Korean Air to reform as a holding company in August

Korean Air has announced its plan to transform into a new holding company structure with two entities by August 2013: Hanjin KAL Holdings and Korean Air. The Korean Air’s Board of Directors approved this reform on 22 March. Hanjin KAL Holdings will be responsible for investment business management while Korean Air will be in charge of the overall airline business operations.

The plan to establish a new holding company structure is to increase the company’s asset value and improve its transparency. While the holding entity will solely focus on the management of its affiliate companies and the investment in new business, its operating company will be in charge of generating profits for the airline business. Thus, the new structure will establish a systematic management system, which effectively enhances and boosts business efficiency and stability for the company.

The existing shareholders of Korean Air will receive their shares of the new holding company in proportion to their current stocks.

Hanjin KAL Holdings, a new holding company, will take control of investment business, general management of affiliate companies and intellectual properties such as branding and trademarks.

Korean Air, its operating company, will be responsible for airline business operations, from air transport, aerospace, catering, inflight duty-free sale to limousine buses.

Mr. Tai Soo Suk, incumbent President and COO of Hanjin Transportation Co., Ltd, is appointed as the President and COO of Hanjin KAL Holdings.

Korean Air will hold an Extraordinary General Meeting to seek approval for the restructuring plan in the late June. The business of Korean Air will be reorganised on 1 August accordingly.

Sourced: etravelblackboardasia