Hanjin Kal
Overview
Hanjin Kal (한진칼) is a company that serves as the holding company of Korean Air, positioned at the apex of the Hanjin Group's governance structure. It was established in November 2018 when Korean Air was split through a spin-off into a surviving entity (Hanjin Kal) and a new entity (Korean Air). Hanjin Kal maintains control over major affiliates including Korean Air, and oversees the group's management strategies and investment decisions.
Key Details
Establishment Background and Governance Structure
The establishment of Hanjin Kal resulted from the spin-off of Korean Air in 2018. At the time, Korean Air aimed to separate its aviation transport business and holding business to enhance management efficiency and transparently reform its governance structure. After the split, Hanjin Kal became the largest shareholder of Korean Air and functions as the de facto holding company of the Hanjin Group. Major shareholders of Hanjin Kal include Hanjin Group Chairman Cho Won-tae (조원태) (approximately 17.5%), Delta Air Lines (approximately 14.9%), and the National Pension Service (approximately 8.5%). In particular, the friendly shareholding relationship between Chairman Cho Won-tae and Delta Air Lines plays a crucial role in stabilizing management control.
Business Segments
As a holding company, Hanjin Kal holds major affiliates such as Korean Air, Jin Air, Hanjin, and Korea Airport Service as subsidiaries. Korean Air is the largest airline in South Korea, handling passenger and cargo transportation; Jin Air is a low-cost carrier (LCC) operating domestic and short-haul international routes; Hanjin provides logistics and courier services; and Korea Airport Service offers aircraft ground handling services. Hanjin Kal itself generates revenue through investment management, brand licensing, and real estate leasing.
Financial Status
As of 2023, Hanjin Kal's consolidated revenue was approximately 14.5 trillion KRW, with an operating profit of about 1.2 trillion KRW. Korean Air's performance accounts for over 80% of the total, and the recovery of air travel demand and rising cargo freight rates after the COVID-19 pandemic contributed to improved results. The debt ratio is around 150%, which is relatively high due to the nature of the aviation industry, but it is gradually improving.
Management Control Dispute
From 2019 to 2020, Hanjin Kal experienced a management control dispute between Chairman Cho Won-tae and his cousins, former Korean Air Vice President Cho Hyun-ah (조현아) and former Hanjin Vice President Cho Hyun-min (조현민). At the time, Cho Hyun-ah and Cho Hyun-min allied with activist fund KCGI (Kang Sung-bu Fund) to challenge Chairman Cho Won-tae's control. However, with support from Delta Air Lines and the National Pension Service, the dispute ended in Chairman Cho Won-tae's victory. During this process, Hanjin Kal's stock price fluctuated significantly, and interest in improving corporate governance increased.
ESG Management
Hanjin Kal has recently strengthened its ESG (Environmental, Social, Governance) management. Korean Air is expanding the introduction of next-generation aircraft and the use of sustainable aviation fuel (SAF) to reduce carbon emissions, while Hanjin Kal has established an ESG committee within its board to formulate related policies. Additionally, in 2023, it received an integrated A grade from the Korea ESG Standards Institute.
Latest Trends
In 2024, Hanjin Kal is facing major decisions regarding Korean Air's acquisition of Asiana Airlines. After the European Union (EU) competition authorities recommended conditional approval in late 2023, final approval is expected to be determined during 2024. If the acquisition is completed, Hanjin Kal will hold a top-10 global airline through Korean Air, and significant changes are anticipated in its governance and financial structure. Additionally, in March 2024, Hanjin Kal strengthened its shareholder return policy by announcing plans for share buybacks and cancellations, leading to a rise in its stock price. Meanwhile, the possibility of Jin Air's initial public offering (IPO) in 2025 has also been raised, drawing attention to strengthening competitiveness in the low-cost carrier market.
Related Topics
- [[Korean Air]]
- [[Cho Won-tae]]
- [[Hanjin Group]]
- [[Asiana Airlines]]
- [[Delta Air Lines]]
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