"‘No Plans’ but Growing Restructuring Concerns... Hanjin Steps Up to Address"

Civil Pilots Association: "No Integration Without Restructuring Realistic"
Korean Air: "Contracted No Workforce Restructuring... Resolved by Diversifying Route Times and Destinations"

[Image source=Yonhap News]

[Asia Economy Reporter Yu Je-hoon] As Korean Air's acquisition battle for Asiana Airlines begins, concerns over 'workforce restructuring' are growing. Although Hanjin Group draws a line by stating "there will be no restructuring," it appears to be actively trying to calm the increasing backlash.

According to industry sources on the 21st, KDB Industrial Bank and Hanjin Group estimate that the overlapping workforce between Korean Air and Asiana Airlines is about 800 employees. This accounts for approximately 2.8% of the combined workforce of both companies (around 28,000 employees), and Hanjin Group explains that this can be covered by natural attrition such as retirements.

Chowon-tae, Chairman of Hanjin Group, also personally clarified the matter. After attending the posthumous award ceremony for the late Chairman Cho Yang-ho at the Korea Federation of Business Organizations on the 17th, he told reporters, "There are no plans for restructuring," and added, "Although there are indeed many overlapping personnel at present, considering future expansion, the overlapping workforce can be sufficiently utilized."

However, there are considerable doubts within the industry about whether business normalization without restructuring is possible. Given the characteristics of Korean Air and Asiana Airlines as large, equal-level airlines, most areas such as flight operations, cabin crew, maintenance, and general staff overlap, and the situation must also take into account the COVID-19 pandemic.

In particular, both companies also have three low-cost carriers (LCCs) ? Jin Air, Air Busan, and Air Seoul ? as well as ground handling subsidiaries (Korea Airport Corporation, Asiana Airport Services), IT-related subsidiaries (Hanjin Information & Communications, Asiana IDT), and CRS-related subsidiaries (Topaz Travel Information, Asiana Sabre). Since these are also mid- to long-term integration targets, the issue of overlapping personnel is inevitably a recurring topic.

The Korea Private Aviation Pilots Association issued a statement the day before, pointing out, "With more than half of aviation personnel currently on leave, no one in the aviation industry believes that the integration of Korean Air, Asiana Airlines, Jin Air, Air Busan, and Air Seoul without restructuring is realistic."

As concerns over restructuring grow, Hanjin Group is also actively trying to ease tensions. Following Chairman Cho’s direct statement that "there are no plans for restructuring," Woo Ki-hong, President of Korean Air, also sought to soothe public opinion after attending a meeting of the Tourism Industry Committee at the Korea Chamber of Commerce and Industry the day before.

President Woo said, "Although the COVID-19 pandemic has never been more severe, Korean Air has never conducted artificial restructuring in its 51-year history and will not do so in the future," adding, "We included in the contract with KDB Industrial Bank that there will be no workforce restructuring for Asiana Airlines and its subsidiaries."

When asked whether route restructuring might trigger workforce restructuring, he emphasized, "Since there will basically be no workforce restructuring, rather than consolidating routes, we will create plans to maintain personnel through various methods such as adjusting schedules, destinations, and aircraft."

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