Korean Air has announced plans to acquire Asiana Airlines.
Korean Air’s parent company, the Hanjin KAL Group, has announced it will acquire Asiana Airlines after a board meeting earlier today.
Korean Air will buy Asiana for KRW 1.8 trillion. Korean Air’s parent company, Hanjin KAL, is receiving KRW 800 billion from Korea Development Bank, one of Asiana’s existing shareholders. Korean says its main reasons behind acquiring Asiana is to “stabilize the Korean aviation industry, which is suffering from COVID-19”.
The way this press release is worded makes it sound like a complete merger between Asiana and Korean Air which will likely get rid of the Asiana brand:
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Once Korean Air “acquires” Asiana, it will be one of the top 10 airlines in the world.
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Countries with less than 100 million people “in general have a single full service carrier”. With Korean Air acquiring Asiana, there will only be one full service carrier in South Korea.
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Korean Air’s “acquisition” and the expansion of its routes, fleet, capacity, will give the airline competitiveness to compete with global airlines.
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"The merger between the two airlines is expected to further enhance the competitiveness of the Korean aviation industry with more streamlined route operations.
It’s unclear what will happen to Asiana’s low-cost subsidiaries Air Busan and Air Seoul. Additionally, this could mean Asiana may leave Star Alliance. It’s possible Asiana could operate as a separate brand from Korean Air, but it would make sense to merge the two full service carriers to simplify operations.
Sources/Image Credits
Sources:
https://en.yna.co.kr/view/AEN20201116002651320
https://www.reuters.com/article/asiana-airlines-ma/update-1-hanjin-kal-to-buy-asiana-airlines-after-getting-724-mln-kdb-injection-yonhap-idUSL1N2I202Z
https://twitter.com/JournoDannyAero/status/1328166653222285312
What are your thoughts on this? Do you think this is a full merger or could it be similar to the “Lufthansa Group” with its ownership over Lufthansa, Swiss, Austrian Airlines, and more?
