Asiana Airlines delays decision on the sale of its cargo business
31 / 10 / 2023
Source: Thanhliemnguyen/Shutterstock
Asiana Airlines has delayed a decision on whether to sell its cargo unit as part of its takeover by Korean Air.
The airline’s board met yesterday to decide whether to go ahead with the sale as the two companies looked to obtain European Union approval for the deal.
In a stock exchange announcement following the meeting, the airline’s board said that a vote on the decision did not happen and a new meeting to discuss the plans would take place within a month.
According to earlier reports, Korean Air has been in talks with several other carriers to buy the cargo assets.
Asiana’s cargo business accounts for around 20% of the carrier’s total revenue and labour unions are also thought to be opposed to the plan.
Korean Air first announced plans to acquire Asiana in November 2020 but the timetable fell victim to the Covid pandemic and resulting turmoil in the airline industry.
The airline had been hoping to submit its plans to the European regulators by the end of October. Korean Air had also proposed to cease four European routes to appease the regulator.
Securing regulatory approval for the plan in several regions, notably Japan, the US and European Union, has also proved tricky.
However, it has gained approval in Singapore, China and the UK.
Between them, the two carriers dominate the long-haul market to and from South Korea, and this has complicated the approval process.
Korean Air’s network covers 120 cities in 43 countries and it operates an extensive freighter fleet, handling 1.6m tons of cargo internationally and 36,000 tons domestically in 2020.
Asiana Airlines’ international cargo business covers 12 countries, 27 cities and 25 routes.
According to Airfleets.net, the carrier operates 10 Boeing 747-400 freighters and a single Boeing 767-300 freighter.
Air Cargo News sister title FlightGlobal said that the European Commission in May opposed the merger, citing the potential reduction in competition between South Korea and the European Economic Area and Europe. In particular, the commission felt that the merger would reduce competition on passenger routes between South Korea and France, Germany, Italy, and Spain.
It added that the deal would also hurt competition in the cargo sector.
