It’s not a great time for aviation in South Korea.
Korea’s second largest airline, Asiana, has been in a bit of an accounting fiasco, and the company’s CEO stepped down a bit over a week ago.
Korean’s largest airline, Korean Air, has been involved in an endless number of scandals, mostly involving the Cho family. Just about everyone has heard of the “nut rage” incident involving Heather Cho, but that’s only one of many scandals. The Cho family has also been accused of embezzlement and tax evasion.
Cho Yang-ho was the CEO of Korean Air. Just weeks ago he was kicked off the board of the airline, after serving on it for 27 years. He needed two-thirds of the board’s vote in order to stay on the board, but was only able to get 64% of the vote, so barely missed the requirement.
However, he stayed on as CEO of the airline, though it’s now being reported that he has passed away.
70 year old Cho Yang-ho died Sunday in Los Angeles, according to a Korean Air statement. The cause of death wasn’t revealed in a statement from the airline, though other sources suggest that this was due to a chronic illness.
Stocks of Korean Air rose Monday morning following this news. I sort of hate to say that, though it perhaps reflects the sentiment that exists towards the family, as they’re not very well liked, to put it mildly. They’ve also been doing a pretty awful job running the airline.
Cho directly owned 17.8% of Hanjin Kal, which is the holding firm that owns Korean Air. His family together owns a 29% stake. So with his passing, there are a lot of questions about what this means for the airline and his shares in the company, given just how much of the company he owned.
It also raises the question of who will take over his position. Rather than trying to find the best person for a particular job, Korean Air has long been run like a family business, with Cho’s unqualified kids getting jobs at the airline.
Recently an activist fund increased their stake in the airline to about 13.5%, hoping to fix mismanagement at the company.
Hopefully this situation finally prompts some positive change in leadership at the company, though I wouldn’t count on it, given just how many shares the Cho family owns.