[Edaily Marketin YunJi Kim Reporter] As Hoban Group moves to secure its position as the largest shareholder of Hanjin KAL, attention is turning to cases of management control disputes involving foreign airlines. While Hoban Group maintains that its purpose is purely investment, overseas examples include companies that acquired airline stakes and secured management control only to step down due to conflicts with existing shareholders, as well as those that became deeply involved in management but lost control due to the airline’s financial crisis. Conversely, there are also cases where companies pursued a management takeover but were forced to divest even their existing stakes due to intervention by competition authorities, resulting in mixed outcomes following the acquisition of shares.

According to investment banking (IB) industry sources on the 3rd, Hoban Group recently filed a merger notification with the Fair Trade Commission, noting that it may have surpassed Hanjin Group Chairman Cho Won-tae’s camp to become the largest shareholder after purchasing additional shares in Hanjin KAL. With Chairman Cho also planning to acquire an additional 325,000 shares of Hanjin KAL for approximately 37 billion won, there are signs that the stake competition between the two sides is reigniting. It remains to be seen whether Hoban Group will participate in management in the future, such as by nominating director candidates or submitting shareholder proposals.

Overseas, there have been several instances where companies not primarily engaged in the aviation industry acquired stakes in airlines and subsequently secured management control. A prime example is San Miguel, a major Philippine food and beverage conglomerate, which acquired a 49% stake in the parent company of Philippine Airlines in 2012 for approximately $500 million, thereby securing management control. At the time, San Miguel President Ramon Ang took charge of Philippine Airlines’ management and embarked on an aggressive business expansion, including the acquisition of aircraft and the expansion of routes. However, he clashed with the camp of Chairman Lucio Tan—the existing major shareholder and a Philippine tycoon—over investment strategies and other matters. As the conflict between the two sides deepened, Chairman Lucio Tan’s camp repurchased San Miguel’s stake for approximately $1 billion in 2014. In effect, control of Philippine Airlines had returned to Chairman Tan’s side after just two years.

There is also a case where, after securing a stake in an airline and expanding its involvement in management, the investor ultimately handed over control to the New Zealand government due to deteriorating financial conditions. The New Zealand investment firm Bryaly Investments participated in the privatization of Air New Zealand in 1989 and emerged as a major shareholder. Bryaly subsequently increased its stake, securing approximately 47% by 1999. Along with this, it expanded its influence over management by increasing the number of its representatives on the board from two to four and securing the chairmanship.

However, the situation changed after Air New Zealand fell into a financial crisis following its full acquisition of Australia’s Ansett Airlines. At the time, a foreign media outlet in New Zealand analyzed that Bryally’s management intervention—which prioritized investment returns—had influenced Air New Zealand’s reckless acquisition of Ansett Airlines. Subsequently, in 2001, the New Zealand government stepped in with a bailout, significantly weakening Bryally’s influence over management.

In some airline mergers and acquisitions, attempts to secure controlling stakes were thwarted by competition authorities. A prime example is the Irish low-cost carrier Ryanair, which acquired a 29.8% stake in its competitor Aer Lingus and sought to take over management, but the European Commission blocked the deal due to concerns over reduced competition on air routes. The UK competition authority also ruled in 2013 that the stake could restrict Aer Lingus’s ability to merge with other airlines or pursue its business strategy, and ordered the stake to be reduced to 5%. Ryanair contested this decision and took legal action, but the UK Competition and Markets Authority upheld its original ruling in 2015, requiring the stake to be reduced to 5% or less.

Analysts note that, unlike general businesses, the aviation industry is a strategic sector where national interests come into play; therefore, disputes over control of airlines do not necessarily follow the logic of capital alone. They point out that the rules of the game can change due to regulatory oversight and defensive measures by existing shareholders.

Meanwhile, analysts in the investment banking sector note that even if Hoban Group secures its position as the largest shareholder of Hanjin KAL, actually gaining management control is a separate matter. Since Chairman Cho’s side has major shareholders classified as friendly—such as Delta Air Lines and the Korea Development Bank—the outcome of the management control battle could hinge on how these shareholders exercise their voting rights. In particular, with the terms of three directors recommended by the Korea Development Bank set to expire ahead of the regular shareholders’ meeting next March, changes to the board’s composition are also possible. Observers note that the key factors will be the outcome of the Fair Trade Commission’s review of the business combination and whether Hoban Group will seek to participate in management by nominating director candidates or submitting shareholder proposals.