Asiana Airlines Ends Legal Battle, Settles Damages with LSG Sky Chef Korea
Asiana Airlines, based in Seoul Incheon, Korea, has brought an end to a lengthy legal battle by withdrawing its appeal against a ruling that found the airline unfairly terminated a catering contract with LSG Sky Chef Korea. This development was confirmed in a corporate filing made on January 23, 2024, marking the conclusion of the dispute in the Seoul District Central Court. Although the filing did not provide specific reasons for Asiana’s decision to terminate the proceedings, it signifies a significant resolution in a long-standing controversy.
The origins of this dispute can be traced back to 2017 when Asiana Airlines abruptly terminated its catering contract with LSG Sky Chef Korea. The termination occurred following LSG’s refusal to purchase warrants issued by another entity affiliated with Asiana’s parent company. This incident quickly escalated into a major national scandal, drawing widespread attention.
In response to the airline’s actions, LSG Sky Chef Korea filed a lawsuit against Asiana Airlines in 2018, asserting that the airline had violated the terms of their contract. After several years of legal proceedings, the Seoul District Central Court issued a decision in August 2023, partially upholding LSG’s claims. As a result of this ruling, Asiana Airlines was ordered to pay KRW 18.27 billion (approximately USD 13.7 million) to LSG, in addition to interest and legal costs. Dissatisfied with the judgment, Asiana Airlines initiated an appeal in September 2023.
However, the latest corporate filing from Asiana Airlines reveals that the airline has chosen to withdraw its appeal, bringing the lawsuit to an end. The statement also notes that interest and litigation costs will be included in the final payment to LSG Sky Chef Korea, effectively settling the dispute.
In a separate legal matter related to the contract termination, Asiana Airlines faced another setback in October 2023. The Fair Trade Commission imposed a corrective order and a KRW 2.8 billion (approximately USD 2.1 million) fine on Asiana after determining that the airline had encouraged LSG Sky Chef Korea, as well as the caterer who succeeded the contract, to purchase zero-interest bonds. Asiana Airlines had lodged complaints with the Fair Trade Commission after losing the catering contract due to the refusal of LSG and the new caterer to purchase these bonds. Despite Asiana’s efforts, its appeals against the investigation’s outcome and associated penalties were ultimately unsuccessful, with the matter reaching South Korea’s highest court.
As the legal battles come to a close, this development represents a significant chapter in the ongoing dispute between Asiana Airlines and LSG Sky Chef Korea.