Significant consolidation will follow merger of Korean Air and Asiana
December 8, 2024
The Government of South Korea announced a proposed merger of Korean Air and Asiana Airlines in November 2020. The plan was for Korean Air to absorb Asiana Airlines, creating a global ‘top ten’ airline and a dominant carrier in South Korea.
For the merger to proceed, it was realised that approval would be necessary from the competition authorities in six key markets, and 14 separate countries. Approval from European Union and United States authorities was always going to be difficult, and Korea formulated a backup plan involving a foreign equity investment into Asiana.
In February 2024, Korean Air secured conditional Commission approval for the consolidation, but this was contingent on finding an acceptable buyer for Asiana’s global cargo freighter business, which Korean Air offered to divest, including its aircraft, slots and traffic rights, as well as cargo contracts, which have now been successfully sold to Air Incheon.
Korean Air will make assets (including aircraft, slots and traffic rights) available to its competitor T’Way, allowing the latter to start passenger operations as the ‘remedy carrier’ on the four routes of specific concern (from Seoul to Barcelona, Frankfurt, Paris and Rome).
These measures fully addressed the competition concerns identified by the European Commission, and approval was finally received on 28 November. Korean Air said that: “following EC merger clearance, we have reported both this outcome and our Asiana share acquisition plan to the US Department Of Justice.”
South Korea’s Maeil Business Newspaper, has reported that the DOJ has given its final approval for the merger, though it does not formally announce the results of its reviews, according to the Maeil.
The scene is now set for consolidation of Korea’s airlines. Asiana will disappear, being absorbed by Korean Air, while a ‘super’ Low Cost Carrier (LCC) will also be formed with Jin Air absorbing Air Seoul and Air Busan.
Jin Air was launched by Korean Air in January 2008, and is today South Korea’s largest LCC with a fleet of four Boeing 777-200ERs, 19 Boeing B737-800s, five 737-8s, and three 737-900s.
Air Busan was founded by Asiana Airlines in August 2007, initially operating as Busan International Airlines. It became Air Busan in February 2008, and today operates a fleet of five Airbus A320s, eight A321s, and eight A321neos. Air Seoul was also established by Asiana Airlines in April 2015, and today operates a fleet of six A321s.
