April and May are two months that Korean Air (KAL) may want to forget. Hurt by a 15 April Boeing MD-11 freighter crash in Shanghai - its fourth hull loss since August 1997 - South Korea's president Kim Dae-jung blasted the airline, calling it an embarrassment and demanding sweeping management changes. Some even called for the airline to change its name to avoid causing "further harm" to South Korea.
KAL complied with some calls for change with a senior management reshuffle and the resignation of 79-year-old chairman, Cho Choong-hoon, whose family controls at least 25% of the airline. His son, chief executive Cho Yang-ho, was named chairman and the airline said he would only be responsible for "external affairs".
Executive vice-president, Shim Yi-taek, was named president and chief executive and many other top managers were moved to new positions.
The exercise was criticised by industry observers, who dubbed it "cosmetic", saying it only amounted to a face-saving undertaking for the younger Cho.
KAL ignored the criticism, saying new president Shim had been tasked with ensuring that "absolute flight safety is the main priority and focus of airline operations." The airline adds: "To regain the trust of its passengers, customers and partners around the world, Korean Air pledges to make every effort to become an airline of reliability and trust." President Kim's criticism was widely interpreted as censure of the powerful Cho family. It came days after KAL partners Delta Air Lines and Air Canada stopped placing their passengers on its flights in the wake of the MD-11 crash.
The Shanghai accident came a month after the airline suffered two domestic landing incidents in a week. It came a week after the airline rejected as "a severe distortion of the situation" a damning internal safety review that made its way on to the Internet.
The government has threatened to impose sanctions for the latest incidents and accidents, although officials say penalties imposed so far have not been working. While they would like to force change, they say the government has to be careful as the airline is a private concern and foreign investors might be scared off if they go too far. The public is meting out its own brand of punishment. KAL's domestic load factor was down in April and early May while rival Asiana Airlines saw sharp increases.
Source: Airline Business
