Questions rise about prospective chief of Korea’s big airline
Korean Air and Asiana Airlines are set to merge in years to come, and Cho Won-tae, chief of the former’s parent company Hanjin Group, is expected to take charge of the new mega-sized entity.
But, critics pose questions about whether the 45-year-old businessman is eligible to lead the amalgamated outfit, which would become the world’s No. 7 carrier.
In a recent online press conference, Korean Air announced that it will take over Asiana next year, which flew to more than 60 cities in 20-plus countries prior to COVID-19.
“There are suspicions about Cho’s ability to head the large-sized airline, the only flag carrier of the country,” corporate watchdog CEO Score founder Park Ju-gun said.
“In addition, his reputation is not so good.”
Like Park, some take issue with his management capacity; Korean Air saw its bottom lines deteriorate since 2019 when he took the company’s helm after the death of his father, former Hanjin Chairman Cho Yang-ho.
Korean Air’s 2019 operating profit stood at some $230 million, down 59 percent from a year before. Its 2020 operating income decreased further 57 percent year-on-year to less than $100 million.
Last year’s performance was negatively affected by the virus pandemic, which devastated the world’s airline industry.
Controversies on remuneration
To deal with the situation, Korean Air cut the average salary of its employees by more than 15 percent from 2019.
By contrast, Cho’s remuneration from Korean Air and Hanjin surged 40 percent from a year. Hanjin said that the rise was thanks to the payment for his full-year chairmanship, but criticisms pop up.
“Last year, Korean Air employees suffered from great hardship amid the pandemic. Many accepted unpaid leaves,” said Lee Ji-woo from People’s Solidarity for Participatory Democracy, a local civic group.
“But Chairman Cho’s salaries rocketed 40 percent. I want to ask whether such a businessman is acceptable for CEO of that big company.”
It was not the first time for him to cause a fuss.
In June 2000, Cho ran over an on-duty police officer and fled the scene after violating traffic laws. Back then, a civilian caught him. Five years later, he was booked for assaulting a senior citizen in her 70’s.
In 2012, he came under fire for coming up with verbal abuse at the leader of a civic group who conducted a one-person protest at Inha University owned by Hanjin Group.
In late 2019, Cho also grabbed headlines for a violent brawl with his mother over a management-related disagreement, which took place after his father passed away.
Visiting his mother’s home, Cho reportedly wielded a fireplace poker, broke a vase, and injured his mother in the presence of his wife and three kids.
Cho and his mother eventually apologized.
Korean Air is set to merge with Asiana as the carriers languished due to COVID-19. Their creditors, including the state-run Korea Development Bank, have channeled multi-billion dollars into making the firm stay afloat.