Korean Air’s “nut rage” sisters are retiring
FOUR years ago, Korean Air chief executive Cho Hyun-ah made headlines around the world when she threw a fit because she was served macadamia nuts in their package rather than on a first class meal on the airline. She reportedly insulted the cabin crew, threw documents at them, and made them kneel down and ask for forgiveness. At the time, she was a company vice president, and she made the plane return to her gate to remove the offending flight attendant. After spending several months in prison for violating aviation safety laws, Cho Hyun-Ah was able to return to her father’s conglomerate, this time managing hotels rather than Korean Air. But a new scandal may have achieved what the “nut rage” could not.
This month, police opened an investigation into Hyun-ah’s younger sister, Hyun-min, a senior marketing executive at Korean Air. It was alleged that she had thrown water in the face of an advertising executive during a business meeting. She apologized for her behavior and said that she had thrown water on the floor, not in the face of the other senior officer. Cho Yang-ho, the father and chairman of Korean Air, apologized on April 22 for the behavior of two of his daughters and announced that they would leave their management positions at the company.
In the end, Mr. Cho may have had little choice but to remove his daughters from the company. Investigators raided the family’s homes and offices this month. And the company has become so unpopular that some Koreans have asked their country’s government to stop the airline from using “Korea” in its name. “As the chairman of Korean Air, as well as a father, I feel terrible about the immature actions of my daughters,” Mr. Cho said in a statement. “It’s my fault and everything is my fault. I sorry for the people.”
The series comes at a bad time for Mr Cho’s family group, the Hainjin Group, which is recovering from several years of bad news. Korean Air had several years of losses before and after the first “nut rage” incident. In 2016 the group’s container line, Hainjin Shipping, declared bankruptcy. The following year Korean Air managed to stabilize its finances by issuing a $390m rights issue and returning to the black. A “water rage” could set back the company’s recovery. But with the competitive threat from state-subsidized Chinese airlines and low-cost carriers from elsewhere in Asia rising every month, the two incidents could turn out to be the least of big problems. which is before us.