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Final decision on Jin Air’s fate expected today

June 29,2018
The fate of Korean Air’s low-cost affiliate, Jin Air, could be decided today, and all eyes are on how the government will deal with the 1,900 employees whose jobs are on the line.

The Ministry of Land, Infrastructure and Transport has been consulting with local law firms on whether to strip Jin Air of its business license after it became apparent that Cho Hyun-min, the youngest daughter of Korean Air Chairman Cho Yang-ho, is an American citizen.

Under Korean aviation law, foreigners cannot be board directors at Korean airlines for security reasons. Cho was a registered director at Jin Air between 2010 and 2016, a violation that could result in the revocation of the airline’s business license.

Industry sources say the Transport Ministry will make its final decision today. On Monday, the vice minister said the government would release its decision before the end of this month. Possible penalties include the revocation of Jin Air’s business license and heavy fines.

The Transport Ministry faces a difficult decision by penalizing the airline. Since the ministry is partly to blame for not catching the violation when Cho was still on the board, the government does not want to appear too lenient or seem like it is giving favors to Korean Air. From this perspective, a mere fine could be considered too weak a punishment.

But if the ministry opts to revoke Jin Air’s license, it would put 1,900 jobs at risk and hurt the airline’s minority shareholders. This would be an especially difficult route to take in the current political climate, when President Moon Jae-in has made job growth and supporting workers as his policy focus.

Industry sources speculate that the ministry might revoke the license but give a grace period of one or two years to minimize the damage to employees and minority shareholders. Some experts suggest the ministry could come up with a completely new way of penalizing the company, given Cho has already stepped down from her post.

Neither the Transport Ministry nor Jin Air has made a statement on the issue. “We’ll probably release a statement tomorrow after the ministry makes an announcement,” a spokesperson from Jin Air said on Thursday.

On Wednesday, the labor union of Korean Air released a statement vowing strong protest against the government if the jobs of Jin Air employees are put on the line without a solution.

The labor union said it was important to punish the Cho family for its wrongdoings, but it was more important to guarantee the job security of Jin Air employees who were not involved in the family’s legal violations.


BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]