Korean Air (KE, Seoul Incheon) will focus on its mainline business as it grapples with worsening business conditions, its president Cho Won-tae said in a press conference in New York on November 19, the Yonhap News Agency reported.
He hinted that Hanjin Group, the flag carrier's biggest shareholder, may go as far as to sell non-core assets in order to focus on the key pillars of air transportation, aircraft parts manufacturing, and hotels and resorts.
“It is hard for us to keep our mainstay businesses in good condition due to the unfavourable business conditions. We expect the economy to deteriorate further next year due to the ongoing US-China trade war and lower travel demand to Japan amid a bilateral trade dispute,” Cho said.
As further headaches, he also pointed to the weakening Korean won against the dollar, which inflates costs such as fuel and dollar-denominated debts. Korean Air's net losses plunged to KRW709.48 billion won (USD603 million) in the January-September period, from KRW57.49 billion (USD49 million) the year before.
According to Pulse News Korea, Cho also said at the news conference: “I don’t have any other interest than air transportation. Korean Air is our pillar company and the other [businesses] should support it. I am not interested in any other business.”
He referred to travel and hospitality businesses as those that support the airline. Quizzed about the possibility of group-wide restructuring, he said he “hadn’t given it much thought” but that “there is no reason to hold on to a business that does not make a profit.”
Various members of the Cho dynasty hold a 28.93% stake in Hanjin. Cho Won-tae took over as group chairman after the death of his father Cho Yang-ho in April. He dismissed speculation of a feud with his two sisters over inheritance and control of the group.
