Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
Asiana workers face job insecurity, zero bonuses amid record sales
Asiana Airlines labor union workers stage a protest against Korean Air's sale of Asiana's cargo business to finalize the long-delayed takeover, in front of Government Complex Seoul, Oct. 24. Yonhap
By Lee Min-hyung
Asiana Airlines employees are growing increasingly apprehensive about their job security as the impending takeover by Korean Air approaches completion. Korean Air, thus far, has maintained an ambiguous stance, refraining from presenting concrete action plans to assure the continued employment of Asiana workers.
The employees also expressing discontent over the slim chance of receiving incentives, despite Asiana Airlines achieving record sales of 6.53 trillion won ($4.88 billion) in 2023, marking a 16 percent increase from the previous year. This dissatisfaction contrasts with Korean Air's earlier confirmation of its intention to provide a bonus equivalent to 407 percent of employees' basic monthly salary, following its own historic annual sales of 14.57 trillion won during the same period.
The complaints were delivered during a meeting between Asiana Airlines CEO Won Yoo-seok and its employees last week, but top management of the cash-strapped airline failed to provide clear answers as to how the company can guarantee employees’ job security once the takeover is complete.
"The meeting can be seen as part of a gesture by the management that it has held enough communication with employees to justify its critical future decision-making, such as sales of our cargo business," a labor union member from Asiana Airlines said. "The absence of incentives also leaves much to be desired at a time when our job security is threatened."
The sale of Asiana's cargo unit was part of a precondition for the European Union to grant conditional approval of the takeover plan.
Spokespeople from Korean Air and Asiana Airlines said their concerns are understandable, but the management of both firms cannot make immediate decisions on the issue, as the takeover plan is still under review by a U.S. antitrust authority.
“Asiana Airlines’ management and labor union are still engaged in a wage negotiation deal, so we still have to wait and see whether employees will be able to receive bonuses based on our sales growth,” a spokesperson at Asiana Airlines said.
But it appears to be a difficult task for the airline to persuade its main creditor – Korea Development Bank (KDB) – for the incentive, as the airline spends most of its revenue to repay interest on debt. The firm’s operating profit fell by 45.4 percent in 2023 from the previous year.
The long-protracted takeover is anticipated to be completed by as early as the end of the first half of 2023, if the plan wins approval from the U.S. Department of Justice (DOJ). A total of 13 out of 14 overseas authorities has so far granted approvals for the high-stakes merger in the past three years.
A spokesperson at Korean Air said it cannot take any specific measures to guarantee the job security of Asiana employees until the DOJ makes its final decision.
“The acquisition has yet to be completed, so we cannot take any legal or administrative procedures for such demands from Asiana Airlines,” the official said. “Asiana Airlines has not yet become one of our subsidiaries. But we are expected to speed up resolving the issue upon the completion of reviews from foreign authorities.”