Korean Air Lines (KAL) has put its in-flight duty-free services up for sale during the sale of its in-flight meal services, with market insiders’ attention focused on the reasons for the move.

KAL will start sending teaser memorandums (TMs) this week to sell its in-flight meal services, according to industry sources on June 22. The airline is also reportedly considering selling its in-flight duty-free services instead of offloading mileage services and maintenance, repair and operations (MRO) services. Credit Suisse, which is providing consulting services to the airline, is likely to lead the sale of in-flight duty-free services.

Market insiders are paying attention to the reason the airline has changed its plan from selling its mileage services to in-flight duty-free services. There was an expectation the mileage services unit would be put up for sale next with many foreign airlines previously selling their shares. Global private equity firms, including Affinity Equity Partners, have expressed interest in the mileage services unit, raising the likelihood of a sale.

Selling in-flight duty-free services is meaningful in that local activist fund Korea Corporate Governance Improvement (KCGI) has seen the business as a cash cow. KCGI, which is in a proxy battle over the management control of  KAL parent company Hanjin KAL, has constantly demanded an expansion of its cash cow businesses, including in-flight duty-free services and MRO services. Industry watchers said that by selling its in-flight duty-free services, the airline can make its move distinct from KCGI’s suggestions.

Indeed, the three-party coalition of KCGI has criticized Hanjin Group’s Vision 2023 announced in January 2019 claiming it imitated KCGI’s ideas.

Market insiders also said Hanjin KAL chairman Cho Won-tae wants to remove the legacy of his older sister Cho Hyun-ah. Cho Hyun-ah led the addition of in-flight duty free offering to the airline’s first A380 jumbo jet in 2011.

KAL may be carrying out the sale of its in-flight meal services with the same intention of getting rid of Cho Hyun-ah’s traces considering she put a lot of efforts into the business when she was in charge of in-flight services for the airline. (Reporting by Ik-hwan Choi)