Walter Cho, chair and CEO of Hanjin Group and Korean Air, has called on South Korea’s new administration to prioritize safeguarding the aviation sector from tariffs in future trade negotiations with Washington.
Speaking to Bloomberg TV on Monday during a visit to India for the 81st Annual General Meeting of the International Air Transport Association, where he serves on the Board of Directors, Cho underscored the role of the new administration in restoring stability amid tariff-induced concerns.
He described the nation’s six-month leadership vacuum as “troubling, especially with the global economic situation.”
“Now with the new leadership coming up, I think that (the trade deal) should be the priority for the Korean government,” Cho stated, adding that, regardless of the election outcome, he expects predictability in the business climate.
His remarks came just ahead of Tuesday’s presidential election, in which Lee Jae-myung of the Democratic Party of Korea was elected Korea’s 21st president.
Cho’s concerns over tariffs largely pertain to the weakening of the airline’s selling power, given its extensive commercial ties with aerospace companies like Boeing and Airbus.
“We're a large buyer of aircraft, but we also sell a lot of airplane parts to Boeing and Airbus,” said Cho. “Historically, aviation was not part of the tariffs. Now, it’s going to cause a lot of confusion for businesses.”
He also flagged ongoing risks related to trade tensions, noting that decreased cargo volumes from China to the US have posed challenges for the airline, despite its solid passenger business, with demand in premium cabins holding steady.
“But we’re expecting some turmoil depending on the trade negotiations,” he noted, adding that trade deals will inevitably significantly impact the Korean economy, and by extension, passenger demand.
Beyond the US market, Korean Air is looking to grow in other regions while maintaining its existing capacity in the US. According to Bloomberg, the airline is also preparing to be among the first to resume flight routes over Russia once the war in Ukraine ends.
By No Kyung-min (minmin@heraldcorp.com)
