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Aekyung, Hanjin heirs lock horns in Korea’s airline industry
By Kim Ji-hyunPublished : July 13, 2016 - 15:51
[THE INVESTOR] Reigning budget carrier Jeju Air is in trouble.
In the first quarter of this year, its key rival Jin Air beat it by a close margin -- just 5,000 passengers -- to become the No.1 in the industry in terms of passengers, according to Korea Airports Corp. data on July 13.
Jeju Air did manage to retrieve the title in the second quarter, and also recorded the most number of passengers for H1. But this is not just a battle of the airliners.
It’s a game of wits and perseverance between two powerful business tycoons who may not have built their way up from the bottom, but are nevertheless key figures in the airline industry.
One of the primary players is Ahn Yong-chan, Aekyung Group vice chairman who heads Jeju Air.
Jin Air, on the other hand, is led by Cho Won-tae, son of Hanjin Group chairman Cho Yang-ho. Hanjin Group runs Korean Air.
Aekyung heir competing against Hanjin group’s only son
Ahn, 57, is the husband of consumer goods conglomerate Aekyung Group chairwoman Chang Young-shin’s daughter.
Ahn was one of the main figures who spearheaded the project of establishing Jeju Air back in 2005.
Throughout the first five years when the carrier was in deficit, Ahn persuade Aekyung to undergo several capital increases.
He once told the local media that he feels fortunate because unlike other companies that must show results over a short-term, thanks to Aekyung, he was able to build a sustainable business.
Ahn has pledged to achieve an annual 20 percent growth by 2020 to aim for sales of 1.5 trillion won (US$ 1.3 billion) and become Asia’s top budget carrier.
On Nov. 6, 2015, Jeju Air went public, 10 years after its establishment.
Cho Won-tae, on the other hand is the 40-year-old only son of Hanjin chairman Cho Yang-ho.
He currently heads seven of Hanjin’s affiliates, but financial woes of Hanjin Shipping haven taken their toll on his leadership.
Hanjin Shipping is the world’s seventh largest shipping line, but rising chartering costs and a tanking global industry has been a drag on the firm. Hanjin Group also operates Korean Air, the nation’s largest commercial airline company.
The success of Jin Air would help pave the way for a smooth transition of power.
In the first quarter of this year, its key rival Jin Air beat it by a close margin -- just 5,000 passengers -- to become the No.1 in the industry in terms of passengers, according to Korea Airports Corp. data on July 13.
Jeju Air did manage to retrieve the title in the second quarter, and also recorded the most number of passengers for H1. But this is not just a battle of the airliners.
It’s a game of wits and perseverance between two powerful business tycoons who may not have built their way up from the bottom, but are nevertheless key figures in the airline industry.
One of the primary players is Ahn Yong-chan, Aekyung Group vice chairman who heads Jeju Air.
Jin Air, on the other hand, is led by Cho Won-tae, son of Hanjin Group chairman Cho Yang-ho. Hanjin Group runs Korean Air.
Aekyung heir competing against Hanjin group’s only son
Ahn, 57, is the husband of consumer goods conglomerate Aekyung Group chairwoman Chang Young-shin’s daughter.
Ahn was one of the main figures who spearheaded the project of establishing Jeju Air back in 2005.
Throughout the first five years when the carrier was in deficit, Ahn persuade Aekyung to undergo several capital increases.
He once told the local media that he feels fortunate because unlike other companies that must show results over a short-term, thanks to Aekyung, he was able to build a sustainable business.
Ahn has pledged to achieve an annual 20 percent growth by 2020 to aim for sales of 1.5 trillion won (US$ 1.3 billion) and become Asia’s top budget carrier.
On Nov. 6, 2015, Jeju Air went public, 10 years after its establishment.
Cho Won-tae, on the other hand is the 40-year-old only son of Hanjin chairman Cho Yang-ho.
He currently heads seven of Hanjin’s affiliates, but financial woes of Hanjin Shipping haven taken their toll on his leadership.
Hanjin Shipping is the world’s seventh largest shipping line, but rising chartering costs and a tanking global industry has been a drag on the firm. Hanjin Group also operates Korean Air, the nation’s largest commercial airline company.
The success of Jin Air would help pave the way for a smooth transition of power.
What the numbers say so far
Jin Air managed to trump its leading rival Jeju Air in the first quarter of this year when it became the No.1 budget carrier in terms of passenger number.
Jeju Air soon took back its place in the second quarter by a significant clip -- 147,540 passengers -- but industry watchers say the airline will have more on its plate in the near future.
In April, Jin Air more than doubled the number of seats on its international flights. In May, the seats went up again by 97.6 percent compared to 2015.
During the same period, Jeju Air failed to go as far, raising the number of seats by just 18.5 percent and 22 percent, respectively.
Not only that, Jeju Air even lost ground to Jin Air on the Gimpo-Jejudo Island route -- its main forte. In the first half of this year, Jin Air was the No.1 budget carrier on that route, having flown 1.35 million passengers.
By Kim Ji-hyun (jemmie@heraldcorp.com)
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