Korean Air targets completion of Asiana acquisition in 2024
02 / 01 / 2024
Source: Thanhliemnguyen/Shutterstock
Korean Air said it expects to complete the acquisition of Asiana Airlines this year, as it acknowledged that the process had “taken much longer than expected”.
In a message to employees on New Year’s Day, airline chief Walter Cho said he is “confident” the merger – first announced in November 2020 amid the Covid-19 pandemic – will finalise this year.
The integrated airline will “be a tremendous growth engine for us in the long run”, Cho added, urging employees to “work together” in its launch.
“Korean Air will be poised to stand shoulder to shoulder with global leading airlines. The merger will optimise our network and allow us to operate to new destinations, so that we may offer customers more choices.”
Last month, European Union competition regulators set a February deadline to review Korean Air’s proposed acquisition of Asiana Airlines.
The two airlines last year gained board approval to sell the cargo business of Asiana Airlines to offset concerns about the market share the combined entity would have on the Korea-Europe trade lane.
While the acquisition has gained approvals from several regulators, including in Singapore, the UK and China, it has faltered in major jurisdictions such as the EU, USA and Japan.
The drawn-out process was nearly derailed in late-October, when the Asiana board failed to decide whether to divest its cargo unit, which was a crucial factor to gaining EU approvals for the merger.
Days later, Asiana greenlit the divestment of its cargo division, paving the way for regulatory approvals, and setting the acquisition process back on track.
In his New Year’s message, Cho also warns of “a rocky road” in the near-term, flagging challenges such as geopolitical risk, supply chain disruptions and a sluggish economic outlook.
He stated: “In contrast to the difficult times we have faced, our valued passengers have rekindled their travel plans, and airports buzz with activity. While we celebrate our victory over a significant crisis, a rocky road remains ahead.”
He added that its cargo business – once the “lucrative” financial lifeline amid the pandemic – is seeing a slowdown, while the passenger travel business will see “intensified industry competition”.
To this end, Cho said the airline must “consistently cultivate and refine our strengths”.
EU sets deadline for decision on Korean Air’s proposed Asiana takeover
