Additional reporting by Andrew Pentol

The Korea Fair Trade Commission (KFTC) is conducting an on-site probe into Korean Air’s inflight duty free business amid claims family members have ‘reaped profits unfairly’, TRBusiness reliably understands from industry sources.

This latest development follows news of a customs raid on the airline’s headquarters on Monday following allegations that Chairman Cho Yang-ho’s family members importing luxury goods into South Korea without paying duties.

The FTC has told various Asian media outlets that 30 staff have been mobilised for the investigation, which began on Friday (20 April).

TRBusiness is in contact with the FTC and will bring you further comment in due course.

PRESSURE BUILDS

The probes pour further pressure on the ruling family of South Korea’s flag carrier after Cho Yang-ho was forced to publicly apologise following accusations his daughter, Cho Hyun-min, threw water in the face of an advertisement agency manager during a meeting last month.

Cho Yang-ho has since removed both daughters from their posts at the airline and its affiliates.

Cho Hyun-min is the younger sister of Cho Hyun-ah (Heather Cho) who made global headlines when she ordered a Korean Air flight to return to its departures gate at New York John F. Kennedy International Airport in 2014 before takeoff.

This was after she behaved in an inappropriate manner towards a flight attendant who served her with a ‘packet’ of macadamia nuts at her first class seat.

Cho was subsequently arrested and spent around three months in jail before being freed by the Seoul Appeal Court in May 2015.

With regards to the latest incident, a DF&TR executive told TRBusiness Korean Air is being forced to contend with ‘public rage’ in South Korea.

“Some people are actually changing their flights from Korean Air to other carriers following everything that has happened,” they commented.

“Some people have even requested the government stop the airline using the name ‘Korean’ in its title as they are so ashamed, but it is unlikely this will actually happen. This, however, is an example of just how severe the public rage is against the airline.”

Another source added: “[The] public mood is getting worse and worse. Gapjil and chaebol  [South Korean terms used to describe subordinating behaviour by those in positions of power in the case of the former, and a large family-owned business conglomerate in the latter – Ed] are big issues in recent days.”