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Korean Air and Asiana Airlines planes meet at Incheon International Airport. Yunhap news
As Hanjin Group is known to be seeking the acquisition of Asiana Airlines, which has run into commercial difficulties, the focus is on whether an ultra-large domestic airline will be born.
If the acquisition is successful, the national airline’s ‘2nd top’ system, which has been in place for 32 years since the establishment of Asiana Airlines in 1988, will become Korean Air’s individual system. However, due to the high debt of Asiana Airlines and the reaction of the unions, it will take a long time to complete the acquisition process. On the 13th, Korean Air announced on the 13th that “it is under review, but no specific decisions have been made” regarding the acquisition of Asiana Airlines. Korean Air is cautious, but the industry and the government expect the Hanjin Group’s acquisition of Asiana Airlines to start sooner or later.
It is reported that the government will hold a meeting of related ministers (Sankyungjang) to strengthen industrial competitiveness from the 16th, and will officially formulate the acquisition of Asiana Airlines by Hanjin Group. In line with this, Hanjin Kal, the holding company of Hanjin Group, is also 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 early next week.
Korean Air has reportedly already shown its willingness to take over Asiana Airlines, for example by discussing the acquisition of Asiana Airlines with Korea Development Bank for several months. When Korean Air acquires Asiana Airlines, the scale will quickly rise to the world’s top 10.
According to the ‘World Air Transport Statistics 2020’ published by the International Air Transport Association (IATA), Korean Air was ranked 18th in the global airline rankings last year according to the International Passenger RPK (the number of passengers paid by flight times flight distance) and Asiana Airlines. It was ranked 32nd. When Korean Air and Asiana Airlines are combined, it is similar to American Airlines, which ranks 10th. In terms of number of international passengers, Korean Air ranks 19th and Asiana Airlines 36th. Together, it is 10th.
In the international cargo volume ranking, Korean Air (5th) and Asiana Airlines (23rd) can combine to rank third over Cathay Pacific. In terms of wholly owned aircraft, Korean Air currently owns 164 aircraft and Asiana Airlines owns 79 aircraft, a combined 249 aircraft. Air France (220 units) and Lufthansa (280 units) are known to be among the top 10 in the world.
The participation of national operators will exceed half when combined with subsidiaries. At the end of last year, Korean Air’s market share was 22.9% and Asiana Airlines’ 19.3%. The market share of the low-cost airlines (LCC) of both companies, such as Jin Air, Air Busan and Air Seoul, is 62.5%.
Reporter Kim Doo-yong [email protected]
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