KAL to Focus on
- Expands code-sharing on Korea-Japan routes with JAL
Korean Air Chairman Cho Yang-ho has called for KAL to pursue a high-end marketing designed to offer the best services corresponding to customers' demands.
"The days were gone when customers waited for their favorite airline, and efforts should be made to standardize internal systems and to strive for becoming a global leader through operation excellence by pursing a high-end marketing aimed at meeting their demands," KAL Chairman Cho Yang-ho said. He made the remarks during a two-day seminar of executives between Feb. 22 and Feb. 23.
KAL Chairman Cho urged the executives to maintain a sense of crisis and ensure risk management against possible crisis factors such as oil price hikes and the epidemic Severe Acute Respiratory Syndrome (SARS) that could still be dormant. KAL will become an airline with a focus only on the airline industry, he said.
Cho asked his executives to share the need for reforming productivity and to spread it among the staff members. KAL plans to reflect alternatives of practical actions on reforming productivity, raised during the seminar when it draws up its long-term survival strategy.
KAL aims to post 7.8 trillion won in sales, more than 600 billion in operating profits and 400 billion won in ordinary profits during 2005.
Despite several hardships, KAL's performance during 2004 turned to the black, but in reality, profit figures were offset by the appreciation of the Korean currency, the chairman said.
High costs have been a common task facing all airlines around the world, and KAL needs to redouble efforts to improve productivity, said Chairman Cho, adding that even members of the friendly alliance are KAL's competitors and the thing executives should have to carry out is to enhance productivity by devising strategic ideas.
Chairman Cho said investments into new aircraft could lead to a reduction in repair and personnel costs, and disposal of old aircraft is needed to enhance productivity after the passage of some time. He noted that Singapore Airlines is the case in point.
Cho emphasized that the thing KAL will have to do for the real restructuring is to enhance productivity and the added-value by making the most use of the existing hardware and raising efficiency of human resources through strengthening education, rather than to spend less, not buy equipment, halt services and reduce manpower.
The KAL chairman disclosed during his New Year message the "10-10-10 Strategy," designed to reduce costs by 10 percent, raise revenues by 10 percent and improve productivity by 10 percent.
In the meantime, KAL Chairman Cho was one of the KAL staff members awarded with citations for the 30-year career with KAL, during a ceremony celebrating the 36th anniversary of its foundation at the KAL head office in Gonghang-dong, northern Seoul, on March 2. KAL president Lee Jong-hee received the 35-year career award.
Cho has been with KAL 30 years as of this year since December 1974 when he entered the airline. He has held such several positions as sales, computing, equipment and personnel management, and he was promoted to chairman in 1999.
KAL held a variety of events celebrating the anniversary of its founding. Taking an instance, 360 passengers were selected among those who purchased flight tickets through its homepage (www.koreanair.co.kr) between March 1 and March 13 and they were given with a bounty of gifts, including 30 free accommodation tickets at KAL Hotel.
Code-sharing with JAL
KAL has agreed to expand the code-sharing of the Busan-Nagoya route with Japan Airlines effective March 27 on the occasion of the celebration of the 40th anniversary of normalization of diplomatic ties between Korea and Japan.
KAL and JAL will jointly operate four flights per day on the Busan-Nagoya route for a total of 28 flights per week. They will almost double the number of flights on the three routes, including the Incheon-Gomatsu route, from 36 flights to 64 flights per week. nw