SUSTAINING EXCELLENCE - Korean Air
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SUSTAINING EXCELLENCE 2014 Korean Air Sustainability Report
ABOUT THIS REPORT CONTENTS
The Korean Air sustainability report is published yearly and this is the ninth issue since its first 02 Letter from the CEO
publication in 2006. It was prepared in accordance with the GRI G4 Guidelines, covering the 04 Company Profile
company’s sustainability management strategies and accomplishments economically, socially
08 Routes
and environmentally. Verified credibility of data and information contained in the report was
provided by a third party assurer, whose report is included. Korean and English publications are 10 Vision and Business Philosophy
available at our corporate website: www.koreanair.com. 12 Governance
Reporting Guidelines 14 Business Ethic
- In accordance with the ‘Comprehensive’ option of the GRI (Global Reporting Initiative) G4 16 Crisis Management
Guidelines
18 Materiality Test
- The contents were structured to cover the material issues as identified in the 2014
materiality analysis results 20 Value Created from Korean Air’s Business Activities
22 Growth for Excellence
Reporting Period
- January through December 2013 (partially obtained from 1H 2014 performance) 30 People for Excellence
- Qualitative data collected over past three years (2011-2013) for trend analysis 42 Greening for Excellence
56 Value for Excellence
Reporting Scope
- All business premises of Korean Air, including its head office as well as its domestic and 66 Harmony for Excellence
overseas branches (data related to its subsidiaries or affiliates are not included in this 76 Appendix
edition as they had little impact on business activities of Korean Air.
77 UN Global Compact
Report Assurance 78 Awards and Associations
- GRI G4 and AA1000AS standards (assured by Korean Standards Association)
79 GRI Index
Significant Changes from the Previous Report 85 Third Party Assurance Statement
- On August 1, 2013, Hanjin KAL was established through equity spin-off of the former Invest-
ment Project Division.
Additional Information
Korean Air’s corporate website: (www.koreanair.com)
Korea’s Financial Supervisory Service’s electronic disclosure system: (http://dart.fss.or.kr)
Contact Information
Korean Air Environment Team (Environment and Construction Management Department)
SELAFE@koreanair.com / Tel. +82-2-2656-5512
The Centennial
Since the first, historical scheduled commercial airline flight in the world that flew 30 km from St. Petersburg Port to Tampa Bay on January
1, 1914, the global airline industry has developed far beyond expectations over the past century and has become an essential part of
world industry and global cultural exchange. Whether it is bringing together Seoul and New York or Mumbai and Cape Town, the airline
industry has closed both the geographical and psychological gaps between people from all corners of the globe.
Now, can you imagine another 100 years from now and the kind of further advances in travelling and cargo transport that could bring
about even more change to our lives? Amidst these changes, what kind of role would the aviation industry contribute?
Join us in taking a glimpse at a world Korean Air appreciates as much as it understands when it comes to a sustainable future
economically, socially and environmentally.
LETTER FROM SUSTAINING EXCELLENCE KOREAN AIR
THE CEO
02
2014 SUSTAINABILITY REPORT LETTER FROM THE CEO
Dear stakeholders, We will then embrace innovation and a bettered functioning model to build
a more flexible and dynamic organizational structure. While maintaining a
I would like to first express my heartfelt appreciation for your
scope on market movements and trends to stay ahead, we will further im-
continued support and encouragement in Korean Air. As a lead- prove our customer service framework to enable a flexible and prompt re-
ing global carrier, Korean Air has emerged as a top link in the sponse to customer needs.
industry with continued support and partnerships among vast
We will continue endeavors towards ‘optimal flight scheduling’ based on im-
backgrounds.
proved efficiency in our mobilization of not only the fleet but all resources
As we publish the ninth issue of our sustainability report, we available. According to our fleet modernization plan, we anticipate the recep-
made absolutely sure that it explicitly and implicitly communi- tion of seven new high-efficient aircrafts, comprising of five passenger air-
cated the company’s endeavors towards balanced sustainability planes including the two A380s and two cargo aircrafts, B747-8F and B777F,
in all the triple bottom-lines with our stakeholders. and have readied for the disposal of old planes, the B747-400 passenger
plane and A300-600 cargo aircraft. Our first scheduled routes to Houston,
Looking back on 2013, the aviation industry faced a great deal of challenges U.S.A., will be the first step in our multi sector advancement with high growth
due to the delayed global economic recovery, unstable political developments potential around the world, equipping us with profitable routes.
03
on the Korean peninsula, skyrocketing oil prices and the Won’s appreciation
Our 45th anniversary serves a significant marking point to go back to our
against Yen. These challenges, however, catalyzed Korean Air to strive for
roots under the founding philosophy: “national contribution through trans-
a consolidated growth of its foundation in various areas under the motto of
portation.” It specifically implicates that of corporate social responsibility and
“co-prosperity.” This encouraged a concentrated focus on not only internal
its national obligation. Korean Air was founded upon this philosophy and we
but outbound cooperation.
will renew our commitment to fulfilling our social and national responsibility
Its close partnership with Czech Airlines (CSA) helped Korean Air bolster its through a meaningful and successful transportation industry.
competitive edge in the European market, while the new non-stop routes
On the global front, as a member of the UN Global Compact, Korean Air will
to Colombo, Sri Lanka, and Male, Maldives, further promoted an expansion
continue to comply with the ten-point principle including human rights, labor,
of its Asian network. Furthermore, our customer service was upgraded with
environment and anti-corruption, while partaking in causes for the less-priv-
state-of-the-art aircraft fleets, the A380 and B747-8F, bringing about an
ileged to fulfill our role as a respected and admired corporate citizen.
enhancement of fuel efficiency and cost competitiveness in our fleet opera-
tions. From early on, we always paid attention to the growth potential of the Over a 100 year-history, the commercial airlines industry has established
unmanned aerial vehicles (UAV) market and have focalized our R&D efforts itself as an industry of infinite growth potential linking the globe together. As
into developing a wide array of UAVs. the airplane has enabled the achievement of man’s long-cherished dream of
being able to fly, Korean Air will also continue its journey towards achieving
Currently, however, the uncertainties of the market have yet to dissipate.
the dream of a better future for all.
Making concerted efforts to preemptively respond to these uncertainties
and risk factors in the market is our primary task. Under the shared goal of We look forward to your joining us on this journey.
‘solidifying a growth through fundamental restructuring,’ we will reexamine
Thank you.
the structure of our functioning to create thorough, profit-oriented business Chairman & CEO Cho Yang-ho
plans and enhanced productivity at a reduced cost.
COMPANY SUSTAINING EXCELLENCE KOREAN AIR
PROFILE
Korean Air was founded in 1969 as the nation’s first air- R&D and MRO (maintenance, repair and overhaul) ser-
liner. Celebrating its 45th anniversary in 2014, its business vices as well as related businesses, including catering/in-
portfolio extends beyond its main businesses—passenger flight sales, hotel/limousine services.
and cargo transportation—to include aircraft component
Corporate Overview
Company Name KOREAN AIR LINES.CO., LTD. No. of Employees 20,567 (including overseas employees)
Headquarters 260 Haneul-gil (1370 Gonghang-dong), Fleet 147 aircrafts
Gangseo-gu, Seoul, Korea Routes 125 destinations in 44 countries
TEL +82-2-2656-7114 No. of Passengers 23.40 million
Website http://www.koreanair.com Carried
Main Business Areas Passenger/cargo transportation, aerospace, Freight Carried 1.45 million tons
04
catering service, in-flight sales, limousine service Subsidiaries The company’s electronic disclosure at
Sales KRW 11,712.4 billion http://dart.fss.or.kr
* Figures stand for FY 2013 ending on December 31, 2013
Sales Performance for FY 2013
(KRW in billions)
Sales
11,712.4
Operating Revenue 10,096.3
755.0 Others
861.1 Ancillary
2014 SUSTAINABILITY REPORT COMPANY PROFILE
Operating Results
Passenger (Unit: 10,000 persons) Cargo (Unit: 10,000 tons)
2,340 145
International 1,665 International 136.6
Domestic 675 Domestic 8.4
Sales by Business Area
05
Air Transportation (Unit: KRW billion)
Passenger Cargo Others
2011 7,024.3 2011 3,497.2 2011 771.4
2012 7,690.3 2012 3,098.8 2012 841.5
2013 7,267.1 2013 2,789.4 2013 900.9
* Others include the revenue from in-flight sales, flight mileage
service, ground operations and warehousing.
Others (Unit: KRW billion)
Aerospace Catering Service Hotel & Limousine Service
2011 393.6 2011 74.2 2011 44.6
2012 497.7 2012 85.7 2012 47.7
2013 638.2 2013 91.7 2013 25.1
SUSTAINING EXCELLENCE KOREAN AIR
Korean Air 45 Years’ Milestones
Flight Hours (Unit: 1,000 hours) Fleet (Unit: aircrafts) Sales (Unit: KRW billion)
615 615 147 147
11,712.4 11,712.4
● 112 ●
385 ●
5,659.0
72 ●
06 202 ●
106 1,679.1
37 ●
●
20 ● 558.7
11 3.6
●
● ●
● ●
● ●
1969 1980 1990 2000 2013 1969 1980 1990 2000 2013 1969 1980 1990 2000 2013
1960's 1970's 1980's
1969
Jun. 1962 Founding of Korean Air Lines Corporation Apr. 1971 First scheduled transpacific cargo Dec. 1981 Completion of Korean Air international air
service to U.S. cargo terminal construction at Los Angeles
Mar. 1969 Privatization of Korean Air by
International Airport
Hanjin Corporation Apr. 1972 First scheduled passenger service to
U.S. (Seoul-Tokyo-Honolulu-Los Angeles) Sep. 1982 Delivery of first home-manufactured
Oct. 1969 Launching of company’s first
jetfighter F-5-E/F Jegong No. 1
international route May 1973 Introduction of Boeing’s B747
Jumbo to transpacific routes Jan. 1983 Introduction of Total
Oct. 1969 Introduction of Boeing’s quad-jet B720
Passenger Service System (TOPAS), a passenger
reservation and ticketing system
2014 SUSTAINABILITY REPORT COMPANY PROFILE
Total Shareholders’ Equity
Passengers (Unit: 10,000 persons) Cargo (Unit: 10,000 tons) Total Assets (Unit: KRW billion) (Unit: KRW billion)
2,340 2,207
2,340 145 145
20,964.3 20,964.3 298.9 337.8
298.9
126
● ●
● 10,748.0 174.0 ●
●
1,226 ●
●
51 07
● ●
2,903.3 ●
350 28.4
70 737.4
14 ● 5.7 1.5
● 0
●
● ●
● ●
● ●
●
1969 1980 1990 2000 2013 1969 1980 1990 2000 2013 1969 1980 1990 2000 2013 1969 1980 1990 2000 2013
1990's 2000's 2010's
2013
May 1992 First graduates from Korean Air Pilot Jun. 2000 Agreed to SkyTeam global alliance with Mar. 2012 Completed enterprise resource planning
Training School other founding member airliners (ERP) system
Mar. 1995 Reception of 100th aircraft Nov. 2003 Launched Audio Video on Demand (AVOD) Apr. 2013 Celebrated 10th anniversary of
(B747-400) Mongolian Afforestation Project
Oct. 2003 Completion of eight A380 aircraft order
Feb. 1998 Received Mercury Award in purchase
catering service category
Jan. 2005 Obtained IOSA (IATA Operation Safety Audit)
certificate from International Air Transport Association
(IATA)
ROUTES IN SUSTAINING EXCELLENCE KOREAN AIR
SERVICE
As the nation’s leading global carrier, Korean Air con- Anchorage
nected the Incheon International Airport to 125 cities in
44 countries around the world as of the end of 2013. Our
commitment continues to remain devoted to providing ex-
pedient yet safe and convenient flights to our passengers ●
flying toward all corners of the world, spearheading the
cultural and industrial exchanges with numerous nations Vancouver
throughout the world. ●
Seattle
● New Routes ● Toronto
Chicago
Las Vegas ●
San Francisco
Destinations in China ● ● New York
Los Angeles ●
26 cities
● Washington D.C.
Shenyang Honolulu ● ●
Mudanjiang Dallas
08 Weihai Yanji
● ●
Tianjin ● ●
Beijing ● Miami
Urumqi ●
● Atlanta
● ● ●
● Dalian Destinations in the
Qingdao ●
Jinan
Americas
Shanghai/Pudong
15 cities
● ●
Wuhan Shanghai/Hongqiao
Zhengzhou ●
● ● ● Taipei
Xian ●
● ● ●
●
Chengu ● ● ●
●
Kunming Sao Paulo
● Hangzhou
●●
Changsha Xiamen
Guangzhou Huangshan
Shenzhen Nanjing
●
Hong Kong
Revenue from Passenger Routes (Unit: KRW billion) Revenue from Cargo Routes (Unit: KRW billion)
KOREA 525.1 KOREA 16.4
JAPAN 726.7 JAPAN 128.4
CHINA 896.1 CHINA 322.1
SOUTHEAST ASIA 1,294.5 SOUTHEAST ASIA 391.2
OCEANIA 3,07.6 OCEANIA 32.3
AMERICAS 2,366.6 AMERICAS 1,153.5
EUROPE/THE MIDDLE EAST/ 1,027.2 EUROPE/THE MIDDLE 722.0
AFRICA EAST/ AFRICA
CIS 123.3 CIS 23.52014 SUSTAINABILITY REPORT ROUTES IN SERVICE
Stockholm Destinations in Korea
Destinations in Europe, 13 cities
Middle East and Africa
Oslo
Copenhagen
29 cities Irkutsk Hakodate
Sapporo
London/Heathrow
Saint Petersburg Daegu
●
●
Moscow Vladivostok
●
Wonju/Hoengseong Pohang ●
● Ulaanbaatar Aomori
● ● ●
Cheongju/Daejeon Ulsan
● Amsterdam ●
●
Paris ● Frankfurt ● Shizuoka
Navoi Akita
● ● Seoul/Gimpo ●
Zaragoza ● ● Prague Tashkent Niigata Tokyo/Narita
● ● Seoul/Incheon
Madrid ● Vienna ● Tokyo/Haneda
● Yangon Komatsu
●
●
●
Istanbul ●
Chiang Mai
● ●
●●
● ● ● 09
● Tel Aviv ● Gunsan ●●
● Osaka
Kathmandu ●● ●
●
Gwangju ●
● ● ● ●
Siem Reap Nagoya
● ●
Dubai ● Yeosu/Suncheon
Rome Cairo Hanoi ● ● ● Okayama
● ● Da Nang Manila Oita
Milan ● Mumbai ● ●
● Cebu Jeju
Zurich ● ●
● ● Kagoshima
● ● Ho Chi Minh Jinju/Sacheon
Basel Colombo ●
Bangkok ● ● Busan Fukuoka
Brussels Riyadh Male ● ●
● Phnom Penh ● Nagasaki
Jeddah Phuket ●
●
● Guam
● Penang ●
Palau
● Kuala Lumpur
Singapore Kota Kinabalu
● ●
Destinations in Japan
Destinations
Nairobi
in Southeast Asia
Bali Nadi (Fiji)
15 cities
21cities Jakarta Brisbane
●
Sydney ●
●
Auckland
● KOREA 5.4 Destinations in
● JAPAN 8.5 Oceania
●
Market Share
in Sales
● CHINA 12.1
● SOUTHEAST ASIA 16.8
● OCEANIA 3.4
6 cities
(Unit: %) ● AMERICAS 35.0
● EUROPE/ THE MIDDLE EAST/ AFRICA 17.4
● CIS 1.4VISION & BUSINESS SUSTAINING EXCELLENCE KOREAN AIR
PHILOSOPHY
In the pursuit of maximizing the level of customer satisfac- corporate culture, Korean Air believes in finding ways to
tion, creating a professional, employee-initiated organiza- partner and grow with its stakeholders.
tion and evolving towards a standard and principle-based
10
OPERATIONAL VISION
EXCELLENCE
MISSION
TO BE A RESPECTED
EXCELLENCE LEADER
> SERVICE >
IN FLIGHT EXCELLENCE IN THE WORLD AIRLINE
COMMUNITY
INNOVATIVE
EXCELLENCE2014 SUSTAINABILITY REPORT VISION & BUSINESS PHILOSOPHY
Adhering to standards and principles Creating an innovated and bettered Organizational management based on
corporate culture expertise and autonomy
▶ stablishing standards and principles on
E
par with global standards ▶ Embracing a progressive and youthful mindful ▶ Mutual respect for expertise in various fields
▶ ursuing flexibility in business based on
P ▶ Change-embracing organizational culture ▶ ational decision-making based on an
R
standards and principles ▶ uture-oriented reshuffling of business
F efficient management system
▶ Eliminating short-cut business operations structure by focusing on core competencies ▶ eeking creative solutions through
S
harmonious relations
11
BUSINESS Principle- Customer- Change- System-
Appreciation
Based Oriented Embracing Based
PHILOSOPHY of Talent
Management Management Management Management
Creating customer loyalty with highest level Developing future growth engines with
of customer satisfaction competent human resources
▶ omprehensively and systematically approaching
C ▶ Formulating a top-tier team
customer relations ▶ Devoting to fostering of key talent
▶ Promptly attending to customer needs ▶ Gearing toward ‘employee-first’ corporate culture
▶ aximizing customer value through the Management
M
By Wandering About (MBWA) practicesCORPORATE SUSTAINING EXCELLENCE KOREAN AIR
GOVERNANCE
A commitment toward a mutual growth motivates Korean Air Board of Directors Composition
to ensure that all its stakeholders’ are properly included in Consisting of six standing and seven non-standing directors, Korean
the decision-making process. Comprising of non-standing Air’s board of directors (BOD) determines the solution to company
directors with a variety of academic and business back- management issues. Four subcommittees under the BOD support the
board with their respective specialties in management, director recom-
grounds in law, governmental policies and finance, the board mendation, auditing and internal control.
of directors contribute their profound knowledge to the
management decision-making process while taking note of Subcommittees
the economic, environmental and social impact of such de- Reviews and makes decisions on issues
Management commissioned by Board of Directors
cisions. The diversity of communication media, namely the Committee
Three standing and three non-standing directors
corporate website and publications, allow us to share major
Non-Standing
Selects candidates for non-standing director positions
management issues and information with stakeholders on a Director Nomination
Three standing and four non-standing directors
Committee
real time basis. In the future, we will continue to expand our
12 Monitors the BOD’s activities and the company’s performance
communication channels to better the reception of all that Audit Committee
Three non-standing directors
are partnered with us.
Internal Transaction Reviews and approves large-scale internal transactions
Committee One standing and two non-standing directors
Board of Directors (as of Mar. 21, 2014)
Name Gender Position/Career Date of Term Remarks
Appointment
Cho Yang-ho Male Chairman & CEO Mar. 22, 2013 3 yrs Chairman of the BOD
Chi Chang-hoon Male President & COO Mar. 22, 2013 3 yrs
Lee Sang-kyoon Male Senior Vice President & CFO Mar. 21, 2014 3 yrs
Standing
Lee Tae-hee Male General Council Mar. 22, 2013 3 yrs
Cho Hyun-ah Female Senior Vice President & CSO Mar. 16, 2012 3 yrs
Cho Won-tae Male Senior Vice President & CMO Mar. 16, 2012 3 yrs
Kim Seung-yu Male Chief Director of Hana High School, Former CEO of Hana Financial Group Mar. 16, 2012 3 yrs
Park Oh-soo Male Professor, College of Business Administration, Seoul National University Mar. 16, 2012 3 yrs
Lee Sog-woo Male Lawyer, Doore Law Firm, Former Chief Justice of the South Seoul District Court Mar. 22, 2013 3 yrs
Lee Yun-woo Male Chairman of Geoje Big Island Asset Management, Former Vice President of Korea Mar. 16, 2012 3 yrs Chief of the Audit
Non-standing Development Bank Committee
Hyun Jung-taik Male Professor, College of International Trade, Inha University, Vice Chairman of the Mar. 22, 2013 3 yrs
National Economic Advisory Council
Lee Joo-seok Male Advisor to Kim & Chang Law Firm, Former Director of the Seoul Regional Tax Office Mar. 16, 2012 3 yrs
Ahn Yong-seok Male Lawyer, Lee & Ko Law Firm Mar. 21, 2014 3 yrs2014 SUSTAINABILITY REPORT CORPORATE GOVERNANCE
Ownership Structure Top Decision-Making Body and Socially
Responsible Management
Shareholder No. of Owner- Transactions Remarks
Shares ship with Korean Air At Korean Air, the CEO also takes the chair of the board of directors, com-
missioning decisions to be made on the overall corporate management issues,
Cho Yang-ho 18,906,304 31.62 - Specially
interested party including the sustainability management. Additionally, the Top Management
National Pension 3,638,037 6.08 - Council, comprising of the chief officers of each business division, supports the
Fund BOD with constructing policies on company business strategy and sustainability
Hanil Cement 475,302 0.79 - management. This council serves to reflect the expectations and demands of
Samsung Asset 427,515 0.71 - stakeholders regarding the company’s economic, social and environmental ac-
Management tivities while further examining these issues to formulate the soundest solution
Shinyoung Securities 313,191 0.52 - for the entire company. Korean Air arranges regular meetings of this council to
ensure constant monitoring and review of the agenda items and resolutions.
BOD Operational Performance Results Evaluation and Remuneration to Directors and 13
No. of BOD Meetings (meetings) Attendance Rate of Directors (%) Executives
Remunerations of non-standing directors are determined by the resolutions
2011 6 2011 81
founded at the general shareholders’ meeting (GSM). In order to ensure the
2012 8 2012 84
independency and expertise in the decision-making process of non-standing
2013 9 2013 78
directors, Korean Air does not believe in operating compensation system in
accordance with the rewarding of performance evaluation results. In 2013,
No. of Approved Agenda Items (items) Attendance Rate of Non-standing
Directors (%) the GSM capped the remuneration of the BOD at KRW 5.0 billion. The actual
payment toward directors amounted to KRW 4.76 billion. Simultaneously act-
2011 51 2011 89
ing as standing directors, top executives are compensated based on their
2012 47 2012 89
accomplishments toward set goals for sustainability management practices
2013 47 2013 94
inclusive of the risk/opportunity factors in the business environment. The me-
dian of payments to all Korean Air employees was 2.13 percent of the highest
* A total of nine BOD meetings were convened in 2013 to deliberate and
payment made to a single member.
approve such agenda items as the BOD subcommittee composition, spin-off,
and order-placement of new airplanes.
Stakeholder Communication Channels
Korean Air soundly discloses all major management data to its stakeholders
Process to prevent any conflict of interests within
through communication channels such as investor relations publications, gen-
the board eral shareholders’ meetings, IR meetings, and IR websites as well as its busi-
The stipulations of Korean Air’s BOD regulations disqualify directors with vest- ness reports, quarterly and semi-annual reports and other regular reports. In
ed interests in any particular agenda from the voting rights on the item in ques- particular, the sustainability report is published with the approval of the vice
tion and are therefore unable to partake in the quorum at the meeting. presidents and presidents of all Korean Air divisions.BUSINESS ETHICS SUSTAINING EXCELLENCE KOREAN AIR
In the pursuit of maximizing the level of customer satisfac- ● espect the principles of free competition and remain at the forefront of
R
the development of the airline transport industry.
tion, creating a professional, employee-initiated organiza-
● ontribute devotedly to the development of society and preservation of
C
tion and evolving towards a standard and principle-based
the environment.
corporate culture, Korean Air believes in finding ways to
● cknowledge the corporate principles set forth by the company and
A
partner and grow with its stakeholders. uphold all of our obligations and responsibilities.
CEO’s Commitment to Business Ethics Korean Air Business Ethics Practices
“Korean Air owes much to society for its growth to date making To be a 세계 항공업계를
respected leader선도하는 글로벌
in the world 항공사
airline community
it our duty to apply transparency and compassion-based busi-
↑
ness ethics to company management practice. Our particular
focus should be placed on mutual partnerships with suppliers, Environmental Win-Win
Employee
Transparent Management & Social Partnership
ensuring the welfare of local communities, taking action to cre- Ethics
14 Management Sustainability Contribution & Customer
Training Management
ate a better world and contributing expertise to the develop- Satisfaction
ment of local communities and co-prosperity with suppliers. In
time, we will be rewarded with a sense of trust enabling us to Ethics
● Transparent
● Environmental
● Volunteer
● Supplier
●
training for corporate management corps support
further enhance the competitiveness and brand value of Ko- employees governance system Disaster
●
programs
rean Air.” Integrity
● Internal
● Sustainability
● relief Fair
●
pact control report activities transactions
- Excerpt from Korean Air CEO New Year’s speech on Jan. 2, 2014 Business
●
system Afforestation
●
guidelines/
Ethics Compliance
● project in compliance
database program Mongolia program
Donations
●
Voice of
●
Customer
Charter of Ethics (VoC)
Safety
●
Management
Korean Air regards transparency and responsibility as vital management Program
values. We respect free market principles and abide by relevant rules and
regulations in our business practices. With these principles, we strive to Code of Ethics Behavioral Guidelines
promote prosperity for the company and society as a whole. As a result,
we vow to abide by Korean Air’s new-instituted Charter of Ethics.
Korean Air Business Ethics Timeline
● Regard customer satisfaction and safety as our highest priority.
● Jan. 2001: Enactment and declaration of Charter of Ethics
● xert nothing but the best of efforts in increasing investment value for
E
our investors.
● Oct. 2002: Implementation of ‘Whistle-Blowing’ System
● Jul. 2012: Appointment of First Compliance Officer
● Respect all employees and make an effort to enhance their quality of life.
● Mar. 2014: Introduction of regulations mandating voluntary self-report
● Promote joint development with our business partners based on mutual trust.
of related parties on the same value chain of Korean Air2014 SUSTAINABILITY REPORT BUSINESS ETHICS
Charter of Ethics Establishes the underlying business philosophy Total Hours of Education
and business policies International regulations on cartels 16
Compliance with the antitrust
Behavioral Guidelines Seven principles of behavioral guidelines regulations 1,355
How to steer clear of sexual
harassment risks at work 60,327
Action Guides Action plans and clear standards
Business ethics practices at
Korean Air 3,871
Risk Management ‘Whistle-Blowing’ system
Introduction to the compliance 16,785
System Compliance Officer program
Voluntary self-report of related parties on the
same value chain
‘Whistle-Blowing’ Program
Raising ethical awareness of employees Committed to eliminating all irregularities or corruption from its premises,
All employees are mandated to complete the biennial ethics training course on Korean Air has been operating the whistle-blowing program since October
the internal self-learning network to be reminded of their commitment to busi- 2002. Anyone can report witnessed malpractices via e-mail at jebo@koreanair.
ness ethics and submit the integrity pact at the end of the course. com. Reported cases are verified through internal investigation before appro-
priate measures are taken, such as absolving or correcting corruption, malprac- 15
Anti-corruption Education Performance (Unit: persons)
tice, and inefficiency in routine or policy. The whistleblower is protected under
2011 the established framework as stipulated in the corporate bylaws and regulations
International regulations on cartels 11 and provided with feedback on their reports. In 2013, a total of 23 cases were
Compliance with the antitrust
regulations 130 reported and appropriately processed following the established procedures.
How to steer clear of sexual
harassment risks at work 21,157
Business ethics practices at
2,221
Korean Air
Introduction to the compliance
Compliance Program
program
-
Korean Air has adopted a voluntary compliance program to abide by relevant
2012 rules and regulations regarding fair trade, followed by the establishment of an
International regulations on cartels 3 internal inspection system for its actual operation. Since the declaration of
Compliance with the antitrust
regulations 206 the CEO in 2004, Korean Air has set its sights on establishing and promoting
How to steer clear of sexual
harassment risks at work 21,485 compliance practices with fair trade regulation while setting up an internal or-
Business ethics practices at
Korean Air 824 ganization to prevent any irregularities or cartels within the industry.
Introduction to the compliance
program -
2013 Internal Control System
International regulations on cartels 2
Compliance with the antitrust
Korean Air regularly monitors the status of internal operations through the es-
regulations 1,019 tablished internal accounting control system, ensuring transparent disclosure
How to steer clear of sexual
harassment risks at work 17,685 on the company’s accounting information that was verified with its credibility.
Business ethics practices at
Korean Air 826 The monitoring scope also covers the entire business process, as well as ac-
Introduction to the compliance 16,785 counting, to detect loopholes and better upon the company’s operations.
programCRISIS SUSTAINING EXCELLENCE KOREAN AIR
MANAGEMENT
Non-financial Risk Management
Risk Types Risk Factors Countermeasures
Market ● Global economic developments ● Annually checking economic and aviation industry forecasts and trends as well as their
● C
ompetitive low-cost airlines impact on our business, followed by development of necessary countermeasures
market ● Pursuing profitable growth through profit-oriented route operations and an enhanced global
● G
lobal carriers’ inroads into the network
Korean market ● Focusing on high-end customers through strategic operation of high-end fleet and
enhanced customer services
● Timely response to market changes and customer demands through flexible operations
according to market demands
Operational ● A
irplane accidents or hijacking ● E
stablishing a safety management system under a safety-first policy
● O
perating a Safety & Security Office under direct control of the COO to prevent accidents
16 ● S
etting procedure for operating a response center by regulation, guidelines, manuals and division
in event of an airplane accident
● A
nnually performing company-wide drills respond to airplane accidents
● R
egularly checking contingency plans and revising emergency response procedures
● O
perating the Safety Coordinators, ‘Go Team’, ‘Care Team’
Resource ● Oil price hikes ● C
onsistently monitoring oil prices and developing purchase strategies
● O
il price options, oil swaps, etc.
Environmental ● Environmental accidents ● C
ompliance with pollutant emissions regulations, company-wide environmental risk prevention
● C
limate change activities and environmental accident contingency plans
● A
doption and operation of high-efficiency aircrafts, optimal routes and short-cuts, optimization
of fuel loads, economic flight procedures, enhancing aircraft performance
● G
reenhouse gas inventory system
Regulatory ● C
ompliance with local laws and ● Constantly monitoring all laws and regulations
regulations in each country ● Responding to regulatory risks with legal experts
● C
arbon controls (EU ETS, GHG & Energy ● Maximizing efficiency of fuel use and saving costs through strategic operation of low-cost
Target Management System, etc.) emissions trading
Community ● Issues concerning local ● Investing in community development infrastructure
communities, NGOs, etc. ● Engaging in diverse social contribution activities
● Expanding communication channels with local communities2014 SUSTAINABILITY REPORT CRISIS MANAGEMENT
Financial Risk management
NATURAL HEDGE
Fuel prices
Strategies > > Risk Factors
Foreign exchange rates
Interest rates
ACTIVE HEDGE 17
Natural Hedge Active Hedge
● Fuel prices/Foreign exchange rates: Hedging between the
● B
alancing out the bottom-lines of incoming and outgoing rate of 30 percent of annual exposure in consideration of
currencies statistical figures and market developments
● K
eeping even percentages of fixed and floating interest ● Interest rates: Shifting between the floating rates to fixed
rates of debt portfolio rates under interest rate-swap agreements in accordance
with market conditions.MATERIALITY SUSTAINING EXCELLENCE KOREAN AIR
TEST
Korean Air selected the stakeholder groups and ran the responsibility. Based on the results of the test, the report-
materiality test according to procedure provided by the ing content and methodology was prioritized to cover all
GRI G4 Guidelines and the ISO 26000 standard on social information of concern to our stakeholders.
Reporting Content Definition Process
Materiality Test
Stakeholder interview
●
Benchmark
●
Material Issue List-up
Media analysis
●
Relevance Materiality (report contents)
Review of material issues
●
in the previous year
18
* Relevance test: 46 relevant issues were finalized from the issues provided * Materiality Test: Results of the relevance test verified the issues requiring a
by the GRI G4, Sustainability Topics for Sector (GRI) in accordance with the survey were included in the surveys on the internal and external stakeholders.
relevance guidelines as provided by the ISO 26000 Survey results were analyzed to finalize the 11 trend issues and 14 impact
issues as the material issues to be covered in this report.
Stakeholder Survey
Category Frequency Percentage
Internal Employees 66 45.5%
Governmental agencies 3 2.1%
Customers (domestic & global) 56 38.6%
Affiliates and subsidiaries 1 0.7%
External
Local communities 1 0.7%
Suppliers 13 9.0%
R&D Centers, related organizations 4 2.8%
Part-timers/interns 1 0.7%
Total 145 100%2014 SUSTAINABILITY REPORT MATERIALITY TEST
Materiality Test Outcomes Changes in Priority 2013 vs. 2014
4.60 2013 Key Issues 2014 Key Issues
Increased demand for stability of
◀ Stakeholder Concern
products & services
1
1 Increased demand for stability of products & services 1 Increased demand for stability of products & services
2 Diversified customer needs 2 Response to fluctuation in foreign exchange rates
Response to fluctuation in foreign
3 Increased demand for customer information security and oil prices
2 exchange rates and oil prices
4.40 4 Increased demand for business transparency 3 Intensifying market competition
Emissions (atmospheric)
7 4 Increased importance of need for talent
Economic achievements 6 Health and safety of customers 5 Growth in number of customers valuing health,
(revenue, pensions, government grants) eco-friendliness and pro-social behavior 5 Diversified customer needs
Climate change (global warming)
Indirect economic benefits (SOC 6 Active promotion of affordable airline market 6 Health and safety of customers
Growth in global interdependence
investments, up-and down-stream Training and
following globalization
industries, expected benefits) education 7 Acceleration of technology advancement 7 Emissions (atmospheric)
4.20
21 14 8 Intensifying market competition 8 Growth in global interdependence following
4 Increased importance of need for talent globalization
Energy consumption 15 8
9 Increased importance of need for talent
3 Intensifying market competition
12 Product and service labeling (customer satisfaction) 10 Growth in global interdependence following globalization 9 Growth in number of customers valuing health,
Lending business acumen 16 eco-friendliness and pro-social behavior
to social contribution 22 17 10 5 Diversified customer needs 11 Easy access to corporate information
Recruitment 9 Growth in number of customers valuing health, (via Internet, SNS, etc.) 10 Climate change (global warming)
4.00
(gender, new, part-time)
23 eco-friendliness and pro-social behavior
11 Acceleration of technology advancement 12 Increased demand for fair transactions 11 Acceleration of technology advancement 19
19
Corporate governance 24
(stakeholder communication) Market position (wages, procurement, recruitment) 13 Health and safety at work 12 Product and service labeling (customer satisfaction)
13 Growth in importance of securing and managing 14 Customer health and safety 13 Growth in importance of securing and
stable supply chain managing stable supply chain
Products & Services 15 Guarantee of fundamental rights at work
(environmental impact) 14 Training and education
3.80
16 Digital inclusion
15 Economic achievements
18 Optimizing socially responsible investment (SRI) 17 Employee education and training
(revenue, pensions, government grants)
20 Growth in demand for fair competition and 18 Climate change (global warming)
Public recognition of the company as win-win partnership 16 Energy consumption
a conservative old-timer
25 19 Increased exportation of high value-added products
17 Products & Services (environmental impact)
3.60 20 Protection of customer information
18 Optimizing socially responsible investment (SRI)
21 Increased demand for fair competition and mutual growth
19 Market position (wages, procurement, recruitment)
22 Energy use
20 Growth in demand for fair competition and
23 Product and service labeling (customer satisfaction) win-win partnership
24 Development of importance of securing and 21 Indirect economic benefits (SOC investments, up-
3.40 managing a stable supply chain and down-stream industries, expected benefits)
25 Market position (wages, procurement, recruitment) 22 Lending business acumen to social contribution
26 Optimizing socially responsible investment (SRI) 23 Recruitment (gender, new, part-time)
27 Impact of transport on the environment 24 Corporate governance (stakeholder communication)
Impact on the business ▶
3.20
28 Economic achievements 25 Public recognition of the company as a
(revenue, pensions, government grants) conservative old-timer
3.20 3.40 3.60 3.80 4.00 4.20 4.40 4.60
29 Strategies responding to external factors
30 Stakeholder engagement
31 Wastewater and waste material, CO2 emissions Changes
32 Fuel consumption Same
33 Job creation Down
34 Increased green purchase UpVALUE CHAIN SUSTAINING EXCELLENCE KOREAN AIR
Procurement Marketing/Sales
Procurement of flight operation supplies Marketing and sales of Korean Air’s services
PR, advertisement
Manufacturers:
aircrafts, jet engines and components
Refiners: jet fuels
In-flight meal manufacturing
20
Product prices:
promotion, sales
MRO (maintenance, repair,
and overhaul)
Farmers and retailors:
agricultural produce and in-flight
meal ingredients
Guaranteeing the safe and fast transportation of passen- ticipate in R&D efforts for future aircraft technologies and
gers and cargoes to their respective destinations is of our rockets. Our services dismantle the physical and mental
utmost priority. Our in-flight services help our passengers distances, stimulating cultural exchanges and economic
enjoy a safe and convenient flight on board making MRO development with the freedom of movement. The aviation
operations the most important part of our ground opera- industry brings the world closer together and Korean Air is
tions in ensuring a safe flight. Furthermore, we also par- proud to be part of it.2014 SUSTAINABILITY REPORT VALUE CHAIN
Flight Operation Post-flight Operation
Check-in, boarding, catering service, in-flight entertainment Airplane cleaning, waste disposal
Passenger: check-in, boarding, catering
service, in-flight entertainment
Aerospace business: R&D for
aircraft/unmanned aerial vehicles,
satellites/rockets
Cargo
21
Airplane cleaning
Waste disposal
Stakeholder Value Distribution by Korean Air (Unit: KRW billion)
Korean Air actively practices social contribution with job creation and supplier support programs. While serving customers with its main businesses of passenger and cargo transportation,
taxation obligations are faithfully seen through ultimately contributing to the nation’s economy.
Employee Shareholders Tax Services Creditors Local communities Suppliers
Wages 1,427.7 Dividends - Corporate income Interest expenses 437.4 Donations 10.8 Rental 198.5 Fuel expenses 4,352.0
Fringe benefits 271.0 tax 2.6 Manufacturing expenses 694.6
Airport maintenance 1,108.8GROWTH
FOR
EXCELLENCE
22
400 dollars
On January 1, 1914, an airplane took to the air, flying the first historical commercial
flight from St. Petersburg Port to Tampa Bay in Florida, U.S. The one and only passenger,
who won the bid for flight through an auction for USD 400, was then-mayor of St.
Petersburg. Current monetary value sees that USD 400 equivalent to what would be
now USD 9,300. It was the historical landmark investment toward a new future of faster
and safer transportation contributed by that first historical passenger on board.23 KRW 11,712.4 billion In 2013, Korean Air recorded KRW 11,712.4 billion in sales from transporting a total of 23.4 million passengers and 1.45 million tons of cargo. Safe, fast-service flights and delivery help numerous people around the world bolster the value of their businesses, experience different cultures and better understand each other. The aviation industry contributes economically to countless people and Korean Air is proud to be a part of this chain of value creation.
While working hard to contribute to global
economic growth through strengthening our
sales numbers, we continuously strive to
reinforce the competitiveness of a growth-
propelled aviation industry.
Key Economic Issues
Economic results (revenue, dividends, government grants) / Market position
24
(wages, procurement, recruitment) / Indirect economic benefits / Increased socially
responsible investments / Growth in global interdependence following globalization /
Acceleration of technology advancement / Intensifying market competition
Korean Air’s strategy for higher economic performance results
Realizing substantial growth through fundamental renovation and stable revenue structure
↑
● S
olidifying its market leadership through fleet modernization and global marketing
Establishing
competencies
a stable revenue
● Securing new growth engines by developing new markets, products and services
structure
● Fortifying system-based business operation to realize profitable growth
Enhancing ● B
olstering our network competitiveness through optimized fleet operation and scheduling
efficiency ● Increasing productivity with low-cost, high-efficient business model
and productivity of ● F
urthering operation efficiency with reinforced human resources/organizational
enterprise resources competenciesMajor Economic Achievements
Transportation (Unit: million persons/ million tons)
2011 23.30
2012 24.28
2013 23.40
2011 1.71
Passengers Cargoes
1.54
23.40 1.45
2012
2013 1.45
Passengers Cargoes
25
Sales (Unit: KRW billion) Fleet Introduction/Disposal New Routes
2011
16
2 new routes
4
11,803.1 12,261.7 11,712.4
2012
2011 2012 2013 Busan~Nanjing
14
●
8
Incheon~Colombo/Male ●
2013 ●
Fleet Investment Amount (Unit: KRW billion)
10
9
2011 2,400.6
2012 1,481.1 9 6 2
2013 1,851.0
Introduction Disposal 2011 2012 2013GROWTH SUSTAINING EXCELLENCE KOREAN AIR
FOR
EXCELLENCE
Korean Air’s sustainable Market Overview and Outlook
growth also contributes to The world’s aviation industry witnesses explosive growth in the number
of passengers every year. In fact, the 4.3 percent annual growth rate of
the growth of society market demand for air transport over the five-year period from 2008
and the nation with its to 2012 is projected to further grow to a rate of 5.4 percent during the
next five-year period beginning from 2013. In particular, the number of
economic impact. traveling passengers between the Asia-Pacific regions is predicted to
show a robust 5.7 percent annual growth rate for the same period. The
actual growth rate of international passengers rose by 5.2 percent year
on year in the Asia-Pacific region, while the international cargo trans-
port in the same market dropped 0.6 percent for the same period. This
decline can be explained by the delayed recovery of the global economy
and sagging market demands for cargo transport. However, the market
26 CONTEXT demand for international cargo transport is forecast to start gaining
ground in 2014 when advanced economies in Europe start to recover,
Economic Performance boosting the import and export volumes.
The global air transport industry supports 58.1 million jobs world- On the domestic front, the number of outbound and inbound passen-
wide and contributes USD 2.4 trillion to global gross domestic product gers edged up by 7.7 percent and 9.6 percent respectively for the same
(GDP).* Domestically, it creates 575,800 jobs and USD 28.4 billion to period in 2013, ultimately translating to an overall passenger increase
Korea’s GDP. In particular, the increased investment in SOC projects to of 9.2 percent. This growth rate is anticipated to continue for the time
meet the level of increased travel and tourism demand among Asian being, thanks to improved immigration services, including visa issuance,
people is expected to conjure a deeper economic impact, while also Brazil World Cup and Incheon Asian Games, as well as the explosive
bringing the global community closer. As the nation’s leading airliner, growth in the China-destined travelers.
Korean Air takes pride in contributing to the development of the global
aviation industry with its profit-generating business activities. All the
while, creating jobs and contributing to the national and global GDP in
PROGRESS
addition to distributing its profits to all stakeholders.
*S
ources: ATAG, Aviation Benefit beyond borders_2014_Apr_54p 2013 Condensed Balance Sheets (Unit: KRW billion)
2011 2012 2013
Total Assets 20,222.5 20,678.0 20,964.3
Total Liabilities 18,036.1 18,304.3 18,693.7
Total Shareholders’ Equity 2,186.4 2,373.7 2,270.62014 SUSTAINABILITY REPORT GROWTH FOR EXCELLENCE
2013 Condensed Income Statements (Unit: KRW billion)
Fleet (as of the end of 2013)
2011 2012 2013 Type Dec. 31, 2012 Dec. 31, 2013
Sales 11,805.3 12,261.7 11,712.4 A380-800 6 8
Gross Profit 1,599.5 1,396.0 1,105.9 B747-400 15 14
Operating Income (loss) 394.1 277.6 (18.0) B777-300ER 10 12
Income Before Income (443.0) 396.4 (401.1) B777-300 4 4
Taxes (loss) Large-size Subtotal 35 38
Net Income (loss) (301.1) 259.6 (290.5) B777-200 18 18
Passenger
A330-200 7 8
A330-300 16 15
27
New Routes in 2013 A300-600 3 2
B737-800 20 18
Routes Aircraft Schedule First Flight B737-900 20 22
Small-size Subtotal 84 83
Incheon-Colombo/Male A330 3 flights/week Mar. 9, 2013
Passenger Aircraft Total 119 121
Busan/Nanjing B737 4 flights/week Jul. 12, 2013
B747-400F 23 19
Cargo B747-8F 2 4
B777F 2 3
Cargo Aircraft Total 27 26
Grand Total 146 147GROWTH
SUSTAINING EXCELLENCE KOREAN AIR
FOR
EXCELLENCE
2014 Business Strategy & Key Tasks
Stakeholder Interview
Fundamental business restructuring to strengthen growth platform
“Korean Air is ahead of the pack in effectively ↑
responding to major CSR trends and sustainability
● Improving profitability in passenger/cargo transport
issues through continuous fleet modernization and Profit-oriented operations
business ● Year-round cost-reduction campaigns
constant management of environmental issues. operations ● C ost structure renovation through cutback on
I was impressed by its bold step of adopting the new fixed costs
aircraft model, A380, before any Korean airliners ● treamlining the organization and increasing outsourcing
S
and its aggressive expansion in new markets and Higher cost
competitiveness
● nhancing the operational rate of high-efficient
E
machinery and quickly adopting
business fields. In that context, Korean Air commands through improved
resource new equipment meeting market demand
undisputed leadership in the market. Nonetheless, the productivity aking full use of idle cargo planes and enhancing
● M
cost competitiveness of passenger planes
28 current issues regarding the company’s governance
and rising debts arouse prudence in its management ● trengthening market anticipation and responsiveness
S
Reinforcing core to customer demand
practices of financial and non-financial risks. Going competencies aking over reins in growth engine businesses and
● T
for higher global increasing network competitiveness
forward, I think Korean Air needs to further bolster competitiveness uilding on business alliances and developing new
● B
its responsiveness and willingness to take on new business models
challenges plus take on a more far-sighted approach
to its business strategies so that it may establish
stable business fundamentals unswayed by Passenger Business Strategies
temporary issues.” Amid the skyrocketing oil prices and relentless competition in the aviation in-
dustry, Korean Air pursues stronger competitiveness and sustainable growth
according to the following business strategies for passenger transport.
● Route schedule flexibility considering difference between high and low
seasons, while increasing supply of profitable routes by assigning optimal
aircrafts to each route
● Strategically utilizing top-notch aircrafts to increase sales of high-end class
seats and strengthening alliance marketing to penetrate the premium and
commercial markets
Kim Min-ji
Analyst at e-Trade Securities ● Securing sustainable growth platform with strategic development of
new markets with high growth potential; Launching of new scheduled
flights for Incheon-Colombo/Maldives and Busan-Nanjing routes in 20132014 SUSTAINABILITY REPORT GROWTH FOR EXCELLENCE
(Incheon-Houston route currently in works); Pursuing new market de- Routes Operation Strategies
mands through expansion of network with non-scheduled routes to cap-
ture niche markets.
● Identifying new market demand for business
Cargo Business Strategies Constant market or leisure purposes and strengthening regional
development and network in China and Southwest regions
In cargo transport operations, we are concentrating our cargo airplanes on network ● D iversifying schedule to enhance market
profitable routes built upon our strengths of quality transport service, global improvement competitiveness and connection between routes
network, varied product & service line-ups while making full use of the pas-
senger planes’ cargo transport; thus helping us secure both cost competitive- ● Adjusting supply and scheduling to regional
ness and route profitability. Proactive market demand and/or foreign exchange
response to market fluctuations
● We currently work on improving profitability by selling new, highly profitable changes ● Effective competition strategies in proportion
products that meet customer needs, such as the cargoes for medical sup- to the growing market supply for America-
Asia routes
plies, fresh freights and e-commerce freights.
29
● Following the adoption of the new, high-fuel efficient cargo plane models, ● caling down on low-demand, low-profit
S
namely two B747-8Fs and one B777F in 2013, one of each craft will be Profit-oriented routes
launched into operation and planes beyond their peak will be taken off the routes operation ●
Actively tapping into the market demand for
line in 2014 to enhance efficiency in our fleet operation. non-scheduled routes by utilizing idle
cargo planes
● Penetrating into the niche market of our exclusive passenger transport
routes, we are rigorously developing new sources of revenue, such as the ● Increasing operational rate by boosting
routes on Xian in China, and other cities in Vietnam and Latin America. In Enhancing assignment of high-density aircrafts to long-
2014, we will take advantage of the increased traffic rights as agreed in efficiency in fleet haul routes
the Korea-China Aviation Talks in pursuit of the new opportunities in the operation ● Adopting use of large-sized passenger
planes in consideration of market demands
Chinese market.
for passenger and cargo transports
NEXT STEP Fleet Operational Plans
● A total of 56 new passenger crafts (including two A380, 10 B747-8I, and 10
New Route Plan in 2014 B787) and five new cargo crafts (three B747-8F and two B777F) are to be
● Preemptively seizing business opportunities in the highly-potential yet ex- initiated into the fleet between 2014 and 2019 to meet the growing market
clusive, U.S. route needs for air transport.
● New light-weighted, high fuel-efficient aircrafts will significantly increase
Route Aircraft Schedule First Flight flight distance, making them optimal for long-haul routes. Out-of-date,
low-efficient aircrafts, such as A300-600 and B747-400, are slated to be
Incheon-Houston B777 7 flights/week May 2, 2014
phased out.PEOPLE
FOR
EXCELLENCE
30
Tony Jannus pilot
Tony Jannus was the pilot of the Benoist Airboat, the airplane that served the world’s
first scheduled airline service in 1914. After his first flight, Jannus continued piloting
this 8 meter-long airboat twice a day back and forth the first historical commercial route
between St. Petersburg and Tampa. The world’s first scheduled airline, St. Petersburg-
Tampa Airboat Line transported 1,204 passengers with only eight days of flight
cancellation until its contract terminated three months later.31 20,433 As of 2013, the number of Korean Air’s employees was recorded at 20,433. Every year, the company hires 1,200 to 2,500 new employees and assists them with systematic training and education programs to gain expertise in their respective job duties be it ground operations, engineering or part of the cockpit and cabin crews. Greater experience led to more sophisticated and diversified services, eventually contributing to the advancement of the global aviation industry. Employees’ expertise and teamwork remains to be the unchanged, underlying factor to a 100-year-old aviation industry.
Committed to a higher quality of life for our
employees, we offer generous fringe benefits and
foster competent experts in the industry
throughout the globe with varied and efficient
education on top of training programs.
Key Employee Issues
32
Increased importance for inclusion of talented team members, employment, and
training & education
Our efforts toward better employee welfare and corporate culture
● Seeking fundamental changes and a greater dynamic in corporate culture
- Reinforced change management through interactive communication covering entire organization
- Training systems cultivating minds to innovate along with strong sense of responsibility in our employees
● Varied maternity protection programs
● Operating Korea’s first technology-oriented university, Jeongseok University, and
supporting employees’ life-long learning with subsidies for tuitions
● mployee communication programs: Companionship Campaign (2013) and Hanmaeum
E
Campaign (2014)
● Operating the Industrial Health and Safety Committee
● Management of health and safety indicators concerning injury ratesMajor Achievements in Employee Welfare
New Employment (Unit: persons)
2011
1,801
732
2012
769
684
Female Male 2013
714 470 470
714
Female Male
33
Percentage of Female Employees Per-Employee Education Hours (Unit: hours) Maternity/Baby Breaks (Unit: cases)
131 101 Female Male
712 1,064 1,038
2011
42.6% 2013 167
2011 2012 2013
111
2012 Occupational Injury Rate (Unit: %)
125
100 0.08
0.07
2013 0.06
Korean Air does not discriminate its employees
by gender, age, religion or regional background 131
and strictly abides by the local laws and regula- 101
tions pertaining to the location of operation. 2011 2012 2013PEOPLE SUSTAINING EXCELLENCE KOREAN AIR
FOR
EXCELLENCE
Korean Air believes Promoting Employee Equality
CONTEXT
its commitment to employee Korean Air does not tolerate any form of discrimination in employment,
assignment, evaluation and compensation based on gender, age, reli-
satisfaction can help job Business Philosophy Valuing People gion, or regional background. We also comply with local laws and regu-
security and upgrade the Korean Air’s founder had a strong belief that a company is the sum of lations at all our operations, domestic and overseas. We also prohibit
its people and that a good education can inspire change in people. This forced labor, child labor and any form of extortion as stipulated in the
quality of life for all. belief has been handed down for the past few decades, setting the Korean Labor Standards Act and ILO Conventions.
guidelines for employee policy, regarding recruitment, compensation,
education and training, fringe benefits and corporate culture.
At Korean Air, people from various professions are working together in
ground operations, engineering, and flight operations. The different re-
quirements coinciding with these professions result in a non-discrim-
inate environment when it comes to the consideration of employment
34 or compensation by gender or employment status (regular or contract-
based). In particular, we pay special attention to the well-being of fe-
male workers with our practical programs to support maternity. Addi-
tionally, we have in place a number of professional training/education
programs related to the aviation industry, helping our employees rear
their expertise in their own professions. We strongly believe this also
helps enhance the quality of life for all our employees as well.
PROGRESS
Employees by Gender and Profession * as of Dec. 31, 2013, executives not included
Classification Ground Operation (general Engineering (aviation, aerospace, research, Crews Others Total
affairs/ marketing/ transportation) procurement, communication, and flight management) (cockpit/cabin) (IT/catering, etc.)
Total 6,424 5,272 8,327 410 20,433
Male 3,405 5,188 2,790 348 11,731
Female 3,019 84 5,537 62 8,702You can also read
