Korea’s leading resort operator, Sono Hospitality Group, has formally begun efforts to acquire management control of the local budget airline T’way Air with the aim of leveraging the aviation sector as a key growth engine.
Sono International Co., the holding company of Sono Hospitality Group, announced on Wednesday that it plans to actively participate in T’way Air’s management. Its efforts include demanding operational improvements, seeking access to the shareholder registry and submitting shareholder proposals.
“Sono Hospitality Group will utilize its extensive domestic and international infrastructure to introduce diverse products and enhance customer service, aiming to maximize customer satisfaction at T’way Air and boost shareholder value,” Seo Jun-hyuk, the group's chairman said. “Our entry into the aviation industry marks a new growth phase for the group as we strive to establish ourselves as a global leader.”
Earlier on Monday, the group sent a formal proposal to T’way Air and its CEO, Jeong Hong-geun, outlining the need for a complete overhaul of the management team and a paid-in capital increase to secure the airline’s stability.
Sono International emphasized the airline’s current challenges, stating, “T’way Air’s inadequate investment in maintenance, workforce and compliance with aviation safety regulations reflects a lack of awareness of safety's critical importance.” The company called for a comprehensive reassessment of T'way's safety measures.
The company further highlighted the damage to T’way Air’s brand image caused by the Transport Ministry’s low ratings of the airline's operational reliability, and subsequent administrative actions and fines.
On Tuesday, Sono International formally submitted its proposals for the regular shareholders’ meeting scheduled for March and requested access to the shareholder registry.
Through its shareholder proposals, the group intends to request the addition of an agenda item for appointing new directors. With a new board, it seeks to craft strategies to ensure stable operations, to improve the airline's financial health and to maximize synergies between Sono's aviation and hospitality businesses.
As of Jan. 14, T’way Air’s largest shareholders are T’way Holdings and Yerimdang, with a combined stake of 30.06 percent.
Sono Hospitality Group is the second-largest shareholder, holding a combined 26.77 percent through Sono International (16.77 percent) and its affiliate Daemyung Sonoseason (10 percent).
Given the nearly equal stakes of the two largest shareholders, speculation is growing about the possibility of a fight for control over the company's management.
By Kim Hae-yeon (hykim@heraldcorp.com)
