Airline News
Chaebol model under scrutiny following Korean Air ‘nut rage’
January 13th 2015
South Korean prosecutors last week charged Heather Cho Hyun-Ah, the daughter of Korean Air chairman, Yang Ho Cho, for violating aviation security law when she delayed a New York – Seoul flight last month following an abusive outburst over the way she was served nuts by a cabin attendant. Read More »
The case sparked public outrage and ridicule in South Korea where the economy is dominated by family-controlled conglomerates known as chaebol. Family members traditionally wield far greater influence over major corporations than shareholders and top executives with no blood ties to the founding family. The Cho family owns about 10% of the Hanjin Group, parent of Korean Air.
The ‘nut rage’ case seems to reveal the worst of what may lie ahead as the chaebol families' third generation – the grandchildren of the conglomerates' founders – takes charge. While not every 40-year-old heiress is as entitled and ill-mannered as Cho appears to be, the next wave of chaebol leaders has been coddled since birth and promoted with blinding speed. On average, the grandchildren and great-grandchildren at South Korea’s 30 major conglomerates have been elevated to executive positions within three-and-a-half years, compared with 22 years for rank-and-file employees.
Curbing the power of the chaebol was one of the election promises of president Park Geun-hye, but as the economy is facing a downturn many in South Korea are sceptical that the government will truly challenge the influence of the chaebol, often associated with the widening wealth.
