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Korean Air comes up with voluntary retirement program to reduce labor costs

By Lim Chang-won Posted : December 11, 2019, 17:52 Updated : December 11, 2019, 17:52

[Yonhap Photo]

SEOUL -- Korean Air came up with a voluntary retirement program for employees after the new chairman of South Korea's scandal-stricken Hanjin Group vowed to improve the high-cost structure of group units and reduce costs. It was the first voluntary retirement program since 2013.

On Wednesday, Korean Air posted a notice of applications for voluntary retirement on its intranet. The program targets employees who are over 50 years and in service for more than 15 years. Exceptions include flight attendants, technical and research personnel, overseas service personnel.

Labor costs account for 20.9 percent of Korean Air's fixed expenses. In November, the number of Korean Air executives was cut from 108 to 79. Hanjin has been under pressure to enhance their corporate governance and transparency in accounting and management.

Cho Won-Tae, 43, who was officially designated as Hanjin Group chairman in May to succeed his father who died on April 8, told a meeting of Korean reporters in New York in November that internal and external uncertainties could delay the turnaround of Korean Air.

Hanjin has been hit hard by a series of scandals which led to multiple investigations into the late chairman's wife and two daughters.

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