A Sibling Rivalry May Have Created the World’s 10th Largest Airline

Sean Lim
5 min readDec 8, 2020


Remember the nut rage heiress of Korean Air who assaulted the hot flight attendant over whether the company changed its policy of serving macadamia nuts on a warm plate in first class? Well, her feud to take control of the company away from her brother, the appointed heir, may have pushed Korean Air to become the world’s 10th largest airline.

Or it could be the 15th largest depending on whose stats you trust more. Nevertheless, in November this year, Korean Air announced it would acquire rival Asiana Airlines in a $1.6 billion deal. But was it a business-first decision? Or was it the latest power move in family battle as posited by Korea Corporate Governance Improvement (KCGI)? KCGI is Hanjin KAL’s (Korean Air’s parent company) largest shareholder.

The quickest way to understand this story is to look at the numbers. After the elder Korean Air chairman passed away a week after he was ousted by the board in the spring of 2019, he left control of the company to his son. That should have been the end of the story. But the heiress contends that their father’s will expressed that the family should run it together. Yet, we all know in Korea there really can be only one master. And late last year reports emerged that the eldest daughter (nut rage heiress) would launch a campaign against her younger brother to battle for the throne.

To do so, the heiress cobbled together her shares along with other activist shareholders to total 46.7 percent of Hanjin KAL — the empire’s mother company. Her brother and his team including his mother, younger sister and companies like Delta Air Lines and Kakao Corp. held 41.3 percent. With the majority now in her court, it looked like the heiress was on track to oust her brother at the next board meeting.

But even if Korean companies are accused of mismanagement, there is one thing these scions are experts at — the power game. And the heir found a new ally. Enter a new player joining the arena — the state-run Korea Development Bank. It made a deal that would make the Little Mermaid’s Ursula blush. For a $720 million investment into Hanjin KAL, the Korea Development Bank would end up with about 10.66 percent of the parent company. The money would flow to Korean Air, which would then have the cash to buy Asiana Airlines. That’s nice for the 10th largest airline narrative. But the real story is that the 10.66 percent KDB stake is expected to side with the male heir. Under the new scoreboard, the brother’s team would have 47 percent control and the sister’s team would have 41 percent. Game. Set. Match.

There can only be one master.

But there’s a catch. The brother signed away all of his shares as collateral in his deal with KDB. The bank can liquidate these shares and even fire the brother if the bank is not pleased with the performance of the newly merged company. That’s a big bet. Yet, KDB adamantly denies that it’s getting involved in the sibling rivalry. It even says the investment may turn a profit of about $300 million.

On the other hand, this deal may be an 11th hour solution to the headache caused by the Asiana Airlines crisis. Its deal to be acquired by Hyundai Development Company fell through in September after several other suiters bailed. No one seemed like they wanted to take this girl to the ball. And now, an arranged marriage seems to get rid of several problems at once.

But don’t count out the heiress. She is the eldest after all and probably feels like male privilege robbed her of the chance to inherit the company. Plus, she has KCGI on her side. They believe the deal will dilute their shares and investment value so they’re trying to do what it takes to stop it. And so what, if it benefits the heiress at the same time?

If there’s a silver lining, it may be that this drama can be sorted out while most of us avoid air travel until the coronavirus clears. People need to focus on delivering great service in the skies. From my experience, the airline has been ahead of the curve in terms of delivering a global-level product. Perhaps it will lead the transition to a conglomerate led by professional managers as opposed to remaining a family-controlled empire. (Note: if the family owned a majority of the company then who’s to question whether they should leave control in the family? But since it’s a public company with investors owning the majority, it’s other people’s capital on the line.)

And if you’re wondering whether I am a critic of Korean Air as an everyday consumer, I am not. I’m actually a super fan. I love flying this airline and its service has always been impeccable. From what I gather, Korean Air has its employees to thank. There’s great pride and accomplishment if you’ve ‘made it’ as an employee of Korean Air. I’ve always felt the staff keeps up the quality of the airline despite all of the politics because they put their heart and self-value into it.

I don’t remember if I’ve ever had a warm nut tray on Korean Air, but I was blown away by the midnight cookies and milk.

Originally published at https://theseoulite.com on December 8, 2020.



Sean Lim

Content Creator | Former Broadcast Journalist | New Thoughts. New World.