Korean Air has completed the acquisition of compatriot Asiana Airlines, after successfully netting a 63.88% ownership stake in the latter.
The announcement comes as Korean Air made a final payment of W800 billion ($558 million) to Asiana as part of a share purchase transaction. It caps off an ambitious acquisition – with investments amounting to W1.5 trillion – that began more than four years ago amid the coronvirus pandemic.
In late-November, Korean won the crucial green light from European regulators, who had initially opposed the merger on the grounds that it would reduce competition on passenger routes between South Korea and France, Germany, Italy, and Spain.
Korean Air expects to fully integrate the operations of Asiana “within two years”, with no “workforce restructuring” expected. Asiana will meanwhile operate as a subsidiary of Korean Air.
“The integration strategy includes network optimisation through diversified flight schedules on overlapping routes, service expansion to new destinations and enhanced safety investments,” states Korean Air.
The airline will also integrate Asiana’s frequent flyer programme into its own, with the deal subject to Korean regulatory review.
Media reports also suggest that Korean Air’s Jin Air will serve as the wider group’s low-cost brand after its consolidation with Asiana’s two low-cost units, Air Busan and Air Seoul.
“The acquisition represents a strategic milestone for Korea’s aviation industry. Korean Air will proceed to implement measures to strengthen the country’s aviation capabilities and enhance its competitive position in the global market,” says the SkyTeam operator.
The long-drawn process has seen the airline made several concessions to assuage monopolistic concerns. For instance, to gain European approval, Korean transferred the operations of four European routes to low-cost rival T’way Air.
Asiana also divested its cargo business to compatriot Air Incheon as part of remedy measures in the lead-up to the merger.
