Korean Air completes Asiana takeover to form one of Asia's biggest airlines (updated)

ASIANA AIRLINES

12/12/2024 05:22

* 
      Korean Air's purchase of debt-laden Asiana first announced
in
2020
    

        * 
      Deal had been hampered by competition concerns and
required
concessions to regulators
    

        * 
      Korean Air will be the world's 12th-largest carrier by
international capacity -data
    

  
 (Adds graphic, related content, detail on integration in lower
paragraphs)
    By Lisa Barrington
       SEOUL, Dec 12 (Reuters) - Korean Air  003490.KS  said on
Thursday it had completed its protracted purchase of South
Korean rival Asiana Airlines  020560.KS , making it one of
Asia's biggest carriers.
    The 1.8 trillion won ($1.3 billion) deal, the longest-ever
merger to complete between airlines, was first announced four
years ago by South Korea's largest carrier to rescue debt-laden
Asiana, which was grappling with a plunge in demand during the
COVID-19 pandemic.
   The acquisition of South Korea's No. 2 carrier was hampered
by competition concerns and Korean Air had to make significant
concessions to competition watchdogs around the world, including
handing routes to other airlines and selling Asiana's cargo
operations.
    Korean Air acquired a 63.88% stake in Asiana on Thursday,
making it a subsidiary three years later than the smaller
airline had initially anticipated. 
    The enlarged Korean Air group could account for just over
half of South Korea's passenger capacity, and would become the
world's 12th-largest airline by international capacity, a
Reuters analysis of airline data from Cirium and OAG shows
    It would rank alongside China's top three state-owned
carriers as one of the Asia-Pacific region's largest by revenue,
according to 2023 financial results.  
    Korean Air said Asiana's integration would not include
layoffs. 
    "The combined organisation projects natural staff growth
through business expansion, with employees in overlapping
functions being reassigned within the organisation," it said in
a statement.
        Asiana will be run as a subsidiary for up to two years
before integrating into one airline that will keep the Korean
Air name, but with new branding.
        Korean Air will also create a single low-cost carrier
and its integration strategy includes spreading out flight
schedules on overlapping routes, adding new destinations and
further investments in safety, it said.
    A plan to merge the two airlines' frequent flyer programmes
will be submitted to the Korea Fair Trade Commission by June
2025 for review, Korean Air added.
    The airline said the merger aims to boost the capabilities
and network reach of South Korea's Incheon International
Airport, the world's fourth-busiest for international flights
and fifth-busiest for cargo, which competes with Asian hubs Hong
Kong and Singapore.   
    Airline consolidation is rarer in Asia than in Europe, which
has seen a wave of mergers in the last two decades, and in North
America where regulators fear the industry is too concentrated.
    Korean Air said the deal would strengthen its competitive
position globally.
    Asiana will hold an extraordinary general meeting of
shareholders on Jan. 16 to appoint new board directors nominated
by Korean Air.

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Korean Air aims to complete protracted Asiana takeover next week
   https://www.reuters.com/business/aerospace-defense/korean-air-brings-forward-asiana-acquisition-date-dec-11-2024-12-03/
Expanded Korean Air could represent just over half of South
Korean capacity    https://reut.rs/3OGDHxW
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Lisa Barrington; Editing by Nicholas Yong and
Jamie Freed)
 ((nicholas.yong@thomsonreuters.com;))