< Reveal sidebar

Korean Air to Offload Non-Essential Assets, Improve Transparency

A Korean Air A380 At Los Angeles International Airport. (Photo: AirlineGeeks | James Dinsdale)

Korean Air, South Korea’s flag carrier, is selling its non-essential assets in an effort to improve its financial standing and increase transparency, FlightGlobal reports. The most notable asset the airline will sell is real-estate in downtown Seoul, South Korea and a leisure company, which Korean Air wholly owns, that operates a resort in Incheon, South Korea, outside of Seoul.

“Korean Air’s sale of unprofitable assets reflects its goal of strong financial stability,” the airline said. It announced that the Seoul real estate “faced multiple development challenges,” while the resort needs “an additional and long-term investment…to create profitability.”

The carrier has also announced plans to improve corporate transparency, including strengthening its board’s independence. It created a recommendation committee, composed entirely of directors from outside the airline, to help lead its efforts. This committee will review Korean Air’s major business issues and suggest fixes to secure shareholder values and rights.

“Korean Air is determined to maximize shareholder value,” the airline said. “The resolutions that were passed reflect the company’s strong will to improve its financial position and create a sound and transparent governance structure.”

Korean Air reported a net loss of 627 billion won ($530.17 million USD) through three quarters in 2019. It has also been struck with controversy in recent years. In 2018, Jin Air, one of Korean Air’s affiliates, almost lost its air operator’s certificate when it was found that executive vice-president Emily Cho, who had held U.S. citizenship, had served on its board from 2010 to 2016, violating a law that prohibits foreign nationals from serving on the board of a national passenger airline.

Cho Yang-Ho, Korean Air’s former Chief Executive Officer, was voted off the airline’s board last April amid allegations of embezzlement and tax evasion.

Korean Air’s amnesty efforts will help improve the airline’s tarnished image. By giving its Board of Directors more influence, the carrier is limiting the power that any one person holds at the airline, limiting their ability to abuse the carrier’s resources. Removing unprofitable assets from its portfolio will also allow Korean Air to focus more time and resources on its brand, helping it improve passenger experience and return to profitability.

John McDermott

Author

  • John McDermott

    John McDermott is a student at Northwestern University. He is also a student pilot with hopes of flying for the airlines. A self-proclaimed "avgeek," John will rave about aviation at length to whoever will listen, and he is keen to call out any airplane he sees, whether or not anyone around him cares about flying at all. John previously worked as a Journalist and Editor-In-Chief at Aeronautics Online Aviation News and Media. In his spare time, John enjoys running, photography, and watching planes approach Chicago O'Hare from over Lake Michigan.

Subscribe to AirlineGeeks' Daily Check-In

Receive a daily dose of the airline industry's top stories along with market insights right in your inbox.

Related Stories

One Dead, 30 Injured Following Extreme Turbulence on Singapore Airlines Flight

One passenger is dead and 30 more have been reported injured after severe turbulence forced the landing of an international…

Lufthansa Needs To Try Harder if It Wants To Take Over ITA

Recently, new pieces of information surfaced on the ongoing proceeding for the Lufthansa Group to acquire a stake in the…

Bonza’s Future Remains Uncertain

Bonza, the recently shut down carrier in Australia, has no end in sight for returning to the skies after two…