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The South Korean airline group is already under fire after a
daughter of its chairman allegedly threw water at an attendee of
a business meeting, reigniting public anger at the bad behavior
of families controlling the country's biggest conglomerates.
The incident involving Cho Hyun-min, who has since stepped down
as executive at Korean Air and Jin Air, sparked probes into her
family and its businesses by various government agencies.
On Tuesday, TV channel KBS cited unidentified sources as saying
the transport ministry last week discussed whether to cancel Jin
Air's license. The discussion followed the discovery that Cho
had been a registered board member despite being a U.S. citizen,
in violation of transport law, KBS said.
A transport ministry official told Reuters that the ministry is
considering cancelling the license, but that nothing has been
decided. The ministry, in a statement last month, said it would
consider taking legal and administrative measures against Jin
Air if it found any wrongdoing after initial reports of Cho's
citizenship.
A spokeswoman for Jin Air said the company is cooperating with
the ministry's investigation and declined further comment.
"The chance of license cancellation is low, but even in such a
case, this will not have a major impact on Korean Air which can
take back planes it has leased to Jin Air," said Joseph Kim, a
chief consultant at Seoul Aero.
"But this is a shame, and a blow to investors of Jin Air, which
was only listed in December," he said.
Cho and older sister Heather Cho, who was jailed for delaying a
flight after objecting to the way nuts were served, no longer
hold any positions at Korean Air, Jin Air or affiliates.
"I see the possibility of actual license cancellation really,
really low," said analyst Park Kwang-rae at Shinhan Investment.
Nevertheless, such a penalty could create job instability for
anyone related such as tour operators, he said.
"The problem is that since literally everyone is watching what
the group does about such incidents, every little twist could
see investment sentiment deteriorate," Park said.
Jin Air's share price ended down 4.1 percent in a flat broader
market <.KS11> on Wednesday. Shares of its biggest shareholder,
Hanjinkal <180640.KS>, were down 5.0 percent, while those of
Korean Air were up 0.3 percent. Among rivals, Asian Airlines Inc
<020560.KS> was up 3.7 percent and Jeju Air <089590.KS> was up
3.1 percent.
(Reporting by Joyce Lee Hyunjoo Jin and Dahee Kim; Additional
reporting by Jamie Freed; Editing by Christopher Cushing)
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