Jin Air made the announcement in a regulatory filing with the Financial Supervisory Service. The low-cost carrier (LCC) said Cho's resignation from its CEO post is intended to strengthen a responsible management system by a professional manager.
Jin Air is the budget unit of Korean Air Lines Co., the country's No. 1 full-service airline. Both companies are part of Hanjin, a transportation and logistics conglomerate.
Cho's resignation is the latest in a series of moves by Cho's family to try to ease mounting public outrage over allegations of misconduct.
In April, South Korea's customs service raided Korean Air headquarters over suspicions that Cho's family members sneaked luxury goods into South Korea without paying duties.
Police have also launched an investigation into chairman Cho's wife -- Lee Myung-hee -- over alleged physical and verbal abuse.
Lee, who is chairperson of the nonprofit Ilwoo Foundation, allegedly tried to slap the face of a construction crew worker hired to remodel her Seoul residence in 2013 while forcing the worker to kneel down. The worker avoided being hit by moving his head backward, and Lee yelled at the worker and kicked his knee.
She is also suspected of insulting an employee at the Incheon-based Grand Hyatt hotel, affiliated with Hanjin Group, and later having the worker fired for not recognizing her and calling her an old woman.
Separately, Cho's youngest daughter, Cho Hyun-min, a former executive of Korean Air and Jin Air, is the subject of a probe for allegedly throwing water in the face of an ad agency manager during a meeting in March.
She is the younger sister of Cho Hyun-ah, who gained global notoriety for the "nut rage" incident in 2014. Cho Hyun-ah forced a plane back to the boarding gate at New York's John F. Kennedy International Airport because she was upset with the way her nuts were served -- in an unopened bag instead of on a plate.