Jin Air may lose license
Cho Hyun-min, left, then a senior executive of Jin Air, serves passengers aboard a plane in this July 17, 2012, photo. / Yonhap
By Kang Seung-woo
A notorious Korean Air heiress' alleged tantrum has spawned widespread fallout, the latest development being the possible cancellation of its budget carrier's license.
The nation's largest full-service airline also has Jin Air, the No. 2 player in the low-cost carrier (LCC) sector, under its wing.
Cho Hyun-min, a former marketing executive at the airline, is embroiled in allegations she threw water in the face of an ad agency executive during a business meeting in March. Police questioned her about the incident last week.
The fallout is looming large as the transport ministry carried out an internal review, last week, on whether to strip Jin Air of its air operator's certificate after finding Cho served on its board of directors for six years from 2010 to 2016 -- despite being ineligible for the post.
According to the transport law, a foreign national cannot hold a post on the board of a domestic or international logistics company and a violation can invalidate the license for the budget carrier. Cho is a U.S. citizen.
Initially, the Ministry of Land, Infrastructure and Transport was reluctant to punish the budget airline, citing she no longer retains the position. According to a relevant regulation, an airline can avoid any punitive actions if a foreign board member steps down within a three-month grace period after the government's notification.
However, amid growing public outcry, the government body seems to have changed its stance on the issue.
The ministry is said to have already asked three local law firms to review relevant laws regarding Cho's board membership. If their conclusions should lead to revocation of the license, it plans to hold a public hearing and take additional follow-up measures.
“As it is an inspection by the ministry, we are not in a position to comment on it,” said a spokesman for the low-cost airline.
“We are fully cooperating with the ministry.”
However, should the ministry cancel Jin Air's license, its fallout is expected to bring huge adverse effects that may take the case to court.
Firslty, the airline currently employs more than 1,900 employees who may lose their jobs. Worse, Korean Air is likely to retain them, according to the airline industry.
Jin Air was launched in 2008 as a subsidiary of Korean Air, but the two have wholly separate operations.
The budget carrier chalked up 97 billion won ($90 million) for a full-year operating profit in 2017 -- an 85.5 percent gain from the previous year. In addition, it went public last December -- the second LCC player to do so after industry-leading Jeju Air in 2015.
In the wake of the ministry's internal review, speculation is rampant that the transport ministry is taking drastic actions to cover up its failure to properly oversee Jin Air in 2013, when the budget carrier changed its air transport license.
Meanwhile, the so-called “water rage” incident has stretched out to other family members, accused of abusing their power over subordinates.
Cho's mother Lee Myung-hee, the director of the Ilwoo Foundation and wife of Hanjin Group Chairman Cho Yang-ho, received a travel ban, Wednesday, pending a probe into allegations she verbally and physically assaulted company employees.