Korean Air expects to take two years to integrate Asiana purchase

Jin Air Co

31/03/2021 04:12

March 31 (Reuters) - Korean Air Lines Co Ltd  003490.KS 
expects it will take two years after its purchase of Asiana
Airlines Inc  020560.KS  closes before the rival brands can be
integrated, and it plans to merge their three low-cost arms into
one, its president said. 
    Korean Air in November announced it would spend 1.8 trillion
won ($1.59 billion) to become Asiana's top shareholder, in
aviation's first major consolidation since COVID-19 brought the
industry to its knees.  urn:newsml:reuters.com:*:nL1N2I202Z
    It is also the biggest shake-up in South Korean air travel
since Asiana's founding ahead of the 1988 Seoul Olympics.
    In a written briefing to media on Wednesday, Korean Air
President Woo Keehong said his airline hoped to receive
competition approvals for the Asiana deal from nine countries by
the end of the year.
    "Korean Air plans to fully integrate with Asiana Airlines
about two years after Korean Air completes the acquisition and
Asiana Airlines becomes its subsidiary," he said. 
    Korean Air also expects to merge the airlines' low-cost arms
Jin Air Co Ltd  272450.KS , Air Busan Co Ltd  298690.KS  and Air
Seoul into a single budget carrier that can better realise
economies of scale, Woo said.
    "By consolidating these three airlines, it can become a
top-level low-cost airline not only in Korea, but also in Asia,"
he said.
    Korean Air and Asiana will look to integrate their large
aircraft fleets, which in some cases have different engine types
for the same model, Woo said, adding that it would be easier to
phase out Asiana's planes, as many have leases expiring within
five years. 
    Korean Air expects about 1,200 roles between the airlines
will overlap, but it will manage the situation through attrition
and retirements rather than direct job cuts, he said.
($1 = 1,132.2400 won)

 (Reporting by Jamie Freed in Sydney. Editing by Gerry Doyle)
 ((Jamie.Freed@thomsonreuters.com;))