Korean Air upgrades service, image

The corner workplace in the chairman regarding Korean Air overlooks the end of the runways with
Gimpo International, South Korea's oldest airport.
During the 1990s, Cho Yang-Ho ended up being usually summoned there simply by his father, the
late Cho Choong Hoon. Standing before the floor-to-ceiling windows, father and also son would
eyeball planes taxiing with regard to takeoff. the heavier and also better-loaded a new plane, your
farther it roared along the runway.
"When our aircraft would go every 1 associated with the means to the end with the runway, i was
feeling good," says the younger Cho, chuckling at the memory. "When our aircraft would Korea
fashion shop consider off prior to various other airlines, I knew our advertising team and also I were
within trouble."
Now that he occupies your corner office, Cho, 60, no more utilizes the particular informal inspection
technique of assessing how well Korean Air will be doing. The Actual airline features expanded so
much which it now flies simply domestic along with China- and also Japan-bound flights coming from
Gimpo. Many of its international passenger along with cargo operations fly via Incheon International
airport, which opened within 2001.
Under Cho's tutelage, Korean Air offers shed its image involving as an accident-prone airline from
the creating nation to get to become the largest Asian carrier operating in the USA. That flies from a
lot more cities inside the USA to cities throughout Asia compared to any other airline, the company
says. It's your world's largest commercial airline cargo carrier. the organization estimates it invested
$5.4 billion inside the final 10 years to boost safety, upgrade its fleet, install new technology along
with overhaul its corporate culture. That now features a four-star score out of your possible five
stars via Skytrax, any London aviation consulting firm which rates airlines about quality. That's on
par with Lufthansa, Virgin Atlantic and Thai Airways.
The airline's outlook, as reflected in a new advert campaign, will be decidedly much more global and
made to appeal for you to high-paying business travelers who would like the luxurious regarding top
regional competitors Singapore Airlines along with Cathay Pacific.
"That's our target," Cho says. "We'd like to think about Korean Air as certainly 1 of the very best
airlines which they'd wish to fly."
Putting safety very first
Korean Air has a colorful history that will befits its country's rapid and also turbulent economic
development. And Also in it, Cho located his challenge right after using manage as chairman within
1999.
The Korean government developed Korean Air Lines inside 1962. While then-dictator Park ChungHee sought to end up being able to privatize it, he tapped Cho's father, who had developed the main
transportation company which began along with 1 truck inside 1945 and also grew by shuttling U.S.
military supplies. the company, Hanjin Group, grew to be the particular largest transportation
conglomerate inside South Korea, called chaebol here. The idea controls your country's largest
airline and shipping and delivery company.

Korean Air launched its first long-haul passenger support for you to Los Angeles International within
1972. Its emergence being an international carrier, as with a range of other Korean brands that will
went global, had rough spots. It had certainly 1 of your highest accident rates until the late 1990s,
with seven serious accidents through the decade. Delta and also Air France dropped Korean Air like
a code-share partner in 1999 shortly after an accident.
An often-told tale, which resurfaced not too long ago within Malcolm Gladwell's e-book Outliers,
assigns blame for a Korean Air crash within Guam inside 1997 around the carrier's hierarchical
cultural legacy which teaches Koreans to become deferential towards his or her elders along with
superiors. Your co-pilot failed to communicate up when the pilot designed a fatal error, Gladwell
says.
The accidents had been deemed a new national embarrassment and also prompted the particular
Korean government for you to push with regard to management along with operational alterations in
1999, which in turn triggered Cho's ascendance for you to chairman.
In getting control of the airline, Cho, which got his MBA in the College of Southern California, had
been determined to enhance safety higher than most else.
Korean Air voluntarily decided to comply by incorporating U.S. standards additionally to always be
able to Korean aviation regulations, including cockpit crew work-and-rest guidelines. This hired
Boeing along with Airbus for full-flight simulator training. Small pilots are usually "now trained to
talk up when it's time to converse up," Cho says.
Cho visited Delta's headquarters and saw its operational control center, where almost all Delta
aircraft are monitored real-time prior to as well as during flights. Cho returned to Seoul and
established a new comparable center. He additionally changed the actual mindset in which Gladwell
says contributed towards the crash in Guam, which killed 228 people.
"It exists in every Oriental cultures," Cho says with the hierarchical culture. And Also he doesn't look
to shed blame for that problems it caused.
"I've been in airlines for 35 years," he says, "so I'm responsible for both negative as well as positive
things. We adopted tradition for any extended period since i was too busy (expanding) to take on
globe airlines."
Korean-American traffic huge
Cho says he thinks he's succeeded within changing the culture with Korean Air by installing "a
methods approach" targeted at minimizing the personality-driven, top-down culture that's any legacy
associated with Korean enterprise managers which place emphasis on intuition as well as
responding to orders.
He invested heavily inside details technology, making a central clearinghouse pertaining to
monitoring and also investigating safety reports and also audit findings. all divisions were ordered to
share and also coordinate data.
"Now, whoever comes (in) must follow the (established) procedure," he says.
Cho's changes didn't stop at safety.

To keep on leading of stiff competition, Korean Air continues to be getting new planes. Fifteen
associated with its fleet involving 103 passenger planes are generally lower than 4 a extended time
old. Your airline plans to commit $200 million much more in order to upgrade its fleet for mid- and
also long-haul routes, additionally to 38 Boeing 777s, Airbus A380s along with Boeing 787s on which
in turn it's awaiting delivery.
Since 2005, the particular airline also has expended $137 million in new seats, cabin interiors, inflight entertainment systems as well as new uniforms.
Growth provides followed. Korean Air provides passenger support in 105 cities within 35 countries.
Benefiting from the Korean-American population surge throughout recent years, your airline is
becoming the largest Asian carrier operating within the USA. The idea flies via cities that have big
Korean-American populations, which includes Los Angeles, New York, Washington, Seattle, Chicago,
Atlanta, Dallas, San Francisco, Honolulu and Las Vegas. It flew 109,000 seats throughout July about
non-stop flights for you to Asia from your contiguous U.S. states, up 21% from 2004. Its operating
revenue has grown 42% inside the final 5 years, in order to $8.2 billion 2008.
The changes reflect Cho's engineer sensibilities, says Park Oh-Soo, a new Seoul National University
Or College professor associated with organizational strategy, and a board member who's known Cho
for around 10 years.
"He areas excellent emphasis upon rules along with rules, generating choices rationally," Park says
of Cho. "He pushed regarding alter even prior to he became chairman. However he wasn't the many
notable decision-maker then. He couldn't create radical (decisions)."

The changes in addition reflect Cho's appreciation for your U.S. means of performing business.
Max Nikias, provost in the College regarding Southern California, which counts Cho as being a
friend, says the actual airline executive provides "great admiration for your American (business)
culture. He's tried difficult to deliver in which in order to Korean Air's culture," Nikias says.
Cho, who is fluent throughout English, has even brought any relaxed, American-style dress code
regarding not necessarily wearing ties inside the summer.
Despite Korean Air's success, your existing economic crisis and also subsequent downturn inside
journey possess exposed any persistent weakness common amongst national carriers from little
countries. Along With the particular South Korean won relatively weak against the dollar, the actual
number of non-transfer outbound passengers from Korea Koreans would be the largest base
regarding clients fell 30% in the first six weeks regarding this coming year in contrast using a 12
months earlier. Its operating revenue is actually estimated to be able to drop 13% throughout 2009
in order to about $7.1 billion, ending 5 consecutive numerous years of growth, according to
JPMorgan. "We've not really been immune from the present crisis," Cho says.
Korean Air's situation would happen for you to be more serious been there not necessarily been to
find a push to be able to woo passengers who're vacationing beyond Seoul. Newer planes, upgraded
premium-class seats as well as the convenience of Incheon International, which in turn was voted

the actual "Best Airport Worldwide" by simply Airports Council International four a lengthy time in
the row, spent some time working for you to its advantage.
Another crucial promoting point can be its expansion throughout China, Cho says. Korean Air now
flies in order to twenty Chinese cities, one of one in the most expansive networks within the nation
among non-Chinese carriers.
Korean Air's transfer targeted traffic throughout Seoul rose 16% in the 1st half of 2009, even as its
all round passenger count declined 5.6%.
"Korean Air's management quality provides improved within the past 10 years," says Corrine Png, a
JPMorgan analyst. "But cost-cutting remains the challenge, as well as the aviation sector in Asia is
very competitive."
Png acknowledges Korean Air's aggressive replacement involving unreliable, aging planes. But, the
lady says, the airline includes a way to go, especially amongst company travelers that nevertheless
think about Singapore Airlines and also Cathay Pacific as superior in service and also fashion from
korea quality. Singapore along with Cathay Pacific produce more than 40% regarding their own
income from premium-class traffic, whilst Korean Air posts concerning 30%.
"Singapore Airlines' competitive advantage can be its younger fleet and also strong branding.
Cathay Pacific features a superior hub area because of in order to its geographical proximity to be
able to China."
California dreamin'
Reserved along with shy, Cho avoids your grandiose backslapping and large entourage which are
typical amongst CEOs associated with huge companies within South Korea.
"He has integrity. He will be with out lip service. He is not prone for you to overexposure," Park says
of him.
However, like many Korean CEOs, Cho commands fantastic respect coming from subordinates and
from outsiders. and it extends to the USA.
"It's extremely visible," says Nikias in the School of Southern California, exactly where Cho was
influential throughout obtaining funding with regard to a fresh multimedia middle and also a number
of endowments. "You can sense it. Even inside large USC alumni events, I can see that our alums
truly display excellent respect for (Cho) along with which he is."
Cho and the family, whom very own with regards to 25% associated with Korean Air, additionally
happen for you to be mainly free from private scandals that will engulf some associated with the
leading Korean conglomerate CEOs and their family members members, Park says. These kinds of
billionaires are thought celebrities on this wealth-obsessed country, along with stories regarding
chaebol members in the family involved in or perhaps rumored to become associated with failed
marriages as well as sibling rivalry frequently seize headlines.
In 1999, Cho ended up being arrested for tax evasion stemming through rebate payments created by
manufacturers, component of the crackdown through the late President Kim Dae-Jung to curb the
energy of the big conglomerates. Cho was handed a new suspended jail sentence involving 3 years.
Following an appeal, Cho settled using the government having a $12 million payment, the company

says. Cho says the fees were the particular late president's "political revenge" against his family
members for supporting some other candidates.
Cho finds constant media interest in the particular home restraining. Along With in 6 foot, Cho is
actually simple to spot. He's taller compared to nearly all Koreans of his generation.
"I'm limited within my movement in Korea," he says. "I may in absolutely no way drive (my personal
car) here. Basically get in for you to a little accident, it's an instant headline."
Thus, he enjoys hanging out with his home inside Newport Beach, Calif. Right now there he revels
inside simple pleasures unthinkable inside South Korea: driving a car his or perhaps your ex own
car, wearing jeans throughout public.
An avid traveler, Cho says among his fondest journey memories is really a cross-country trek across
the USA with classmates via his Korean high school: "Two cars, 6 people, 6,000 miles within 18 days.
We stayed at $20 motels, ate breakfast with McDonald's and ate lunch with KFC."
Contributing: Barbara Hansen