By Kim Hyun-bin
Korean Air will take a more aggressive approach in dealing with local low-cost carriers (LCCs) as competition in the local market has become fiercer and budget carriers' growing presence is starting to take a toll on full-service carriers' market share.
"So far, we have been very passive in dealing with the LCCs and they have been taking over our market," Korean Air Chairman Cho Won-tae said during a press conference on the sidelines of the International Air Transport Association's (IATA) Annual General Meeting (AGM) at COEX in Seoul, Monday.
"We have been watching the market in Korea and have discussed the issue, and we concluded we can't ignore the situation anymore and need to take a more aggressive approach toward LCCs."
To strengthen the airline's competitiveness against local and global competitors, Cho said he plans to seek more joint ventures with other carriers.
"The Delta joint venture has been growing at a steady rate and has produced satisfying results, and we plan to seek more with other airlines in the future," he said.
Regarding government imposed sanctions on Jin Air, Korean Air's LCC subsidiary, following a series of scandals surrounding the Cho family, the chairman said he will respect and abide by any decision made by the Ministry of Land, Infrastructure and Transport.
Last August, the transport ministry banned the budget carrier from adding new aircraft and expanding its routes until it significantly improved its governance practices.
"We believe Jin Air has fulfilled all requirements set by the transport ministry and are awaiting its approval. We will respect and abide by its decision," he said.
The sanctions and fierce competition in the local market have taken a toll on Jin Air's performance, and he said it's expected to get even worse. "But on the other hand, we believe the past year under sanctions has become a chance for Jin Air to ensure internal stability and profitability."
Cho, who took the helm of the airline after the sudden death of his father in April, said his family members are still discussing inheritance issues and trying to iron out the details.
"The former chairman passed away suddenly without giving specific details. However, he always emphasized that cooperation and harmony among family members and safeguarding our company should be the first priority," he said. "With that in mind, our family members have been discussing the issue."
In early April, Former Hanjin Group Chairman Cho Yang-ho passed away from chronic lung disease and Won-tae stepped up to head the group.
He was elected president of this year's AGM, Sunday, and also named a member of the IATA Board of Governors, the decision-making body of the association.
The first IATA annual AGM to be held in Korea ― hosted by Korean Air ― ended Monday.
More than 800 officials from 290 airlines in 120 countries participated in the three-day event to discuss issues surrounding the global aviation industry including economics, safety and ways to enhance cooperation.
Next year's meeting will be held in Amsterdam, with KLM Royal Dutch Airlines being the host airline.
Korean Air will take a more aggressive approach in dealing with local low-cost carriers (LCCs) as competition in the local market has become fiercer and budget carriers' growing presence is starting to take a toll on full-service carriers' market share.
"So far, we have been very passive in dealing with the LCCs and they have been taking over our market," Korean Air Chairman Cho Won-tae said during a press conference on the sidelines of the International Air Transport Association's (IATA) Annual General Meeting (AGM) at COEX in Seoul, Monday.
"We have been watching the market in Korea and have discussed the issue, and we concluded we can't ignore the situation anymore and need to take a more aggressive approach toward LCCs."
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| Cho Won-tae, Chairman of Hanjin Group and Korean Air |
"The Delta joint venture has been growing at a steady rate and has produced satisfying results, and we plan to seek more with other airlines in the future," he said.
Regarding government imposed sanctions on Jin Air, Korean Air's LCC subsidiary, following a series of scandals surrounding the Cho family, the chairman said he will respect and abide by any decision made by the Ministry of Land, Infrastructure and Transport.
Last August, the transport ministry banned the budget carrier from adding new aircraft and expanding its routes until it significantly improved its governance practices.
"We believe Jin Air has fulfilled all requirements set by the transport ministry and are awaiting its approval. We will respect and abide by its decision," he said.
The sanctions and fierce competition in the local market have taken a toll on Jin Air's performance, and he said it's expected to get even worse. "But on the other hand, we believe the past year under sanctions has become a chance for Jin Air to ensure internal stability and profitability."
Cho, who took the helm of the airline after the sudden death of his father in April, said his family members are still discussing inheritance issues and trying to iron out the details.
"The former chairman passed away suddenly without giving specific details. However, he always emphasized that cooperation and harmony among family members and safeguarding our company should be the first priority," he said. "With that in mind, our family members have been discussing the issue."
In early April, Former Hanjin Group Chairman Cho Yang-ho passed away from chronic lung disease and Won-tae stepped up to head the group.
He was elected president of this year's AGM, Sunday, and also named a member of the IATA Board of Governors, the decision-making body of the association.
The first IATA annual AGM to be held in Korea ― hosted by Korean Air ― ended Monday.
More than 800 officials from 290 airlines in 120 countries participated in the three-day event to discuss issues surrounding the global aviation industry including economics, safety and ways to enhance cooperation.
Next year's meeting will be held in Amsterdam, with KLM Royal Dutch Airlines being the host airline.
