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JULY 2018

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Asiana shareholders threaten lawsuit; SK Group denies takeover plans

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July 20th 2018

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There is never a shortage of drama and controversy at South Korea’s two largest airlines, Asiana Airlines and Korean Air. Read More »

This week the Korea Herald reported that Asiana shareholders were considering filing a class action against the Kumho Asiana board, including airline chairman Park Sam-koo, alleging loss of reputation as a result of the poor handling of an in-flight catering crisis earlier this month.

For approximately a week in early July, scores of Asiana flights departed without in-flights. Asiana compensated affected passengers with US$30-50 vouchers. Nevertheless, local media claimed that Asiana board members travelling throughout the period were still served hot meals.

Asiana earlier this year cancelled its catering deal with LSG Sky Chefs in favour of a new arrangement with Gate Gourmet Korea (GGK), an HNA Group company, which was supposed to come into effect starting July 1.

In March, a fire crippled GGK’s production facilities, which forced the GGK to subcontract the Asiana deal to DO&CO.

DO&CO had traditionally produced an average 3,000 in-flight meals a day, a fraction of the 25,000 daily meals required by Asiana. DO&CO, completely overwhelmed but wanting to ‘save face’, accepted the contract but then failed to ramp-up production in time to meet its commitment, which meant hundreds of flights a day departed without meals.

Sadly, the CEO of DO&CO committed to suicide on July 2 after telling a friend he felt ashamed and humiliated for not being able to fulfil the Asiana deal.

The contract between Asiana and DO&CO runs through to the end of September.

Separately, South Korea’s third-largest conglomerate, SK Group, on Tuesday denied media reports that it was planning to take over Asiana from Kumho Group.

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