[The Editors' Verdict] Did Aekyung Group Only Offer an Apology in Name?

Jeju Air Disaster: Aekyung Group Bowed Down
Affiliate Hotels Hold Employee Prize Events During National Mourning Period
Jeju Air Website Apology... Holding Company Practices Social Distancing

There are two main ways companies respond to adverse events. One is for the owner to directly apologize and actively promise compensation for damages, and the other is to wait for the critical public opinion to subside.

Aekyung Group, involved in the Jeju Air passenger plane disaster that crashed at Muan Airport in Jeollanam-do, leans toward the latter. After the passenger plane disaster occurred on the morning of December 29 last year, Aekyung Group issued an apology letter under the name of Chairman Jang Young-shin and all employees only after more than half a day had passed. This was done through a written statement sent to the press.

It took 11 hours after the accident for Chae Hyung-seok, the eldest son of Aekyung Group’s chairman and the Executive Vice Chairman, to visit the disaster site at Muan Airport in Jeollanam-do, accompanied by Kim I-bae, President of Jeju Air, and Ko Jun, CEO of the holding company AK Holdings, which led to protests from the bereaved families. Despite the company’s apology, Chairman Jang’s written apology and the management’s delayed visit raised doubts about the sincerity of the apology.

In particular, suspicions grew stronger when it was revealed that a regular employee meeting (town hall meeting) with a prize draw was held at a hotel owned by Aekyung Group (Novotel Ambassador Suwon) two days after the disaster. While most companies scaled down their year-end and New Year ceremonies during the national mourning period for the Jeju Air disaster, Aekyung Group affiliates held an event with refreshments where employees cheered at the news of performance bonuses.

Chairman Jang, who is nearly ninety years old this year, cannot bring back the precious lives lost in this disaster by apologizing directly to the bereaved families. However, given that this is the worst aviation casualty in South Korean history with 179 victims, if the owner had shown direct remorse and responsibility, the reckless behavior of the affiliates could have been avoided.

The hotel is operated under consignment by the global hotel chain Ambassador, so Aekyung’s explanation is that group-level instructions did not function properly. However, Ko Jun, who bowed again to the bereaved families regarding this prize event, was the hotel’s CEO until about a month ago. Currently, the hotel’s CEO is Lee Kang-yong, CEO of AK Plaza, known as an “Aekyung man.” This means he is in a position to deliver a strong mourning message at the group level.

What is even stranger is that Aekyung Group’s mourning message cannot be found officially except for Jeju Air, which operated the accident aircraft. Jeju Air posted an apology letter under the name of CEO Kim I-bae on its website immediately after the accident last month. However, the holding company AK Holdings has not posted any apology letter to date. The excuse that they were too busy handling the accident, as with the delayed visit to Muan Airport, is unconvincing. AK Holdings responded swiftly enough to disclose major subsidiary management matters, including insurance details of the accident aircraft, on the 30th of last month, right after the disaster.

In the distribution industry, there have been cases where management officials who took preemptive responsibility and promised compensation for consumer damage incidents, including humidifier disinfectant cases, were instead considered to have admitted responsibility and suffered disadvantages or punishments. Aekyung Group also sold humidifier disinfectants, which led to consumer boycotts, and related employees were even detained. This is likely the background for Aekyung Group’s passive response.

AK Holdings is the largest shareholder holding more than half of Jeju Air’s shares and has been raising group management funds by using Jeju Air’s shares as collateral. Both Jeju Air, the direct party to the disaster, and Aekyung Group cannot avoid moral responsibility for the major disaster regardless of the cause.

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