Hanjin Group said Tuesday that it is considering dividing its flagship subsidiary Korean Air into two firms as part of its recent move to finally adopt a holding company system.

The group, however, made it clear that any specific plans have yet to be finalized, according to its regulatory filing on the day.

Earlier news reports said that Korean Air will be divided into two entities, with one of them becoming a holding company to oversee the whole group.

Last year, Hanjin, the nation’s 10th-largest conglomerate, merged Korean Air with its other affiliate Hanjin Travel, pledging it would resolve the issue of circular shareholding in phases.

The latest move, industry watchers say, seems to be aimed not just at improving transparency of group management overall but also at strengthening ownership of chairman Cho Yang-ho.

Some other conglomerates such as SK, LG, GS, Doosan, LS and CJ have introduced the holding company system for the same reasons.

Cho currently owns 9 percent of shares in Korean Air and 6.87 percent in Hanjin Group.

In local conglomerates, owner families have wielded their power through circular shareholdings even though they actually own only a small fraction of company shares.

By Lee Ji-yoon (jylee@heraldcorp.com)