Jin Air allowed to keep its license by ministryJin Air, Korean Air’s budget airline, will keep its business license, the government decided after months of deliberation.
The Ministry of Land, Infrastructure and Transport announced Friday at the Sejong government complex that it decided not to strip the low-cost carrier of its license.
“The government decided not to take away the business license of Jin Air after determining that the side effects, such as instability caused to employees and inconvenience for consumers, would far outweigh its social benefit,” said Kim Jeong-ryeol, vice minister for transport, during Friday’s briefing.
The Transport Ministry’s decision came after two hearings open to employees of Jin Air and Air Incheon, a cargo airline affiliate of Korean Air, as well as a number of discussions with transport and legal experts.
Jin Air has been under investigation by the Transport Ministry after it was discovered in April that Cho Hyun-min, the Korean Air heiress who is an American citizen, was on its board of directors from 2010 to 2016.
Korean aviation law prohibits national-flagged airlines from having any foreign nationals on their boards for security reasons.
Incheon Air has been under investigation for having a Russian on its board in 2014.
“We were not able to question Cho Hyun-min directly, but we were able to hear her defense through her attorney,” said Jin Hyun-hwan, director general for aviation policy at the ministry. “Our focus was on the legality of the matter and whether Jin Air took unfair profits by violating the law.”
The director general also explained that Jin Air promised measures that will prevent such incidents from happening in the future.
But the ministry will ban Jin Air from expanding its routes and registering new airplanes until it determines that Jin Air corrected its problems with selecting directors.
“We respect the motivation behind the decision by the Transport Ministry,” Jin Air said in a statement.
Jin of the Transport Ministry explained there are no legal grounds to exclude Cho family members from the management, despite the many embarrassments they have caused the Korean Air group in recent years, particularly anger management issues by Cho Hyun-min, her sister and mother.
But the labor union of Jin Air demanded the Cho family apologize to employees and relinquish control of the company.
“Until now, the family that controls the company has not said a word,” said the union in an official statement. “They are evading responsibility even after they caused thousands of employees to almost lose their jobs. We demand the family take responsibility and step back from all management.”
Upon the announcement of the decision by authorities, the share price of Jin Air, which reached an record in-session low on Thursday at 20,350 won ($18.10) before closing the day at 21,700 won, recovered tremendously, rising by 6.22% to end Friday’s session at 23,050 won.
BY CHOI HYUNG-JO [email@example.com]