Caution raised against revoking Jin Air's license.
Concerns are growing over the possible revocation of Jin Air's business license ahead of the Ministry of Land, Infrastructure and Transport's closed-door hearing that starts today to review the laws related to the ministry's forthcoming decision on the future of the nation's second-largest low-cost carrier.
According to airline industry officials Sunday, revoking Jin Air's license will lead to potential lawsuits against the government because the government itself allowed the budget carrier to go into business and become public.
Foreign investors holding an 11.7 percent share in Jin Air reportedly plans to bring the case to the International Centre for Settlement of Investment Disputes (ICSID), if the transport ministry revokes the company's license.
The government has lost all the previous cases that were brought to the ICSID.
The foreign shareholders are expected to ask for 100 billion won ($89.7 million) at least in compensation, considering the drop in Jin Air's stock price over the past three months and additional opportunity costs.
The budget airline's market cap dropped to 730.5 billion won last Friday from 1 trillion won in April, when it was found that Hawaiian-born U.S. citizen Cho Hyun-min, or Emily Cho, daughter of Korean Air Chairman Cho Yang-ho, had served as a board member of the budget airline between 2010 and 2016.
"The revocation of our business license will have a significant impact on our subcontractors, minority shareholders and foreign investors," a Jin Air official said.
A representative of foreign investors will reportedly attend the hearing today to point out the unfairness of the revocation. Industry officials expect the government will face a bigger amount of compensation, as minority shareholders are also moving to file lawsuits against the government.
Against this backdrop, 2,000 employees of Jin Air and 10,000 workers at the air carrier's subcontractors have been concerned about the possible loss of their jobs following the license revocation which may result from the misconduct of the owner family.
During a rally in front of the Government Complex in Seoul, July 25, Jin Air employees urged the ministry to scrap its plan to hold hearings, claiming the government threatens job security and the livelihood of workers.
The labor union of Korean Air, an affiliate of Jin Air, also sent a petition to the transport minister last Friday.
"If the ministry decides to revoke Jin Air's license, the decision will have a serious impact on the employment of Jin Air and its subcontractors. This is in sharp contrast to the administration's policy to create more jobs," the union said in the petition.
The Korean Air union has also criticized the government for applying an unfair double standard to Asiana Airlines and Air Incheon, both of which also had foreign board members in the past.
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|Publication:||The Korea Times News (Seoul, Korea)|
|Date:||Jul 29, 2018|
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