Asiana Airlines Wins Wage Battle in Seoul High Court

luvsmiling, Sept. 4, 2015, 10:12 a.m.

Asiana Airlines barely reversed the verdict on an ordinary wage lawsuit filed by its laborers, but it cannot smile as the court revealed its poor financial status. According to airline industry watchers on September 3, the Seoul High Court sided with Asiana Airlines, reversing a lower court’s ruling that regular bonuses should be included in regular wages, and that the company should recalculate extra salary for its employees based on the new regular wage.

Under the labor and management agreement, Asiana Airlines does not include regular bonuses in ordinary wages. The company pays regular bonuses with basic wages and a continuous-service allowance every two months. The lower court ruled that 600 percent of regular bonuses is the ordinary wage at Asiana Airlines. However, the higher court overturned the decision, saying if bonuses are included in the ordinary wage, it would increase by 40 percent, which would cause critical financial risk to the already cash-strapped company.

The Seoul judges explained that although the airline escaped from a restructuring process last December, it still owes approximately 587 billion won to its creditors. Moreover, it detailed that since its foundation, the airline has never gained accumulated net profit, and its accumulated net loss stands at 1.11 trillion won so far.

The court said, “If Asiana Airlines loses the case and has to pay 11.7 billion won in extra wages, it will only add to its debt, and the amount would have a big impact on the company, which is against the principle of good faith between the company and its employees.” Meanwhile, Asiana Airlines is struggling with its pilots over the ordinary wage issue at a lower court.

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