woo said, "The integration of Jin Air and Asiana Airlines’ LCC subsidiaries and the integration of Korean Air and Asiana Airlines are completely different matters," explaining, "Jin Air competes with Korean Air and takes customers away, but Korean Air does not interfere."

He added, "Currently, Korean Air holds a 26% slot share at Incheon Airport, and Asiana Airlines holds 14%, totaling 40%," and said, "(Compared to foreign airlines at foreign airports) this is not a large share."

Regarding the injunction request to prohibit new share issuance filed by the 'Shareholder Alliance for the Normalization of Hanjin Group (Three-Party Alliance),' he said, "The court will make a reasonable judgment, and we will respond appropriately," adding, "Rather than focusing on the Three-Party Alliance issue, we will concentrate on integrating affiliates and creating synergies."

On the schedule for due diligence of the Asiana Airlines acquisition, he mentioned, "We have formed a due diligence team and will proceed immediately," adding, "We will first conduct document-based due diligence, and if necessary, conduct face-to-face interviews or on-site inspections." Regarding the mileage integration ratio between the two companies, he said, "A reasonable integration ratio will be determined through due diligence."

This content was produced with the assistance of AI translation services.