Korean Air turns 50 with eye on growth
During the event, the company vowed to improve transparency and improve its performance amid a series of scandals involving Hanjin Chairman Cho Yang-ho and his family. Cho, who is battling charges of embezzlement, was not at the ceremony.
Hanjin Kal is the airline’s largest shareholder.
At the ceremony, the company reaffirmed its commitment to “Vision 2023,” announced last month. The strategy aims to increase sales while cutting debt.
The airline’s goal is to reach 16 trillion won ($14.3 billion) in sales with a 1.7 trillion won operating profit by 2023 and reduce the debt ratio to below 395 percent from the 699 percent recorded last year.
Korean Air plans to expand links to America and Asia utilizing a joint venture partnership with Delta Air Lines signed in 2017.
The company will also seek to raise profitability in its cargo business through the development of new air routes to growing markets, such as Vietnam, India and Central America. As for its aerospace business, the airline will secure growth through the mass production of unmanned air vehicles.
In light of the charges of smuggling, embezzlement and other wrongdoings leveled against Cho family members, the airline plans to enhance management transparency by creating an audit committee and a committee for recommending outside directors.
The company’s sales last year rose seven percent, or 848.4 billion won, to hit 12.6 trillion won. Annual operating profit dropped 27.6 percent to 692.4 billion won, largely due to the increased cost of oil.
Korean Air traces its origins to 1946. The government acquired the original company in 1962, and the airline was privatized in 1969.
It has achieved much over the past five decades. Korean Air began with only a single jet and seven prop aircraft. It has since expanded its fleet to 166 aircraft and now offers services to 124 cities in 44 countries.
“Over the past 50 years, the two wings of Korean Air were the love of consumers and shareholders and the public trust,” said the president at the ceremony. “Our plan for the 100th year is to offer wings to society so they can dream of better lives.”
The airline began service on transpacific routes and connections to Europe and the Middle East in 1970s, and gained a reputation abroad after being selected as the official airline of the 1988 Seoul Olympics.
The company experienced strong growth in 1990s and 2000s. Cho was the airline’s president in 1992 and ultimately CEO in 1999. The company continued to grow in the ’90s after initiating services to Beijing and Moscow.
Korean Air was a founding member of the Sky Team global alliance in June 2000, along with Delta Air Lines and Air France. Sky Team is one of the world’s three main alliances, along with Star Alliance and OneWorld.
BY JIN MIN-JI [firstname.lastname@example.org]