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JAL Acquires Hanjin KAL Stake, Strengthening Alliance with Korean Air

JAL Acquires Stake in Hanjin KAL, Bolstering Alliance with Korean Air Amid Management Dispute
Japan Airlines (JAL) has acquired a stake in Hanjin KAL, the holding company of Korean Air, marking a significant development in the strategic partnership between the two carriers. Although the exact size and value of JAL’s investment have not been disclosed, industry analysts emphasize the timing of the acquisition as critical, coinciding with an intensifying management control dispute involving the Hoban Group.
Strategic Investment Amid Shareholder Tensions
JAL announced the acquisition in Tokyo on June 3, simultaneously signing a broader strategic partnership agreement with Korean Air. Korean Air clarified that JAL’s investment was made independently, motivated by the long-term market value of Hanjin KAL. The absence of a regulatory filing for large shareholdings—mandatory for stakes of 5% or more—suggests that JAL’s stake remains below this threshold.
The investment arrives at a pivotal moment. The Hoban Group has rapidly increased its stake in Hanjin KAL, reaching 20.15% as of July, closely matching the combined 20.57% held by Chairman Cho Won-tae and his allies. Should JAL’s stake be aligned with Chairman Cho, it could serve as a crucial “white knight” in defending his management control amid the ongoing contest.
Currently, major shareholders of Hanjin KAL include Delta Air Lines with 14.90%, Korea Development Bank (KDB) holding 10.58%, and the National Pension Service at 5.11%. Both Delta and KDB are regarded as supporters of Chairman Cho. With JAL’s addition, the pro-Cho faction would command over 46% of shares, significantly outnumbering the Hoban Group’s holdings.
Potential Challenges and Market Implications
Despite the strengthened alliance, challenges remain. There is speculation that KDB, which played a stabilizing role during the 2019 management dispute between Chairman Cho and his sister, might divest its 10.58% stake to recover public funds following the planned merger of Korean Air and Asiana Airlines. Such a move could reignite a full-scale battle for control with the Hoban Group.
JAL’s investment also raises questions regarding regulatory approval and the integration process with Korean Air, given the cross-border nature of the partnership. Market reactions have been largely positive, with expectations that the deepening cooperation will boost investor confidence and potentially enhance stock performance for both airlines. Competitors, including Delta Air Lines, a major stakeholder, are closely monitoring the situation and may reconsider their strategic positions in response to JAL’s involvement.
Chairman Cho has a history of leveraging foreign airline partnerships to consolidate his control. During the 2019 dispute, Delta Air Lines acquired a stake in Hanjin KAL, reinforcing Cho’s position. Since then, Delta has expanded its cooperation with Korean Air, including a joint bid for Canada’s WestJet.
Expanding Cooperation Beyond Equity Investment
The partnership between JAL and Korean Air extends beyond equity stakes to encompass broad business collaboration. Despite their membership in different global airline alliances—Korean Air in SkyTeam and JAL in oneworld—the two carriers have agreed to pursue a cooperative relationship that transcends alliance boundaries. Enhanced codesharing on Korea-Japan routes is expected to be the initial focus, particularly as Korean Air advances its merger with Asiana Airlines.

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