Korean Air, “Review of Acquisition of Asiana Airlines” is facing the birth of a very large national airline

As Hanjin Group is known to pursue the acquisition of Asiana Airlines, which has fallen into commercial difficulties, the focus is on the birth of a large domestic airline.

If the acquisition is successful, the national airline’s “2nd top” system, which has been maintained for 32 years since Asiana Airlines was founded in 1988, will be converted to Korean Air’s only system. However, due to Asiana Airlines’ high debt and union backlash, it will take some time to complete the acquisition process. On the 13th, Korean Air announced on the 13th that “it is under consideration, but no specific decisions have been made” regarding the acquisition of Asiana Airlines. Korean Air is cautious, but the industry and government expect Hanjin Group’s acquisition of Asiana Airlines to begin sooner or later.

It is reported that the government will hold a meeting of related ministers (Sankyungjang) to strengthen industrial competitiveness as early as the 16th and will officially form the acquisition of Asiana Airlines by the Hanjin Group at the government level. In line with this, Hanjin Kal, the holding company of Hanjin Group, is expected to hold a board meeting on the 16th to discuss the issue of the Asiana Airlines acquisition, and then submit a letter of intent (LOI) to Asiana Airlines at the start of the next week.

It is reported that Korean Air has already shown willingness to take over Asiana Airlines, for example by discussing the acquisition of Asiana Airlines with Korea Development Bank. When Korean Air acquires Asiana Airlines, the ladder will quickly rise to the top 10 in the world.

According to the “ World Air Transport Statistics 2020 ” published by the International Air Transport Association (IATA), Korean Air ranked 18th in the global airline rankings last year based on the RPK of international passengers (the number of passengers paid per flight multiplied by the flight distance) and Asiana Airlines. He took the 32nd place. When Korean Air and Asiana Airlines combine, it is similar to American Airlines, which is ranked 10th. In terms of the number of international passengers, Korean Air is 19th and Asiana Airlines is 36. Together, it is 10th.

In the international cargo volume ranking, Korean Air (5th) and Asiana Airlines (23rd) can be combined to take third place on Cathay Pacific. In terms of its own aircraft, Korean Air currently owns 164 aircraft and Asiana Airlines owns 79 aircraft, along with 249 aircraft. Air France (220 units) and Lufthansa (280 units) are known to be among the top 10 in the world.

The share of domestic carriers will exceed half when combined with subsidiaries. At the end of last year, Korean Air’s share of domestic flights was 22.9% and Asiana Airlines’ share of 19.3%. The market share of the low cost carriers (LCCs) of both companies such as Jin Air, Air Busan and Air Seoul is 62.5%.

Reporter Kim Doo-yong [email protected]