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Korean Air president warns about airline's survival as the sibling feud heats up at the carrier group
March 13th 2020
Korean Air president, Woo Kee-hong, reported Reuters this week, has told employees the impact of COVID-19 could be so great on the airline group that its survival may not be guaranteed. Read More »
The comments were in a note Woo sent to employees on Monday that was published in several media outlets.
"We can easily imagine the severity of the crisis we are facing in comparison," Woo's note said.
"And what is more daunting is the situation can get worse at any time. We cannot even predict how long it will last."
South Korea has been one of the countries hardest hit by the virus, with 7,755 confirmed cases at March 11 according to World Health Organisation figures. Sixty people have died from the disease in Korea.
Scores of countries have banned foreign visitors who have been in or transited through South Korea in the previous 14 days, leading to a precipitous drop in demand for air travel into and out of the country.
Korean Air (KAL) has grounded about 100 of its 145 aircraft, including all eight A380s, with its international capacity down by about 80%.
The SkyTeam alliance member has asked staff to take unpaid leave, among other initiatives."But if the situation continues for a longer period, we may reach the threshold where we cannot guarantee the company’s survival," Woo said.
Separately, Heather Cho, the elder sister of KAL boss, Walter Cho, is building her shareholder coalition with activist investor, Korea Corporate Governance Improvement, with plans to unseat her brother from his leadership roles at KAL and parent, Hanjin Kal.
It is reported the eldest Cho has voting rights of 37% compared with Walter, supportive family and partner, Delta Air Lines of 40%. The Cho family, collectively, controls 33% of Hanjin Group. Disaffected shareholders want Walter replaced as a board director by telecommunications veteran, Kim Shin-bae, an industrialist believed to favour restructuring of the airline group.
